EXHIBIT 99-8(a)
CUSTODIAN CONTRACT
BETWEEN
MASSACHUSETTS CAPITAL DEVELOPMENT FUND
AND
STATE STREET BANK AND TRUST COMPANY
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 Fund Held
by the Custodian in the United States............................. 2
2.1. Holding Securities....................................... 2
2.2. Delivery of Securities................................... 2
2.3. Registration of Securities............................... 5
2.4. Bank Accounts............................................ 6
2.5. Payments for Shares...................................... 6
2.6. Investment and Availability of Federal Funds............. 7
2.7. Collection of Income..................................... 7
2.8. Payment of Fund Monies................................... 8
2.9. Liability for Payment in Advance of Receipt of Securities
Purchased............................................. 9
2.10. Appointment of Agents.................................... 10
2.11. Deposit of Fund Assets in Securities System.............. 10
2.11A. Fund Assets Held in the Custodian's Direct Paper System.. 12
2.12. Segregated Account....................................... 13
2.13. Ownership Certificates for Tax Purposes.................. 14
2.14. Proxies.................................................. 14
2.15. Communications Relating to Fund Portfolio Securities..... 15
2.16. Reports to Fund by Independent Public Accountants........ 15
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States..................................... 16
3.1 Appointment of Chase as Subcustodian..................... 16
3.2 Standard of Care; Liability.............................. 16
3.3 Fund's Responsibility for Rules and Regulations.......... 17
4. Payments for Repurchases or Redemptions of Shares of the Fund..... 17
5. Proper Instructions............................................... 17
6. Actions Permitted Without Express Authority....................... 18
7. Evidence of Authority............................................. 18
8. Duties of the Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income..................... 19
9. Records ......................................................... 19
10. Opinion of Fund Independent Accountants .......................... 20
11. Compensation of Custodian......................................... 20
TABLE OF CONTENTS (CONTINUED)
PAGE
12. Responsibility of Custodian...................................... 20
13. Effective Period, Termination and Amendment...................... 21
14. Successor Custodian.............................................. 22
15. Interpretive and Additional Provisions........................... 24
16. Massachusetts Law to Apply....................................... 24
17. Prior Contracts.................................................. 24
CUSTODIAN CONTRACT
This Contract between Massachusetts Capital Development Fund, a business
trust organized and existing under the laws of Massachusetts, having its
principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx,
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, 00000, hereinafter called the
"Custodian",
WITNESSETH: That 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 its assets pursuant to the provisions
of the Articles of Incorporation including securities and cash it desires to be
held within the United States (collectively "domestic securities") and
securities and cash it desires to be held outside the United States
(collectively "foreign securities"), subject to the terms of Article 3 hereof.
The Trust agrees to deliver to the Custodian all securities and cash owned by
it, and all payments of income, payments of principal or capital distributions
received by it with respect to all securities owned by the Trust from time to
time, and the cash consideration received by it for such new or treasury shares
of beneficial interest ("Shares") of the Trust as may be issued or sold from
time to time. The Custodian shall not be responsible for any property of the
Trust held or received by the Trust and not delivered to the Custodian. Upon
receipt of "Proper Instructions" (within the meaning of Article 5), the
Custodian shall from time to time employ one or more sub-custodians, but only in
accordance with an applicable vote by the Board of Directors of the Fund, and
provided that, the Custodian shall have no more or less responsibility or
liability to the Fund 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 Fund Held By the
Custodian in the United States. The provisions of this Article 2 shall apply to
the duties of the Custodian as they relate to domestic securities, held in the
United States.
2.1. Holding Securities. The Custodian shall hold and physically segregate for
the account of the Fund all non-cash property, including all domestic securities
owned by the Fund to be held in the United States, other than (a) securities
which are maintained pursuant to Section 2.11 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 a "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 Book-Entry System ("Direct Paper
System") pursuant to Section 2.11.A.
2.2. Delivery of Securities. The Custodian shall release and deliver securities
owned by the Fund held by the Custodian or in a Securities System account of the
Custodian or in the Direct Paper System only upon receipt of Proper
Instructions, 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 Fund 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 Fund;
3) In the case of a sale effected through a Securities System, in accordance
with the provisions of Section 2.11 hereof;
4) To the depository agent in connection with tender or other similar offers for
portfolio securities of the Fund;
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 Fund
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 2.10 or into the name or
nominee name of any sub-custodian appointed pursuant to Article l; 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;
7) Upon the sale of such securities for the account of the Fund, 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 Fund,
but only against receipt of adequate collateral as agreed upon from time to time
by the Custodian and the Fund, 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 Fund prior to the receipt of such
collateral;
11) For delivery as security in connection with any borrowings by the Fund
requiring a pledge of assets by the Fund, but only against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any agreement among the
Fund, 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 organizations, regarding escrow or other
arrangements in connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement among the
Fund, 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 Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer Agent") for
the Fund, 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 Fund's currently effective prospectus and statement of additional
information ("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, a certified copy of a resolution of the Board
of Directors or of the Executive Committee signed by an officer of the Fund 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. Domestic securities held by the Custodian
(other than bearer securities) in the United States shall be registered in the
name of the Fund or in the name of any nominee of the Fund or of any nominee of
the Custodian which nominee shall be assigned exclusively to the Fund, unless
the Fund 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 the Fund, or in the name or nominee name of any agent appointed
pursuant to Section 2.10 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All domestic securities accepted by the
Custodian on behalf of the Fund 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 "Fund's Account or Accounts") in the name of the Fund,
subject only to draft or order by the Custodian acting 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 Fund,
other than cash maintained by the Fund 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 the Fund 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 be approved by vote of majority of the Board of Directors of the Fund.
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 Fund's Shares or from the Transfer Agent of the Fund and deposit into the
Fund's account such payments as are received for Shares of the Fund issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund and the Transfer Agent of any receipt by it of payments
for Shares of the Fund.
2.6. Investment and Availability of Federal Funds. Upon mutual agreement between
the Fund and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, 1) Invest in such instruments as may be set forth 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 between the Custodian and
the Fund; and 2) Make federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the Custodian in the amount of
checks received in payment for Shares of the Fund which are deposited into the
Fund's account.
2.7. Collection of Income. The Custodian shall collect on a timely basis all
income and other payments with respect to registered domestic securities held
hereunder to which the Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely basis all
income and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian or its
agent thereof and shall credit such income, as collected, to the Fund's
custodian Account. Without limiting the generality of the 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 domestic securities held hereunder. Income due the Fund on
domestic securities loaned pursuant to the provisions of Section 2.2 (10) shall
be the responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund with such
information or data as may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which the Fund is properly
entitled.
2.8. Payment of Fund Monies. Upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of domestic securities for the account of the Fund 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 Fund 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 2.11 hereof; or (c) in the case of a
purchase involving the Direct Paper System, in accordance with the conditions
set forth in Section 2.11A; or (d) in the case of repurchase agreements entered
into between the Fund 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 Fund of securities owned by the Custodian
along with written evidence of the agreement by the Custodian to repurchase such
securities from the Fund;
2) In connection with conversion, exchange or surrender of domestic securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund as set forth in
Article 4 hereof;
4) For the payment of any expense or liability incurred by the Fund, including
but not limited to the following payments for the account of the Fund: interest,
taxes, management, accounting, transfer agent and legal fees, and operating
expenses of the Fund 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 declared pursuant to the governing documents
of the Fund;
6) For payment of the amount of dividends received in respect of domestic
securities sold short;
7) For any other proper purpose, but only upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board of Directors or of
the Executive Committee of the Fund signed by an officer of the Fund 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 domestic securities for the account
of the Fund is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions from the Fund to so
pay in advance, the Custodian shall be absolutely liable to the Fund 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
Fund 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. 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.
2.11. Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain domestic securities owned by the Fund 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 domestic securities of the Fund 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 domestic securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for domestic securities purchased for the account of
the Fund 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 on the records of the Custodian to reflect such payment and transfer
for the account of the Fund. The Custodian shall transfer domestic securities
sold for the account of the Fund 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 Fund. Copies of all
advices from the Securities System of transfers of domestic securities for the
account of the Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Fund at its request. Upon request, the
Custodian shall furnish the Fund confirmation of each transfer to or from the
account of the Fund in the form of a written advice or notice and shall furnish
to the Fund copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the Fund.
4) The Custodian shall provide the Fund 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 the initial or annual certificate, as the
case may be, required by Article 10 hereof;
6) Anything to the contrary in this Contract notwithstanding, the Custodian
shall be liable to the Fund for any loss or damage to the Fund 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 Fund, 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 Fund has not been made whole for any such loss or
damage.
2.11A. Fund Assets Held in the Custodian's Direct Paper System. The Custodian
may deposit and/or maintain domestic securities owned by the Fund in the Direct
Paper System subject to the following provisions:
1.) No transaction relating to domestic securities in the Direct Paper System
will be effected in the absence of Proper Instructions;
2) The Custodian may keep domestic securities of the Fund in the Direct Paper
System only if such securities are represented in an 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 domestic securities of the Fund
which are maintained in the Direct Paper System shall identify by book-entry
those securities belonging to the Fund;
4) The Custodian shall furnish the Fund confirmation of each transfer of Direct
Paper to or from the account of the Fund, in the form of a written advice or
notice on the next business day following such transfer and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's transaction in the
Direct Paper System for the account of the Fund;
5) The Custodian shall pay for domestic securities purchased for the account of
the Fund 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 Fund. The
Custodian shall transfer securities sold for the account of the Fund 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 Fund;
6) The Custodian shall provide the Fund with any report on its system of
internal accounting control for the Direct Paper System that the Custodian
receives and as the Fund may reasonably request from time to time;
2.12. Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or domestic securities, including securities maintained in an account by the
Custodian pursuant to Section 2.11 hereof, (i) in accordance with the provisions
of any agreement among the Fund, 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 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
Fund, (ii) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purpose of compliance by the Fund 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, a certified copy of a resolution of the Board of Directors
or of the Executive Committee signed by an officer of the Fund 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.
2.13. 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
domestic securities of the Fund held by it and in connection with transfers of
domestic securities.
2.14. Proxies. The Custodian shall, with respect to the domestic securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the domestic securities are registered otherwise than in the name
of the Fund or a nominee of the Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver to the
Fund such proxies, all proxy soliciting materials and all notices relating to
such securities.
2.15. Communications Relating to Fund Portfolio Securities. The Custodian shall
transmit promptly to the Fund all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of call
and put options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from issuers of the
domestic securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the domestic securities
whose tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the Fund shall
notify the Custodian at least three business days prior to the date on which the
Custodian is to take such action.
2.16. Reports to Fund by Independent Public Accountants. The Custodian shall
provide the Fund, at such times as the Fund 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, which shall be of sufficient scope and in
sufficient detail,
as may reasonably be required by the Fund to provide reasonable assurance that
any material inadequacies would be disclosed by such examination, and, if there
are no such inadequacies, shall so state.
3. Duties of the Custodian with Respect to Property of the Fund Held Outside of
the United States. The provisions of this Article 3 shall apply to the duties of
the Custodian as they relate to foreign securities held outside the United
States.
3.1 Appointment of Chase as Subcustodian. The Custodian is authorized and
instructed by the Fund to employ Chase Manhattan Bank N.A. ("Chase") as
subcustodian for the Fund's foreign securities (including cash incidental to
transactions in such securities) on the terms and conditions set forth in the
Subcustody Contract between the Custodian and Chase which is attached hereto as
Exhibit A (the "Subcustody Contract"). The Custodian acknowledges that it has
entered into the Subcustody Contract and hereby agrees to provide such services
to the Fund and in accordance with such Subcustody Contract as necessary for
foreign custody services to be provided pursuant thereto.
3.2 Standard of Care; Liability. Notwithstanding anything to the contrary in
this Contract, the Custodian shall not be liable to the Fund for any loss,
damage, cost, expense, liability or claim arising out of or in connection with
the maintenance of custody of the Fund's foreign securities by Chase or by any
other banking institution or securities depository employed pursuant to the
terms of the Subcustody Contract, except that the Custodian shall be liable for
any such loss, damage, cost, expense, liability or claim directly resulting from
the failure of the Custodian to exercise reasonable care in the performance of
its duties hereunder.
At the election of the Fund, the Fund shall be entitled to be subrogated to the
rights of the Custodian under the Subcustody Contract with respect to any claim
arising hereunder against Chase or any other banking institution or securities
depository employed by Chase if and to the extent that the Fund has not been
made whole therefor.
3.3 Fund's Responsibility for Rules and Regulations. As between the Custodian
and the Fund, the Fund shall be solely responsible to assure that the
maintenance of foreign securities and cash pursuant to the terms of the
Subcustody Contract comply with all applicable rules, regulations,
interpretations and orders of the Securities and Exchange Commission, and the
Custodian assumes no responsibility and makes no representations as to such
compliance.
4. Payments for Repurchases or Redemptions of Shares of the Fund. From such
funds as may be available for the purpose but subject to the limitations of the
Articles of Incorporation and any applicable votes of the Board of Directors of
the Fund 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 their Shares. In connection with the redemption or repurchase of Shares of
the Fund, 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 the Fund, the Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the Fund 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 Fund and the
Custodian.
5. Proper Instructions. Proper Instructions as used throughout this Contract
means a writing signed or initialed by one or more person or persons as the
Board of Directors 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 Fund 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 Directors of the Fund accompanied by a detailed description of
procedures approved by the Board of Directors, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Directors and the Custodian are satisfied
that such procedures afford adequate safeguards for the Fund's assets.
6. Actions Permitted without Express Authority. The Custodian may in its
discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling securities
or other similar items relating to its duties under this Contract, provided that
all such payments shall be accounted for to the Fund;
2) surrender securities in temporary form for securities in definitive form;
3) endorse for collection, in the name of the Fund, 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 Fund except as otherwise directed by the Board of
Directors of the Fund.
7. 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 Fund. The Custodian may receive and
accept a certified copy of a vote of the Board of Directors of the Fund 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 Directors
pursuant to the Articles of Incorporation 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.
8. 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
Directors of the Fund to keep the books of account of the Fund and/or compute
the net asset value per share of the outstanding shares of the Fund or, if
directed in writing to do so by the Fund, 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 the Fund as described in
the Fund's currently effective prospectus and shall advise the Fund and the
Transfer Agent daily of the total amounts of such net income and, if instructed
in writing by an officer of the Fund 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 the
Fund shall be made at the time or times described from time to time in the
Fund's currently effective prospectus.
9. Records. The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be the
property of the Fund 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 Fund and
employees and agents of the Securities and Exchange Commission. The Custodian
shall, at the Fund's request, supply the Fund with a tabulation of securities
owned by the Fund and held by the Custodian and shall, when requested to do so
by the Fund and for such compensation as shall be agreed upon between the Fund
and the Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountant. The Custodian shall take all
reasonable action, as the Fund may from time to time request, to obtain from
year to year favorable opinions from the Fund's independent accountants with
respect to its activities hereunder in connection with the preparation of the
Fund's Form N-lA, and Form N-SAR or other annual reports to the Securities and
Exchange Commission and with respect to any other requirements of such
Commission.
11. 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 Fund and the Custodian.
12. 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, but shall be
kept indemnified by the Fund for any action taken or omitted by it in the proper
execution of instructions from the Fund. It shall be entitled to rely on and may
act upon advice of counsel for the Fund on all matters and shall be without
liability for
any action reasonably taken or omitted pursuant to such advice. Notwithstanding
the foregoing, the responsibility of the Custodian with respect to redemptions
effected by check shall be in accordance with a separate agreement entered into
between the Custodian and the Fund.
The Custodian shall be liable for the acts and omissions of Chase appointed as
its subcustodian pursuant to the provision of Article 3 to the extent set forth
in Sections 3.2 and 3.3 hereof.
The Fund 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 it or its nominee's own negligent action, negligent failure to act or
willful misconduct. The Custodian is authorized to charge any account of the
Fund for such items 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
the Fund for any purpose which results in the Fund incurring an overdraft at the
end of any business day or for extraordinary or emergency purposes during any
business day, the Fund hereby grants to the Custodian a security interest in and
pledges to the Custodian securities held for it by the Custodian, in an amount
not to exceed five percent of the applicable Fund's gross assets, the specific
securities to be designated in writing from time to time by the Fund or its
investment adviser (the "Pledged Securities"). Should the Fund 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.
13. 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 act under Section 2.11 hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the Board
of Directors of the Fund has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Directors has reviewed the use the Fund of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended and that the Custodian shall not act under
Section 2.11.A hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors has approved the
initial use of the Direct Paper System and the receipt of an annual certificate
of the Secretary or an Assistant Secretary that the Board of Directors has
reviewed the use by the Fund of the Direct Paper System; provided further,
however, (a) that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Articles of Incorporation, and (b) that the Fund may at any time by
action of its Board of Directors (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 Fund 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.
14. Successor Custodian. If a successor custodian shall be appointed by the
Board of Directors of the Fund, 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 then held by it hereunder and shall transfer to an account of the
successor custodian all of the Fund's securities 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 Directors of
the Fund, 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 Directors 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 and all instruments
held by the Custodian relative thereto and all other property held by it under
this Contract and to transfer to an account of such successor custodian all of
the Fund's securities 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 termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors 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.
15. Interpretive and Additional Provisions. In connection with the operation of
this Contract, the Custodian and the Fund 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 Articles of Incorporation of the Fund.
No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
16. 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.
17. Prior Contracts. This Contract supersedes and terminates, as of the date
hereof, the existing custodian contract between the Fund and the Custodian. Any
reference to the custodian contract between the Fund and the Custodian in
documents executed prior to the date hereof shall be deemed to refer to this
Contract.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 25th day of April, 1988.
ATTEST MASSACHUSETTS CAPITAL
DEVELOPMENT FUND
XXXXXX X. XXXXX By: XXXXXXX X. XXXXXX
Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxx
ATTEST STATE STREET BANK &
TRUST COMPANY
X. XXXXXXX By: ILLEGIBLE
X. Xxxxxx Illegible
Assistant Secretary Vice President
