EXHIBIT 99.8(a)
CUSTODIAN CONTRACT
Between
MFS UNION STANDARD TRUST
and
STATE STREET BANK AND TRUST COMPANY
MFS-Union Custody Agreement
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held By
It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Duties of the Custodian with Respect to Property
of the Trust Held by the Custodian . . . . . . . . . . . . . . . . 2
2.1 Holding Securities . . . . . . . . . . . . . . . . . . . . . 2
2.2 Delivery of Securities . . . . . . . . . . . . . . . . . . . 2
2.3 Registration of Securities . . . . . . . . . . . . . . . . . 4
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 Payments for Shares . . . . . . . . . . . . . . . . . . . . 5
2.6 Investment and Availability of Federal Funds . . . . . . . . 5
2.7 Collection of Income . . . . . . . . . . . . . . . . . . . . 5
2.8 Payment of Trust Monies . . . . . . . . . . . . . . . . . . 6
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased . . . . . . . . . . . . . . 7
2.10 Payments for Repurchases or Redemptions
of Shares of the Trust . . . . . . . . . . . . . . . . . . . 7
2.11 Appointment of Agents . . . . . . . . . . . . . . . . . . . 8
2.12 Deposit of Trust Assets in Securities System . . . . . . . . 8
2.12A Trust Assets Held in the Custodian's Direct
Paper System . . . . . . . . . . . . . . . . . . . . . . . . 9
2.13 Segregated Account . . . . . . . . . . . . . . . . . . . . . 10
2.14 Ownership Certificates for Tax Purposes . . . . . . . . . . 11
2.15 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.16 Communications Relating to Trust Portfolio
Securities . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.17 Proper Instructions . . . . . . . . . . . . . . . . . . . . 11
2.18 Actions Permitted Without Express Authority . . . . . . . . 12
2.19 Evidence of Authority . . . . . . . . . . . . . . . . . . . 12
3. Duties of Custodian With Respect to the Books of
Account and Calculation of Net Asset Value and Net
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5. Opinion of Trust's Independent Accountants . . . . . . . . . . . . 13
6. Reports to Trust by Independent Public Accountants . . . . . . . . 13
7. Compensation of Custodian . . . . . . . . . . . . . . . . . . . . 14
8. Responsibility of Custodian . . . . . . . . . . . . . . . . . . . 14
9. Effective Period, Termination and Amendment . . . . . . . . . . . 15
10. Successor Custodian . . . . . . . . . . . . . . . . . . . . . . . 15
11. Interpretive and Additional Provisions . . . . . . . . . . . . . . 16
12. Additional Funds . . . . . . . . . . . . . . . . . . . . . . . . . 16
13. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . . . 17
14. Delegation of Certain Custodial Duties to MFS . . . . . . . . . . 17
CUSTODIAN CONTRACT
This Contract between MFS Union Standard Trust, a business trust
organized and existing under the laws of Massachusetts, having its principal
place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
hereinafter called the "Trust", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust intends to initially offer shares in two series, the
MFS Union Standard Equity Fund and the MFS Union Standard Fixed Income Fund
(such series together with all other series subsequently established by the
Trust and made subject to this Contract in accordance with paragraph 12,
being herein referred to as (the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Trust hereby employs the Custodian as the custodian of the assets
or the Portfolios of the Trust pursuant to the provisions of the Declaration
of Trust. The Trust agrees, on behalf of the Portfolios, to deliver to the
Custodian all securities and cash of the Portfolios, and all payments of
income, payments of principal or capital distributions received by it with
respect to all securities owned by the Portfolios from time to time, and the
cash consideration received by it for such new or treasury shares of
beneficial interest of the Trust representing interests in the Portfolios
("Shares") as may be issued or sold from time to time. The Custodian shall
not be responsible for any property of a Portfolio held or received by the
Portfolio and not delivered to the Custodian
Upon receipt of "Proper Instructions" (within the meaning of Section 2.17),
the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, but only in accordance with an
applicable vote by the Board of Trustees of the Trust on behalf of the
applicable Portfolio(s). The Custodian shall have no more or less
responsibility or liability to the Trust on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE
TRUST HELD BY THE CUSTODIAN
2.1 HOLDINQ SECURITIES. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, including all
securities owned by such Portfolio, other than (a) securities which are
maintained pursuant to Section 2.12 in a clearing agency which acts as
a securities depository or in a book-entry system authorized by the
U.S. Department of the Treasury, collectively referred to herein as
"Securities System" and (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained in the Direct
Paper System of the Custodian pursuant to Section 2.12A.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by a Portfolio held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only
upon receipt of Proper Instructions from the Trust on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio and receipt
of payment therefor;
2) Upon the receipt of payment in connection with any repurchase agreement
related to such securities entered into by the Portfolio:
3) In the case of a sale effected through a Securities System, in accordance
with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other similar offers
for securities of the Portfolio:
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of the
Portfolio or into the name of any nominee or nominees of the Custodian
or into the name or nominee name of any agent appointed pursuant to
Section 2.11 or into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; or for exchange for a different number
of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; PROVIDED that, in any such
case, the new securities are to be delivered to the Custodian:
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7) Upon the sale of such securities for the account of the Portfolio, to
the broker or its clearing agent, against a receipt, for examination in
accordance with "street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's
own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger, consolidation,
recapitalization, reorganization or readjustment of the securities of
the issuer of such securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash, if any,
are to be delivered to the Custodian.
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities
or the surrender of interim receipts or temporary securities for
definitive securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian:
10) For delivery in connection with any loans of securities made by the
Portfolio BUT ONLY against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Trust on behalf of the
Portfolio, which may be in the form of cash or obligations issued by
the United States government, its agencies or instrumentalities, except
that in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system authorized
by the U.S. Department of the Treasury, the Custodian will not be held
liable or responsible for the delivery of securities owned by the
Portfolio prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the Trust
on behalf of the Portfolio requiring a pledge of assets by the Trust
on behalf of the Portfolio, BUT ONLY against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any agreement among
the Trust on behalf of the Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the "Exchange
Act") and a member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities
exchange, or of any similar organization or
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organizations, regarding escrow or other arrangements in connection
with transactions by the Portfolio;
13) For delivery in accordance with the provisions of any agreement among
the Trust on behalf of the Portfolio, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio:
14) Upon receipt of instructions from the transfer agent ("Transfer Agent")
for the Trust, for delivery to such Transfer Agent or to the holders of
shares in connection with distributions in kind, as may be described
from time to time in the currently effective prospectus and statement
of additional information of the Trust related to the Portfolio
("Prospectus"), in satisfaction of requests by holders of Shares for
repurchase or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions from the Trust on behalf of the
applicable Portfolio, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee signed by an officer of the
Trust and certified by the Secretary or an Assistant Secretary, setting
forth the purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be made.
2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the
applicable Portfolio or in the name of any nominee of the Trust on
behalf of the applicable Portfolio or of any nominee of the Custodian
which nominee shall be assigned exclusively to the applicable
Portfolio, UNLESS the Trust has authorized in writing the appointment
of a nominee to be used in common with other registered investment
companies having the same investment adviser as such Portfolio, or in
the name or nominee name of any agent appointed pursuant to Section
2.11 or in the name or nominee name of any sub-custodian appointed
pursuant to Article 1. All securities accepted by the Custodian on
behalf of a Portfolio under the terms of this Contract shall be in
"street name" or other good delivery form.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts (the "Portfolio's Account or Accounts") in the name
of each Portfolio of the Trust, subject only to draft or order by the
Custodian acting
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pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds held by
the Custodian for a Portfolio may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; PROVIDED, however, that every such bank or trust company
shall be qualified to act as a custodian under the Investment Company
Act of 1940 and that each such bank or trust company and the funds to
be deposited with each such bank or trust company shall on behalf of
each applicable Portfolio be approved by vote of a majority of the
Board of Trustees of the Trust. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
2.5 PAYMENTS FOR SHARES. The Custodian shall receive from the distributor
for the Shares or from the Transfer Agent of the Trust and deposit into
each Portfolio's Account such payments as are received for Shares of
that Portfolio issued or sold from time to time by the Trust. The
Custodian will provide timely notification to the Trust on behalf of
each such Portfolio and the Transfer Agent of any receipt by it of
payments for Shares of such Portfolio.
2.6 INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement
between the Trust on behalf of each applicable Portfolio and the
Custodian, the Custodian shall, upon the receipt of Proper Instructions
from the Trust on behalf of a Portfolio, 1) invest in such instruments
as may be set forth in such instructions on the same day as received
all federal funds received after a time agreed upon the Custodian and
the Trust; and 2) make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Trust and the
Custodian in the amount of checks received in payment for Shares of
such Portfolio which are deposited into the Portfolio's account.
2.7 COLLECTION OF INCOME. The Custodian shall collect on a timely basis
all income and other payments with respect to registered securities
held hereunder to which each Portfolio shall be entitled either by law
or pursuant to custom in the securities business, and shall collect on
a timely basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such securities
are held by the Custodian or an agent thereof and shall credit such
income, as collected, to such Portfolio's custodian account. Without
limiting the generality of the
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foregoing, the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held
hereunder. Income due each Portfolio on securities loaned pursuant to
the provisions of Section 2.2 (10) shall be the responsibility of the
Trust. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Trust with such information or
data as may be necessary to assist the Trust in arranging for the
timely delivery to the Custodian of the income to which the Portfolio
is properly entitled.
2.8 PAYMENT OF TRUST MONIES. Upon receipt of Proper Instructions from the
Trust on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of securities for the account of the Portfolio but
only (a) against the delivery of such securities to the Custodian (or
any bank, banking firm or trust company doing business in the United
States or abroad which is qualified under the Investment Company Act of
1940, as amended, to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in the case of a
purchase effected through a Securities System, in accordance with the
conditions set forth in Section 2.12 hereof; or (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.12A; or (d) in the case of repurchase
agreements entered into between the Trust on behalf of the Portfolio
and the Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's account
at the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Portfolio of
securities owned by the Custodian alone with written evidence of the
agreement by the Custodian to repurchase such securities from the
Portfolio;
2) In connection with conversion, exchange or surrender of securities owned
by the Portfolio as set forth in Section 2.2 hereof:
3) For the redemption or repurchase of Shares issued by the Portfolio as set
forth in Section 2.10 hereof;
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4) For the payment of any expense or liability incurred by the Portfolio,
including but not limited to the following payments for the account of
the Portfolio: interest, taxes, management, accounting, transfer agent
and legal fees, and operating expenses of the Trust whether or not such
expenses are to be in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends on Shares of the Portfolio declared
pursuant to the governing documents of the Trust;
6) For payment of the amount of dividends received in respect of securities
sold short:
7) For any other proper purpose, BUT ONLY upon receipt of, in addition to
Proper Instructions from the Trust on behalf of the Portfolio, a
certified copy of a resolution of the Board of Trustees or of the
Executive Committee of the Trust signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary, setting forth the
purpose for which such payment is to be made, declaring such purpose to
be a proper purpose, and naming the person or persons to whom such
payment is to be made.
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED. In
any and every case where payment for purchase of securities for the
account of a Portfolio is made by the Custodian in advance of receipt
of the securities purchased in the absence of specific written
instructions from the Trust on behalf of such Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the Trust for such
securities to the same extent as if the securities had been received by
the Custodian EXCEPT that in the case of repurchase agreements entered
into by the Trust on behalf of a Portfolio with a bank which is a
member of the Federal Reserve System, the Custodian may transfer funds
to the account of such bank prior to the receipt of written evidence
that the securities subject to such repurchase agreement have been
transferred by book-entry into a segregated non-proprietary account of
the Custodian maintained with the Federal Reserve Bank of Boston or of
the safekeeping receipt, provided that such securities have in fact
been so transferred by book-entry.
2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE TRUST. From
such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the
Board of Trustees of the Trust pursuant thereto, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds
available for payment to holders of Shares who have delivered to the
Transfer Agent a request for redemption or repurchase of
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their Shares. In connection with the redemption or repurchase of
Shares of a Portfolio, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming shareholders. In connection
with the redemption or repurchase of Shares of a Portfolio, the
Custodian shall honor checks drawn on the Custodian by a holder of
Shares or by an entity designated by the Trust acting on such holder's
behalf, which checks have been furnished by the Trust to the holder of
Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time
between the Trust and the Custodian.
2.11 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; PROVIDED, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.12 DEPOSIT OF TRUST ASSETS IN SECURITIES SYSTEMS. The Custodian may deposit
and/or maintain securities owned by a Portfolio in a clearing agency
registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a Securities
System provided that such securities are represented in an account
("Custodian's Account") of the Custodian in the Securities System which
shall not include any assets of the Custodian other than assets held as
a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the Portfolio
which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the account of the
Portfolio upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Custodian's Account, and
(ii) the making of an entry
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on the records of the Custodian to reflect such payment and transfer
for the account of the Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio upon (i) receipt of
advice from the Securities System that payment for such securities has
been transferred to the Custodian's Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer and
payment for the account of the Portfolio. Copies of all advices from
the Securities System of transfers of securities for the account of the
Portfolio shall identify the Portfolio, be maintained for the Portfolio
by the Custodian and be provided to the Trust at its request. Upon
request, the Custodian shall furnish the Trust on behalf of the
Portfolio confirmation of each transfer to or from the account of the
Portfolio in the form of a written advice or notice and shall furnish
to the Portfolio copies of daily transaction sheets reflecting each
day's transactions in the Securities System for the account of the
Portfolio.
4) The Custodian shall provide the Trust for the Portfolio with any report
obtained by the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding securities
deposited in the Securities System;
5) The Custodian shall have received from the Trust on behalf of the
Portfolio the initial or annual certificate, as the case may be,
required by Article 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the Custodian
shall be liable to the Trust for the benefit of the Portfolio for any
loss or damage to the Portfolio resulting from use of the Securities
System by reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their employees or
from failure of the Custodian or any such agent to enforce effectively
such rights as it may have against the Securities System; at the
election of the Trust, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent that the
Trust has not been made whole for any such loss or damage.
2.12A TRUST ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The Custodian
may deposit and/or maintain securities owned by a Portfolio in the
Direct Paper System of the Custodian subject to the following
provisions:
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1) No transaction relating to securities in the Direct Paper System will be
effected in the absence of Proper Instructions from the Trust on behalf
of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the Direct Paper
System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which shall not
include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers:
3) The records of the Custodian with respect to securities of the Portfolio
which are maintained in the Direct Paper System shall identify by
book-entry those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the account of the
Portfolio upon the making of an entry on the records of the Custodian
to reflect such payment and transfer of securities to the account of
the Portfolio. The Custodian shall transfer securities sold for the
account of the Portfolio upon the making of an entry on the records of
the Custodian to reflect such transfer and receipt of payment for the
account of the Portfolio;
5) The Custodian shall furnish the Trust on behalf of the Portfolio
confirmation of each transfer to or from the account of the Portfolio,
in the form of a written advice or notice, of Direct Paper on the next
business day following such transfer and shall furnish to the Trust on
behalf of the Portfolio copies of daily transaction sheets reflecting
each day's transactions in the Direct Paper System for the account of
the Portfolio;
6) The Custodian shall provide the Trust on behalf of the Portfolio with
any report on its system of internal accounting control as the Trust
may reasonably request from time to time.
2.13 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Trust on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the Trust on
behalf of the Portfolio, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity
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Futures Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written
by the Portfolio or commodity futures contracts or options
thereon purchased or sold by the Portfolio, (iii) for the
purposes of compliance by the Portfolio with the procedures
required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper
corporate purposes, BUT ONLY, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions from the Trust on
behalf of the applicable Portfolio, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee
signed by an officer of the Trust and certified by the Secretary
or an Assistant Secretary, setting forth the purpose or purposes
of such segregated account and declaring such purposes to be
proper corporate purposes.
2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of each Portfolio held by it and in
connection with transfers of securities.
2.15 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of a Portfolio or a nominee of a Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted. The
Custodian shall promptly deliver to American Capital Strategies Ltd., a
Maryland corporation ("ACS"), on behalf of the applicable Portfolio,
such proxies and all proxy soliciting materials relating to such
securities, together with all proxies and proxy soliciting materials
relating to securities registered in the name of a Portfolio or a
nominee of a Portfolio which are received by the Custodian on behalf of
such Portfolio. All such materials shall be sent to ACS at the
following address: 0 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000; Xxxxxxxx,
Xxxxxxxx 00000; Attn: Xxxxxx Xxxxxxxx.
2.16 COMMUNICATIONS RELATING TO TRUST PORTFOLIO SECURITIES. The Custodian
shall transmit promptly to the Trust for each Portfolio all written
information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection
therewith and notices of exercise of call and put options written by
the Trust on behalf of each Portfolio and the maturity of futures
contracts purchased or sold by each Portfolio) received by the
Custodian from issuers of the
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securities being held for the Portfolios. With respect to tender
or exchange offers, the Custodian shall transmit promptly to the
Trust all written information received by the Custodian from
issuers of the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange
offer. If the Trust on behalf of a Portfolio desires to take
action with respect to any tender offer, exchange offer or any
other similar transaction, the Trust shall notify the Custodian
at least three business days prior to the date on which the
Custodian is to take such action.
2.17 PROPER INSTRUCTIONS. Proper Instructions as used throughout this
Article 2 means a writing signed or initialled by one or more person or
persons as the Board of Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction
or type of transaction involved, including a specific statement of the
purpose for which such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Trust shall
cause all oral instructions to be confirmed in writing. Upon receipt of
a certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Trustees of the Trust accompanied by a
detailed description of procedures approved by the Board of Trustees,
Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the
Board of Trustees and the Custodian are satisfied that such procedures
afford adequate safeguards for the Portfolios' assets.
2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Trust on behalf of each
applicable Portfolio:
1) make payments to itself or others for minor expenses of handing
securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to the
Trust on behalf of the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolios, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of the Portfolios except as otherwise
directed by the Board of Trustees of the Trust.
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2.19 EVIDENCE OF AUTHORITY. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been
properly executed by or on behalf of the Trust. The Custodian may
receive and accept a certified copy of a vote of the Board of Trustees
of the Trust as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of
any action by the Board of Trustees pursuant to the Declaration of
Trust as described in such vote, and such vote may be considered as in
full force and effect until receipt by the Custodian of written notice
to the contrary.
3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Trust to
keep the books of account of each Portfolio and/or compute the net asset
value per share of the outstanding shares of each Portfolio or, if directed
in writing to do so by the Trust on behalf of the Portfolio, shall itself
keep such books of account and/or compute such net asset value per share. If
so directed, the Custodian shall also calculate daily the net income of a
Portfolio as described in the Trust's currently effective prospectus related
to such Portfolio and shall advise the Trust and the Transfer Agent daily of
the total amounts of such net income and, if instructed in writing by an
officer of the Trust to do so, shall advise the Transfer Agent periodically
of the division of such net income among its various components. The
calculations of the net asset value per share and the daily income of each
Portfolio shall be made at the time or times described from time to time in
the Trust's currently effective prospectus related to such Portfolio.
4. RECORDS
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Trust under the Investment
Company Act of 1940, with particular attention to Section 31 thereof and
Rules 3la-1 and 3la-2 thereunder, applicable federal and state tax laws and
any other law or administrative rules or procedures which may be applicable
to the Trust. All such records shall be the property of the Trust and shall
at all times during the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the Trust and
employees and agents of the Securities and Exchange Commission.
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The Custodian shall, at the Trust's request, supply the Trust with a
tabulation of securities owned by each Portfolio and held by the Custodian
and shall, when requested to do so by the Trust and for such compensation as
shall be agreed upon between the Trust and the Custodian, include certificate
numbers in such tabulations.
5. OPINION OF TRUST'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Trust on behalf
of each applicable Portfolio may from time to time request, to obtain from
year to year favorable opinions from the Trust's independent accountants with
respect to its activities hereunder in connection with the preparation of the
Trust's Form N-1A, and Form N-SAR or other annual reports to the Securities
and Exchange Commission and with respect to any other requirements of such
Commission.
6. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Trust, on behalf of each of the
Portfolios at such times as the Trust may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or
maintained in a Securities System, relating to the services provided by the
Custodian under this Contract; such reports, shall be of sufficient scope and
in sufficient detail, as may reasonably be required by the Trust to provide
reasonable assurance that any material inadequacies would be disclosed by
such examination, and, if there are no such inadequacies, the reports shall
so state.
7. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Trust on behalf of each applicable Portfolio and the Custodian.
8. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in
acting upon any notice, request, consent, certificate or other instrument
reasonably believed by it to be genuine and to be signed by the proper party
or parties. The Custodian shall be held to the exercise of reasonable care in
carrying out the provisions of this Contract and shall be indemnified by the
Trust for any action taken or
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omitted by it in the proper execution of instructions from the Trust. It
shall be entitled to rely on and may act upon advice of counsel for the Trust
on all matters and shall be without liability for any action reasonably taken
or omitted pursuant to such advice.
The Trust on behalf of a Portfolio agrees to indemnify and hold
harmless the Custodian and its nominee from and against all taxes, charges,
expenses, assessments, claims and liabilities (including counsel fees)
incurred or assessed against it or its nominee in connection with the
performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct
The Custodian is authorized to charge any account of the applicable
Portfolio for each such item and its fees. To secure any such authorized
charges and any advances of cash or securities made by the Custodian to or
for the benefit of a Portfolio for any purpose which results in the Portfolio
incurring an overdraft at the end or any business day or for extraordinary or
emergency purposes during any business day, the Trust on behalf of the
Portfolio hereby grants to the Custodian a security interest in and pledges
to the Custodian securities held for the Portfolio by the Custodian, in an
amount not to exceed five percent of the applicable Portfolio's gross assets,
the specific securities to be designated in writing from time to time by the
Trust on behalf of the Portfolio or its investment adviser (the "Pledged
Securities"). Should the Trust on behalf of the Portfolio fail to repay
promptly any advances of cash or securities, the Custodian shall be entitled
to use available cash and to dispose of the Pledged Securities as is
necessary to repay any such advances.
9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT.
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided,
may be amended at any time by mutual agreement of the parties hereto and may
be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect
not sooner than thirty (30) days after the date of such delivery or mailing;
PROVIDED, however that the Custodian shall not with respect to a Portfolio
act under Section 2.12 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees of the Trust have approved the initial use of a particular
Securities System by such Portfolio as required by Rule 17f-4 under the
Investment Company Act of 1940, as amended; and PROVIDED FURTHER, however,
(a) that the Trust shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any
provision of the Declaration of Trust, and (b) that the Trust
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on behalf of one or more of the Portfolios may at any time by action of its
Board of Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
Upon termination of the Contract, the Trust on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be
due as of the date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
10. SUCCESSOR CUSTODIAN
If a successor custodian for the assets of one or more of the
Portfolios shall be appointed by the Board of Trustees of the Trust, the
Custodian shall, upon termination, deliver to such successor custodian at the
office of the Custodian, duly endorsed and in the form for transfer, all
securities of each applicable Portfolio then held by it hereunder and shall
transfer to an account of the successor custodian all of the securities of
each such Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Trust, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered
to the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the Investment Company Act of
1940, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the Custodian
on behalf of each applicable Portfolio and all instruments held by the
Custodian relative thereto and all other property held by it under this
Contract on behalf of each applicable Portfolio and to transfer to an account
of such successor custodian all of the securities of each such Portfolio held
in any Securities System. Thereafter, such bank or trust company shall be the
successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of
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termination hereof owing to failure of the Trust to procure the certified
copy of the vote referred to or of the Board of Trustees to appoint a
successor custodian, the Custodian shall be entitled to fair compensation for
its services during such period as the Custodian retains possession of such
securities, funds and other properties and the provisions of this Contract
relating to the duties and obligations of the Custodian shall remain in full
force and effect.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and
the Trust on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor
of this Contract. Any such interpretive or additional provisions shall be in
a writing signed by both parties and shall be annexed hereto, PROVIDED that
no such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Declaration of Trust of
the Trust. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
12. ADDITIONAL FUNDS
In the event that the Trust establishes one or more series of Shares in
addition to the initial series with respect to which it desires to have the
Custodian render services as custodian under the terms hereof, it shall so
notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Shares shall become a Portfolio
hereunder.
13. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
14. DELEGATION OF CERTAIN CUSTODIAN DUTIES TO MFS.
The Custodian may delegate to Massachusetts Financial Services Company
("MFS") the performance of any or all of its duties hereunder relating to (i)
accounting for investments in currency and for financial instruments
(including, without limitation, options contracts, futures contracts, options
on futures contracts, options on foreign currency and forward foreign
currency exchange contracts) and (ii) federal and state regulatory
compliance. The Custodian shall compensate MFS for the performance of such
duties at such fee or fees as MFS shall
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determine to be equal to MFS's cost for performing such duties (the "MFS
Fees"). Following its payment of the MFS Fees to MFS, the Custodian shall
recover the amount of the MFS Fees from the Trust on such terms as the
Custodian and the Trust shall agree. MFS assumes responsibility for all
duties delegated to it by the Custodian pursuant to this Section 14, and the
Custodian may rely on MFS for the accuracy and correctness of the accounting
information provided by MFS to the Custodian pursuant to this Section 14.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative as
of the 8th day of December, 1993.
MFS UNION STANDARD TRUST
By A. XXXXX XXXXXXX
------------------------------
STATE STREET BANK AND TRUST COMPANY
By XXXXXX XXXXX
------------------------------
Executive Vice President
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