EXHIBIT NO. 99.7(f)
AMENDMENT NO. 2 TO CUSTODIAN AGREEMENT
This Amendment No. 2 ("Amendment") to the Custodian Agreement is made as of
May 2, 2003 by and among each of the business trusts listed on Schedule A hereto
(each, a "Trust"), State Street Bank and Trust Company (the "Custodian") and MFS
Service Center, Inc., a Delaware corporation (the "Transfer Agent"). Capitalized
terms used in this Amendment without definition shall have the respective
meanings given to such terms in the Custodian Agreement referred to below.
WHEREAS, each Trust and the Custodian entered into a Custodian Agreement
dated as of July 2, 2001 (as amended and in effect from time to time, the
"Agreement"); and
WHEREAS, certain Portfolios of the Trusts (the "Master/Fund of Fund
Portfolios") will primarily invest in shares of one or more other Portfolios
listed on Exhibit A of the Agreement, pursuant to applicable exemptions from the
provisions of Section 12(d) of the 1940 Act;
WHEREAS, the Master/Fund of Fund Portfolios desire to use the Transfer
Agent as the functional equivalent of a securities depositary for their
investments in such other Portfolios, and to have their interest in those other
Portfolios' shares recorded by book entry on the Transfer Agent's records;
WHEREAS, the staff of the SEC, through a series of no-action letters, has
established conditions under which the Master/Fund of Fund Portfolios' interest
in those other Portfolios' shares may be maintained on the Transfer Agent's
books, as set forth in Addendum 1 hereto; and
WHEREAS, the parties hereto desire to amend the Agreement to accommodate
these arrangements and any similar arrangements entered into in the future by
the Portfolios;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
agreements hereinafter contained, the parties hereby agree to amend the
Agreement, pursuant to the terms thereof, as follows:
1. SECTION 2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT.
Section 2 of the Agreement is hereby amended by adding the following sentence
to the end of the first paragraph:
"With respect to uncertificated shares (the "Underlying Shares") of
registered investment companies, the maintenance of Custodian records that
identify the Underlying Shares as being recorded in the Custodian's
name on behalf of the Portfolios will be deemed custody for purposes
hereof."
2. SECTION 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE TRUSTS
HELD BY THE CUSTODIAN IN THE UNITED STATES.
Section 3 of the Agreement is hereby amended by adding the following
provision:
"Section 3.9A Deposit of Fund Assets with the Transfer Agent. Underlying
Shares of another Portfolio ("Underlying Portfolio Shares") may be
deposited and/or maintained in an account or accounts maintained with the
Transfer Agent. The Transfer Agent shall be deemed to be acting as if it
is a "securities depository" for purposes of Rule 17f-4 under the 1940
Act. The Trust hereby directs the Custodian to deposit and/or maintain
such securities with the Transfer Agent, subject to the following
provisions:
1) The Custodian shall keep Underlying Portfolio Shares owned by a
Portfolio with the Transfer Agent provided that such securities are
maintained in a separate account or accounts on the books and
records of the Transfer Agent in the name of the Custodian as
custodian for the Portfolio.
2) The records of the Custodian with respect to the Underlying
Portfolio Shares which are maintained with the Transfer Agent shall
identify by book-entry those Underlying Portfolio Shares belonging
to a Portfolio.
3) The Custodian shall pay for Underlying Portfolio Shares purchased
for the account of a Portfolio upon (i) a determination by the
Custodian that such Underlying Portfolio Shares have been purchased
and will be transferred to the account of the Custodian, on behalf
of the Portfolio, on the books and records of the Transfer Agent,
and (ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Portfolio.
The Trust acknowledges that the Custodian will only pay for
Underlying Portfolio Shares under this Section on the basis of
standing or periodic Proper Instructions. The Custodian shall
receive confirmation from the Transfer Agent of the purchase of such
securities and the transfer of such securities to the Custodian's
account with the Transfer Agent only after such payment is made. The
Custodian shall transfer Underlying Portfolio Shares redeemed for
the account of a Portfolio (i) upon a determination by the Custodian
that such securities have been redeemed and that payment for such
securities will be transferred to the Custodian, 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. The Custodian will
receive confirmation from the Transfer Agent of the redemption of
such securities and payment therefore only after such securities are
redeemed. Copies of all trade summary sheets from the Custodian
reflecting purchases and sales of Underlying Portfolio Shares for
the account of a Portfolio shall identify the Portfolio, be
maintained for the Portfolio by the Custodian, and shall be provided
upon request to the Trust on behalf of the Portfolio, together with
any daily or other periodic transaction sheets reflecting each day's
transactions for a Portfolio as reflected on the books and records
of the Transfer Agent. The Custodian shall deliver to the Trust such
reports on its system of internal accounting controls as the Trust
may from time to time request.
4) The Custodian shall not be liable to the Trust or any Portfolio for
any loss or damage to the Trust or any Portfolio resulting from
maintenance of Underlying Portfolio Shares with the Transfer Agent
except for losses resulting directly from the negligence, misfeasance
or misconduct of the Custodian or any of its agents or of any of its
or their employees.
5) The Trust, on behalf of the Portfolio, the Transfer Agent and the
Custodian shall comply with the applicable conditions set forth in
Addendum 1 hereto, so long as those conditions are required to be
complied with by the SEC or the staff of the SEC."
3. CONTINUING AGREEMENT.
Except as expressly amended by the Amendment No. 2 to Custodian Agreement,
the provisions of the Agreement shall remain in full force and effect.
4. ADDITION OF PORTFOLIOS TO SCHEDULE A
Schedule A of this Amendment listing the Master/Fund of Fund Portfolios may
be amended from time to time in the manner provided in section 15(a) of the
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
No. 2 to Custodian Agreement to be executed in its name and behalf by its duly
authorized representative(s) as of the date first written above.
EACH OF THE ENTITIES SET FORTH ON
SCHEDULE A TO THE AMENDMENT
By: XXXXX X. XXXXXXXXX, XX.
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Name: Xxxxx X. Xxxxxxxxx, Xx.
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Title: Assistant Secretary and Assistant
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Clerk
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STATE STREET BANK AND TRUST COMPANY
By: XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
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Title: Executive Vice President
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MFS SERVICE CENTER, INC.
By: XXXXX X. XXXXXXX
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Name: Xxxxx X. Xxxxxxxx
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Title: President
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SCHEDULE A TO AMENDMENT
MFS SERIES TRUST IX, on behalf of its series:
MFS Research Bond Fund J
MFS SERIES TRUST X, on behalf of its series:
MFS Conservative Allocation Fund
MFS Moderate Allocation Fund
MFS Growth Allocation Fund
MFS Aggressive Growth Allocation Fund
ADDENDUM 1
CONDITIONS REQUIRED BY STAFF OF SEC
PORTFOLIO CONDITIONS
1. The Portfolio must maintain a system that is reasonably designed to prevent
unauthorized officers' instructions and which will provide, at least, for
the form, content, and means of giving, recording and reviewing the
instructions.
2. The Board of Trustees overseeing the Portfolio must approve the arrangement
with the Transfer Agent and review it as appropriate.
3. The number of persons authorized to transmit instructions by or on behalf
of the Portfolio to the Transfer Agent must be limited (e.g., to 5).
4. Persons transmitting instructions by or on behalf of the Portfolio to the
Transfer Agent must use passwords to insure that they are properly
authorized.
5. Internal accounting controls by or on behalf of the Portfolio must be
employed that subject all transaction sheets reflecting purchase,
redemption or exchange activity by the Portfolio and maintained by the
Transfer Agent to daily proof against the Portfolio's transaction
authorizations.
6. The Portfolio's independent accountants must perform at least three
verifications of the Portfolio's investments, at least two of which must be
performed without prior notice to the Portfolio.
TRANSFER AGENT CONDITIONS
7. The Transfer Agent must transmit daily transaction sheets reflecting
purchase, redemption or exchange activity by the Portfolio to someone at
the Portfolio or someone acting on the Portfolio's behalf who is not the
same person who transmitted the instruction to the Transfer Agent.
8. The Transfer Agent must maintain segregated accounts representing any
assets held for the Custodian.
CUSTODIAN CONDITIONS
9. The Custodian must maintain the Portfolio's securities (i.e., investment in
Underlying Shares) directly with the Transfer Agent in a separate account
in its name.
10. The Custodian must send to the Portfolio or someone acting on behalf of the
Portfolio copies of all transaction sheets reflecting purchase, redemption
or exchange activity by the Portfolio received from the Transfer Agent of
any transfer to or from the account of the Portfolio.
11. The Custodian must send to the Portfolio or someone acting on behalf of the
Portfolio reports regarding the Custodian's system of internal accounting
control as the
Portfolio or someone acting on behalf of the Portfolio may reasonably
request from time to time.
