EXHIBIT NO. 99.7(a)
CUSTODIAN AGREEMENT
AGREEMENT made as of the 18th day of December, 2006 between each of the
Investment Companies listed on Appendix A hereto, as the same may be amended
from time to time (each a "Fund" and collectively the "Funds") and State Street
Bank and Trust Company (the "Custodian"), and effective as to each Fund as set
forth on Appendix A.
WITNESSETH
WHEREAS, each Fund is or may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio of
cash, securities and other assets (all such existing and additional series now
or hereafter listed on Appendix A attached hereto being hereinafter referred to
individually, as a "Portfolio," and collectively, as the "Portfolios"); and
WHEREAS, each Fund desires to appoint the Custodian as custodian on behalf
of each of its Portfolios in accordance with the provisions of the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, under the terms and conditions set forth in this Agreement, and the
Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of each of its Portfolios, each Fund hereby employs and appoints
the Custodian as a custodian, subject to the terms and provisions of this
Agreement. Each Fund shall deliver to the Custodian, or shall cause to be
delivered to the Custodian, cash, securities and other assets owned by each of
its Portfolios from time to time during the term of this Agreement and shall
specify to which of its Portfolios such cash, securities and other assets are to
be specifically allocated. The Custodian hereby accepts its appointment as
custodian, subject to the terms and provisions of this Agreement, and agrees to
perform the services described herein in accordance with the standard of care
set forth in Section 5.01(a) hereof. The Custodian shall not be responsible for
any property of any Portfolio held or received by such Portfolio (i) not
delivered to the Custodian, or (ii) that is delivered out pursuant to Proper
Instructions (as hereinafter defined).
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ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties
set forth in this Article II. Pursuant to and in accordance with Article IV
hereof, the Custodian may appoint one or more Subcustodians or may maintain
assets with one or more Eligible Securities Depositories (each as hereinafter
defined) to exercise the powers and perform the duties of the Custodian set
forth in this Article II and references to the Custodian in this Article II
shall include any Subcustodian or Eligible Securities Depository so appointed or
utilized, as applicable.
Section 2.01. Safekeeping. The Custodian shall keep safely all cash,
securities and other assets of each Fund's Portfolios delivered to the Custodian
and, on behalf of such Portfolios, the Custodian shall, from time to time,
accept delivery of cash, securities and other assets for safekeeping.
Section 2.02. Manner of Holding Securities and Other Assets.
(a) Except to the extent precluded by Section 8-501(d) of the
Uniform Commercial Code as in effect in The Commonwealth of Massachusetts
("UCC"), the Custodian shall hold all securities and other assets, other
than cash and Bank Loans (as hereinafter defined), of a Fund's Portfolio
that are delivered to it hereunder in a "securities account" with the
Custodian for and in the name of such Portfolio and shall treat all such
assets, other than cash and Bank Loans, as "financial assets" as those
terms are used in the UCC. The Custodian shall at all times hold securities
or other financial assets held for each Fund's Portfolios either: (i) by
physical possession of the certificated securities or instruments
representing such financial assets, in either registered or bearer form; or
(ii) in book-entry form by maintaining "security entitlements," within the
meaning of the UCC, with respect to such financial assets with (A) a
Securities System (as hereinafter defined) in accordance with the
provisions of Section 2.23(a) below or (B) an Eligible Securities
Depository in accordance with the provisions of Section 2.23(b) below. The
standards for the performance of the duties and obligations of the
Custodian under UCC Article 8, including without limitation Section 8-504
through Section 8-508, with respect to securities entitlements of a Fund or
its Portfolios shall be as set forth under this Agreement.
(b) The Custodian shall at all times hold registered securities
of each Portfolio in the name of the Custodian, the Portfolio or a nominee
of either of them, unless specifically directed by Proper Instructions (as
hereinafter defined) to hold such registered securities in so-called street
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name; provided that, in any event, all such securities and other assets
shall be held in an account of the Custodian containing only assets of a
Portfolio, or only assets held by the Custodian as a fiduciary or custodian
for customers; and provided further, that the records of the Custodian
shall indicate at all times the Portfolio or other customer for which such
securities and other assets are held in such account and the respective
interests therein.
(c) Notwithstanding the provisions of the foregoing paragraphs of
this Section 2.02, the Custodian shall have certain responsibilities with
respect to the shares (the "Underlying Shares") of certain open-end
management investment companies managed by Massachusetts Financial Services
Company ("MFS") or its affiliates or successors or another investment
adviser (the "Underlying Funds") owned by one or more of the MFS Fund of
Funds as listed on Appendix D attached hereto, as the same may be amended
from time to time in accordance with the provisions of Section 9.07(d)
hereof (each a "Fund of Funds Portfolio" and collectively the "Fund of
Funds Portfolios"), and deposited and/or maintained in an account or
accounts maintained directly with the transfer agent or a designated
sub-transfer agent of each such Underlying Fund (an "Underlying Fund
Transfer Agent"), subject to and in accordance with the following
provisions:
(i) Upon receipt of a confirmation or statement from an
Underlying Fund Transfer Agent that such Underlying Fund Transfer Agent is
holding or maintaining Underlying Shares in the name of the Custodian (or a
nominee of the Custodian) for the benefit of a Fund of Funds Portfolio, the
Custodian (A) shall identify by book-entry that such Underlying Shares are
being held by it for the benefit of the Fund of Funds Portfolio in the
Custodian's name or its nominee's name, as the custodian for such Fund of
Funds Portfolio and (B) shall maintain copies of such confirmations or
statements received from an Underlying Fund Transfer Agent, which shall be
provided to the Fund of Funds Portfolio upon its reasonable request made
from time to time, but in no event more frequently than monthly.
(ii) The Custodian shall provide to any Fund such reports
regarding the Custodian's system of internal accounting controls in the
manner as is set forth in Section 2.28 hereof.
(iii) In respect of the purchase of Underlying Shares for
the account of a Fund of Funds Portfolio, upon receipt of Proper
Instructions, the Custodian shall pay out monies of such Fund of Funds
Portfolio as so directed, and record such payment from the account of such
Fund of Funds Portfolio on the Custodian's books and records.
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(iv) In respect of the sale or redemption of Underlying
Shares for the account of a Fund of Funds Portfolio, upon receipt of Proper
Instructions, the Custodian shall transfer such Underlying Shares as so
directed, record such transfer from the account of such Fund of Funds
Portfolio on the Custodian's books and records and, upon the Custodian's
receipt of the proceeds therefor, record such payment for the account of
such Fund of Funds Portfolio on the Custodian's books and records.
(v) The Custodian shall not be liable to any Fund for any
loss or damage to the Fund or any Fund or Funds Portfolio resulting from
the maintenance of Underlying Shares with the Underlying Fund Transfer
Agent except for losses resulting directly from the fraud, negligence or
willful misconduct of the Custodian or any of its agents or of any of its
or their employees.
(vi) With respect to Underlying Shares, the holding of
confirmation statements that identify the Underlying Shares as being
recorded in the Custodian's name on behalf of the Fund of Fund Portfolios
will be deemed custody for the purposes hereof.
Section 2.03. Security Purchases. Upon receipt of Proper Instructions, the
Custodian shall pay for and receive securities purchased for the account of a
Portfolio, provided that, payment shall be made by the Custodian only upon
receipt of the securities by: (1) the Custodian; (2) a clearing corporation of a
national securities exchange of which the Custodian is a member; (3) a
Securities System; or (4) an Eligible Securities Depository. Notwithstanding the
foregoing, upon receipt of Proper Instructions: (i) in the case of a repurchase
agreement, the Custodian may release funds to a Securities System prior to the
receipt of advice from the Securities System that the securities underlying such
repurchase agreement have been transferred by book-entry into the Account (as
hereinafter defined) maintained with such Securities System by the Custodian,
provided that, the Custodian's instructions to the Securities System require
that the Securities System may make payment of such funds to the other party to
the repurchase agreement only upon transfer by book-entry of the securities
underlying the repurchase agreement into the Account; (ii) in the case of time
deposits, call account deposits, currency deposits, and other deposits, foreign
exchange transactions, futures contracts or options, pursuant to Sections 2.09,
2.10, 2.12 and 2.13 hereof, the Custodian may make payment therefor before
receipt of an advice or confirmation evidencing said deposit or entry into such
transaction; (iii) in the case of the purchase of securities, the settlement of
which occurs outside of the United States of America, the Custodian may make
payment therefor and receive delivery of such securities in accordance with
local custom and practice generally accepted by
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Institutional Clients (as hereinafter defined) in the country in which the
settlement occurs, but in all events subject to the standard of care set forth
in Section 5.01(a) hereof; (iv) in the case of the purchase of securities in
which, in accordance with standard industry custom and practice generally
accepted by Institutional Clients with respect to such securities, the receipt
of such securities and the payment therefor take place in different countries,
the Custodian may receive delivery of such securities and make payment therefor
in accordance with standard industry custom and practice for such securities
generally accepted by Institutional Clients, but in all events subject to the
standard of care set forth in Section 5.01(a) hereof; and (v) in the case of the
purchase of Underlying Fund shares for a Fund of Funds Portfolio, the Custodian
shall pay for and receive such Underlying Fund shares purchased for the account
of a Fund of Funds Portfolio in accordance with Section 2.02(c) hereof. For
purposes of this Agreement, an "Institutional Client" shall mean a major
commercial bank, corporation, insurance company, or substantially similar
institution, which, as a substantial part of its business operations, purchases
or sells securities and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper Instructions,
the Custodian shall exchange securities held by it for the account of a
Portfolio for other securities in connection with any reorganization,
recapitalization, split-up of shares, change of par value, conversion or other
event relating to the securities or the issuer of such securities, and shall
deposit any such securities in accordance with the terms of any reorganization
or protective plan. The Custodian shall, without receiving Proper Instructions:
surrender securities in temporary form for definitive securities; surrender
securities for transfer into the name of the Custodian, a Portfolio or a nominee
of either of them, as permitted by Section 2.02(b); and surrender securities for
a different number of certificates or instruments representing the same number
of shares or same principal amount of indebtedness, provided that the securities
to be issued will be delivered to the Custodian or a nominee of the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper Instructions, the
Custodian shall make delivery of securities which have been sold for the account
of a Portfolio, but only against payment therefor in the form of: (1) cash,
certified check, bank cashier's check, bank credit, or bank wire transfer; (2)
credit to the account of the Custodian with a clearing corporation of a national
securities exchange of which the Custodian is a member; or (3) credit to the
Account of the Custodian with a Securities System or Eligible Securities
Depository, in accordance with the provisions of Section 2.23(a) and Section
2.23(b) hereof. Notwithstanding the foregoing, upon the receipt of Proper
Instructions: (i) in the case of the sale of securities, the settlement of which
occurs outside of the United States of America, such securities shall be
delivered and paid for in accordance with local custom and practice generally
accepted by Institutional Clients in the country in which the settlement occurs,
but in all events subject to the standard of care set forth in Section 5.01(a)
hereof; (ii) in the case of the sale of securities in which, in accordance with
standard industry custom and practice
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generally accepted by Institutional Clients with respect to such securities, the
delivery of such securities and receipt of payment therefor take place in
different countries, the Custodian may deliver such securities and receive
payment therefor in accordance with standard industry custom and practice for
such securities generally accepted by Institutional Clients, but in all events
subject to the standard of care set forth in Section 5.01(a) hereof; (iii) in
the case of securities held in physical form, such securities shall be delivered
and paid for in accordance with "street delivery custom" to a broker or its
clearing agent, against delivery to the Custodian of a receipt for such
securities, provided that the Custodian shall have taken reasonable steps to
ensure prompt collection of the payment for, or the return of, such securities
by the broker or its clearing agent, and provided further that the Custodian
shall not be responsible for the selection of or the failure or inability to
perform of such broker or its clearing agent; and (iv) in the case of the sale
of Underlying Fund shares of a Fund of Funds Portfolio processed through the
Underlying Fund Transfer Agent, the Custodian shall release such Underlying Fund
shares, provided that, the Custodian shall act in accordance with Section
2.02(c) hereof.
Section 2.06. Depositary Receipts. Upon receipt of Proper Instructions, the
Custodian shall surrender securities to the depositary used for such securities
by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter referred to, collectively, as "ADRs"), against a written
receipt therefor adequately describing such securities and written evidence
satisfactory to the Custodian that the depositary has acknowledged receipt of
instructions to issue ADRs with respect to such securities in the name of the
Custodian or a nominee of the Custodian, for delivery to the Custodian at such
place as the Custodian may from time to time designate. Upon receipt of Proper
Instructions, the Custodian shall surrender ADRs to the issuer thereof, against
a written receipt therefor adequately describing the ADRs surrendered and
written evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
securities underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Notwithstanding anything
contained in this Agreement to the contrary, upon receipt of Proper
Instructions, the Custodian shall be held to the exercise of reasonable care in
taking the following actions: (a) deliver warrants, puts, calls, rights or
similar securities to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale, provided that the new
securities, cash or other assets, if any, acquired as a result of such actions
are to be delivered to
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the Custodian; and (b) deposit securities upon invitations for tenders thereof,
provided that the consideration for such securities is to be paid or delivered
to the Custodian, or the tendered securities are to be returned to the
Custodian; provided, the Custodian shall not be liable for any late exercise of
any right or power in respect of a Portfolio's securities unless (i) the
Custodian has received a Proper Instruction with regard to the exercise of any
such right or power and (ii) the Custodian or the relevant Subcustodian is in
actual possession of the Portfolio's securities, in both cases prior to the
deadline established by the Custodian in its reasonable discretion and
communicated to the Portfolio. The Custodian will furnish promptly to the Fund,
on behalf of its applicable Portfolio, material information concerning
subscription rights, bonus issue, stock repurchase plan, redemption, exchange,
tender offer or similar actions relating to the Portfolio's securities received
by Custodian (or any Subcustodian) from an issuer of any of the Portfolio's
securities, or from a securities information source customarily used by prudent
professional global custodians.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall receive and
collect all stock dividends, rights and other items of like nature and,
notwithstanding anything contained in this Agreement to the contrary, upon
receipt of Proper Instructions, shall be held to the exercise of reasonable care
in taking action with respect to the same as directed in such Proper
Instructions; provided, the Custodian shall not be liable for any late exercise
of any right or similar action in respect of a Portfolio's securities unless (i)
the Custodian has received a Proper Instruction with regard to the exercise of
any such right or action and (ii) the Custodian or the relevant Subcustodian is
in actual possession of the Portfolio's securities, in both cases prior to the
deadline established by the Custodian in its reasonable discretion and
communicated to the Portfolio.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, a Fund on behalf of any applicable
Portfolio relating to compliance with the rules of the Options Clearing
Corporation or of any registered national securities exchange or similar
organization(s), the Custodian shall: (a) receive confirmations or other
documents, if any, evidencing the purchase or writing of an option on a security
or securities index by the applicable Portfolio; (b) deposit and maintain in a
segregated account, securities (on the Custodian's books and records, physically
or by book-entry in a Securities System), cash or other assets; and (c) pay,
release and/or transfer such securities, cash or other assets in accordance with
notices or other communications evidencing the expiration, termination or
exercise of such options furnished by the Options Clearing Corporation, the
securities or options exchange on which such options are traded, or such other
organization as may be responsible for handling such option transactions.
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Each Fund, on behalf of its applicable Portfolios, and the broker-dealer shall
be responsible for the sufficiency of assets held in any segregated account
established in compliance with applicable margin maintenance requirements and
the performance of other terms of any option contract.
Section 2.10 Futures Contracts. Upon receipt of Proper Instructions, or
pursuant to the provisions of any futures margin procedural agreement among a
Fund, on behalf of any applicable Portfolio, the Custodian and any futures
commission merchant (a "Procedural Agreement"), the Custodian shall: (a) receive
and retain confirmations, if any, evidencing the purchase or sale of a futures
contract or an option on a futures contract by the applicable Portfolio; (b)
segregate on the Custodian's books and records, for the benefit of the
applicable futures commission merchant, cash or securities of a Portfolio to
secure the obligations of such Portfolio under any futures contracts or options
on futures contracts written by the Portfolio for the benefit of a futures
commission merchant; (c) deliver out to a futures commission merchant to a
broker's margin account (a "Broker's Futures Margin Account") cash, securities
and other assets designated as initial, maintenance or variation "margin"
deposits, such amounts being intended to secure the applicable Portfolio's
performance of its obligations under any futures contracts purchased or sold or
any such options on futures contracts written by the Portfolio; and (d) accept
delivery of such assets back from a futures commission merchant holding a
Broker's Futures Margin Account. Each Fund, on behalf of its applicable
Portfolios, and the applicable futures commission merchant shall be responsible
for the sufficiency of assets held in a Broker's Futures Margin Account in
compliance with applicable margin maintenance requirements and the performance
of any futures contract or option on a futures contract in accordance with its
terms. Any Fund assets held in a Broker's Futures Margin Account by a futures
commission merchant shall be deemed to be in the custody of such futures
commission merchant, and the Custodian shall not be liable for the acts or
omissions of any futures commission merchant during the period such futures
margin is in the futures commission merchant's custody.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the Custodian
shall deliver securities of a Portfolio to lenders or their agents, or otherwise
establish a segregated account as agreed to by the applicable Fund on behalf of
such Portfolio and the Custodian, as collateral for borrowings effected by such
Portfolio, provided that such borrowed money is paid by the lender (a) to or
upon the Custodian's order, as Custodian for such Portfolio, and (b)
concurrently with delivery of such securities.
Section 2.12. Interest Bearing Deposits. Upon receipt of Proper
Instructions directing the Custodian to purchase interest bearing fixed term and
call deposits (hereinafter referred to collectively, as "Interest Bearing
Deposits") for
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the account of a Portfolio, the Custodian shall purchase such Interest Bearing
Deposits in the name of the Portfolio with such banks or trust companies
(including the Custodian, any Subcustodian or any subsidiary or affiliate of the
Custodian) (hereinafter referred to as "Banking Institutions") and in such
amounts as the applicable Fund may direct pursuant to Proper Instructions. Such
Interest Bearing Deposits may be denominated in U.S. Dollars or other
currencies, as the applicable Fund on behalf of its Portfolio may determine and
direct pursuant to Proper Instructions. The Custodian shall include in its
records with respect to the assets of each Portfolio appropriate notation as to
the amount and currency of each such Interest Bearing Deposit, the accepting
Banking Institution and all other appropriate details, and shall retain such
forms of advice or receipt evidencing such account, if any, as may be forwarded
to the Custodian by the Banking Institution. The responsibilities of the
Custodian to each Fund for Interest Bearing Deposits accepted on the Custodian's
books in the United States of America on behalf of the Fund's Portfolios shall
be that of a U.S. bank for a similar deposit. With respect to Interest Bearing
Deposits other than those accepted on the Custodian's books, (a) the Custodian
shall be responsible for the collection of income as set forth in Section 2.15
and the transmission of cash and instructions to and from such accounts; and (b)
the Custodian shall have no duty with respect to the selection of the Banking
Institution or, so long as the Custodian acts in accordance with Proper
Instructions, for the failure of such Banking Institution to pay upon demand.
Upon receipt of Proper Instructions, the Custodian shall take such reasonable
actions as the applicable Fund deems necessary or appropriate to cause each such
Interest Bearing Deposit account to be insured to the maximum extent required by
all applicable deposit insurers including, without limitation, the Federal
Deposit Insurance Corporation.
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Section 2.13. Foreign Exchange Transactions.
(a) Foreign Exchange Transactions Other Than as Principal. Upon
receipt of Proper Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery on behalf of and for the account of a Portfolio with such
currency brokers or Banking Institutions as the applicable Fund may
determine and direct pursuant to Proper Instructions. The Custodian shall
be responsible for the transmission of cash and instructions to and from
the currency broker or Banking Institution with which the contract or
option is made, and the maintenance of proper records as set forth in
Section 2.26.
(b) Foreign Exchange Contracts as Principal. The Custodian shall
not be obligated to enter into foreign exchange transactions as principal.
However, if the Custodian has made available to a Fund its services as a
principal in foreign exchange transactions, upon receipt of Proper
Instructions, the Custodian shall enter into foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future
delivery on behalf of and for the account of a Portfolio of such Fund with
the Custodian as principal. The Custodian shall be responsible for the
selection of the currency brokers or Banking Institutions and the failure
of such currency brokers or Banking Institutions to comply with the terms
of any contract or option.
(c) Payments. Notwithstanding anything to the contrary contained
herein, upon receipt of Proper Instructions the Custodian may, in
connection with a foreign exchange contract, make free outgoing payments of
cash in the form of U.S. Dollars or foreign currency prior to receipt of
confirmation of such foreign exchange contract or confirmation that the
countervalue currency completing such contract has been delivered or
received.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions,
Custodian shall, in connection with loans of securities by a Portfolio, deliver
securities of such Portfolio to the borrower thereof prior to receipt of the
collateral, if any, for such borrowing; provided that, in cases of loans of
securities secured by cash collateral, the Custodian's instructions to the
Securities System shall require that the Securities System deliver the
securities of the Portfolio to the borrower thereof only upon receipt of the
collateral for such borrowing. Upon receipt of Proper Instructions, the
Custodian shall release the collateral received with respect to a loan of
securities to the borrower against receipt of the loaned securities. The
Custodian shall deliver out securities in connection with any lending
arrangements made by the Fund on behalf of
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one or more Portfolios to a third-party lending agent or such lending agent's
custodian in accordance with Proper Instructions (which may not provide for
contemporaneous receipt by the Custodian of collateral therefor) as agreed upon
from time to time by the Custodian and the Fund on behalf of the Portfolio.
Section 2.15. Bank Loans. The Custodian shall, in connection with bank
loans, bank loan participations and bank loan assignments (whether in the U.S.
or outside the U.S.) ("Bank Loans"), record, hold, and segregate for the account
of a Fund, on behalf of its applicable Portfolios, all instruments,
certificates, agreements and/or other documents evidencing such Bank Loans
entered into by the Fund, on behalf of its applicable Portfolios (collectively,
"Financing Documents") which the Custodian may receive. The Custodian shall be
under no obligation to examine the contents or determine the sufficiency of any
Financing Documents or to provide any certification with respect thereto. The
Custodian shall be entitled to assume the genuineness, sufficiency and
completeness of any Financing Documents received. The Custodian shall maintain
records of all locations of such Financing Documents, together with a current
inventory thereof. Upon receipt of Proper Instructions, the Custodian shall
promptly deliver to a Fund, on behalf of the applicable Portfolio, or its
designee, any Financing Documents being held on behalf of such Portfolio. Each
Fund, on behalf of the applicable Portfolios, shall cause the Custodian to be
named as its nominee for any Bank Loan and shall otherwise provide for the
direct payment of all amounts due and payable to such Fund, on behalf of the
applicable Portfolios, with respect to any Bank Loan. In addition, the Fund
shall provide the Custodian with information it receives from the bank or other
entity managing a Bank Loan or Financing Document regarding expected interest
and principal payments with respect to the Bank Loans. The Custodian shall
deliver to each applicable Fund regular reports with respect to its Bank Loans
and the Financing Documents with such frequency as may be mutually agreed. The
Custodian shall provide the Funds with prompt notice of any electronic
information it actually receives regarding the Bank Loans or Financing
Documents. The Custodian shall have no responsibilities or duties whatsoever
under this Agreement, with respect to Bank Loans or Financing Documents, except
for such responsibilities and duties as are expressly set forth herein.
Section 2.16. Collections.
(a) General Collections. The Custodian shall use reasonable
efforts, and shall use reasonable efforts to cause any Subcustodian, to:
(i) collect on a timely basis amounts due and payable to each Fund with
respect to portfolio securities and other assets of each of such Fund's
Portfolios; (ii) promptly credit to the account of each applicable
Portfolio all income and other payments relating to portfolio
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securities and other assets held by the Custodian hereunder upon
Custodian's receipt of such income or payments or as otherwise agreed in
writing by the Custodian and the applicable Fund; (iii) promptly endorse
and deliver any instruments required to effect such collections; (iv)
promptly execute ownership and other certificates and affidavits for all
federal, state and foreign tax purposes in connection with receipt of
income, capital gains or other payments with respect to portfolio
securities and other assets of each applicable Portfolio, or in connection
with the purchase, sale or transfer of such securities or other assets; and
(v) file on a timely basis any appropriate certificates or other affidavits
for the refund or reclaim of foreign taxes paid; provided, however, that
with respect to portfolio securities registered in so-called street name,
the Custodian shall use its best efforts to collect amounts due and payable
to each Fund with respect to its Portfolios. The Custodian shall promptly
notify each applicable Fund in writing by facsimile transmission, or in
such other manner as each such Fund and the Custodian may agree in writing,
if any amount payable with respect to portfolio securities or other assets
of the Portfolios of such Fund(s) is not received by the Custodian when
due. The Custodian shall not be responsible for the collection of amounts
due and payable with respect to portfolio securities or other assets that
are in default and for which the Custodian has not actually received
official notification (with respect to such Fund's Portfolio) regarding any
future income or other payments.
(b) Bank Loan Collections. In addition to its obligations under
Section 2.16(a), if principal payments with respect to a Bank Loan are not
received by the Custodian on the date on which they are due, or in the case
of interest payments, not received either on a scheduled interest payable
date or in the amount of their accrued interest payable ("Loan Payments"),
the Custodian shall promptly, but in no event later than the next
succeeding day that is not a Saturday, a Sunday or a day on which the
Custodian is closed for business (a "Business Day") after the Loan Payment
date, give telephonic notice, with confirmation by facsimile transmission,
to the party obligated under the Bank Loan or Financing Documents to make
such Loan Payment of its failure to make timely payment.
Section 2.17. Dividends, Distributions and Redemptions. The Custodian shall
promptly release funds or securities: (a) upon receipt of Proper Instructions,
to one or more Distribution Accounts (as hereinafter defined) designated by the
applicable Fund or Funds in such Proper Instructions; or (b) upon receipt of
Special Instructions (as hereinafter defined), as otherwise directed by the
applicable Fund or Funds, for the purpose of the payment of dividends or other
distributions to shareholders of each applicable Portfolio, and
12
payment to shareholders who have requested repurchase or redemption of their
shares of the Portfolio(s) (collectively, the "Shares"). For purposes of this
Agreement, a "Distribution Account" shall mean an account established at a
Banking Institution designated by the applicable Fund on behalf of one or more
of its Portfolios in Special Instructions.
Section 2.18. Proceeds from Shares Sold. The Custodian shall receive funds
representing cash payments received for Shares issued or sold from time to time
by the Funds, and shall promptly credit such funds to the account(s) of the
applicable Portfolio(s). The Custodian shall promptly notify each applicable
Fund of Custodian's receipt of cash in payment for Shares issued by such Fund by
facsimile transmission or in such other manner as the Fund and Custodian may
agree in writing. Upon receipt of Proper Instructions, the Custodian shall: (a)
deliver all federal funds received by the Custodian in payment for Shares in
payment for such investments as may be set forth in such Proper Instructions and
at a time agreed upon between the Custodian and the applicable Fund; and (b)
make federal funds available to the applicable Fund as of specified times agreed
upon from time to time by the applicable Fund and the Custodian, in the amount
of checks received in payment for Shares which are deposited to the accounts of
each applicable Portfolio.
Section 2.19. Proxies, Notices, Etc. The Custodian shall use reasonable
efforts to promptly deliver to each applicable Fund or its designee all forms of
proxies, all notices of meetings, and all notices regarding class action law
suits or other similar claims affecting or relating to securities, instruments
and Bank Loans owned by one or more of the applicable Fund's Portfolios that are
received by the Custodian, any Subcustodian, any nominee of either of them, or
from a securities information source customarily used by prudent professional
global custodians, and, upon receipt of Proper Instructions, the Custodian shall
use reasonable efforts to promptly execute and deliver, or cause such
Subcustodian or nominee to execute and deliver, such proxies or other
authorizations as may be required. Except as directed pursuant to Proper
Instructions, neither the Custodian nor any Subcustodian or nominee shall vote
upon any such securities, instruments or Bank Loans, or execute any proxy to
vote thereon, or give any consent or take any other action with respect thereto.
With respect to notices regarding class action lawsuits, Custodian shall forward
to each appropriate Fund in accordance with Proper Instructions agreed upon from
time to time, all written information actually received by State Street Bank and
Trust Company in its capacity as Custodian under this Agreement regarding any
class action or other litigation in connection with the US Securities (as
defined herein) or other assets issued in the United States and then held, or
previously held during the term of this Agreement by the Custodian for the
account of such Fund, including, but not limited to, opt-out notices and proof
of claims forms, to the extent State Street Bank and Trust Company has such
13
information in its capacity as Custodian for such Fund under this Agreement. For
purposes of this Section, "US Securities" shall mean portfolio assets of the
Fund for which State Street Bank and Trust Company is serving as Custodian
pursuant to this Agreement and which are securities or other assets issued in
the United States of America that are held, or have been held during the term of
this Agreement by State Street Bank and Trust Company in its capacity as
Custodian for the account of the applicable Fund, which assets have not been
merged into another fund not covered by this Agreement.
Section 2.20. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of each Portfolio.
Section 2.21. Nondiscretionary Functions. The Custodian shall attend to all
nondiscretionary details in connection with the sale, exchange, substitution,
purchase, transfer or other dealings with securities or other assets of each
Portfolio held by the Custodian, except as otherwise directed from time to time
pursuant to Proper Instructions.
Section 2.22. Bank Accounts.
(a) Accounts with the Custodian and any Subcustodians. The
Custodian shall open and operate a bank account or accounts (hereinafter
referred to collectively, as "Bank Accounts") on the books of the Custodian
or any Subcustodian provided that such account(s) shall be in the name of
the Custodian or a nominee of the Custodian, for the account of a
Portfolio, and shall be subject only to the draft or order of the
Custodian; and provided further, however, that such Bank Accounts in
countries other than the United States of America may be held in an account
of the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or other
customer for which such securities and other assets are held in such
account and the respective interests therein. Such Bank Accounts may be
denominated in either U.S. Dollars or other currencies. The
responsibilities of the Custodian to each applicable Fund for deposits
accepted on the Custodian's books in the United States of America shall be
that of a U.S. bank for a similar deposit. The responsibilities of the
Custodian to each applicable Fund for deposits accepted on any
Subcustodian's books shall be governed by the provisions of Section 5.02(d)
hereof.
(b) Accounts With Other Banking Institutions. The Custodian may
open and operate Bank Accounts on behalf of a Portfolio,
14
in the name of the Custodian or a nominee of the Custodian, at a Banking
Institution other than the Custodian or any Subcustodian, provided that
such account(s) shall be in the name of the Custodian or a nominee of the
Custodian, for the account of a Portfolio, and shall be subject only to the
draft or order of the Custodian; provided however, that such Bank Accounts
may be held in an account of the Custodian containing only assets held by
the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein. Such Bank
Accounts may be denominated in either U.S. Dollars or other currencies.
Subject to the provisions of Section 5.01(a), the Custodian shall be
responsible for the selection of the Banking Institution and for the
failure of such Banking Institution to pay according to the terms of the
deposit.
(c) Reserved.
(d) Deposit Insurance. Upon receipt of Proper Instructions, the
Custodian shall take such reasonable actions as the applicable Fund deems
necessary or appropriate to cause each deposit account established by the
Custodian pursuant to this Section 2.22 to be insured to the maximum extent
required by all applicable deposit insurers including, without limitation,
the Federal Deposit Insurance Corporation.
Section 2.23. Deposit of Fund Assets in Securities Systems and Eligible
Securities Depositories. (a) The Custodian may deposit and/or maintain domestic
securities owned by a Portfolio in: (1) The Depository Trust Company; (2) the
Participants Trust Company; (3) any book-entry system as provided in (i) Subpart
O of Treasury Circular Xx. 000, 00 XXX 306.115, (ii) Subpart B of Treasury
Circular Public Debt Series Xx. 00-00, 00 XXX 350.2, or (iii) the book-entry
regulations of federal agencies substantially in the form of 31 CFR 306.115; or
(4) any other domestic clearing agency registered with the U.S. Securities and
Exchange Commission ("SEC") under Section 17A of the Securities Exchange Act of
1934 (or as may otherwise be authorized by the SEC to serve in the capacity of
depository or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which each
applicable Fund has previously approved by Special Instructions (each of the
foregoing being referred to in this Agreement as a "Securities System"). Use of
a Securities System shall be in accordance with applicable Federal Reserve Board
and SEC rules and regulations, if any, and subject to the following provisions:
15
(1) The Custodian may deposit and/or maintain securities
held hereunder in a Securities System, provided that such securities are
represented in an account ("Account") of the Custodian in the Securities
System which Account shall not contain any assets of the Custodian other
than assets held as a fiduciary, custodian, or otherwise for customers and
shall be so designated on the books and records of the Securities System.
(2) The Securities System shall be obligated to comply with
the Custodian's directions with respect to the securities held in such
Account and shall not be entitled to a lien against the assets in such
Account for extensions of credit to the Custodian other than for payment of
the purchase price of such assets.
(3) Each Fund hereby designates the Custodian as the party
in whose name any securities deposited by the Custodian in the Account are
to be registered or recorded.
(4) The books and records of the Custodian shall at all
times identify those securities belonging to each Portfolio which are
maintained in a Securities System.
(5) The Custodian shall pay for securities purchased for the
account of a Portfolio only upon (w) receipt of advice from the Securities
System that such securities have been transferred to the Account of the
Custodian, and (x) the making of an entry on the records of the Custodian
to reflect such payment and transfer for the account of such Portfolio. The
Custodian shall transfer securities sold for the account of a Portfolio
only upon (y) receipt of advice from the Securities System that payment for
such securities has been transferred to the Account of the Custodian, and
(z) the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Portfolio. Copies of all
advices from the Securities System relating to transfers of securities for
the account of a Portfolio shall identify such Portfolio and shall be
maintained for such Portfolio by the Custodian. The Custodian shall deliver
to each applicable Fund on the next Business Day daily transaction reports
which shall include each day's transactions in the Securities System for
the account of each applicable Portfolio. Such transaction reports shall be
delivered to each applicable Fund or any agent designated by such Fund
pursuant to Proper Instructions, by computer or in such other manner as
such Fund and the Custodian may agree in writing.
(6) The Custodian shall, if requested by a Fund pursuant to
Proper Instructions, provide such Fund with all reports obtained
16
by the Custodian or any Subcustodian with respect to a Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System.
(7) Upon receipt of Special Instructions to this effect, the
Custodian shall terminate the use of any Securities System (except the
federal book-entry system) on behalf of any Portfolio as promptly as
practicable and shall take all actions reasonably practicable to safeguard
the securities of any Portfolio maintained with such Securities System.
(b) The Custodian may deposit and/or maintain "Foreign Assets"
(as defined in Rule 17f-5 under the 1940 Act, as the same may be amended
from time to time ("Rule 17f-5")), owned by a Portfolio in a securities
depository located outside the United States of America that the Custodian
has determined meets the definition of "Eligible Securities Depository"
under Rule 17f-7(b)(1) under the 1940 Act, as the same may be amended from
time to time ("Rule 17f-7"), or that has otherwise been made exempt
pursuant to an exemptive order of the SEC or no-action letter of the staff
of the SEC (each of the foregoing being referred to in this Agreement as an
"Eligible Securities Depository"), provided that prior to the deposit or
maintenance of Foreign Assets of a Fund with a securities depository
located outside the United States of America, the Custodian shall have
confirmed in writing to the Fund, on behalf of its Portfolios, that the
securities depository is an Eligible Securities Depository. Use of an
Eligible Securities Depository shall be in accordance with applicable SEC
rules and regulations, in particular Rule 17f-7 under the 1940 Act, and
subject to the following provisions:
(1) The Custodian or any Subcustodian may deposit and/or
maintain Foreign Assets held hereunder in an Eligible Securities
Depository, provided that such Foreign Assets are represented in an Account
of the Custodian or Subcustodian in the Eligible Securities Depository
which Account shall not contain any assets of the Custodian or Subcustodian
other than assets held as a fiduciary, custodian, or otherwise for
customers and shall be so designated on the books and records of the
Eligible Securities Depository unless the Fund by Special Instructions
permits another manner of holding, representing and/or designating a Fund's
Foreign Assets.
(2) The Custodian shall, in accordance with the standard of
care set forth in Section 5.01(a) hereof, be responsible for: (A) providing
the Fund or its designee, on behalf of its applicable Portfolio(s), an
analysis of the custody risks associated with maintaining Foreign Assets
17
with the Eligible Securities Depository; (B) establishing a system to
monitor the custody risks associated with maintaining Foreign Assets with
the Eligible Securities Depository; (C) monitoring the custody risks
associated with maintaining Foreign Assets with the Eligible Securities
Depository on a continuing basis; and (D) promptly notifying the Fund or
its designee of any material change in the custody risks associated with
maintaining Foreign Assets with the Eligible Securities Depository.
(3) The Eligible Securities Depository shall be obligated to
comply with the Custodian's or Subcustodian's directions with respect to
the Foreign Assets held in such Account, provided that the Foreign Assets
held in such Account shall not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the Custodian or
Subcustodian (or either of their respective creditors), except a claim for
reasonable payment for their safe custody or administration.
(4) Each Fund hereby designates the Custodian or each
Subcustodian as the party in whose name any Foreign Assets deposited by the
Custodian or the Subcustodian in the Account are to be registered or
recorded, provided, however, that the Custodian may register or record
Foreign Assets of a Fund in the name of the Fund or other nominee for the
Fund upon the Custodian's provision of written notice to the Fund of such
proposed registration or recordation.
(5) The books and records of the Custodian shall at all
times identify those Foreign Assets belonging to each Portfolio which are
maintained in an Eligible Securities Depository.
(6) The Custodian shall pay for Foreign Assets purchased for
the account of a Portfolio only upon (w) receipt of advice from the
Eligible Securities Depository that such Foreign Assets have been
transferred to the Account of the Custodian or Subcustodian, and (x) the
making of an entry on the records of the Custodian to reflect such payment
and transfer for the account of such Portfolio, provided however, if
required under the laws of the jurisdiction in which the Eligible
Securities Depository is located or pursuant to the rules of an Eligible
Securities Depository, the Custodian may receive delivery of such
securities and make payment therefor in accordance with such applicable
laws or rules of the Eligible Securities Depository, but in all events
subject to the standard of care set forth in Section 5.01(a) hereof. The
Custodian or Subcustodian shall transfer Foreign Assets sold for the
account of a Portfolio only upon (y) receipt of advice from the Eligible
Securities Depository that payment for such Foreign Assets has been
transferred to the Account of the Custodian or Subcustodian, and (z) the
18
making of an entry on the records of the Custodian to reflect such transfer
and payment for the account of such Portfolio, provided however, if
required under the laws of the jurisdiction in which the Eligible
Securities Depository is located or pursuant to the rules of an Eligible
Securities Depository, the Custodian may make payment therefor and receive
delivery of such securities in accordance with such applicable laws or
rules of the Eligible Securities Depository, but in all events subject to
the standard of care set forth in Section 5.01(a) hereof. Copies of all
advices from the Eligible Securities Depository relating to transfers of
Foreign Assets for the account of a Portfolio shall identify such Portfolio
or the Custodian or Subcustodian who is holding the assets of such
Portfolio and shall be maintained for such Portfolio by the Custodian. The
Custodian shall deliver to each applicable Fund no later than the next
succeeding Business Day, or at such other time or times as such Fund and
the Custodian may agree in writing, daily transaction reports which shall
include each day's transactions in the Eligible Securities Depository for
the account of each applicable Portfolio. Such transaction reports shall be
delivered to each applicable Fund or any agent designated by such Fund
pursuant to Proper Instructions, by electronic device or system (including
without limitation, computers) or in such other manner as such Fund and the
Custodian may agree in writing.
(7) The Custodian shall, if requested by a Fund or its
designee pursuant to Proper Instructions, provide such Fund with all
reports obtained by the Custodian or any Subcustodian with respect to an
Eligible Securities Depository's accounting system, internal accounting
controls, and procedures for safeguarding Foreign Assets deposited in the
Eligible Securities Depository.
(8) The Custodian (A) shall terminate the use of any
Eligible Securities Depository on behalf of any Portfolio as soon as
reasonably practicable and shall take all actions reasonably practicable to
safeguard the Foreign Assets of any Portfolio maintained with such Eligible
Securities Depository: (1) upon receipt of Special Instructions; or (2) in
the absence of the receipt of Special Instructions, if the custody
arrangement with the Eligible Securities Depository at any time ceases to
satisfy the requirements of Rule 17f-7(b)(1), and (B) shall provide the
Funds or their respective designees, on behalf of the Portfolios, with
written notification of any termination of the Custodian's use of an
Eligible Securities Depository at least 90 days prior to the effective date
of the proposed termination, unless the Funds in their discretion permit a
shorter notification period.
19
(9) Each Eligible Securities Depository through which the
Custodian maintains Foreign Assets of the applicable Portfolio(s) and the
countries where they may hold Foreign Assets of the applicable Portfolio(s)
shall be listed on Appendix B attached hereto, as the same may be amended
from time to time in accordance with the provisions of Section 9.07(c)
hereof.
Section 2.24. Other Transfers.
(a) Upon receipt of Proper Instructions, the Custodian shall
transfer to or receive from a third party that has been appointed to serve
as an additional custodian of one or more Portfolios (an "Additional
Custodian") securities, cash and other assets of such Portfolios in
accordance with such Proper Instructions. Each Additional Custodian shall
be identified as such on Appendix B, as the same may be amended from time
to time in accordance with the provisions of Section 9.07(c) hereof.
(b) Upon receipt of Special Instructions, the Custodian shall
make such other dispositions of securities, funds or other assets of a
Portfolio in a manner or for purposes other than as expressly set forth in
this Agreement, provided that the Special Instructions relating to such
disposition shall include a statement of the purpose for which the delivery
is to be made, the amount of funds and/or securities or other assets to be
delivered, and the name of the person or persons to whom delivery is to be
made, and shall otherwise comply with the provisions of Sections 3.01 and
3.03 hereof.
Section 2.25. Establishment of Segregated Account. Upon receipt of Proper
Instructions, the Custodian shall establish and maintain on its books a
segregated account or accounts for and on behalf of a Portfolio, into which
account or accounts may be transferred cash and/or securities or other assets of
such Portfolio, including securities maintained by the Custodian in a Securities
System pursuant to Section 2.23(a) hereof or an Eligible Securities Depository
pursuant to Section 2.23(b) hereof, said account or accounts to be maintained:
(a) for the purposes set forth in Sections 2.09, 2.10 and 2.11 hereof; (b) 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 SEC or SEC rules, regulations or publicly available interpretative
letters of the staff of the SEC relating to the maintenance of segregated
accounts by registered investment companies; or (c) for such other purposes as
set forth, from time to time, in Special Instructions.
20
Section 2.26. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by a Fund in the preparation of reports to
such Fund's shareholders and others, audits of accounts, and other ministerial
matters of like nature. The Custodian shall maintain complete and accurate
records with respect to securities and other assets held for the accounts of
each Portfolio as required by the rules and regulations of the SEC applicable to
investment companies registered under the 1940 Act, including: (a) journals or
other records of original entry containing a detailed and itemized daily record
of all receipts and deliveries of securities or other assets (including
certificate and transaction identification numbers, if any), and all receipts
and disbursements of cash; (b) ledgers or other records reflecting (i)
securities in transfer, (ii) securities in physical possession, (iii) securities
borrowed, loaned or collateralizing obligations of each Portfolio, (iv) monies
borrowed and monies loaned (together with a record of the collateral therefor
and substitutions of such collateral), (v) dividends and interest received, (vi)
the amount of tax withheld by any person in respect of any collection made by
the Custodian or any Subcustodian, and (vii) the amount of reclaims or refunds
for foreign taxes paid; and (c) cancelled checks and bank records related
thereto. The Custodian shall keep such other books and records of each Fund as
such Fund shall reasonably request. All such books and records maintained by the
Custodian shall be maintained in a form acceptable to the applicable Fund and in
compliance with the rules and regulations of the SEC, including, but not limited
to, books and records required to be maintained by Section 31(a) of the 1940 Act
and the rules and regulations from time to time adopted thereunder, and shall be
reasonably arranged and indexed by the Custodian in a manner that permits
reasonably prompt location, access and retrieval of a particular record
including, if requested by a Fund, retrieval within the time period specified by
any regulatory entity with jurisdiction over the Fund. All books and records
maintained by the Custodian pursuant to this Agreement shall at all times be the
property of each applicable Fund and shall be available upon request during
normal business hours for inspection and use by such Fund and its agents,
including, without limitation, its independent certified public accountants.
Notwithstanding the preceding sentence, no Fund shall take any actions or cause
the Custodian to take any actions which would cause, either directly or
indirectly, the Custodian to violate any applicable laws, regulations or orders.
In addition to the books and records required to be maintained by the Custodian
pursuant to this Agreement, the Custodian shall keep such other books and
records of each Fund as may be agreed to by the parties and upon such terms as
may be agreed between the parties. All books and records maintained by the
Custodian pursuant to this Agreement shall be maintained for the periods
required under Rule 31a-2 of the 1940 Act. Upon a Fund's request, the Custodian
shall promptly surrender to such Fund copies of all books and records of the
Fund maintained by the Custodian pursuant to this Agreement.
21
Section 2.27. Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as a Fund may periodically
request to obtain from year to year favorable opinions from such Fund's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Fund's Form
N-1A,Form N-CSR and Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements of the SEC or the federal securities laws,
including the 1940 Act, and the rules and regulations thereunder.
Section 2.28. Reports by Independent Certified Public Accountants.
Annually, and as may otherwise be reasonably requested by a Fund, but in no
event more frequently than semi-annually, the Custodian shall deliver to such
Fund a written report prepared by the Custodian's independent certified public
accountants with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting system,
internal accounting control and procedures for safeguarding cash, securities and
other assets, including cash, securities and other assets deposited and/or
maintained in a Securities System, Eligible Securities Depository or with a
Subcustodian. Such report shall be of sufficient scope and in sufficient detail
as may reasonably be required by any Fund and as may reasonably be obtained by
the Custodian.
Section 2.29. Advances by the Custodian. The Custodian may, in its sole
discretion, advance funds on behalf of any of the Portfolios to make any payment
permitted by this Agreement upon receipt of any proper authorization by the
applicable Fund required by this Agreement for such payments on behalf of the
Portfolio. Should such a payment or payments, with advanced funds, result in an
overdraft (due to insufficiencies of the Portfolio's account with the Custodian,
or for any other reason), any such overdraft or related indebtedness shall be
deemed for purposes of this Agreement a loan made by the Custodian to the Fund
for the account of the Portfolio payable on demand. Such overdraft shall bear
interest at such rate as may be agreed to from time to time by the Fund and the
Custodian for such loans unless the Fund on behalf of the Portfolio shall
provide the Custodian with compensating balances. Each of the Funds agrees that
the Custodian shall have a continuing lien and security interest to the extent
of any overdraft or indebtedness, in and to any property at any time held by the
Custodian for the benefit of the applicable Portfolio or in which the applicable
Portfolio has an interest and which is then in the Custodian 's possession or
control (or in the possession or control of any third party acting on the
Custodian's behalf). Each of the Funds authorizes the Custodian, in the
Custodian's sole discretion, at any time to charge any overdraft or
indebtedness, together with interest due thereon, against any balance of account
standing to the credit of the applicable Portfolio on the Custodian's books. In
addition, the Custodian shall be entitled to utilize available cash and
22
to dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement; provided, however, the Custodian shall have provided the Fund
three (3) days' notice with respect thereto.
Section 2.30. Insurance Requirements.
(a) The Custodian shall, at its own expense, procure and
maintain: (i) workers compensation insurance for its own employees in an
amount not less than the statutory limits under all applicable statutes,
rules and regulations in each of the states in which Custodian operates and
under all applicable federal statutes, rules and regulations, (ii)
employers liability insurance in an amount not less than $1,000,000 per
occurrence, (iii) comprehensive general liability insurance in an amount
not less than $1,000,000 per occurrence, (iv) comprehensive automobile
liability (including automobile non-ownership liability) insurance in a
combined single limit amount of not less than $1,000,000 per occurrence,
(v) umbrella or excess liability insurance providing coverages in excess of
the coverages listed in (ii), (iii) and (iv) above in an amount not less
than $5,000,000 per occurrence, (vi) errors and omission liability
insurance in an amount not less than $10,000,000 per claim, (vii) a
fidelity bond in an amount not less than $10,000,000 per loss, and (vii)
electronic and computer crime insurance in an amount not less than
$10,000,000 per loss; provided however that the term "Custodian" in this
Section 2.30 shall not include a Subcustodian or Eligible Securities
Depository. Nothing in this Section 2.30 shall be deemed to limit the
Custodian's liability to the types or coverage amounts specified above or
to limit any coverage under any of Custodian's insurance policies.
(b) Concurrent with the execution of this Agreement and
thereafter upon the request of a Fund (but in no event more frequently than
annually), Custodian shall provide a "certificate of insurance" to each
Fund that evidences that policies, bonds or similar agreements providing
the types and amounts of coverage specified in paragraph (a) of this
Section 2.30 have been entered into and are in full force and effect and
that specifies the applicable deductible amount for each policy, bond or
similar agreement.
Section 2.31. Provision of Information. At the request of a Fund, the
Custodian shall promptly provide to such Fund all information relating to such
Fund's, or any of its Portfolio's, cash, securities, and other assets which may
be reasonably requested by such Fund in order to determine the amount to be paid
to the Custodian under Article VI hereof. Such information shall be delivered to
such Fund at such time(s) and in such forms specified by such Fund.
23
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper
Instructions" shall mean: (i) a tested telex, a SWIFT message, a
written (including, without limitation, facsimile transmission)
request, direction, instruction or certification signed or initialed
by or on behalf of the applicable Fund by one or more Authorized
Persons (as hereinafter defined); (ii) a telephonic or other oral
communication by one or more Authorized Persons; (iii) a communication
effected directly between an electro-mechanical or electronic device
or system (including, without limitation, computers) by or on behalf
of the applicable Fund by one or more Authorized Persons; or (iv) by
such other means and utilizing such intermediary systems and utilities
as may be agreed from time to time by the Custodian and the Fund,
provided that the applicable Fund has followed any security procedures
agreed to from time to time by such Fund and the Custodian including,
but not limited to, the security procedures selected by the Fund via
the form of Funds Transfer Addendum attached hereto; provided,
however, that communications of the types described in clauses (ii)
and (iii) above purporting to be given by an Authorized Person shall
be considered Proper Instructions only if the Custodian reasonably
believes such communications to have been given by an Authorized
Person with respect to the transaction involved. Proper Instructions
in the form of oral communications shall be confirmed by the
applicable Fund by tested telex, SWIFT message or in writing in the
manner set forth in clause (i) above, but the lack of such
confirmation shall in no way affect any action taken by the Custodian
in reasonable reliance upon such oral instructions prior to the
Custodian's receipt of such confirmation. Proper Instructions may
relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
(b) Special Instructions. As used herein, the term "Special
Instructions" shall mean Proper Instructions countersigned or
confirmed in writing by the Treasurer or any Assistant Treasurer of
the applicable Fund or any other person designated by the Treasurer of
such Fund in writing, which countersignature or confirmation shall be
(i) included on the same instrument containing the Proper Instructions
or on a separate instrument relating thereto, and (ii) delivered by
hand, by facsimile transmission, or in such other manner as the
applicable Fund and the Custodian agree in writing.
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(c) Address for Proper Instructions and Special Instructions.
Proper Instructions and Special Instructions shall be delivered to the
Custodian at the address and/or telephone, telecopy or telex number agreed
upon from time to time by the Custodian and the applicable Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of this
Agreement and from time to time thereafter, as appropriate, each Fund shall
deliver to the Custodian, duly certified as appropriate by a Treasurer or any
Deputy or Assistant Treasurer of such Fund, a certificate setting forth: (a) the
names, titles, signatures and scope of authority of all persons authorized to
give Proper Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of such Fund (collectively, the "Authorized
Persons" and individually, an "Authorized Person"); and (b) the names, titles
and signatures of those persons authorized to issue Special Instructions. Such
certificate may be accepted and reasonably relied upon by the Custodian as
conclusive evidence of the facts set forth therein and shall, unless otherwise
specified therein, be considered to be in full force and effect until delivery
to the Custodian of a similar certificate to the contrary. Upon delivery of a
certificate which deletes the name(s) of a person previously authorized by a
Fund to give Proper Instructions or to issue Special Instructions, such persons
shall no longer be considered an Authorized Person or authorized to issue
Special Instructions for that Fund.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Trustee, officer, employee or agent of any Fund shall have
physical access to the assets of any Portfolio of that Fund held by the
Custodian nor shall the Custodian deliver any assets of a Portfolio for delivery
to an account of such person; provided, however, that nothing in this Section
3.03 shall prohibit (a) any Authorized Person from giving Proper Instructions,
or any person authorized to issue Special Instructions from issuing Special
Instructions, so long as such action does not result in delivery of or access to
assets of any Portfolio prohibited by this Section 3.03; or (b) each Fund's
independent certified public accountants from examining or reviewing the assets
of the Portfolios of the Fund held by the Custodian. Each Fund shall deliver to
the Custodian a written certificate identifying such Authorized Persons,
Trustees, officers, employees and agents of such Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and Special
Instructions. So long as and to the extent that the Custodian acts in accordance
with (a) Proper Instructions or Special Instructions, as the case may be, and
(b) the terms of this Agreement (including the standard of care set forth in
Section 5.01(a)), the Custodian shall not be responsible for the title, validity
or
25
genuineness of any property, or evidence of title thereof, received by it or
delivered by it pursuant to this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Interim Subcustodians and Special Subcustodians (each as
hereinafter defined) to act on behalf of a Portfolio. (For purposes of this
Agreement, all duly appointed Domestic Subcustodians, Foreign Subcustodians,
Interim Subcustodians, and Special Subcustodians are hereinafter referred to
collectively, as "Subcustodians.") For the avoidance of doubt, no Underlying
Fund Transfer Agent shall be deemed an agent or Subcustodian of the Custodian
for purposes of any provision of this Agreement.
Section 4.01. Domestic Subcustodians. The Custodian may, at any time and
from time to time, appoint any bank as defined in Section 2(a)(5) of the 1940
Act meeting the requirements of a custodian under Section 17(f) of the 1940 Act
and the rules and regulations thereunder, to act on behalf of one or more
Portfolios as a subcustodian for purposes of holding cash, securities and other
assets of such Portfolios and performing other functions of the Custodian within
the United States (a "Domestic Subcustodian"); provided that, the Custodian
shall notify each applicable Fund in writing of the identity and qualifications
of any proposed Domestic Subcustodian at least thirty (30) days prior to
appointment of such Domestic Subcustodian, and such Fund may, in its sole
discretion, by written notice to the Custodian executed by an Authorized Person
disapprove of the appointment of such Domestic Subcustodian. If, following
notice by the Custodian to each applicable Fund regarding appointment of a
Domestic Subcustodian and the expiration of thirty (30) days after the date of
such notice, such Fund shall have failed to notify the Custodian of its
disapproval thereof, the Custodian may, in its discretion, appoint such proposed
Domestic Subcustodian as its subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. Subject to and in accordance with the
following provisions, the Board of Trustees or other governing body or
entity of each Fund, on behalf of its applicable Portfolio(s), hereby
delegates its responsibilities as set forth in Rule 17f-5 under the 1940
Act, to the Custodian and appoints the Custodian as its "Foreign Custody
Manager" (as such term is defined in Rule 17f-5), and the Custodian hereby
accepts such delegation and appointment and agrees to (1) act on behalf of
the applicable Fund(s) and Portfolios in such capacity, (2)
26
perform the responsibilities set forth in Rule 17f-5, and (3) exercise the
standard of care set forth in Section 5.01(a) hereof in performing its
responsibilities hereunder and under Rule 17f-5, except to the extent Rule
17f-5 provides a higher standard of care, in which case that standard shall
apply.
(i) Subject to and in accordance with the provisions of Rule
17f-5, the Custodian may, at any time and from time to time, appoint: (A)
any "Qualified Foreign Bank" (as such term is defined in Rule 17f-5), (B)
any majority-owned direct or indirect subsidiary of a "U.S. Bank" (as such
term is defined in Rule 17f-5) or U.S. bank holding company meeting the
requirements of an "Eligible Foreign Custodian" (as such term is defined in
Rule 17f-5), (C) any other entity which by order of the SEC, or by
no-action letter of the staff of the SEC is exempt from meeting the
requirements of an "Eligible Foreign Custodian" as set forth in Rule 17f-5,
to act on behalf of the applicable Fund(s) and Portfolio(s) as a
subcustodian for purposes of holding "Foreign Assets" (as defined in Rule
17f-5), or (D) any "Bank" (as such term is defined in the 0000 Xxx) that
qualifies as and may serve as a custodian under Section 17(f) of the 1940
Act (each a "Foreign Subcustodian").
(ii) Without limiting the foregoing, the Custodian shall be
responsible for (A) determining that each applicable Fund's or Portfolio's
Foreign Assets, if maintained with each Foreign Subcustodian, will be
subject to the standard of care set forth in Section 5.01(a) hereof after
considering all factors relevant to the safekeeping of such assets
including, without limitation, those factors set forth in the provisions of
paragraph (c)(1) of Rule 17f-5, (B) ensuring that each foreign custody
arrangement with a Foreign Subcustodian is governed by a written contract
with the Custodian meeting the requirements of paragraph (c)(2) of Rule
17f-5 which will provide reasonable care for each applicable Fund's or
Portfolio's Foreign Assets based on the standard of care set forth in
Section 5.01(a) hereof, (C) determining that each contract with a Foreign
Subcustodian shall include the provisions specified in paragraph
(c)(2)(i)(A) through (F) of Rule 17f-5 or alternatively, in lieu of any or
all of such (c)(2)(i)(A) through (F) provisions, such other provisions as
the Custodian reasonably determines will provide, in their entirety, the
same or greater level of care and protection for the Foreign Assets of each
Fund or Portfolio as such specified provisions in their entirety, (D)
establishing a system to monitor the appropriateness of maintaining each
applicable Fund's or Portfolio's Foreign Assets with each Foreign
Subcustodian pursuant to paragraph (c)(1) of Rule 17f-5 and to monitor the
performance of each Foreign Subcustodian under the subcustodian agreement
between the Custodian and the Foreign Subcustodian, (E)
27
monitoring the appropriateness of maintaining each applicable Fund's and
Portfolio's Foreign Assets with each Foreign Subcustodian pursuant to
paragraph (c)(1) of Rule 17f-5 and the performance of each Foreign
Subcustodian under the subcustodian agreement between the Custodian and the
Foreign Subcustodian, and (F) promptly notifying each applicable Fund or
Portfolio whenever an arrangement described in the preceding clause (E) no
longer satisfies the requirements of Rule 17f-5.
(iii) The Custodian shall prepare written reports to the
Board of Trustees or other governing body or entity of each Fund, on behalf
of its applicable Portfolio(s), on an annual basis showing (A) the identity
and qualifications of each Foreign Subcustodian authorized by the Custodian
to hold Foreign Assets of the Fund(s) and Portfolio(s), (B) the placement
of the Fund's and Portfolio's Foreign Assets with each such Foreign
Subcustodian, (C) the country or countries in which each Foreign
Subcustodian is authorized to hold Foreign Assets of the applicable Fund(s)
and Portfolio(s) and (D) any material changes to the Custodian's foreign
custody arrangements for the applicable Fund(s) and Portfolios) since the
submission of the Custodian's last written report to the applicable Fund's
Board of Trustees or other governing body or entity pursuant to this
Section 4.02(a)(iii), including without limitation:
(1) changes in the Foreign Subcustodians included in the
Custodian's global custody network or arrangements;
(2) any change, including any amendment or modification to
the subcustodian agreements between the Custodian and each of the
Foreign Subcustodians, that could materially affect the ability of a
Foreign Subcustodian to perform its duties in respect of the
applicable Funds, or Portfolios' Foreign Assets.
In addition to the annual reports required by clause (a) (iii) above, the
Custodian shall submit promptly (but in no event later than five (5)
Business Days after the event giving rise to a reporting requirement)
interim reports to the Board of Trustees or other governing body or entity
of each applicable Fund, on behalf of its applicable Portfolio(s), of any
changes that have or could materially affect the ability of a Foreign
Subcustodian to perform its duties in respect of the Funds' and Portfolios'
assets and any actions that the Custodian has taken or proposes to take in
connection with such changes.
(iv) Each duly appointed Foreign Subcustodian and the
countries where and clearing agencies through which they may hold
28
Foreign Assets of the applicable Fund(s) and Portfolio(s) shall be listed
on Appendix B attached hereto and dated as of the date of this Agreement,
as the same may be amended from time to time, in accordance with the
provisions of Section 9.07(c) hereof.
(v) Each Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment by itself or by
one of its Portfolios which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be sufficient
time for the Custodian to effect the appropriate arrangements with a
proposed foreign subcustodian.
(vi) The Custodian shall provide the Funds or their
respective designees, on behalf of their Portfolios, with written
notification of any (A) proposed change in the Foreign Subcustodians
included in the Custodian's global custody network or arrangements at least
thirty (30) Business Days prior to the effective date of the proposed
change, or (B) termination, in whole or with respect to one or more
specified jurisdictions, of its acceptance of the Board of Trustees or
other governing body or entity of a Fund, on behalf of its applicable
Portfolio(s), delegation and appointment as the Fund's "Foreign Custody
Manager" at least ninety (90) days prior to the effective date of the
proposed termination; unless, in either case, the Funds in their discretion
permit a shorter notification period.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the
event that a Portfolio shall invest in a security or other asset to be held
in a country in which no Foreign Subcustodian is authorized to act, the
Custodian shall promptly notify the applicable Fund in writing by facsimile
transmission or in such other manner as such Fund and Custodian shall agree
in writing of the unavailability of an approved Foreign Subcustodian in
such country; and the Custodian shall, upon receipt of Special
Instructions, appoint any Person (as hereinafter defined) designated by the
applicable Fund in such Special Instructions to hold such security or other
asset, provided that such Person meets the requirements of this Section
4.02(b). The subcustodian agreement between the Custodian and any Interim
Subcustodian shall comply with the provisions of the 1940 Act and the rules
and regulations thereunder (including Rule 17f-5, if applicable) and the
terms and provisions of this Agreement. The Custodian shall comply with
Section 4.02 (a)(i), (ii), (iii), and (vi) hereof with respect to the
appointment of an Interim Custodian. (Any Person appointed as a
subcustodian pursuant to this Section 4.02(b) is hereinafter referred to as
an "Interim Subcustodian.")
29
Section 4.03. Special Subcustodians. Upon receipt of Special Instructions,
the Custodian shall, on behalf of one or more Portfolios, appoint one or more
banks, trust companies or other entities designated in such Special Instructions
to act as a subcustodian for purposes of: (i) effecting third-party repurchase
transactions with banks, brokers, dealers or other entities through the use of a
common custodian or subcustodian; (ii) providing depository and clearing agency
services with respect to certain variable rate demand note securities; and (iii)
effecting any other transactions designated by each applicable Fund in Special
Instructions. (Each such designated subcustodian is hereinafter referred to as a
"Special Subcustodian.") Each such duly appointed Special Subcustodian shall be
listed on Appendix B attached hereto, as it may be amended from time to time in
accordance with the provisions of Section 9.07(c) hereof. In connection with the
appointment of any Special Subcustodian, the Custodian shall use reasonable
efforts to enter into a subcustodian agreement with the Special Subcustodian in
form and substance approved by each applicable Fund, provided that such
agreement shall in all events comply with the provisions of the 1940 Act and the
rules and regulations thereunder (including Rule17f-5, if applicable) and the
terms and provisions of this Agreement. If any Special Custodian is a Foreign
Custodian, the Custodian shall comply with Section 4.02 of this Agreement. The
Custodian shall not amend any subcustodian agreement entered into with a Special
Subcustodian, or agree to change or permit any changes thereunder, or waive any
rights under such agreement, except upon prior approval pursuant to Special
Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i) cause
each Domestic Subcustodian and Foreign Subcustodian to, and (ii) use its best
efforts to cause each Interim Subcustodian and Special Subcustodian to, perform
all of its obligations in accordance with the terms and conditions of the
subcustodian agreement between the Custodian and such Subcustodian. In the event
that the Custodian is unable to cause a Subcustodian to fully perform its
obligations thereunder, the Custodian shall use reasonable efforts to promptly
notify the applicable Fund and, upon the receipt of Special Instructions, use
reasonable efforts to promptly terminate such Subcustodian with respect to each
applicable Fund and, if necessary or desirable, appoint a replacement
Subcustodian in accordance with the provisions of Section 4.01, Section 4.02 or
Section 4.03, as the case may be. In addition to the foregoing, the Custodian
(A) may, at any time in its discretion, upon written notification to each
applicable Fund, terminate any Domestic Subcustodian, Foreign Subcustodian or
Interim Subcustodian, and (B) shall, upon receipt of Special Instructions,
terminate any Subcustodian with respect to each applicable Fund, in accordance
with the termination provisions under the applicable subcustodian agreement.
30
Section 4.05. Confirmation Regarding Foreign Subcustodians. Each report
presented to the Board of Trustees of each Fund, on behalf of itself or its
applicable Portfolio(s), by the Custodian pursuant to Section 4.02(a)(iii) above
shall be accompanied by a confirmation representing that (A) the Custodian has
established a system to monitor the appropriateness of maintaining the Fund's or
Portfolio's Foreign Assets with each Foreign Subcustodian pursuant to paragraph
(c)(1) of Rule 17f-5 and to monitor the performance of each Foreign Subcustodian
under the subcustodian agreement between the Custodian and the Foreign
Subcustodian; (B) the Custodian has monitored all Foreign Subcustodians and each
Foreign Subcustodian continues to be an "Eligible Foreign Custodian," (as such
term is defined in Rule 17f-5); (C) each Foreign Subcustodian continues to
provide the standard of care set forth in Section 5.01(a) hereof, after
considering all relevant factors, including without limitation, those factors
set forth in paragraph (c)(1) of Rule 17f-5; (D) all foreign custody agreements
between the Custodian and the Foreign Subcustodians continue to meet the
requirements of paragraph (c)(2) of Rule 17f-5; (E) since the submission of the
last report pursuant to Section 4.02(a)(iii) above, there have been no material
adverse changes to the Custodian's foreign custody network or arrangements other
than those reported to the Board of Trustees or other governing body or entity
of the Fund, on behalf of itself or its applicable Portfolios, in the
accompanying report; and (F) the information included in the report is true,
accurate and complete in all material respects.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise
diligence, prudence and reasonable care in carrying out all of its duties
and obligations under this Agreement, and shall be liable to each Fund for
all direct losses, damages and expenses suffered or incurred by such Fund
or its Portfolio(s) resulting from the failure of the Custodian to exercise
such diligence, prudence and reasonable care. In no event shall any party
hereto be liable for indirect, special or consequential losses, damages or
expenses.
(b) Disruption of Services; Actions Prohibited by Applicable Law,
Etc. In order to prevent the disruption of services in the event of any
reasonably foreseeable adverse event (such as terrorism or related threats
to security, loss of electric power or communications lines, equipment
failure, fire, water damage or severe weather conditions), the Custodian
shall maintain at all times, at no additional expense to the Funds, a
complete business continuity, disaster recovery, business resumption and
31
crisis management plan ("Business Continuity/Disaster Recovery Plan")
reasonably designed to safeguard from loss or damage attributable to
terrorism or related threats to security, fire, flood, theft or any other
cause the cash, security, other assets, records and other data of the Funds
and the Portfolios and the Custodian's records, data, equipment, facilities
and other property used in the performance of its obligations under the
Agreement. Upon reasonable request, the Custodian shall discuss with senior
management of the Funds the Business Continuity/Disaster Recovery Plan
and/or provide a high-level presentation summarizing the Business
Continuity/Disaster Recovery Plan. For the avoidance of doubt, the parties
hereto agree that for purposes of the immediately preceding sentence,
"reasonable" shall mean at least annually. In the event of equipment
failure, work stoppage, governmental action, terrorism or related threats
to security, communication disruption or other impossibility of performance
beyond the Custodian's control, the Custodian shall, at no additional
expense to the Fund, use commercially reasonable efforts to minimize
service interruptions. In no event shall the Custodian incur liability
hereunder if the Custodian or any Subcustodian, Securities System or
Eligible Securities Depository, or any subcustodian, securities depository
or securities system utilized by any such Subcustodian, or any nominee of
the Custodian or any Subcustodian (individually, a "Person") is prevented,
forbidden or delayed from performing, or omits to perform, any act or thing
which this Agreement provides shall be performed or omitted to be
performed, by reason of: (i) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof,
or of any foreign country, or political subdivision thereof or of any court
of competent jurisdiction; or (ii) any act of God or war or other similar
circumstance beyond the control of the Custodian, unless, in each case,
such delay or nonperformance is caused by (A) the negligence, misfeasance
or misconduct of the applicable Person, or (B) a malfunction or failure of
equipment operated or utilized by the applicable Person other than a
malfunction or failure beyond such Person's control and which could not
reasonably be anticipated and/or prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event
which causes any loss, damage or expense to any Fund or Portfolio, (i) the
Custodian shall promptly notify the applicable Fund or Portfolio of the
occurrence of such event, (ii) the Custodian shall cause any applicable
Domestic Subcustodian or Foreign Subcustodian to use all commercially
reasonable efforts and take all reasonable steps under the circumstances to
mitigate the effects of such event and to avoid continuing harm to the
Funds and the Portfolios, and (iii) the Custodian shall use its best
efforts to cause any applicable Interim Subcustodian,
32
Special Subcustodian or Eligible Securities Depository to use all
commercially reasonable efforts and take all reasonable steps under the
circumstances to mitigate the effects of such event and to avoid continuing
harm to the Funds and the Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive
and act upon advice of counsel on all matters. The Custodian shall be
without liability for any action reasonably taken or reasonably omitted in
good faith pursuant to the advice of (i) counsel for the applicable Fund or
Portfolio, or (ii) at the expense of the Custodian, such other counsel as
the applicable Fund(s) and the Custodian may agree upon; provided however,
with respect to the performance of any action or omission of any action
upon such advice, the Custodian shall be required to conform to the
standard of care set forth in Section 5.01(a).
(e) Liability for Past Records. The Custodian shall have no
liability in respect of any loss, damage or expense suffered by a Fund,
insofar as such loss, damage or expense arises from the performance of the
Custodian's duties hereunder by reason of the Custodian's reliance upon
records that were maintained for such Fund by entities other than the
Custodian prior to the Custodian's appointment as custodian for such Fund.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The
Custodian shall be liable for the actions or omissions of any Domestic
Subcustodian or any Foreign Subcustodian to the same extent as if such
action or omission was performed by the Custodian itself. In the event of
any direct loss, damage or expense suffered or incurred by a Fund that is
or was directly caused by or resulting directly from the actions or
omissions of any Domestic Subcustodian or Foreign Subcustodian for which
the Custodian would otherwise be liable, the Custodian shall promptly
reimburse such Fund in the amount of any such loss, damage or expense.
Notwithstanding the foregoing, the Custodian shall be without liability for
any loss, damage or expense caused by or resulting from the insolvency of
any Domestic Subcustodian or Foreign Subcustodian that is not a wholly
owned subsidiary of the Custodian; provided, however, that the foregoing
exculpation of the Custodian for liability as to a particular Domestic
Subcustodian or Foreign Subcustodian shall not be applicable to any
Domestic Subcustodian or Foreign Subcustodian appointed after the date
hereof until the Fund has received 30 calendar days' notice of such
appointment and during such 30-calendar-day period, the Custodian shall, if
requested by the Fund, provide the Fund with such
33
publicly available portion of the financial information regarding the
Subcustodian that the Custodian reviewed in connection with its assessment
of the financial stability of the proposed Subcustodian.
(b) Interim Subcustodians. Notwithstanding the provisions of
Section 5.01 to the contrary, the Custodian shall not be liable to a Fund
for any loss, damage or expense suffered or incurred by such Fund or any of
its Portfolios resulting from the actions or omissions of an Interim
Subcustodian unless such is a direct loss, damage or expense suffered or
incurred by such Fund and is directly caused by, or results directly from,
the negligence, misfeasance or misconduct of the Custodian; provided
however, in the event of any such loss, damage or expense, the Custodian
shall take all reasonable steps to enforce such rights as it may have
against such Interim Subcustodian to protect the interests of the Funds and
the Portfolios. Notwithstanding the foregoing, the Custodian shall be
without liability for any loss, damage or expense caused by or resulting
from the insolvency of any Interim Subcustodian.
(c) Special Subcustodians and Additional Custodians.
Notwithstanding the provisions of Section 5.01 to the contrary and except
as otherwise provided in any subcustodian agreement to which the Custodian,
a Fund and any Special Subcustodian or Additional Custodian are parties,
the Custodian shall not be liable to a Fund for any loss, damage or expense
suffered or incurred by such Fund or any of its Portfolios resulting from
the actions or omissions of a Special Subcustodian or Additional
Subcustodian, unless such is a direct loss, damage or expense suffered or
incurred by such Fund and is directly caused by, or results directly from,
the negligence, misfeasance or misconduct of the Custodian; provided
however, in the event of any such loss, damage or expense, the Custodian
shall take all reasonable steps to enforce such rights as it may have
against any Special Subcustodian or Additional Custodian to protect the
interests of the Funds and the Portfolios. Notwithstanding the foregoing,
the Custodian shall be without liability for any loss, damage or expense
caused by or resulting from the insolvency of any Special Subcustodian or
Additional Custodian.
(d) Securities Systems and Eligible Securities Depositories.
Notwithstanding the provisions of Section 5.01 to the contrary, the
Custodian shall not be liable to a Fund for any loss, damage or expense
suffered or incurred by such Fund or any of its Portfolios resulting from
the use by the Custodian of a Securities System or Eligible Securities
Depository, unless such is a direct loss, damage or expense suffered or
incurred by such Fund and is directly caused by, or results directly from,
34
the negligence, misfeasance or misconduct of the Custodian; provided
however, in the event of any such loss, damage or expense, the Custodian
shall take all reasonable steps to enforce such rights as it may have
against the Securities System or Eligible Securities Depository to protect
the interests of the Funds and the Portfolios. Notwithstanding the
foregoing, the Custodian shall be without liability for any loss, damage or
expense caused by or resulting from the insolvency of any Securities System
or Eligible Securities Depository.
Section 5.03. Indemnification.
(a) Indemnification Obligations of the Funds. Subject to the
limitations set forth in this Agreement, each Fund severally (and not
jointly nor jointly and severally) agrees to indemnify and hold harmless
the Custodian and its nominees from all direct loss, damage and expense,
and reasonable attorneys' fees, suffered or incurred by the Custodian or
its nominee caused by or arising from actions taken by the Custodian on
behalf of such Fund or its Portfolio in the performance of its duties and
obligations under this Agreement; provided however, that such indemnity
shall not apply to loss, damage, expense or attorneys' fees occasioned by
or resulting from the negligence, misfeasance or misconduct of the
Custodian or its nominee (for the avoidance of doubt, the term "nominee" as
used in this Article V shall not include Interim Custodians, Special
Subcustodians, Additional Custodians, Eligible Securities Depositories or
Securities Systems); provided, further, that the Custodian shall not be
entitled to indemnification as to any matter to the extent that the loss,
damage, expenses or attorneys' fees is the result of the Custodian's breach
of the applicable standard of care under this Agreement, except for any
liability arising out of the insolvency of any Subcustodian, as to which
the indemnification obligation of each Fund and Portfolio shall not be
limited. In addition, each Fund agrees severally (and not jointly nor
jointly and severally) to indemnify any Person against any liability
incurred by reason of taxes assessed to such Person, or other loss, damage,
expenses or attorneys' fees incurred by such Person, resulting from the
fact that securities and other property of such Fund's Portfolios are
registered in the name of such Person; provided however, that in no event
shall such indemnification be applicable to income, franchise or similar
taxes which may be imposed or assessed against any Person.
(b) Indemnification Obligation of the Custodian. Subject to the
limitations set forth in this Agreement, the Custodian agrees to indemnify
and hold harmless each Fund, on behalf of its Portfolios, from all direct
loss, damage and expense, and reasonable attorneys' fees,
35
suffered or incurred by such Fund on behalf of its Portfolios and resulting
directly from the failure of the Custodian to exercise the standard of care
set forth in Section 5.01(a) hereof; provided however, that such indemnity
shall not apply to loss, damage, expense or attorneys' fees occasioned by
or resulting from the negligence, misfeasance or misconduct of any Fund.
(c) Notice of Litigation; Right to Prosecute, Etc. No Fund or
Portfolio shall be liable for indemnification under this Section 5.03
unless a Person shall have promptly notified such Fund or Portfolio in
writing of the commencement of any litigation or proceeding brought against
such Person in respect of which indemnity may be sought under this Section
5.03. With respect to claims in such litigation or proceedings for which
indemnity by a Fund or Portfolio may be sought and subject to applicable
law and the ruling of any court of competent jurisdiction, such Fund or
Portfolio shall be entitled to participate in any such litigation or
proceeding and, after written notice from such Fund or Portfolio to any
Person, such Fund or Portfolio may assume the defense of such litigation or
proceeding with counsel of its choice at its own expense in respect of that
portion of the litigation for which such Fund or Portfolio may be subject
to an indemnification obligation; provided however, a Person shall be
entitled to participate in (but not control) at its own cost and expense,
the defense of any such litigation or proceeding if such Fund or Portfolio
has not acknowledged in writing its obligation to indemnify the Person with
respect to such litigation or proceeding. If such Fund or Portfolio is not
permitted to participate or control such litigation or proceeding under
applicable law or by a ruling of a court of competent jurisdiction, such
Person shall reasonably prosecute such litigation or proceeding. A Person
shall not consent to the entry of any judgment or enter into any settlement
in any such litigation or proceeding without providing each applicable Fund
or Portfolio with adequate notice of any such settlement or judgment, and
without each such Fund's or Portfolio's prior written consent. All Persons
shall submit written evidence to each applicable Fund or Portfolio with
respect to any cost or expense for which they are seeking indemnification
in such form and detail as such Fund or Portfolio may reasonably request.
Section 5.04. Fund's Right to Proceed. Notwithstanding anything to the
contrary contained herein, each Fund or Portfolio shall have, at its election
upon reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's rights
against any Subcustodian, Securities System, Eligible Securities Depository or
other Person for any loss, damage or expense caused such Fund or Portfolio by
such Subcustodian, Securities System, Eligible Securities Depository or other
Person, and shall be entitled to enforce the rights of the Custodian with
respect
36
to any claim against such Subcustodian, Securities System, Eligible Securities
Depository or other Person, which the Custodian may have as a consequence of any
such loss, damage or expense, if and to the extent that such Fund or Portfolio
has not been made whole for any such loss or damage. If the Custodian makes such
Fund or Portfolio whole for any such loss or damage, the Custodian shall retain
the ability to enforce its rights directly against such Subcustodian, Securities
System, Eligible Securities Depository or other Person. Upon such Fund's or
Portfolio's election to enforce any rights of the Custodian under this Section
5.04, such Fund or Portfolio shall reasonably prosecute all actions and
proceedings directly relating to the rights of the Custodian in respect of the
loss, damage or expense incurred by such Fund or Portfolio; provided that, so
long as such Fund or Portfolio has acknowledged in writing its obligation to
indemnify the Custodian under Section 5.03 hereof with respect to such claim,
such Fund or Portfolio shall retain the right to settle, compromise and/or
terminate any action or proceeding in respect of the loss, damage or expense
incurred by such Fund or Portfolio without the Custodian's consent and provided
further, that if such Fund or Portfolio has not made an acknowledgment of its
obligation to indemnify, such Fund or Portfolio shall not settle, compromise or
terminate any such action or proceeding without the written consent of the
Custodian, which consent shall not be unreasonably withheld or delayed. The
Custodian agrees to cooperate with each Fund or Portfolio and take all actions
reasonably requested by such Fund or Portfolio in connection with such Fund or
Portfolio's enforcement of any rights of the Custodian. Each Fund or Portfolio
agrees to reimburse the Custodian for all reasonable out-of-pocket expenses
incurred by the Custodian on behalf of such Fund or Portfolio in connection with
the fulfillment of its obligations under this Section 5.04; provided, however,
that such reimbursement shall not apply to expenses occasioned by or resulting
from the failure of the Custodian to exercise the standard of care set forth in
Section 5.01(a) hereof.
ARTICLE VI
COMPENSATION
On behalf of each of its Portfolios, each Fund shall compensate the
Custodian for its services and expenses in such amounts, and at such times, as
may be agreed upon in writing, from time to time, by the Custodian and such
Fund.
ARTICLE VII
TERM AND TERMINATION
Section 7.01. Termination of Agreement as to One or More Funds. This
Agreement shall become effective as of the date first above-written and shall
remain in full force and effect for a period of two (2) years (the "Initial
Term").
37
During the Initial Term and thereafter, each Fund, at its discretion, may
terminate this Agreement in the event of any of the following termination
events: (i) such Fund's determination that there is a reasonable basis to
conclude that the Custodian is insolvent or that the financial condition of the
Custodian is deteriorating in any material respect, in which case termination
shall take effect upon the Custodian's receipt of written notice of termination,
or at such later time as such Fund shall designate; (ii) the Custodian fails to
(a) perform in a material respect and on more than one occasion the safekeeping
services set forth in Section 2.01 hereof, and (b) cure or establish a remedial
plan, acceptable to such Fund acting reasonably, in each case within 30 days of
written notice thereof; or (iii) in such Fund's reasonable opinion, the
Custodian has not achieved one or more of the performance measures set forth in
any service level document (a "Service Level Document") that may be established
by the parties, and a plan or revised plan has not been put into place in
accordance with the following procedures: In the event that such Fund reasonably
believes that the Custodian has not met one or more of the performance measures
set forth in any Service Level Document during any calendar quarter, the Fund
may, in its discretion, submit a written deficiency notice to the Custodian
outlining the performance deficiencies ("Deficiency Notice"). Such Deficiency
Notice must be provided to the Custodian within 20 days of the end of such
calendar quarter. After receipt of such notice, the Custodian shall present the
Fund with a written plan to address the deficiency(ies) set forth in the
Deficiency Notice (the "Plan"). Such Plan must be provided to Fund within 30
days after receipt of the Deficiency Notice. If the Custodian fails to submit a
Plan within such 30-day period, Fund may terminate this Agreement upon 60 days'
written notice to the Custodian. The Fund, in its discretion, may accept or
reject the Plan by notifying the Custodian in writing ("Response Notice") within
15 days after submission of the Plan. If the Fund fails to provide a Response
Notice within such 15-day period, it shall be presumed that Fund accepted the
Plan. In the event the Fund submits a Response Notice rejecting the Plan, the
Custodian shall submit a revised plan ("Revised Plan") to the Fund. Such Revised
Plan must be provided to the Fund within 30 days after provision of the Response
Notice rejecting the Plan. If the Custodian fails to submit a Revised Plan
within such 30-day period, the Fund may terminate the Agreement upon 60 days'
written notice to the Custodian. The Fund, in its sole discretion, may accept or
reject the Revised Plan by notifying the Custodian in writing ("Revised Plan
Notice"). Any Revised Plan Notice must be submitted to the Custodian within 15
days after provision of the Revised Plan. If Fund fails to provide a Revised
Plan Notice within such 15-day period, it shall be presumed that the Fund
accepted the Revised Plan. If Fund provides a Revised Plan Notice to the
Custodian that rejects the Revised Plan, the Fund may, in its sole discretion,
terminate this Agreement upon 60 days' written notice to the Custodian. Such
termination notice must be submitted to the Custodian within 60 days after
provision of the Revised Plan Notice.
38
Following the Initial Term, with respect to each Fund, this Agreement shall
continue in full force and effect until the first to occur of: (a) termination
by the Custodian by an instrument in writing delivered or mailed to such Fund,
such termination to take effect not sooner than ninety (90) days after the date
of such delivery; (b) termination by such Fund by an instrument in writing
delivered or mailed to the Custodian, such termination to take effect not sooner
than thirty (30) days after the date of such delivery; or (c) termination by
such Fund by written notice delivered to the Custodian, based upon such Fund's
determination that there is a reasonable basis to conclude that the Custodian is
insolvent or that the financial condition of the Custodian is deteriorating in
any material respect, in which case termination shall take effect upon the
Custodian's receipt of such notice or at such later time as such Fund shall
designate. In the event of termination pursuant to this Section 7.01 by any Fund
(a "Terminating Fund"), each Terminating Fund shall make payment of all accrued
fees and unreimbursed expenses and all overdrafts and related charges with
respect to such Terminating Fund within a reasonable time following termination
and delivery of a statement to the Terminating Fund setting forth such fees and
expenses. The Custodian may retain such portion of a Terminating Fund's assets
as is necessary to satisfy any obligation of such Terminating Fund to the
Custodian. Each Terminating Fund shall identify in any notice of termination a
successor custodian or custodians to which the cash, securities and other assets
of its Portfolios shall, upon termination of this Agreement with respect to such
Terminating Fund, and following the satisfaction of all obligations of such
Terminating Fund to State Street Bank and Trust Company arising under this
Agreement and/or such Terminating Fund's fund accounting agreement with State
Street Bank and Trust Company, be delivered. In the event that no written notice
designating a successor custodian shall have been delivered to the Custodian on
or before the date when termination of this Agreement as to a Terminating Fund
shall become effective, the Custodian may deliver to a bank or trust company
doing business in Boston, Massachusetts or New York, New York, 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 and
other assets of such Terminating Fund's Portfolios held by the Custodian and all
instruments held by the Custodian relative thereto and all other property of the
Terminating Fund's Portfolios held by the Custodian under this Agreement.
Thereafter, such bank or trust company shall be the successor of the Custodian
with respect to such Terminating Fund under this Agreement. In the event that
securities and other assets of such Terminating Fund's Portfolios remain in the
possession of the Custodian after the date of termination hereof with respect to
such Terminating Fund owing to a failure of the Terminating Fund to appoint a
successor custodian, the Custodian shall be entitled to compensation for its
services in accordance with the fee schedule most recently in effect, for such
period as the Custodian retains possession of such securities and other assets,
and the provisions of this Agreement relating to
39
the duties and obligations of the Custodian and the Terminating Fund shall
remain in full force and effect. In the event of the appointment of a successor
custodian, it is agreed that, subject to the satisfaction of all obligations of
such Terminating Fund to the Custodian, the cash, securities and other property
owned by a Terminating Fund and held by the Custodian, any Subcustodian or
nominee shall be delivered to the successor custodian; and the Custodian agrees
to reasonably cooperate with such Terminating Fund in the execution of documents
and performance of other actions necessary or desirable in order to substitute
the successor custodian for the Custodian under this Agreement.
Section 7.02. Termination as to One or More Portfolios. During the Initial
Term, this Agreement may be terminated as to one or more of a Fund's Portfolios
(but less than all of its Portfolios) in accordance with Section 7.01. Following
the Initial Term, this Agreement may be terminated as to one or more of a Fund's
Portfolios (but less than all of its Portfolios) by delivery by a Fund, on
behalf of its Portfolios, to the Custodian of an amended Appendix A deleting
such Portfolios pursuant to Section 9.07(b) hereof, in which case termination as
to such deleted Portfolios shall take effect thirty (30) days after the date of
such delivery. The execution and delivery of an amended Appendix A which deletes
one or more Portfolios shall constitute a termination of this Agreement only
with respect to such deleted Portfolio(s), shall be governed by the preceding
provisions of Section 7.01 as to the identification of a successor custodian and
the delivery of cash, securities and other assets of the Portfolios so deleted,
and shall not affect the obligations of the Custodian and any Fund hereunder
with respect to the other Portfolios set forth in Appendix A, as amended from
time to time.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
TERM SECTION
---- -------
Account 2.23(a)
ADRs 2.06
Additional Custodian(s) 2.24(a)
Authorized Person(s) 3.02
Bank Account(s) 2.22(a)
Bank Loans 2.15
Banking Institution(s) 2.12
Broker's Futures Margin Account(s) 2.10
Business Continuity/Disaster Recovery Plan 5.01(b)
40
TERM SECTION
---- -------
Business Day 2.16(b)
Custodian Preamble
Deficiency Notice 7.01
Distribution Account(s) 2.17
Domestic Subcustodian(s) 4.01
Eligible Securities Depository 2.23(b)
Financing Documents 2.15
Foreign Subcustodian(s) 4.02(a)(i)
Fund(s) Preamble
Fund of Funds Portfolio(s) 2.02(c)
Initial Term 7.01
Institutional Client(s) 2.03
Interest Bearing Deposit(s) 2.12
Interim Subcustodian(s) 4.02(b)
Loan Payment(s) 2.16(b)
MFS 2.02(c)
Person 5.01(b)
Plan 7.01
Portfolio(s) Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
Response Notice 7.01
Revised Plan 7.01
Revised Plan Notice 7.01
Rule 17f-5 2.23(b)
Rule 17f-7 2.23(b)
SEC 2.23(a)
Securities System(s) 2.23(a)
Service Level Document 7.01
Shares 2.17
Special Instructions 3.01(b)
Special Subcustodian(s) 4.03
Subcustodian(s) Article IV
Terminating Fund 7.01
Underlying Fund(s) 2.02(c)
Underlying Fund Transfer Agent 2.02(c)
Underlying Shares 2.02(c)
UCC 2.02(a)
US Securities 2.19
1940 Act Preamble
41
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by each Fund. Upon request, each Fund shall execute
and deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their
respective obligations to such Fund under this Agreement or any applicable
subcustodian agreement with respect to such Fund, provided that the
exercise by the Custodian or any Subcustodian of any such rights shall in
all events be in compliance with the terms of this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions,
the Custodian shall execute and deliver to each applicable Fund or to such
other parties as such Fund(s) may designate in such Proper Instructions,
all such documents, instruments or agreements as may be reasonable and
necessary or desirable in order to effectuate any of the transactions
contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A COPY OF
THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF EACH FUND THAT IS
ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST IS ON FILE WITH THE SECRETARY OF THE
COMMONWEALTH OF MASSACHUSETTS, AND NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS
NOT EXECUTED ON BEHALF OF THE MEMBERS OF THE BOARD OF TRUSTEES OR MEMBERS OF THE
BOARD OF MANAGERS OF ANY FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS
AGREEMENT ARE NOT BINDING UPON ANY OF THE TRUSTEES, MANAGERS, OFFICERS,
SHAREHOLDERS OR PARTNERS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE
ASSETS AND PROPERTY OF EACH FUND'S RESPECTIVE PORTFOLIOS. THE CUSTODIAN AGREES
THAT NO SHAREHOLDER, TRUSTEE, MANAGER, OFFICER OR PARTNER OF ANY FUND MAY BE
HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY FUND ARISING
OUT OF THIS AGREEMENT.
Section 9.03. Several Obligations of the Funds and the Portfolios. WITH
RESPECT TO ANY OBLIGATIONS OF A FUND ON BEHALF OF ANY OF ITS PORTFOLIOS ARISING
OUT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE OBLIGATIONS ARISING
UNDER SECTIONS 5.03, 5.04 AND ARTICLE VI HEREOF, THE CUSTODIAN SHALL LOOK FOR
PAYMENT OR SATISFACTION OF ANY OBLIGATION SOLELY TO THE ASSETS AND PROPERTY OF
THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH EACH FUND HAD
SEPARATELY
42
CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN INSTRUMENT WITH RESPECT TO
EACH OF ITS PORTFOLIOS. CONSISTENT WITH THE FOREGOING, THE OBLIGATIONS OF EACH
FUND AND PORTFOLIO UNDER THIS AGREEMENT ARE SEVERAL AND NEITHER JOINT NOR JOINT
AND SEVERAL.
Section 9.04. Representations, Warranties and Covenants.
(a) Representations, Warranties and Covenants of Each Fund. Each
Fund hereby severally and not jointly represents and warrants that each of
the following shall be true, correct and complete with respect to it at all
times during the term of this Agreement: (i) the Fund is duly organized
under the laws of its jurisdiction of organization and is registered as an
open-end or closed-end management investment company under the 1940 Act;
and (ii) the execution, delivery and performance by the Fund of this
Agreement on behalf of each applicable Portfolio are (w) within its power,
(x) have been duly authorized by all necessary action, and (y) will not (A)
contribute to or result in a breach of or default under or conflict with
any existing law, order, regulation or ruling of any governmental or
regulatory agency or authority, or (B) violate any provision of the Fund's
corporate charter, Declaration of Trust or other organizational document,
or bylaws, or any amendment thereof or any provision of its most recent
Prospectus or Statement of Additional Information.
(b) Representations, Warranties and Covenants of the Custodian.
The Custodian hereby represents and warrants to each Fund that each of the
following shall be true, correct and complete at all times during the term
of this Agreement: (i) the Custodian is duly organized under the laws of
its jurisdiction of organization and qualifies to act as a custodian to
open-end and closed-end management investment companies under the
provisions of the 1940 Act; (ii) the execution, delivery and performance by
the Custodian of this Agreement are (w) within its power, (x) have been
duly authorized by all necessary action, and (y) will not (A) contribute to
or result in a breach of or default under or conflict with any existing
law, order, regulation or ruling of any governmental or regulatory agency
or authority, or (B) violate any provision of the Custodian's corporate
charter, or other organizational document, or bylaws, or any amendment
thereof, (iii) the Custodian is a "Qualified Foreign Bank" (as defined in
Rule 17f-5), a "U.S. Bank" (as defined in Rule 17f-5) or an entity which by
order of the SEC or by no-action letter of the staff of the SEC is exempt
from meeting the requirements of an "Eligible Foreign Custodian" (as set
forth in Rule 17f-5), (iv) the Custodian qualifies as a "Primary Custodian"
(as defined in Rule 17f-7) and accepts the responsibilities thereof with
respect to the Funds and Portfolios, (v) the
43
Custodian has entered into policies, bonds or similar arrangements which
provide the types and minimum amounts of insurance and related coverage set
forth in Section 2.30 hereof and such policies, bonds or similar
arrangements are in full force and effect; and (vi) the Custodian shall
maintain and keep current a Business Continuity/Disaster Recovery Plan and
the capacity to execute such Business Continuity/Disaster Recovery Plan.
Section 9.05. Application of SEC Rules; Interpretation of Agreement in
Accordance with SEC or Publicly Available Interpretative Letters of the SEC
Staff. To the extent this Agreement refers to Rule 17f-5, Rule 17f-6, Rule
17f-7, or any other rule promulgated by the SEC under the federal securities
laws, including the 1940 Act, this Agreement shall be deemed to refer to those
rules to the extent relevant and shall be interpreted in accordance with those
rules as they may be amended or restated from time to time or otherwise
interpreted or modified in accordance with relevant SEC or publicly available
interpretative letters of the SEC staff. This Agreement, including the duties
and obligations of the Custodian hereunder, shall be interpreted in accordance
with the applicable requirements of the federal securities laws, as such laws
may be interpreted or modified from time to time in accordance with relevant SEC
or publicly available interpretative letters of the SEC Staff.
Section 9.06. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the Fund, on the one hand, and the Custodian, on
the other, with respect to the subject matter hereof and accordingly, supersedes
as of the effective date of this Agreement any custodian agreement heretofore in
effect between each Fund and the Custodian.
Section 9.07. Waivers and Amendments. No provision of this Agreement may be
waived, amended or terminated except by a statement in writing signed by the
party against which enforcement of such waiver, amendment or termination is
sought; provided, however: (a) Appendix A listing the Portfolios of each Fund
for which the Custodian serves as custodian may be amended from time to time to
add one or more Portfolios for one or more Funds, by each applicable Fund's
execution and delivery to the Custodian of an amended Appendix A, and the
execution of such amended Appendix by the Custodian, in which case such
amendment shall take effect immediately upon execution by the Custodian; (b)
subject to Article VII hereof, Appendix A may be amended from time to time to
delete one or more Portfolios (but less than all of the Portfolios) of one or
more of the Funds, by each applicable Fund's execution and delivery to the
Custodian of an amended Appendix A, in which case such amendment shall take
effect thirty (30) days after such delivery, unless otherwise agreed by the
Custodian and each applicable Fund in writing;
44
(c) Appendix B listing Foreign Subcustodians, Eligible Securities Depositories,
Special Subcustodians and Additional Custodians, may be amended from time to
time to add or delete one or more Foreign Subcustodians, Eligible Securities
Depositories, Special Subcustodians or Additional Custodians for a Fund or
Funds, with respect to Foreign Subcustodians or Eligible Securities
Depositories, by the Custodian's delivery of appropriate notice to the Fund, in
which case such amendment shall take effect immediately upon such delivery of
notice; and, with respect only to Special Subcustodians or Additional
Custodians, by either party's execution and delivery to the other party hereto
of an amended Appendix B; and (d) Appendix D listing the Fund of Funds
Portfolios for which the Custodian serves as custodian may be amended from time
to time to add or delete one or more of the Fund of Funds Portfolios, by each
applicable Fund's or Portfolio's execution and delivery to the Custodian of an
amended Appendix D, and the execution of such amended Appendix by the Custodian,
in which case such amendment shall take effect immediately upon execution by the
Custodian.
Section 9.08. Interpretation. In connection with the operation of this
Agreement, the Custodian and any Fund may agree in writing from time to time on
such provisions interpretative of or in addition to the provisions of this
Agreement with respect to such Fund as may in their joint opinion be consistent
with the general tenor of this Agreement. No interpretative or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement or affect any other Fund.
Section 9.09. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the parties
hereto.
Section 9.10. Governing Law. Insofar as any question or dispute may arise
in connection with the custodianship of foreign securities pursuant to an
agreement with a Foreign Subcustodian that is governed by the laws of the State
of
New York, the provisions of this Agreement shall be construed in accordance
with and governed by the laws of the State of
New York, provided that in all
other instances this Agreement shall be construed in accordance with and
governed by the laws of The Commonwealth of Massachusetts, in each case without
giving effect to principles of conflicts of law.
Section 9.11. Notices. Except in the case of Proper Instructions or Special
Instructions, notices and other writings contemplated by this Agreement shall be
delivered by hand or by facsimile transmission (provided that in the case of
delivery by facsimile transmission, notice shall also be mailed postage prepaid
to the parties at the following addresses:
45
(a) If to any Fund:
[Trust Name]
c/o Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Treasurer of the MFS Funds
Telephone: 000-000-0000
(b) If to the Custodian:
State Street Bank and Trust Company
U.S. Investor Services Division, LCC/2S
Lafayette Corporate Center
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Attn: W. Xxxxxx Xxx, Senior Vice President
Telephone: 000-000-0000
Telefax: 000-000-0000
with a copy to:
Xxxx Xxxxx Zeven, Senior Vice President & Senior Managing
Counsel
State Street Bank and Trust Company
Legal Division, LCC/2S
Lafayette Corporate Center
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Telephone: 000-000-0000
Telefax: 617-662- 3805
or to such other address as a Fund or the Custodian may have designated in
writing to the other.
Section 9.12. Assignment. This Agreement shall be binding on and shall
inure to the benefit of each Fund severally and the Custodian and their
respective successors and assigns, provided that, subject to the provisions of
Section 7.01 hereof, neither the Custodian nor any Fund may assign this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party.
46
Section 9.13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. With respect to each
Fund, this Agreement shall become effective when one or more counterparts have
been signed and delivered by such Fund and the Custodian.
Section 9.14. Consent to Recording. Subject to Section 9.14, each Fund and
the Custodian hereby agree that each may electronically record all telephonic
conversations between them and that any such recordings may be submitted in
evidence in any proceedings relating to this Agreement.
Section 9.15. Confidentiality: Survival of Obligations. The parties hereto
agree that each shall treat confidentially all information provided by each
party to the other regarding its business and operations. All confidential
information provided by a party hereto shall be used by any other party hereto
solely for the purpose of rendering services pursuant to this Agreement and,
except as may be required in carrying out this Agreement, shall not be disclosed
to any third party without the prior consent of such providing party. During the
term of this Agreement, the Custodian agrees that it will maintain and enforce
policies which prohibit the Custodian and its employees from engaging in
securities transactions based on knowledge of the portfolio holdings of any
Portfolio. In addition, the Custodian is familiar with Regulation S-P and agrees
not to disclose or use non-public personal information about Fund or Portfolio
shareholders except in accordance with Regulation S-P and the Funds' applicable
privacy policies. The foregoing shall not be applicable to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a violation of this Agreement, or that is required to be
disclosed by any bank examiner of the Custodian or any Subcustodian, any auditor
of the parties hereto, by judicial or administrative process or otherwise by
applicable law or regulation. The provisions of this Section 9.15 and Sections
9.01, 9.02, 9.03, 9.10, Section 2.26, Section 3.04, Section 7.01, Article V and
Article VI hereof and any other rights or obligations incurred or accrued by any
party hereto prior to termination of this Agreement shall survive any
termination of this Agreement, including a termination pursuant to Section 7.02.
Section 9.16. Reproduction of Documents. This Agreement and all schedules,
addenda, exhibits, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties hereto all/each agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular
47
course of business, and that any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
Section 9.17. Remote Access Services Addendum. The Custodian and each Fund
agree to be bound by the terms of the Remote Access Services Addendum attached
hereto.
Section 9.18. Shareholder Communications Election. Rule 14b-2 under the
Securities Exchange Act of 1934 requires banks which hold securities for the
account of customers to respond to requests by issuers of securities for the
names, addresses and holdings of beneficial owners of securities of that issuer
held by the bank unless the beneficial owner has expressly objected to
disclosure of this information. In order to comply with the rule, the Custodian
needs the Fund to indicate whether it authorizes the Custodian to provide the
Fund's name, address, and share position to requesting companies whose
securities the Fund owns. If the Fund tells the Custodian "no", the Custodian
will not provide this information to requesting companies. If the Fund tells the
Custodian "yes" or does not check either "yes" or "no" below, the Custodian is
required by the rule to treat the Fund as consenting to disclosure of this
information for all securities owned by the Fund or any funds or accounts
established by the Fund. For the Fund's protection, the rule prohibits the
requesting company from using the Fund's name and address for any purpose other
than corporate communications. Please indicate below whether the Fund consents
or objects by checking one of the alternatives below.
YES |_| The Custodian is authorized to release the Fund's name, address, and
share positions.
NO |X| The Custodian is not authorized to release the Fund's name, address,
and share positions.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
Each of the Investment Companies listed on
Appendix A Attached Hereto, on Behalf of
each of Their Respective Portfolios
By: XXXXX X. XXXXX
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
00
XXXXX XXXXXX BANK AND TRUST COMPANY
By: XXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
[Signature Page to Custodian Agreement]
49
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY
AND
EACH OF THE INVESTMENT COMPANIES
DATED AS OF DECEMBER 18, 2006
Except as may be otherwise indicated below, with respect to each fund listed on
this Appendix A, such fund shall become a "Fund" party to the Custodian
Agreement effective in 2007 upon the day immediately following such fund's
respective fiscal year end (FYE) reflected below.
TRUST FUND (FYE)
----------------------------------------------------------------------------------------
Stand-Alone Trusts Massachusetts Investors Trust (12/31)
Closed End Funds MFS Charter Income Trust (11/30)
MFS Government Market Income Trust (11/30)
MFS Intermediate Income Trust (10/31)
MFS Multimarket Income Trust (10/31)
MFS Municipal Income Trust (10/31)
MFS Special Value Trust (10/31)
MFS Series Trust I MFS Cash Reserve Fund (8/31)
MFS Core Equity Fund (8/31)
MFS Core Growth Fund (8/31)
MFS New Discovery Fund (8/31)
MFS Research International Fund (8/31)
MFS Strategic Growth Fund (8/31)
MFS Technology Fund (8/31)
MFS Value Fund (8/31)
MFS Series Trust X MFS Aggressive Growth Allocation Fund (5/31)
MFS Conservative Allocation Fund (5/31)
MFS Emerging Markets Debt Fund (7/31)
MFS Emerging Markets Equity Fund (5/31)
MFS Floating Rate High Income Fund (8/31)
50
MFS Growth Allocation Fund (5/31)
MFS International Diversification Fund (5/31)
MFS International Growth Fund (5/31)
MFS International Value Fund (5/31)
MFS New Endeavor Fund (7/31)
MFS Moderate Allocation Fund (5/31)
MFS Strategic Value Fund (7/31)
MFS Series Trust XI MFS Mid Cap Value Fund (9/30)
MFS Union Standard Equity Fund (9/30)
MFS Series Trust XII MFS Lifetime Retirement Income Fund (4/30)
MFS Lifetime 2010 Fund (4/30)
MFS Lifetime 2020 Fund (4/30)
MFS Lifetime 2030 Fund (4/30)
MFS Lifetime 2040 Fund (4/30)
MFS Sector Rotational Fund (4/30) - effective date 1/2/07
MFS Variable Insurance Trust MFS Capital Opportunities Series (12/31)
MFS Global Equity Series (12/31)
MFS Emerging Growth Series (12/31)
MFS High Income Series (12/31)
MFS Investors Growth Series (12/31)
MFS Investors Trust Series (12/31)
MFS Mid Cap Growth Series (12/31)
MFS Money Market Series (12/31)
MFS New Discovery Series (12/31)
MFS Research Series (12/31)
MFS Research Bond Series (12/31)
MFS Research International Series (12/31)
MFS Strategic Income Series (12/31)
MFS Total Return Series (12/31)
MFS Utilities Series (12/31)
MFS Value Series (12/31)
MFS/Sun Life Series Trust Bond Series (12/31)
Capital Appreciation Series (12/31)
Capital Opportunities Series (12/31)
Core Equity Series (12/31)
Emerging Growth Series (12/31)
Emerging Markets Equity Series (12/31)
Global Governments Series (12/31)
51
Global Growth Series (12/31)
Global Total Return Series (12/31)
Government Securities Series (12/31)
High Yield Series (12/31)
International Growth Series (12/31)
International Value Series (12/31)
Mass. Investors Growth Stock Series (12/31)
Mass. Investors Trust Series (12/31)
Mid Cap Growth Series (12/31)
Mid Cap Value Series (12/31)
Money Market Series (12/31)
New Discovery Series (12/31)
Research Series (12/31)
Research International Series (12/31)
Strategic Growth Series (12/31)
Strategic Income Series (12/31)
Strategic Value Series (12/31)
Technology Series (12/31)
Total Return Series (12/31)
Utilities Series (12/31)
Value Series (12/31)
Variable Accounts Capital Appreciation Variable Account (12/31)
Global Governments Variable Account (12/31)
Government Securities Variable Account (12/31)
High Yield Variable Account (12/31)
Money Market Variable Account (12/31)
Total Return Variable Account (12/31)
00
XXXXXXXX X
TO
CUSTODIAN AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY
AND
EACH OF THE INVESTMENT COMPANIES
LISTED ON APPENDIX A THERETO
DATED AS OF DECEMBER 18, 2006
The following is a list of Additional Custodians, Special Subcustodians, Foreign
Subcustodians and Eligible Securities Depositories under the Custodian Agreement
dated as of December 18, 2006 (the "Custodian Agreement"):
A. ADDITIONAL CUSTODIANS
None
B. SPECIAL SUBCUSTODIANS
None
C. FOREIGN SUBCUSTODIANS (as of 9/30/06)
COUNTRY SUBCUSTODIAN
------- ------------
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Citibank Pty. Limited
Austria Erste Bank der Osterreichischen Sparkassen AG
Bahrain HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Bangladesh Standard Chartered Bank
53
Belgium BNP Paribas Securities Services, S.A.
Benin via Societe Generale de Banques en Cote d'Ivoire,
Abidjan, Ivory Coast
Bermuda The Bank of Bermuda Limited
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Burkina Faso via Societe Generale de Banques en Cote d'Ivoire,
Abidjan, Ivory Coast
Canada State Street Trust Company Canada
Cayman Islands Scotiabank & Trust (Cayman) Limited
Chile BankBoston, N.A.
People's Republic The Hongkong and Shanghai Banking Corporation Limited,
of China Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d
Cyprus Cyprus Popular Bank Public Company Ltd.
Czech Republic Ceskoslovenska Obchodni Banka, A.S.
Denmark Skandinaviska Enskilda Bankken AB, Sweden (operating through its
Copenhagen branch)
Ecuador Banco de la Produccion S.A. PRODUBANCO
54
Egypt HSBC Bank Egypt S.A.E.
(as delegate of The Hongkong and Shanghai Banking Corporation Limited)
Estonia AS Hansabank
Finland Nordea Bank Finland Plc.
France BNP Paribas Securities Services, S.A.
Deutsche Bank AG, Netherlands (operating through its
Paris branch)
Germany Deutsche Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Guinea-Bissau via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Hong Kong Standard Chartered Bank (Hong Kong) Limited
Hungary HVB Bank Hungary Rt.
Iceland Kaupthing Bank hf.
India Deutsche Bank AG
The Hongkong and Shanghai Banking Corporation Limited
Indonesia Deutsche Bank AG
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas Securities Services, S.A.
Deutsche Bank S.p.A.
55
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Jamaica Bank of Nova Scotia Jamaica Ltd.
Japan Mizuho Corporate Bank Ltd.
Sumitomo Mitsui Banking Corporation
Jordan HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited
Republic of Korea Deutsche Bank AG
The Hongkong and Shanghai Banking Corporation Limited
Latvia A/s Hansabanka
Lebanon HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Lithuania SEB Vilniaus Bankas AB
Malaysia Standard Chartered Bank Malaysia Berhad
Mali via Societe Generale de Banques en Cote d'Ivoire,
Abidjan, Ivory Coast
Malta The Hongkong and Shanghai Banking Corporation Limited
Mauritius The Hongkong and Shanghai Banking Corporation Limited
Mexico Banco Nacional de Mexico S.A.
Morocco Attijariwafa bank
Namibia Standard Bank Namibia Limited
56
Netherlands Deutsche Bank AG
New Zealand Westpac Banking Corporation
Niger via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Nigeria Stanbic Bank Nigeria Limited
Norway Nordea Bank Norge ASA
Oman HSBC Bank Middle East Limited
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Pakistan Deutsche Bank AG
Palestine HSBC Bank Middle East Limited
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Panama HSBC Bank (Panama) S.A.
Peru Citibank del Peru, S.A.
Philippines Standard Chartered Bank
Poland Bank Handlowy w Warszawie S.A.
Portugal Banco Comercial Portugues S.A.
Puerto Rico Citibank N.A.
Qatar HSBC Bank Middle East Limited
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Romania ING Bank N.V.
Russia ING Bank (Eurasia) ZAO, Moscow
57
Senegal via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Serbia HVB Bank Serbia and Montenegro a.d.
Singapore DBS Bank Limited
United Overseas Bank Limited
Slovak Republic Ceskoslovenska Obchodni Banka, A.S., pobocka zahranicnej banky v SR
Slovenia Bank Austria Creditanstalt d.d. - Ljubljana
South Africa Nedbank Limited
Standard Bank of South Africa Limited
Spain Deutsche Bank S.A.E.
Sri Lanka The Hongkong and Shanghai Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Xxxxxx XX
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
Thailand Standard Chartered Bank (Thai) Public Company Limited
Togo via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, A.S.
Uganda Barclays Bank of Uganda Limited
00
Xxxxxxx XXX Xxxx Xxxxxxx
Xxxxxx Xxxx Xxxxxxxx HSBC Bank Middle East Limited
(as delegate of The Hongkong and Shanghai Banking Corporation Limited)
United Kingdom State Street Bank and Trust Company, United kingdom Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai Banking Corporation Limited
Zambia Barclays Bank of Zambia Plc.
Zimbabwe Barclays Bank of Zimbabwe Limited
59
D. ELIGIBLE SECURITIES DEPOSITORIES (as of 9/30/06)
COUNTRY DEPOSITORY
------- ----------
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Bahrain Clearing, Settlement, and Depository System of the Bahrain
Stock Exchange
Bangladesh Central Depository Bangladesh Limited
Belgium Banque Nationale de Belgique
Euroclear Belgium
Benin Depositaire Central - Banque de Reglement
Bermuda Bermuda Securities Depository
Brazil Central de Custodia e de Liquidacao Financeira de Titulos
Privados (CETIP)
Companhia Brasileira de Liquidacao e Custodia
Sistema Especial de Liquidacao e de Custodia (SELIC)
Bulgaria Bulgarian National Bank
Central Depository AD
Burkina Faso Depositaire Central - Banque de Reglement
Canada The Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
60
People's Republic China Securities Depository and Clearing Corporation
Limited Shanghai Branch
of China
China Securities Depository and Clearing Corporation Limited
Shenzhen Branch
Colombia Deposito Central de Valores
Deposito Centralizado de Valores de Colombia S.A.
(DECEVAL)
Costa Rica Central de Valores S.A.
Croatia Sredisnja Depozitarna Agencija d.d.
Cyprus Central Depository and Central Registry
Czech Republic Czech National Bank
Stredisko cennych papiru - Ceska republika
Denmark Vaerdipapircentralen (Danish Securities Center)
Egypt Misr for Clearing, Settlement, and Depository S.A.E.
Central Bank of Egypt
Estonia AS Eesti Vaartpaberikeskus
Finland Suomen Arvopaperikeskus Oy
France Euroclear France
Germany Clearstream Banking AG, Frankfurt
Greece Apothetirion Titlon AE - Central Securities Depository
Bank of Greece,
System for Monitoring Transactions in Securities in Book-Entry Form
61
Guinea-Bissau Depositaire Central - Banque de Reglement
Hong Xxxx Xxxxxxx Xxxxxxxxxxxx Xxxx
Xxxx Xxxx Securities Clearing Company Limited
Hungary Kozponti Elszamolohaz es Ertektar (Budapest) Rt.
(KELER)
Iceland Icelandic Securities Depository Limited
India Central Depository Services (India) Limited
National Securities Depository Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Israel Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearinghouse)
Italy Monte Titoli S.p.A.
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica Jamaica Central Securities Depository
Japan Bank of Japan - Net System
Japan Securities Depository Center (JASDEC) Incorporated
Jordan Securities Depository Center
Kazakhstan Central Securities Depository
Kenya Central Depository and Settlement Corporation Limited
Central Bank of Kenya
62
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Banque du Liban
Custodian and Clearing Center of Financial Instruments
for Lebanon and the Middle East (Midclear) X.X.X.
Lithuania Central Securities Depository of Lithuania
Malaysia Bank Negara Malaysia
Bursa Malaysia Depository Sdn. Bhd.
Mali Depositaire Central - Banque de Reglement
Malta Central Securities Depository of the Malta Stock Exchange
Mauritius Bank of Mauritius
Central Depository and Settlement Co. Ltd.
Mexico S.D. INDEVAL, S.A. de C.V.
Morocco Maroclear
Namibia Bank of Namibia
Netherlands Euroclear Nederland
New Zealand New Zealand Central Securities Depository Limited
Niger Depositaire Central - Banque de Reglement
Nigeria Central Securities Clearing System Limited
Norway Verdipapirsentralen (Norwegian Central Securities Depository)
00
Xxxx Xxxxxx Depository & Securities Registration Company, SAOC
Pakistan Central Depository Company of Pakistan Limited
State Bank of Pakistan
Palestine Clearing, Depository and Settlement, a department
of the Palestine Stock Exchange
Panama Central Latinoamericana de Valores, S.A. (LatinClear)
Peru Caja de Valores y Liquidaciones, Institucion de
Compensacion y Liquidacion de
Valores S.A
Philippines Philippine Depository & Trust Corporation
Registry of Scripless Securities (XXXX) of the Bureau of Treasury
Poland Rejestr Papierow Wartooeciowych
Krajowy Depozyt Papierow Wartosciowych S.A.
Portugal INTERBOLSA - Sociedade Gestora de Sistemas de
Liquidacao
e de Sistemas Centralizados de Valores Mobiliarios, S.A.
Qatar Central Clearing and Registration (CCR), a
department of the Doha Securities Market
Romania Bucharest Stock Exchange Registry Division
National Bank of Romania
Russia Vneshtorgbank, Bank for Foreign Trade of the Russian
Federation
Senegal Depositaire Central - Banque de Reglement
Serbia Central Registrar and Central Depository for Securities
Singapore The Central Depository (Pte) Limited
64
Monetary Authority of Singapore
Slovak Republic Naodna banka slovenska
Centralny depozitar cennych papierov SR, a.s.
Slovenia KDD - Centralna klirinsko depotna xxxxxx x.x.
South Africa Share Transactions Totally Electronic (STRATE) Ltd.
Spain IBERCLEAR
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Depository and Clearing Corporation
Thailand Thailand Securities Depository Company Limited
Togo Depositaire Central - Banque de Reglement
Trinidad and Tobago Trinidad and Tobago Central Bank
Tunisia Societe Tunisienne Interprofessionelle pour la Compensation
et de Depots des Valeurs Mobilieres (STICODEVAM)
Turkey Central Bank of Turkey
Central Registry Agency
Uganda Bank of Uganda
Ukraine Mizhregionalny Fondovy Souz
National Bank of Xxxxxxx
00
Xxxxxx Xxxx Xxxxxxxx Clearing and Depository System,
a department of the Dubai Financial Market
United Kingdom CrestCo.
Uruguay Banco Central del Uruguay
Venezuela Banco Central de Venezuela
Caja Venezolana de Valores
Vietnam Vietnam Securities Depository
Zambia Bank of Zambia
XxXX Central Shares Depository Limited
TRANSNATIONAL
Euroclear
Clearstream Banking, S.A.
66
APPENDIX C TO THE
CUSTODIAN AGREEMENT
BETWEEN
EACH OF THE INVESTMENT COMPANIES
LISTED ON APPENDIX A THERETO
AND
STATE STREET BANK AND TRUST COMPANY
[INTENTIONALLY OMITTED]
67
APPENDIX D TO THE
CUSTODIAN AGREEMENT
BETWEEN
EACH OF THE INVESTMENT COMPANIES
LISTED ON APPENDIX A THERETO
AND
STATE STREET BANK AND TRUST COMPANY
DATED AS OF DECEMBER 18, 2006
A. Fund of Funds
TRUST FUND
----- ----
MFS Series Trust X MFS Conservative Allocation Fund
MFS Moderate Allocation Fund
MFS Growth Allocation Fund
MFS Aggressive Growth Allocation Fund
MFS International Diversification Fund
MFS Series Trust XII MFS Lifetime Retirement Income Fund
MFS Lifetime 2010 Fund
MFS Lifetime 2020 Fund
MFS Lifetime 2030 Fund
MFS Lifetime 2040 Fund
00
[XXXXX XXXXXX LOGO]
SERVING INSTITUTIONAL INVESTORS WORLDWIDE (SM)
FUNDS TRANSFER ADDENDUM
OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street is authorized to promptly debit
Client's account(s) upon the receipt of a payment order in compliance with the
selected Security Procedure chosen for funds transfer and in the amount of money
that State Street has been instructed to transfer. State Street shall execute
payment orders in compliance with the Security Procedure and with the Client's
instructions on the execution date provided that such payment order is received
by the customary deadline for processing such a request, unless the payment
order specifies a later time. All payment orders and communications received
after this time will be deemed to have been received on the next business day.
2. SECURITY PROCEDURE: The Client acknowledges that the Security Procedure it
has designated on the Selection Form was selected by the Client from Security
Procedures offered by State Street. The Client agrees that the Security
Procedures are reasonable and adequate for its wire transfer transactions and
agrees to be bound by any payment orders, amendments and cancellations, whether
or not authorized, issued in its name and accepted by State Street after being
confirmed by any of the selected Security Procedures. The Client also agrees to
be bound by any other valid and authorized payment order accepted by State
Street. The Client shall restrict access to confidential information relating to
the Security Procedure to authorized persons as communicated in writing to State
Street. The Client must notify State Street immediately if it has reason to
believe unauthorized persons may have obtained access to such information or of
any change in the Client's authorized personnel. State Street shall verify the
authenticity of all instructions according to the Security Procedure.
3. ACCOUNT NUMBERS: State Street shall process all payment orders on the basis
of the account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the account
number, the account number shall take precedence and govern. Financial
institutions that receive payment orders initiated by State Street at the
instruction of the Client may also process payment orders on the basis of
account numbers, regardless of any name included in the payment order. State
Street will also rely on any financial institution identification numbers
included in any payment order, regardless of any financial institution name
included in the payment order.
4. REJECTION: State Street reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of State Street's receipt of such payment
order; (b) if initiating such payment order would cause State Street, in State
Street's sole judgment, to exceed any volume, aggregate dollar, network, time,
credit or similar limits upon wire transfers which are applicable to State
Street; or (c) if State Street, in good faith, is unable to satisfy itself that
the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: State Street shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received
in a timely manner affording State Street reasonable opportunity to act.
However, State Street assumes no liability if the request for amendment or
cancellation cannot be satisfied.
6. ERRORS: State Street shall assume no responsibility for failure to detect any
erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY LIMITS: State Street shall assume no responsibility
for lost interest with respect to the refundable amount of any unauthorized
payment order, unless State Street is notified of the unauthorized payment order
within thirty (30) days of notification by State Street of the acceptance of
such payment order. In no event shall State Street be liable for special,
indirect or consequential damages, even if advised of the possibility of such
damages and even for failure to execute a payment order.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When a
Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the New England Clearing House Association, State Street will act as an
Originating Depository Financial Institution and/or Receiving Depository
Institution, as the case may be, with respect to such entries. Credits given by
State Street with respect to an ACH credit entry are provisional until State
Street receives final settlement for such entry from the Federal Reserve Bank.
If State Street does not receive such final settlement, the Client agrees that
State Street shall receive a refund of the amount credited to the Client in
connection with such entry, and the party making payment to the Client via such
entry shall not be deemed to have paid the amount of the entry.
9. CONFIRMATION STATEMENTS: Confirmation of State Street's execution of payment
orders shall ordinarily be provided within 24 hours. Notice may be delivered
through State Street's proprietary information systems, such as, but not limited
to Horizon and GlobalQuest(R), account statements, advices, or by facsimile or
callback. The Client must report any objections to the execution of a payment
order within 30 days.
10. LIABILITY ON FOREIGN ACCOUNTS: State Street shall not be required to repay
any deposit made at a non-U.S. branch of State Street, or any deposit made with
State Street and denominated in a non-U.S. dollar currency, if repayment of such
deposit or the use of assets denominated in the non-U.S. dollar currency is
prevented, prohibited or otherwise blocked due to: (a) an act of war,
insurrection or civil strife; (b) any action by a non-U.S. government or
instrumentality or authority asserting governmental, military or police power of
any kind, whether such authority be recognized as a defacto or a dejure
government, or by any entity, political or revolutionary movement or otherwise
that usurps, supervenes or otherwise materially impairs the normal operation of
civil authority; or(c) the closure of a non-U.S. branch of State Street in order
to prevent, in the reasonable judgment of State Street, harm to the employees or
property of State Street. The obligation to repay any such deposit shall not be
transferred to and may not be enforced against any other branch of State Street.
The foregoing provisions constitute the disclosure required by Massachusetts
General Laws, Chapter 167D, Section 36.
While State Street is not obligated to repay any deposit made at a non-U.S.
branch or any deposit denominated in a non-U.S. currency during the period in
which its repayment has been prevented, prohibited or otherwise blocked, State
Street will repay such deposit when and if all circumstances preventing,
prohibiting or otherwise blocking repayment cease to exist.
11. MISCELLANEOUS: State Street and the Client agree to cooperate to attempt to
recover any funds erroneously paid to the wrong party or parties, regardless of
any fault of State Street or the Client, but the party responsible for the
erroneous payment shall bear all costs and expenses incurred in trying to effect
such recovery. These Guidelines may not be amended except by a written agreement
signed by the parties.
Security Procedure(s) Selection Form
Please select one or more of the funds transfer security procedures indicated
below.
|_| SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages. SWIFT is considered to be one of the most secure and efficient
networks for the delivery of funds transfer instructions.
SELECTION OF THIS SECURITY PROCEDURE WOULD BE MOST APPROPRIATE FOR EXISTING
SWIFT MEMBERS.
|_| STANDING INSTRUCTIONS
Standing Instructions may be used where funds are transferred to a broker on the
Client's established list of brokers with which it engages in foreign exchange
transactions. Only the date, the currency and the currency amount are variable.
In order to establish this procedure, State Street will send to the Client a
list of the brokers that State Street has determined are used by the Client. The
Client will confirm the list in writing, and State Street will verify the
written confirmation by telephone. Standing Instructions will be subject to a
mutually agreed upon limit. If the payment order exceeds the established limit,
the Standing Instruction will be confirmed by telephone prior to execution.
|_| REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data
communications between the Client and State Street. Security procedures include
encryption and or the use of a test key by those individuals authorized as
Automated Batch Verifiers.
CLIENTS SELECTING THIS OPTION SHOULD HAVE AN EXISTING FACILITY FOR COMPLETING
CPU-CPU TRANSMISSIONS. THIS DELIVERY MECHANISM IS TYPICALLY USED FOR HIGH-VOLUME
BUSINESS.
|_| GLOBAL HORIZON INTERCHANGE(SM) FUNDS TRANSFER SERVICE
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients to
electronically transmit authenticated Fedwire, CHIPS or internal book transfer
instructions to State Street.
THIS DELIVERY MECHANISM IS MOST APPROPRIATE FOR CLIENTS WITH A LOW-TO-MEDIUM
NUMBER OF TRANSACTIONS (5-75 PER DAY), ALLOWING CLIENTS TO ENTER, BATCH, AND
REVIEW WIRE TRANSFER INSTRUCTIONS ON THEIR PC PRIOR TO RELEASE TO STATE STREET.
|_| TELEPHONE CONFIRMATION (CALLBACK)
Telephone confirmation will be used to verify all non-repetitive funds transfer
instructions received via untested facsimile or phone. This procedure requires
Clients to designate individuals as authorized initiators and authorized
verifiers. State Street will verify that the instruction contains the signature
of an authorized person and prior to execution, will contact someone other than
the originator at the Client's location to authenticate the instruction.
SELECTION OF THIS ALTERNATIVE IS APPROPRIATE FOR CLIENTS WHO DO NOT HAVE THE
CAPABILITY TO USE OTHER SECURITY PROCEDURES.
|_| REPETITIVE WIRES
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) from an existing authorized account to the
same payee (destination bank and account number) and only the date and currency
amount are variable, a repetitive wire may be implemented. Repetitive wires will
be subject to a mutually agreed upon limit. If the payment order exceeds the
established limit, the instruction will be confirmed by telephone prior to
execution. Telephone confirmation is used to establish this process. Repetitive
wire instructions must be reconfirmed annually.
THIS ALTERNATIVE IS RECOMMENDED WHENEVER FUNDS ARE FREQUENTLY TRANSFERRED
BETWEEN THE SAME TWO ACCOUNTS.
|_| TRANSFERS INITIATED BY FACSIMILE
The Client faxes wire transfer instructions directly to State Street Mutual Fund
Services. Standard security procedure requires the use of a random number test
key for all transfers. Every six months the Client receives test key logs from
State Street. The
test key contains alpha-numeric characters, which the Client puts on each
document faxed to State Street. This procedure ensures all wire instructions
received via fax are authorized by the Client.
WE PROVIDE THIS OPTION FOR CLIENTS WHO WISH TO BATCH WIRE INSTRUCTIONS AND
TRANSMIT THESE AS A GROUP TO STATE STREET MUTUAL FUND SERVICES ONCE OR SEVERAL
TIMES A DAY.
|_| AUTOMATED CLEARING HOUSE (ACH)
State Street receives an automated transmission or a magnetic tape from a Client
for the initiation of payment (credit) or collection (debit) transactions
through the ACH network. The transactions contained on each transmission or tape
must be authenticated by the Client. Clients using ACH must select one or more
of the following delivery options:
|_| GLOBAL HORIZON INTERCHANGE AUTOMATED CLEARING HOUSE SERVICE
Transactions are created on a microcomputer, assembled into batches and
delivered to State Street via fully authenticated electronic transmissions in
standard NACHA formats.
|_| Transmission from Client PC to State Street Mainframe with Telephone
Callback
|_| Transmission from Client Mainframe to State Street Mainframe with Telephone
Callback
|_| Transmission from DST Systems to State Street Mainframe with Encryption
|_| Magnetic Tape Delivered to State Street with Telephone Callback
State Street is hereby instructed to accept funds transfer instructions only via
the delivery methods and security procedures indicated. The selected delivery
methods and security procedure(s) will be effective ______________ for payment
orders initiated by our organization.
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
_________________________ _________________________
Name Name
_________________________ _________________________
Address Address
_________________________ _________________________
City/State/Zip Code City/State/Zip Code
_________________________ _________________________
Telephone Number Telephone Number
_________________________ _________________________
Facsimile Number Facsimile Number
_________________________
SWIFT Number
_________________________
Telex Number
INSTRUCTION(S)
TELEPHONE CONFIRMATION
FUND ________________________________________________
INVESTMENT ADVISER __________________________________
AUTHORIZED INITIATORS
Please Type or Print
PLEASE PROVIDE A LISTING OF FUND OFFICERS OR OTHER INDIVIDUALS WHO ARE CURRENTLY
AUTHORIZED TO INITIATE WIRE TRANSFER INSTRUCTIONS TO STATE STREET:
NAME
SIGNATURE TITLE (SPECIFY WHETHER POSITION SPECIMEN
IS WITH FUND OR INVESTMENT
ADVISER)
_________________________ _______________________________ __________________
_________________________ _______________________________ __________________
_________________________ _______________________________ __________________
_________________________ _______________________________ __________________
_________________________ _______________________________ __________________
AUTHORIZED VERIFIERS
Please Type or Print
PLEASE PROVIDE A LISTING OF FUND OFFICERS OR OTHER INDIVIDUALS WHO WILL BE
CALLED BACK TO VERIFY THE INITIATION OF REPETITIVE WIRES OF $10 MILLION OR MORE
AND ALL NON-REPETITIVE WIRE INSTRUCTIONS:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
_________________________ _______________________________ __________________________
_________________________ _______________________________ __________________________
_________________________ _______________________________ __________________________
_________________________ _______________________________ __________________________
1
REMOTE ACCESS SERVICES ADDENDUM TO THE
CUSTODIAN AGREEMENT
BETWEEN
EACH OF THE INVESTMENT COMPANIES
LISTED ON APPENDIX A THERETO
AND
STATE STREET BANK AND TRUST COMPANY
Remote Access Services
ADDENDUM to that certain Custodian Agreement dated as of December 18, 2006
(the "Custodian Agreement") between each of the Investment Companies listed on
Appendix A attached thereto (the "Customer") and State Street Bank and Trust
Company, including its subsidiaries and affiliates ("State Street").
State Street has developed and utilizes proprietary accounting and other
systems in conjunction with the custodian services which State Street provides
to the Customer. In this regard, State Street maintains certain information in
databases under its control and ownership which it makes available to its
customers (the "Remote Access Services").
The Services
State Street agrees to provide the Customer, and its designated investment
advisors, consultants or other third parties authorized by State Street
("Authorized Designees") with access to In~Sight(SM) as described in Exhibit A
or such other systems as may be offered from time to time (the "System") on a
remote basis.
Security Procedures
The Customer agrees to comply, and to cause its Authorized Designees to comply,
with remote access operating standards and procedures and with user
identification or other password control requirements and other security
procedures as may be issued from time to time by State Street for use of the
System and access to the Remote Access Services. The Customer agrees to advise
State Street immediately in the event that it learns or has reason to believe
that any person to whom it has given access to the System or the Remote Access
Services has violated or intends to violate the terms of this Addendum and the
Customer will cooperate with State Street in seeking injunctive or other
equitable relief. The Customer agrees to discontinue use of the System and
Remote Access Services, if requested, for any security reasons cited by State
Street.
Fees
Fees and charges for the use of the System and the Remote Access Services and
related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). The Customer
shall be
1
responsible for any tariffs, duties or taxes imposed or levied by any government
or governmental agency by reason of the transactions contemplated by this
Addendum, including, without limitation, federal, state and local taxes, use,
value added and personal property taxes (other than income, franchise or similar
taxes which may be imposed or assessed against State Street). Any claimed
exemption from such tariffs, duties or taxes shall be supported by proper
documentary evidence delivered to State Street.
PROPRIETARY INFORMATION/INJUNCTIVE RELIEF
The System and Remote Access Services described herein and the databases,
computer programs, screen formats, report formats, interactive design
techniques, formulae, processes, systems, software, knowhow, algorithms,
programs, training aids, printed materials, methods, books, records, files,
documentation and other information made available to the Customer by State
Street as part of the Remote Access Services and through the use of the System
and all copyrights, patents, trade secrets and other proprietary rights of State
Street related thereto are the exclusive, valuable and confidential property of
State Street and its relevant licensors (the "Proprietary Information"). The
Customer agrees on behalf of itself and its Authorized Designees to keep the
Proprietary Information confidential and to limit access to its employees and
Authorized Designees (under a similar duty of confidentiality) who require
access to the System for the purposes intended. The foregoing shall not apply to
Proprietary Information in the public domain or required by law to be made
public.
The Customer agrees to use the Remote Access Services only in connection with
the proper purposes of this Addendum. The Customer will not, and will cause its
employees and Authorized Designees not to, (i) permit any third party to use the
System or the Remote Access Services, (ii) sell, rent, license or otherwise use
the System or the Remote Access Services in the operation of a service bureau or
for any purpose other than as expressly authorized under this Addendum, (iii)
use the System or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of State Street, or (iv)
allow or cause any information transmitted from State Street's databases,
including data from third party sources, available through use of the System or
the Remote Access Services, to be published, redistributed or retransmitted for
other than use for or on behalf of the Customer, as State Street's customer.
The Customer agrees that neither it nor its Authorized Designees will modify the
System in any way; enhance or otherwise create derivative works based upon the
System; nor will the Customer or Customer's Authorized Designees reverse
engineer, decompile or otherwise attempt to secure the source code for all or
any part of the System.
The Customer acknowledges that the disclosure of any Proprietary Information, or
of any information which at law or equity ought to remain confidential, will
immediately give rise to continuing irreparable injury to State Street
inadequately compensable in damages at law and that State Street shall be
entitled to obtain immediate injunctive relief against the breach or threatened
breach of any of the foregoing undertakings, in addition to any other legal
remedies which may be available.
Limited Warranties
State Street represents and warrants that it is the owner of and has the right
to grant access to the System and to provide the Remote Access Services
contemplated herein. Because of the nature of computer information technology,
including but not limited to the use of the Internet, and the necessity of
relying upon third party sources, and data and pricing information obtained from
third parties, the System and Remote Access Services are provided "AS IS", and
the Customer and its Authorized Designees shall be solely responsible for the
investment decisions, results obtained, regulatory reports and statements
produced using the Remote Access Services. State Street and its relevant
licensors will not be liable to the Customer or its Authorized Designees for any
direct or indirect, special, incidental, punitive or consequential damages
arising out of or in any way connected with the System or the Remote Access
Services, nor shall either party be responsible for delays or nonperformance
under this Addendum arising out of any cause or event beyond such party's
control.
State Street will take reasonable steps to ensure that its products (and those
of its third-party suppliers) reflect the available state of the art technology
to offer products that are Year 2000 compliant, including, but not limited to,
century recognition of dates, calculations that correctly compute same century
and multi century formulas and date values, and interface values that reflect
the date issues arising between now and the next one-hundred years, and if any
changes are required, State Street will make the changes to its products at no
cost to you and in a commercially reasonable time frame and will require
third-party suppliers to do likewise. The Customer will do likewise for its
systems.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET, FOR ITSELF AND ITS
RELEVANT LICENSORS, EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE
SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
Infringement
State Street will defend or, at our option, settle any claim or action brought
against the Customer to the extent that it is based upon an assertion that
access to the System or use of the Remote Access Services by the Customer under
this Addendum constitutes direct infringement of any patent or copyright or
misappropriation of a trade secret, provided that the Customer notifies State
Street promptly in writing of any such claim or proceeding and cooperates with
State Street in the defense of such claim or proceeding. Should the System or
the Remote Access Services or any part thereof become, or in State Street's
opinion be likely to become, the subject of a claim of infringement or the like
under any applicable patent or copyright or trade secret laws, State Street
shall have the right, at State Street's sole option, to (i) procure for the
Customer the right to continue using the System or the Remote Access Services,
(ii) replace or modify the System or the Remote Access Services so that the
System or the Remote Access Services becomes noninfringing, or (iii) terminate
this Addendum without further obligation.
Termination
Either party to the Custodian Agreement may terminate this Addendum (i) for any
reason by giving the other party at least one-hundred and eighty (180) days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty (30) days' notice in the case of notice from the Customer to
State Street of termination, or (ii) immediately for failure of the other party
to comply with any material term and condition of the Addendum by giving the
other party written notice of termination. This Addendum shall in any event
terminate within ninety (90) days after the termination of the Custodian
Agreement. In the event of termination, the Customer will return to State Street
all copies of documentation and other confidential information in its possession
or in the possession of its Authorized Designees. The foregoing provisions with
respect to confidentiality and infringement will survive termination for a
period of three (3) years.
Miscellaneous
This Addendum and the exhibits hereto constitute the entire understanding of the
parties to the Custodian Agreement with respect to access to the System and the
Remote Access Services. This Addendum cannot be modified or altered except in a
writing duly executed by each of State Street and the Customer and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
By its execution of the Custodian Agreement, the Customer accepts responsibility
for its and its Authorized Designees' compliance with the terms of this
Addendum.
EXHIBIT A
To
REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN CONTRACT
IN~SIGHT(SM)
System Product Description
In~Sight(SM) provides bilateral information delivery, interoperability, and
on-line access to State Street. In~Sight(SM) allows users a single point of
entry into State Street's diverse systems and applications. Reports and data
from systems such as Investment Policy Monitor(SM), Multicurrency Horizon(SM),
Securities Lending, Performance & Analytics, and Electronic Trade Delivery can
be accessed through In~Sight(SM). This Internet-enabled application is designed
to run from a Web browser and perform across low-speed data lines or corporate
high-speed backbones. In~Sight(SM) also offers users a flexible toolset,
including an ad-hoc query function, a custom graphics package, a report
designer, and a scheduling capability. Data and reports offered through
In~Sight(SM) will continue to increase in direct proportion with the customer
roll out, as it is viewed as the information delivery system will grow with
State Street's customers.
