EXHIBIT 8(D)
EXECUTION COPY
ADMINISTRATIVE SERVICES AGREEMENT
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THIS AGREEMENT (the "Agreement") is dated as of December 29, 2000 by and
among STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company ("State
Street"), and each entity listed on Schedule 1 hereto, together with any other
entity which may from time to time become a party to this Agreement by execution
of an Instrument of Accession substantially in the form attached as Exhibit 1
hereto (each a "Fund" and collectively, the "Funds").
WHEREAS, each Fund is, unless otherwise noted, registered as an open-end or
closed-end, management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, each Fund desires to retain State Street to furnish certain
accounting and other administrative services, and State Street is willing to
furnish such services, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. INTERPRETATION.
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1.1 In this Agreement:
"Agreement" means this Agreement including the recitals hereto and the
Schedules and Exhibits, as the same may be amended from time to time by
agreement of the parties.
"Authorized Person" means any person authorized by a Fund to give Proper
Instructions on behalf of the Fund and in respect of whom State Street has
not received written notice from the Fund that such authorization has been
revoked.
"Authorized Price Sources" means pricing sources designated by a Fund on
State Street's standard form price source authorization, as the same may be
amended by the Fund and State Street from time to time or as otherwise
designated by the Fund or an Authorized Person, including, without
limitation, the investment adviser to the Fund.
"Business Day" means any day on which the New York Stock Exchange is open
for trading or on which banking institutions in the City of New York are
open for business.
"Charter Documents" means a Fund's Articles of Incorporation or Declaration
of Trust, as the case may be, and By-Laws.
"Compliance Monitoring Services" means the agreed investment compliance
checks as may be carried out by State Street in respect of a Fund on a
daily (or other periodic) basis pursuant to the provisions of the
Compliance Monitoring Services Addendum attached hereto as Exhibit 2.
"Constitutive Documents" means, collectively, a Fund's Charter Documents
and Prospectus, as defined herein.
"Existing Service" means a Service which is described in the Service Level
Agreement or which is determined by the JSC (as defined in Section 15) to
be an Existing Service.
"Historic Fund Records" means the books, records, data files, documents and
other information maintained by or on behalf of each Fund as part of the
Services prior to the effective date of this Agreement and which are
necessary for the provision of the Services by State Street hereunder.
"MLIM" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investment Managers, L.P.
"New Service" means a Service other than an Existing Service.
"Proper Instructions" means instructions (which may be standing
instructions) received by State Street from an Authorized Person, in any of
the following forms:
(i) in writing signed by the Authorized Person; or (ii) in a tested
communication; or (iii) in a communication utilizing access codes
effected between electro-mechanical or electronic devices as may be
agreed upon by the parties in writing from time to time; or
(iv) by such other means as may be agreed upon in writing from time to time
by State Street and the party giving such instruction including,
without limitation, oral instructions.
"Prospectus" means a Fund's currently effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), and the 1940
Act and the Fund's Prospectus(es) and Statement(s) of Additional
Information relating to all portfolios and all amendments and supplements
thereto as in effect from time to time.
"Service Level Agreement" means the Service Level Agreement of even date
herewith between State Street and MLIM relating to the provision of the
Services, as amended from time to time.
"Services" means the accounting and other administrative services described
in Sections 3 and 4 hereof.
1.2 References herein to a Fund shall be deemed to include each portfolio or
class of share of such Fund, as applicable. For purposes of any liability
or indemnification provision hereunder each separate portfolio of an
investment company shall be considered a Fund.
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1.3 In this Agreement references to "persons" shall include legal as well as
natural entities, references importing the singular shall include the
plural (and vice versa), use of the masculine pronoun shall include the
feminine and numbered schedules, exhibits, sections or sub-sections shall
(unless the contrary intention appears) be construed as references to such
schedules and exhibits hereto and sections or sub-sections herein bearing
those numbers. The Schedules and Exhibits are hereby incorporated herein by
reference.
2. APPOINTMENT.
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2.1 Each Fund hereby retains State Street and State Street agrees to provide
the Services, in each case subject to and in accordance with the terms and
conditions set forth in this Agreement and subject to the control,
supervision and direction of the Fund and the review and comment by the
Fund's auditors and legal counsel and in accordance with such procedures as
may be established from time to time between the Fund and State Street.
State Street confirms that it shall offer employment to substantially all
of those persons employed by, and in good standing with, the Mutual Fund
Accounting Department of MLIM as of the date hereof.
2.2 In the event that a Fund establishes one or more additional series of
shares with respect to which it desires to have State Street render
Services under the terms hereof, it shall so notify State Street in writing
and thereafter such series will be subject to the terms and conditions of
this Agreement, and shall be maintained and accounted for by State Street
on a discrete basis.
2.3 Subject to obtaining the prior written approval of each Fund, State Street
may assign, delegate or otherwise transfer any or all of its rights and
obligations under this Agreement to a third party provided that State
Street's liability to the Funds shall not be affected thereby.
2.4 It is hereby acknowledged and agreed by each Fund that this Agreement is
entered into by the Fund as a principal contracting party and not as agent
for any other party and nothing contained herein shall be interpreted as
creating any contractual obligations on the part of State Street towards
any shareholders of the Fund.
2.5 State Street shall not be responsible for any duties or obligations which
it has not specifically undertaken pursuant to this Agreement and no such
duties or obligations shall be implied or inferred.
2.6 This Agreement and the Services to be provided by State Street hereunder
shall be revised by the parties from time to time to comply with changes in
any law, rule or regulation applicable to the Funds.
2.7 If any literature, including, but not limited to, brochures, advertising
materials, web site contents and marketing materials, issued by or on
behalf of a Fund contains any reference to State Street, other than
literature merely identifying State Street as providing accounting or
administrative services to the Fund, or if any literature issued by State
Street contains any reference to a Fund, then the Fund or State Street, as
the case may be,
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will obtain the other party's prior written consent to such reference
before its publication in any form.
3. ACCOUNTING SERVICES.
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3.1 State Street shall maintain the books of account and other financial
records of each Fund in accordance with applicable law, including Section
31(a) of the 1940 Act and rules thereunder, other than records maintained
by the Fund's custodian (as agreed among the Fund, State Street and the
custodian) and shall perform the following duties in the manner prescribed
by the Constitutive Documents and further in accordance 74-ith such written
procedures. including, but not limited to the Service Level Agreement, as
may be established between the Fund and State Street from time to time:
3.1.1 Record general ledger entries;
3.1.2 Calculate daily net income;
3.1.3 Reconcile activity to the trial balance;
3.1.4 Calculate and publish daily net asset value;
3.1.5 Prepare account balances; and
3.1.6 Provide such other accounting services as may be required to enable
each Fund to maintain its books and records in compliance with
applicable law and generally accepted accounting principles.
3.2 Each Fund shall provide timely prior written notice to State Street of any
modification in the manner in which such calculations are to be performed.
For purposes of calculating the net asset value of a Fund, State Street
shall value the Fund's portfolio securities utilizing prices obtained from
Authorized Price Sources. State Street shall not be responsible for any
revisions to the methods of calculation prescribed by the Constitutive
Documents or the Fund unless and until such revisions are communicated in
writing to State Street.
4. ADMINISTRATIVE SERVICES.
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4.1 State Street shall provide the following additional administrative services
to each Fund in the manner prescribed by the Constitutive Documents and
further in accordance with such written procedures, including, but not
limited to, the Service Level Agreement, as may be established between the
Fund and State Street from time to time:
4.1.1 Oversee the maintenance by the Fund's custodian of certain books and
records of the Fund as required under Rule 31a-1(b) of the 1940 Act;
4.1.2 Calculate, submit for approval by officers of the Fund and arrange
for payment of the Fund's expenses;
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4.1.3 Prepare for review and approval by officers of the Fund financial
information for the Fund's semi-annual and annual reports, proxy
statements and other communications required or otherwise to be sent
to Fund shareholders;
4.1.4 Prepare and file, following review by an officer of and legal
counsel for the Fund, the Fund's periodic financial reports required
to be filed with the Securities and Exchange Commission ("SEC") on
Form N-SAR and prepare financial information required by Form N-1A,
Form N-2 and other regulatory filings and such other financial
reports, forms or filings as may be mutually agreed upon;
4.1.5 Prepare reports relating to the business and affairs of the Fund as
may be mutually agreed upon and not otherwise prepared by the Fund's
investment adviser, custodian, legal counsel or independent
accountants;
4.1.6 Make such reports and recommendations to the Board of Directors of
the Fund (the "Board") concerning the performance of the Fund's
independent accountants as the Board may reasonably request;
4.1.7 Make such reports and recommendations to the Board concerning the
performance and fees of the Fund's custodian and transfer and
dividend disbursing agent (the "Transfer Agent") as the Board may
reasonably request or deem appropriate;
4.1.8 Consult with the Fund's officers, independent accountants, legal
counsel, custodian and Transfer Agent in establishing and following
the accounting policies of the Fund;
4.1.9 Provide Compliance Monitoring Services to assist the Fund's
investment adviser in complying with Internal Revenue Code mandatory
qualification requirements, the requirements of the 1940 Act and
Fund prospectus limitations as may be mutually agreed upon;
4.1.10 Assist the Fund in the handling of routine regulatory examinations
and work closely with the Fund's legal counsel in response to any
non-routine regulatory matters;
4.1.11 Assist the Fund in the preparation of reports to the Board of
Directors and with any other work of a routine or non-routine nature
that requires information maintained or accessible through the
Fund's accounting and financial records.
4.2 State Street shall be responsible for the provision of the office
facilities and the personnel required by it to perform the Services
contemplated herein. State Street shall also provide reasonable facilities
for use by the Fund's auditors in connection with any periodic inspection
of the books and records maintained by State Street hereunder.
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5. SERVICE LEVEL AGREEMENT.
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5.1 In conjunction with this Agreement. State Street and MLIM shall enter into
a Service Level Agreement which specifies key performance indicators and
delivery benchmarks in respect of the Services and which reflects the
performance goals of the parties from time to time.
5.2 Subject at alt times to the terms and conditions of this Agreement, State
Street shall use all reasonable endeavors to provide the Services in
accordance with the Service Level Agreement.
5.3 Each Fund shall use all reasonable endeavors to fulfill its duties and
obligations under the Service Level Agreement and to cause any third
parties referenced therein to do likewise. State Street shall have no
liability for any loss, liability, claim, cost or expense to the extent
resulting from or caused by the failure of a Fund or any other party
referenced in the Service Level Agreement to comply with the terms thereof.
For avoidance of doubt, the preceding sentence shall not relieve State
Street of liability to the extent any such loss or expense arises from its
own negligence, bad faith, fraud, willful default or willful misconduct in
the discharge of its duties hereunder.
5.4 The liability of State Street in respect of its obligations under the
Service Level Agreement shall be governed by the terms of this Agreement.
In no event shall a failure by State Street to comply with any term or
condition of the Service Level Agreement constitute a breach or violation
of this Agreement giving rise to financial penalties, damages or
contractual or other remedies, except as set out in this Section 5.
However, the fact that State Street has met the key performance indicators
or delivery benchmarks of the Service Level Agreement shall not relieve
State Street of any liability that it might otherwise have under this
Agreement arising from or as a result of its fraud, willful default,
negligence or willful misconduct in the performance of its duties
hereunder. It is the intention of State Street and each Fund that the
remedy for any:
5.4.1 failure by State Street, a Fund or any third party referenced in the
Service Level Agreement to meet the performance indicators, delivery
benchmarks or other aspects of the Service Level Agreement; or
5.4.2 consistent failure by State Street, a Fund or any third party
referenced in the Service Level Agreement to fulfill its duties and
obligations under the Service Level Agreement in a material respect;
or
5.4.3 dispute relating to the Service Level Agreement,
shall be referral of the matter to the JSC (as defined below) for attempted
resolution or, where applicable, termination of this Agreement in accordance
with Section 20.6.4.
5.5 The purpose of the referral to the JSC is to resolve the inability of the
relevant party to meet the provisions of the Service Level Agreement. It
shall be the responsibility of the JSC to develop and oversee
implementation of procedural or operational changes which will enable the
Service Level Agreement to be more regularly met; revise the obligations
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of the parties under the Service Level Agreement to more adequately meet
the service requirements of the Funds; or otherwise develop a solution
aimed at ensuring that the inability to meet the Service Level Agreement
will be less likely to occur in the future.
5.6 If a matter is referred to the JSC pursuant to Section 5.4 and despite
implementation of the JSC's recommendations, a party consistently fails to
meet in a material respect its obligations under the Service Level
Agreement that were the subject of the referral or any revised obligations
agreed as a result of the referral (other than for reasons outside the
party's reasonable control), then the matter shall be referred to the
senior executive of the Global Investor Services Group of State Street and
the First Vice President--MLIM Operations (or their equivalents following
any reorganization) (together the "Executive Officers") for resolution. The
referral shall expressly cite this Section 5 and state that the relevant
Fund(s) or State Street, as the case may be, may exercise its right to
terminate this Agreement should the matter not be resolved.
5.7 If the Executive Officers are unable to resolve the matter within thirty
(30) Business Days of the referral, and if (but only if) all relevant
parties agree in writing within five (5) Business Days of the
aforementioned deadline, the matter may be submitted to a
mutually-acceptable Professional Mediator (as defined in Section 26.5
below) to attempt to facilitate a resolution within thirty (30) Business
Days of the referral. Any such mediation shall be conducted in accordance
with the provisions of Sections 26.4 through 26.6 below.
5.8 If either (i) following a failure by the Executive Officers to resolve the
matter, the relevant Fund(s) and State Street do not agree on use of a
Professional Mediator or (ii) the matter has not been resolved within
thirty (30) Business Days of the conclusion of such mediation effort, then
the relevant Fund(s) or State Street, as the case may be, shall be entitled
to terminate this Agreement in accordance with Sections 20.4.3 and 20.6.4,
respectively.
5.9 Nothing in this Section 5 shall limit the liability of State Street for any
failure to perform the Services in accordance with the standard of care set
forth in Section 11 and the terms of this Agreement as distinct from a
failure by State Street to meet key performance indicators or delivery
benchmarks of the Service Level Agreement. The fact that the Service Level
Agreement performance metrics have been met shall not excuse State Street
from liability that it would otherwise have under the terms of this
Agreement.
6. NECESSARY INFORMATION.
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6.1 Each Fund will promptly deliver to State Street copies of each of the
following documents and all future amendments and supplements thereto, if
any:
6.1.1 The Fund's Charter Documents;
6.1.2 The Fund's Prospectus;
6.1.3 Certified copies of the resolutions of the Board authorizing (1) the
Fund to enter into this Agreement and (2) certain individuals on
behalf of the Fund to (a) give
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Proper Instructions to State Street pursuant to this Agreement and
(b) sign checks and pay expenses;
6.1.4 A copy of the investment advisory agreement between the Fund and its
investment adviser; and
6.1.5 Such other certificates, documents or opinions which State Street
may, in its reasonable discretion, deem necessary or appropriate in
the proper performance of its duties.
6.2 Each Fund shall provide or cause to be provided to State Street such
additional data and information as State Street may reasonably require in
order to discharge its duties under this Agreement, including, without
limitation, the information detailed in the Service Level Agreement. State
Street shall have no liability for the failure to provide, any error in the
provision of, or any delay in providing, any of the Services to the extent
the provision of such Services is dependent upon receipt of the aforesaid
information and the same has not been provided in a materially complete,
accurate and timely manner. For avoidance of doubt. The preceding sentence
shall not relieve State Street of liability to the extent any such loss or
expense arises from its own negligence, bad faith, fraud, willful default
or willful misconduct in the discharge of its duties hereunder.
6.3 Each Fund shall assure that its custodian and other service providers make
available to State Street such information in respect of the Fund as State
Street may reasonably require for the performance of the Services.
6.4 Each Fund shall use all reasonable endeavors to ensure that any information
provided or caused to be provided to State Street pursuant to this
Agreement, including the Service Level Agreement, shall be provided in a
complete, accurate and timely manner so as to enable State Street to duly
render the Services.
6.5 In the course of discharging its duties hereunder, State Street may rely on
the information provided to it by or on behalf of a Fund or by any persons
authorized by a Fund including, without limitation, any other service
providers to the Fund or any Authorized Price Sources.
6.6 Each Fund acknowledges and agrees that except as otherwise expressly set
forth in the Service Level Agreement, State Street shall have no
responsibility for, or duty to review, confirm or otherwise perform any
investigation as to the completeness, accuracy or sufficiency of any
information provided to it by the Fund, any persons authorized by the Fund
or any other service providers to the Fund, including, without limitation,
any Authorized Price Sources and shall be without liability for any loss,
liability, claim, expense or damage suffered or incurred by any person as a
result of State Street having relied upon and utilized such information in
good faith. For avoidance of doubt, the preceding sentence shall not
relieve State Street of liability to the extent any such loss or expense
arises from its own negligence, bad faith, fraud, willful default or
willful misconduct in the discharge of its duties hereunder. State Street
will promptly notify a Fund in the event it becomes aware that any
information received by it is incomplete,
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inaccurate or insufficient or in the event of a failure or delay by any
party to provide information required by State Street to discharge its
duties under this Agreement.
7. RECONCILIATION.
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7.1 Each Fund represents and warrants to State Street that it has completed or
caused to be completed a full reconciliation of the Historic Fund Records
and except as otherwise disclosed in writing to State Street such records
are accurate and complete in all material respects.
7.2 To the extent the Historic Fund Records remain unreconciled as of the
effective date of this Agreement, each Fund shall ensure that the
outstanding items are reconciled as soon as practicable or otherwise
promptly redressed, in each case at the expense of the Fund. State Street
shall provide all reasonable assistance to each Fund (at the expense of the
Fund) to reconcile any outstanding items.
7.3 State Street shall have no liability to a Fund or any other person and
shall be indemnified and held harmless by each Fund from and against any
loss, liability, damage, claim, cost or expense resulting from or caused by
its good faith reliance on the accuracy and completeness of the Historic
Fund Records.
8. PROPER INSTRUCTIONS.
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8.1 Each Fund shall provide State Street with an incumbency certificate
specifying the names, specimen signatures and powers of all Authorized
Persons. in respect of the Fund. State Street may rely upon the identity
and authority of such persons until it receives written notice from the
relevant Fund to the contrary.
8.2 Each Fund will give State Street all necessary instructions to enable State
Street to fulfill its obligations under this Agreement at such times and in
.such form as mutually agreed upon, including, without limitation, as State
Street may request.
8.3 State Street shall have no responsibility or liability to a Fund and shall
be indemnified and held harmless by the Fund, if a subsequent written
confirmation of an oral Proper Instruction fails to conform to the oral
instructions received by State Street. State Street shall promptly seek
written confirmation of any oral instruction received by it.
8.4 State Street shall have no obligation to act in accordance with purported
instructions to the extent they conflict with applicable law or regulation,
provided that State Street shall not be under any obligation to ensure that
any instruction received by it would not contravene any such laws or
regulations.
8.5 State Street shall not be liable for any loss resulting from a delay
while it obtains clarification of any Proper Instructions which it
reasonably deems to be incomplete or unclear, provided that it promptly
seeks such clarification.
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8.6 State Street shall be held harmless by a Fund in acting upon any
instruction, notice, request, consent, certificate or instrument reasonably
believed by it to be genuine and to be signed or otherwise given by the
proper party or parties.
8.7 If a Fund instructs State Street to take any action (including, without
limitation, the initiation of legal proceedings) which may involve the
payment of money or liability on the part of ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ may
refrain from acting in accordance with such instruction until it has
received indemnity, security or both reasonably satisfactory to it and
sufficient to hold it harmless from and against any loss, liability or
expense which State Street may incur as a result of taking such action.
9. PROFESSIONAL ADVICE.
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When deemed necessary for the proper performance of its duties under this
Agreement with respect to specific and non-routine matters involving one or
more of the Funds, State Street may, with the consent of a Fund (which
consent shall not be unreasonably withheld), seek legal, tax, financial,
administrative or other advice of a reputable professional adviser and
State Street shall be reimbursed in respect of any costs and expenses
properly incurred in obtaining and receiving any such advice. State Street
shall have no liability to a Fund for any loss, liability, claim, cost,
expense, tax or assessment arising as a direct or indirect result of having
relied on such advice in good faith.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
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Each Fund assumes responsibility for complying with all securities, tax,
commodities and other laws, rules and regulations applicable to it in the
conduct of its business.
11. STANDARD OF CARE; LIMITATION OF LIABILITY.
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▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇ shall at all times exercise reasonable care and diligence and
act in good faith in the performance of its duties hereunder, provided,
however, that State Street shall be without liability to any Fund or any
agent thereof for any loss, liability, damage, claim, cost or expense
unless caused by its own fraud, willful default, negligence or willful
misconduct or that of its agents, delegates or employees. State Street
shall be responsible for the performance of only such duties as are
explicitly set forth in this Agreement and shall have no responsibility for
the actions or activities of any other party (save its agents, delegates or
employees), including other service providers to a Fund.
11.2 Each Fund, severally but not jointly, hereby indemnifies and secures
harmless (to the maximum extent permitted by law) State Street from and
against all claims, actions, costs, charges, losses, damages and expenses
(including without limitation legal fees and amounts reasonably paid in
settlement) which State Street may incur or sustain (other than by reason
of State Street's bad faith, willful default or negligence or that of its
agents, delegates or employees) in connection with the performance of its
duties for that particular Fund under this Agreement or otherwise arising
from any act or omission of that particular Fund or any other person
(including any predecessor service provider to the Fund) prior to the
effective date of this Agreement.
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11.3 If State Street (the "Indemnified Party") shall seek indemnification from a
Fund (the "Indemnifying Party") in respect of a claim or liability asserted
by a third party, the Indemnified Party shall give written notice thereof
to the Indemnifying Party promptly after it receives notice of the claim or
liability being asserted, but the failure to do so shall not relieve the
Indemnifying Party from any liability except to the extent that it is
prejudiced by the failure or delay in giving such notice. Such notice shall
summarize the basis for the claim for indemnification and any claim or
liability being asserted by the third party. Within 15 days after receiving
such notice, the Indemnifying Party shall give written notice to the
Indemnified Party stating whether it disputes the claim for indemnification
and whether it will defend against the third-party claim or liability at
its own cost and expense. If the Indemnifying Party fails to give notice
that it disputes an indemnification claim within 15 days after receipt of
notice thereof, it shall be deemed to have accepted and agreed to the
claim. The Indemnifying Party shall be entitled to direct the defense
against the third-party claim or liability with counsel selected by it
(subject to the consent of the Indemnified Party, which consent shall not
be unreasonably withheld) as long as the Indemnifying Party is conducting a
good faith and diligent defense. The Indemnified Party shall at all times
have the right to fully participate in the defense of a third-party claim
or liability at its own expense directly or through counsel. If no such
notice of intent to dispute and defend a third-party claim or liability is
given by the Indemnifying Party, or if such good faith and diligent defense
is not being or ceases to be conducted by the Indemnifying Party, the
Indemnified Party shall have the right, at the expense of the Indemnifying
Party, to undertake the defense of such claim or liability (with counsel
selected by the Indemnified Party), and to compromise or settle it,
exercising reasonable business judgment. Except as otherwise provided in
the immediately preceding sentence, neither the Indemnified Party nor the
Indemnifying Party shall settle or confess any claim or make any compromise
in any case in which the Indemnifying Party will be asked to indemnify the
Indemnified Party, except with the prior written consent of both parties.
The Indemnified Party shall at all times make available such information
and assistance as the Indemnifying Party may reasonably request and shall
cooperate with the Indemnifying Party in such defense, at the expense of
the Indemnifying Party.
11.4 In no event shall any party be liable for any loss arising by reason of the
occurrence of a Force Majeure Event (as defined in Section 12) which
prevents, hinders or delays it from or in performing its obligations under
this Agreement.
▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇ shall not be liable for any liabilities, damages, losses,
claims, taxes, duties, costs or expenses (including, without limitation,
legal fees) whatsoever incurred or suffered by a Fund at any time as a
result of the failure of the Fund or any other person (other than State
Street, its employees, agents or delegates) to comply with the laws or
regulations of any country or jurisdiction. For avoidance of doubt, the
preceding sentence shall not relieve State Street of liability to the
extent such other person's failure to comply with laws or regulations is
the direct result of State Street's negligence, bad faith, fraud, willful
default or willful misconduct in the discharge of its duties hereunder.
11.6 The provisions herein regarding indemnification, liability and limits
thereon shall survive following the expiration or termination of this
Agreement to the extent relating to any
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claim or right of action arising in connection with the performance of this
Agreement and each Fund and State Street shall enter into such documents as
shall be necessary to ensure the survival of the same.
11.7 Each Fund acknowledges that except as otherwise expressly set forth in this
Agreement, State Street's duties under this Agreement do not include any
obligation to monitor the compliance of the Fund or any other person
whatsoever with any restriction or guideline imposed by its Constitutive
Documents or by law or regulation or otherwise with regard to the
investment of the assets of the Fund. In no event shall State Street have
any duty to enforce compliance by the Fund or any other person whatsoever
with any such restrictions or guidelines.
11.8 Each Fund acknowledges and agrees that State Street shall provide
Compliance Monitoring Services, if any, on a contractual basis only in
accordance with the terms of the Compliance Monitoring Services Addendum
attached hereto as Exhibit 2. The Compliance Monitoring Services are
provided by State Street as a supplement to and not in place or in lieu of
a Fund's own compliance program and/or that of the investment advisers of
the Fund.
▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇ shall have no liability to a Fund or otherwise for any loss or
liability resulting from State Street's performance or non-performance of
the Compliance Monitoring Services except as expressly set forth in the
Compliance Monitoring Services Addendum.
11.10 In no event shall State Street or any Fund be liable for any special,
indirect, incidental, punitive or consequential damages of any kind
whatsoever, even if advised of the possibility of such damages. The
limitation on liability imposed by this Section 11.10 shall not be
construed to relieve State Street of liability to a Fund in circumstances
where (i) it is otherwise liable to the Fund under the terms of this
Agreement for losses resulting from an inaccurate Net Asset Value
calculation and (ii) the liability of the Fund arises from its obligation
to compensate shareholders for direct loss resulting from the purchase or
redemption of shares at such inaccurate Net Asset Value.
12. FORCE MAJEURE.
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12.1 If a party is prevented, hindered or delayed from or in performing any of
its obligations under this Agreement by a Force Majeure Event (as defined
below) then:
12.1.1 that party's obligations under this Agreement shall be suspended for
so long as the Force Majeure Event continues and to the extent that
party is so prevented, hindered or delayed;
12.1.2 as soon as reasonably possible after commencement of the Force
Majeure Event that party shall notify the other party in writing of
the occurrence of the Force Majeure Event, the date of commencement
of the Force Majeure Event and the effects of the Force Majeure
Event on its ability to perform its obligations under this
Agreement; and
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12.1.3 as soon as reasonably possible after the cessation of the Force
Majeure Event that party shall notify the other party in writing of
the cessation of the Force Majeure Event and shall resume
performance of its obligations under this Agreement.
12.2 For the purposes of this Section 12 and Section 11.4, "Force Majeure Event"
means any event beyond the reasonable control of a party including, without
limitation, acts of God, war damage, enemy action, riot, civil commotion,
rebellion, act of any government or any other competent authority or
compliance with any law or governmental order, rule, regulation or
direction. For avoidance of doubt, provided that State Street has exercised
reasonable care and diligence and complied with its obligations under
Section 12.3 and 13 below, a Force Majeure Event shall include any failure
or malfunction of any telecommunications, computer or other electrical
mechanical or technological application, service or system to the extent
any such failure is beyond State Street's reasonable control.
12.3 Each party hereto shall use all reasonable efforts to mitigate the effects
of any Force Majeure Event.
13. CONTINGENCY MEASURES.
--------------------
13.1 State Street shall maintain in a separate and safe place additional copies
of all records required to be maintained pursuant to this Agreement or
additional tapes, disks or other sources of information necessary to
reproduce all such records.
13.2 Within twelve (12) months of the date hereof, State Street shall establish
and maintain a disaster recovery back-up facility available for its use in
providing the Services required hereunder in the event circumstances beyond
State Street's control result in State Street not being able to process the
necessary work at its principal facility. State Street shall, from time to
time, upon request from a Fund provide written evidence and details of its
arrangement with respect to such back-up facility. State Street further
agrees to provide each Fund from time to time on request with a copy of the
disaster recovery and contingency plans of State Street and to make its
staff available to discuss such plans on request. Nothing in this Section
shall relieve State Street of any liability that it might otherwise have
under this Agreement arising from or as a result of its fraud, willful
default, negligence or willful misconduct in the performance of its duties
hereunder, provided, however, that the aggregate liability of State Street
to any Fund in relation to the maintenance of a disaster recovery back-up
facility during the initial twelve (12) months of this Agreement shall not
at any time exceed an amount equal to ten (10) per cent of the fee paid or
accrued and payable by such Fund (as of the date of the liability) in,
respect of the accounting and administrative services provided pursuant to
the Agreement.
▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇ shall at all times employ a then current version of one of the
leading commercially available virus detection software programs to test
the on-site hardware and software applications utilized by it to deliver
the Services to determine that such hardware and software does not contain
any computer code designed to disrupt, disable, harm, or otherwise impede
operation. With respect to any applications utilized on a
13
remote basis, State Street shall use commercially reasonable efforts to
obtain a similar representation or commitment from the third party provider
of such application.
▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇ shall at its expense retain a firm of independent auditors to
perform an annual audit of the internal accounting controls and procedures
employed by State Street in the performance of the Services and to issue a
detailed report thereon and shall provide to each Fund a copy of such
report within ten (10) Business Days of its issue by the independent
auditors. The first such annual audit shall be carried out in the fourth
quarter of ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ shall also allow each Fund's independent
auditors and the corresponding personnel of each Fund's investment adviser
reasonable access to perform their own audit of State Street's internal
accounting controls, provided, however, that the frequency and scope of
such audits shall be as agreed by the JSC from time to time.
13.5 Upon request of a Fund, State Street shall from time to time as
appropriate, furnish to such Fund a letter setting forth the insurance
coverage maintained by State Street, any changes in such coverage which may
have occurred from the date of the last such request and any claim relating
to the Fund which State Street may have made under such insurance.
14. FEES AND EXPENSES.
-----------------
14.1 In consideration of the provision of the Services by State Street, each
Fund (or ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investment Managers, L.P., for those Funds
identified on Schedule 1 hereto as Funds for which its investment adviser
pays accounting costs) shall pay to State Street such fees and shall
reimburse State Street such expenses as may be agreed by the parties from
time to time in a separate written fee schedule.
14.2 Each Fund will bear all expenses that are incurred in its operation and not
specifically assumed by State Street. Expenses to be borne by each Fund
include, but are not limited to: organizational expenses; cost of services
of independent accountants and outside legal and tax counsel (including
such counsel's review of the Fund's registration statement, proxy
materials, federal and state tax qualification as a regulated investment
company and other reports and materials prepared by State Street under this
Agreement); cost of any services contracted for by the Fund directly from
parties other than State Street; cost of trading operations and brokerage
fees, commissions and transfer taxes in connection with the purchase and
sale of securities for the Fund; investment advisory fees; taxes, insurance
premiums and other fees and expenses applicable to its operation; costs
incidental to any meetings of shareholders including, but not limited to,
legal and independent accountants' fees, proxy filing fees and the costs of
preparation, printing and mailing of any proxy materials; costs incidental
to Board meetings, including fees and expenses of Board members; the salary
and expenses of any officer, director/trustee or employee of the Fund;
costs incidental to the preparation, printing and distribution of the
Fund's registration statements and any amendments thereto and shareholder
reports; cost of typesetting and printing of prospectuses; cost of
preparation and filing of the Fund's tax returns, Form N-1A or N-2, and all
notices, registrations and amendments associated with applicable federal
and state tax and securities laws; all applicable registration fees
14
and filing fees required under federal and state securities laws; and
fidelity bond and directors' and officers' liability insurance.
15. JOINT SERVICES COMMITTEE.
------------------------
15.1 Following the signing of this Agreement, State Street and the Funds, in
conjunction with MLIM and Princeton Administrators, L.P. (collectively, the
"MLIM Group") which have entered into separate Administrative Services
Agreements with State Street, shall establish a Joint Services Committee
(the "JSC") comprised of an equal number of representatives appointed to
represent State Street and the MLIM Group (the "Committee Members"). For
purposes of this section, the MLIM Group shall be treated as one entity in
terms of their ability to appoint representatives to the JSC. Except as
otherwise agreed, a meeting shall not be validly constituted unless an
equal number of representatives from the MLIM Group and State Street are
present. The JSC shall continue in existence after termination of this
Agreement until such time as all activities performed by State Street under
this Agreement have been transferred to a successor service provider. All
parties shall be entitled from time to time to replace any of their
representatives (and shall notify one another of their intention to do so).
The JSC shall monitor the progress and performance of this Agreement in
relation to the Services and shall meet on a regular basis no less
frequently than quarterly unless otherwise agreed. Each of State Street and
the MLIM Group shall also be entitled to convene meeting of the JSC by
giving notice to all members of the JSC. A representative of the Funds
shall chair all meetings of the JSC. The minutes shall be kept by State
Street and, subject to review of all parties, issued to the MLIM Group. The
JSC shall establish its own procedures and each party shall use all
reasonable endeavors to meet the actions agreed at those meetings and
cooperate with the other to provide personnel, resources and actions to
meet their obligations under this Agreement.
▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇ shall provide to the JSC and the representative(s) of the MLIM
Group a monthly report in such form as the Committee Members shall agree
(the "Key Performance Indicator Report") showing the following performance
levels achieved by State Street in providing the relevant Services
including, but not limited to:
15.2.1 the average performance in the previous 12 months;
15.2.2 the month with the highest and lowest performance levels in the
previous 12 months; and
15.2.3 the performance in each month since the previous meeting.
15.3 The JSC shall be responsible for:
15.3.1 determining whether a Service is an Existing Service or a New
Service and, for this purpose, a Service shall be determined to be
an Existing Service if, although that Service is not described in a
Service Level Agreement, it is a service which a Fund can
demonstrate (to the reasonable satisfaction of State Street) has
been provided or made available prior to the date of this Agreement
by MLIM to one or more of the Funds;
15
15.3.2 oversight of the performance of the Services;
15.3.3 oversight of the performance by State Street, each Fund and third
parties of their duties under the Service Level Agreement;
15.3.4 determining when and where revisions need to be made to this
Agreement and to the Service Level Agreement(s) to more adequately
meet or address the service requirements of the Funds from time to
time; and
15.3.5 determining changes to be made in the Services as a result of
changes in any law, rule or regulation applicable to the Funds.
16. REPRESENTATIONS AND WARRANTIES OF STATE STREET.
----------------------------------------------
16.1 State Street represents and warrants to each Fund that:
16.1.1 It is a Massachusetts trust company, duly organized and existing
under the laws of The Commonwealth of Massachusetts;
16.1.2 It has the corporate power and authority to carry on its business in
The Commonwealth of Massachusetts and the State of New Jersey;
16.1.3 All requisite corporate proceedings hove been taken to authorize it
to enter into and perform this Agreement;
16.1.4 No legal or administrative proceedings have been instituted or
threatened which would impair State Street's ability to perform its
duties and obligations under this Agreement; and
16.1.5 Its entrance into this Agreement shall not cause a material breach
or be in material conflict with any other agreement or obligation of
State Street or any law or regulation applicable to it.
17. REPRESENTATIONS AND WARRANTIES OF THE FUNDS.
-------------------------------------------
17.1 Each Fund represents and warrants to State Street that:
17.1.1 It is a corporation or business trust as the case may be, duly
organized, existing and in good standing under the laws of the
jurisdiction of its incorporation or establishment;
17.1.2 It has the requisite corporate or trust power and authority under
applicable laws and by its Constitutive Documents to enter into and
perform this Agreement;
17.1.3 All requisite proceedings have been to authorize it to enter into
and perform this Agreement;
17.1.4 It is an investment company properly registered under the 1940 Act;
16
17.1.5 A registration statement under the 1933 Act and the 1940 Act has
been filed and, if the Fund is offering securities in a transaction
that requires registration under the 1933 Act, will be effective and
remain effective during the term of this Agreement as required by
applicable law. The Fund also warrants to State Street that as of
the effective date of this Agreement, all necessary filings under
the securities laws of the states in which the Fund offers or sells
its shares have been made;
17.1.6 No legal or administrative proceeding have been instituted or
threatened which would impair the Fund's ability to perform its
duties and obligations under this Agreement; and
17.1.7 Its entrance into this Agreement will not cause a material breach or
be in material conflict with any other agreement or obligation or
the Fund or any law or regulation applicable to it.
18. CONFIDENTIALITY.
---------------
The parties hereto agree that each shall treat confidentially the terms and
conditions of this Agreement and all information provided by each party to
the other regarding its business and operations. All confidential
information provided by a party hereto, including nonpublic personal
information pursuant to Regulation S-P of the Securities and Exchange
Commission, 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 provident party. The
foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required to be disclosed by
any regulatory authority, any authority or legal counsel of the parties
hereto, by judicial or administrative process or otherwise by applicable
law or regulation.
19. RECORDS.
-------
19.1 State Street is authorized to maintain all accounts, registers, corporate
books and other documents and information on magnetic tape or disc or in
accordance with any other mechanical or electronic system provided that
they are capable of being produced in legible form in accordance with
applicable laws.
19.2 In compliance with the requirements of Rule 31a-3 under the ▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ agrees that all records which it maintains for a Fund shall at all
times remain the property of the Fund, shall be readily accessible during
normal business hours, and shall be promptly surrendered upon the
termination of the Agreement or otherwise on written request. State Street
further agrees that all records which it maintains for a Fund pursuant to
Rule 31a-1 under the 1940 Act will be preserved for the periods prescribed
by Rule 31a-2 under the 1940 Act unless any such records are earlier
surrendered as provided above. Records shall be surrendered in usable
machine-readable form. State Street shall
17
have the right to retain copies of such records subject to observance of
its confidentiality obligations under this Agreement.
20. TERM: TERMINATION.
-----------------
20.1 This Agreement shall become effective as of the date of its execution and
delivery and shall continue in full force and effect for an initial term of
five (5) years (the "Initial Term") with automatic one year renewals from
year to year thereafter unless otherwise terminated in accordance with this
provisions of this Section 20.
20.2 Upon termination of this Agreement, each Fund shall pay to State Street
upon demand, such fees and reimbursable costs, expenses and disbursements
as may be due as of the date of such termination.
▇▇.▇ ▇▇▇▇▇ ▇▇▇▇▇▇ shall be entitled to resign its appointment hereunder in
respect of a Fund:
20.3.1 following expiration of the Initial Term, by giving not less than
270 days notice in writing to the Fund to expire at any time,
provided, however, that State Street will use reasonable efforts
in assisting the Fund to select a successor and if, after the
expiration of the notice period, a new administrative services
provider has hot been appointed or is not ready to assume its
duties, State Street shall continue its appointment hereunder for
such additional period as may be mutually agreed between State
Street and the Fund.
20.3.2 with immediate effect at any time prior to the expiry of the
Initial Term if:
20.3.2.1 such Fund shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Fund seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property; or the Fund shall
take any corporate action to authorize any of the preceding
actions, provided, however, that State Street may not resign its
position on the basis that a Fund is being liquidated or
reorganized for reasons other than bankruptcy or insolvency; or
20.3.2.2 such Fund shall commit a material breach of this Agreement, which
breach, although capable of remedy, has not been remedied by the
Fund within thirty (30) days of written notice by State Street; or
18
20.3.2.3 the obligations and duties in respect of a Fund under the Service
Level Agreement have consistently not been met in a material
respect and such failure has not been resolved by the JSC or the
Executive Officers in accordance with Sections 5.5 through 5.8
above.
20.4 A Fund may terminate the appointment of State Street:
20.4.1 following expiration of the Initial Term, by giving not less than
270 days notice in writing to expire at any time.
20.4.2 with immediate effect at any time prior to the expiry of the
Initial Term if:
20.4.2.1 State Street shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or
against State Street seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property; or State Street shall take any corporate action to
authorize any of the preceding actions;
20.4.2.2 State Street shall commit any material breach hereunder, which
breach, although capable of remedy, has not been remedied by State
Street within thirty (30) days of written notice by a Fund;
20.4.2.3 The Fund has substantially liquidated or distributed its assets to
shareholders or a successor following a vote of such shareholders
or other action to dissolve the Fund; or
20.4.2.4 State Street has consistently failed to meet the key performance
indicators, delivery benchmarks or other aspects of the Service
Level Agreement in a material respect and such failure has not
been resolved by the JSC or the Executive Officers in accordance
with Sections 5.5 through 3.8 above.
20.4.3 A Fund may terminate this Agreement with effect on the expiry of the
Initial term by giving twelve months prior written notice or
anytime thereafter in accordance with Section 20.4.1.
20.5 In the event that a Fund terminates one or more series of shares with
respect to which State Street renders Services or a Fund terminates State
Street's appointment pursuant to Section 20.4.2 above, it shall so notify
State Street in writing.
19
20.6 Following any termination of this Agreement State Street and each Fund
agree to provide their committed cooperation to effect an orderly
transition of State Street's duties and responsibilities hereunder to a new
administrative services provider(s) selected by the Fund or Funds as soon
as may be reasonably practicable.
20.7 In the event this Agreement is terminated by one or more of the Funds
pursuant to Section 20.4.2.4 or by State Street pursuant to Section
20.3.2.3. State Street shall pay one-half of the direct costs and expenses
incurred by State Street and the Fund(s) in connection with such
termination and the conversion to a successor administrative services
provider and the Fund or Funds involved shall arrange for the payment of
the balance.
21. NOTICES.
-------
Any notice or other communication authorized or required by this Agreement
to be given to either party shall be in writing and deemed to have beep,
given when delivered in person or by confirmed facsimile, or posted by
certified mail, return receipt requested, to the following address (or such
other address as a party may specify by written notice to the other): if to
a Fund c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investment Managers, L.P., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: Treasurer, fax (▇▇▇) ▇▇▇-▇▇▇▇; and if to State
Street: State Street Bank and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, fax: ▇▇▇-▇▇▇-▇▇▇▇.
22. FURTHER ASSURANCE.
-----------------
Each party to this Agreement shall do execute or procure to be done and
executed all necessary acts, deeds, documents and things reasonably in its
power to give effect to this Agreement.
23. NON-EXCLUSIVITY.
---------------
23.1 The services of State Street to the Funds hereunder are not to be deemed
exclusive and State Street and any affiliate shall be free to render
similar services to others and to retain for its own use and benefit all
fees or other monies payable thereby and neither State Street nor any
affiliate shall be deemed to be affected with notice of or to be under any
duty to disclose to the Funds any fact or thing which comes to the notice
of State Street or that affiliate or any servant or agent of State Street
or that affiliate in the course of State Street rendering similar services
to others or in the course of its business in any other capacity or in any
manner whatsoever otherwise than in the course of carrying out its duties
hereunder.
23.2 Nothing herein contained shall prevent State Street or any affiliate
from buying holding and dealing in any assets upon its own account or
the account of others notwithstanding that similar assets may be held
by State Street for the account of a Fund.
20
24. NO PARTNERSHIP OR AGENCY.
------------------------
Nothing in this Agreement shall be construed as creating a partnership
between State Street and a Fund or as constituting any party the agent of
another party (save as expressly set out in this Agreement) for any purpose
whatsoever and no party shall have the authority or power to bind another
party or to contract in the name of or create a liability against another
party in any way or for any purpose.
25. NON-WAIVER: FORBEARANCE.
-----------------------
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion or the failure of a party to exercise or any
delay in exercising a right or remedy under this Agreement (including any
right implied by law) shall not constitute a waiver of any such term, right
or remedy or a waiver of any other rights or remedies and no single or
partial exercise of any right or remedy under this Agreement shall prevent
any further exercise of the right or remedy or the exercise of any other
right or remedy.
26. DISPUTES.
--------
26.1 The parties desire to prevent both disputes and unanticipated issues
arising under or relating to this Agreement. The parties further desire to
resolve such disputes and unanticipated issues that nevertheless do occur
by use of processes that are intended to avoid and prevent delaying or
impairing in any way the performance by all parties of their respective
obligations under this Agreement. Therefore, the parties have agreed to
utilize the processes specified below in this Section 26 to resolve certain
disputes, as described below, arising under or relating to this Agreement.
26.2 The parties agree that any issue(s) which may arise in connection with the
Agreement shall initially be referred to the JSC, which shall establish a
deadline for resolution of each matter submitted to it.
26.3 If the JSC has not fully resolved such issue(s) by the stated deadline,
then the matter shall be referred to the Executive Officers for resolution.
26.4 If the Executive Officers are unable to resolve the matter within thirty
(30) Business Days of the referral, and if (but only if) all relevant
parties agree in writing within five (5) Business Days of the
aforementioned deadline, then a mutually-acceptable Professional Mediator
(as defined below) may be utilized to review the open issue(s) and attempt
to facilitate a resolution within thirty (30) Business Days of referral of
the issue(s). The parties will mutually determine the location, date,
duration. and process for any such mediation effort, which shall be in all
respects advisory to, and not binding on, the parties. State Street shall
pay one-half of the costs of the Professional Mediator and the Fund or
Funds involved shall arrange for the payment of the balance.
26.5 To be considered as the Professional Mediator, an individual must have
experience in the investment and/or administrative services industry/ies
(preferably both). Any individual employed during the last two (2) calendar
year by any party or any party's current primary legal, accounting, or
consulting firm may not be utilized.
21
26.6 In order to enable and facilitate candor and completeness during, and the
optimal potential benefits of, the mediation process, both (1) the parties'
respective contentions, communications, documents, and/or submissions, if
any, during the mediation, and (2) the analysis, comments, and/or
recommendations of the Professional Mediator, if any (x) will remain
confidential among the parties (to the extent permissible under applicable
law, State Street and each Fund hereby acknowledging that State laws and/or
regulations may require the public availability of some or all information
and documents relating to this Agreement) and (y) may not be asserted,
admitted or otherwise utilized by any party as evidence against another
party in any later or simultaneous mediation, binding arbitration,
litigation, or otherwise.
26.7 If either (i) following a failure by the Executive Officers to resolve the
matter, the relevant parties do not agree on use of a Professional Mediator
or (ii) the open issue(s) have not been resolved within thirty (30)
Business Days of the conclusion of such mediation effort, then resolution
between the parties' will be deemed to have failed and each party shall be
free to enforce of its legal rights under this Agreement in such manner as
it shall deem fit.
27. REMEDIES ARE CUMULATIVE.
-----------------------
Except as expressly provided in this Agreement, the rights and remedies
contained in this Agreement are cumulative and not exclusive of any rights
or remedies provided by law.
28. REPRODUCTION OF DOCUMENTS.
-------------------------
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties
hereto each arms that any such reproduction shall be admissible in evidence
as the original itself, subject to any challenge on the grounds that the
reproduction has been materially altered so that it does not conform to the
terms of the original agreement, if 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 course of business,
and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
29. VARIATION OF AGREEMENT.
----------------------
No variation, amendment or modification of this Agreement shall be valid
unless it is in written and signed for or on behalf of each party hereto.
30. ASSIGNABILITY.
-------------
This Agreement shall not be assigned by either State Street or a Fund
without the prior consent in writing of the other party, except that State
Street may assign this Agreement to a successor of all or a substantial
portion of its business, or to a party controlling, controlled by or under
common control with State Street.
22
31. SUCCESSORS.
-----------
This Agreement shall be binding on and shall inure to the benefit of the
Fund and State Street and their respective successors and permitted
assigns.
32. SEVERABILITY.
------------
In the event that any part of this Agreement shall be determined to be void
or unenforceable for any reason, the remainder of this Agreement shall be
unaffected thereby (unless the purpose of the agreement is substantially
frustrated by such determination), and shall be enforceable in accordance
with the remainder of its terms as if the void or unenforceable part were
not part hereof.
33. COUNTERPARTS.
------------
This Agreement may be executed in any number of counterparts, each of which
shall, when executed and delivered be an original, but all the counterparts
taken together shall constitute one and the same agreement.
34. LIMITATION ON LIABILITY OF TRUSTEES.
-----------------------------------
In relation to each Fund which is a business trust, this Agreement is
executed and made by the Trustees of the Fund not individually, but as
trustees under the Declarations of Trust of the Fund and the obligations of
this Agreement are not binding upon any of such Trustees or upon any of the
shareholders of the Fund individually, but bind only the trust estate of
the Fund.
35. GOVERNING LAW.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law
principles thereof.
36. ENTIRE AGREEMENT.
----------------
This Agreement constitutes the entire agreement between State Street and
each Fund on the subject matter hereof and supersedes and terminates as of
the date hereof, all prior oral or written agreements, arrangements or
understandings between the parties.
[Remainder of Page Intentionally Blank]
23
SIGNATURE PAGE
--------------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers designated below as of the date first written above.
STATE STREET BANK AND TRUST COMPANY
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇ ▇. ▇▇▇▇▇,
President
for and on behalf of the Funds listed in Schedule 1 hereto
-------------------------------------
24
SCHEDULE I
----------
MLIM-ADVISED/1/ INVESTMENT COMPANIES
Apex Municipal Fund, Inc.
CBA Money Fund
CMA Government Securities Fund
CMA Money Fund
CMA Multi-State Municipal Series Trust (10 series)
CMA Tax-Exempt Fund
CMA Treasury Fund
Corporate High Yield Fund II, Inc.
Corporate High Yield Fund III, Inc.
Corporate High Yield Fund, Inc.
Debt Strategies Fund II, Inc.
Financial Institutions Series Trust (Summit Cash Reserves Fund)
Global Financial Services Master Trust
Income Opportunities Fund 2000, Inc.
Master Basic Value Trust
Master Equity Income Trust
Mercury Master Trust (7 portfolios)
Mercury Asset Management VI Funds, Inc.
Master Small Cap Value Trust
Master Large Cap Series Trust (3 series)
Master Premier Growth Trust
Master Mid Cap Growth Trust
Master Senior Floating Rate Trust
Master U.S. High Yield Trust
Mercury Basic Value Fund
Mercury Focus Twenty Fund
Mercury Large Cap Series Funds, Inc. (3 series)
Mercury Mid Cap Growth Fund
Mercury Premier Growth Fund
Mercury Small Cap Value Fund
Mercury Internet Strategies Fund
Mercury U.S. High Yield Fund
Mercury Senior Floating Rate Fund
Mercury US Large Cap Fund
Mercury US Small Cap Growth Fund
Master Focus Twenty Trust
Master Internet Strategies Trust
Master Large Cap Series Trust
Master Premier Growth Trust
Mercury Global Holdings, Inc.
--------
/1/ Includes funds advised by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investment Managers, L.P. and
Fund Asset Management, L.P.
25
Mercury QA Equity Series, Inc.
Mercury QA Strategy Series, Inc.
Mercury Pan European Growth Fund
Mercury International Fund
Mercury Global Balanced Fund
Mercury Gold and Mining Fund
Mercury Select Growth Fund.
Mercury VI US Large Cap Fund
Mercury VI Pan-European Growth Fund
Mercury Puerto Rico Tax-Exempt Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇-Term US Government Fund (formerly Adjustable Rate)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Emerging Markets Debt Fund (formerly Americas Income Fund)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Balanced Capital Fund, Inc./2/
▇▇▇▇▇▇▇ ▇▇▇▇▇ Basic Value Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ California Municipal Series Trust (2 series)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Corporate Bond Fund, Inc. (3 series)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Developing Capital Markets Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Disciplined Equity Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Dragon Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ EuroFund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Fundamental Growth Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Funds for Institutions Series
▇▇▇▇▇▇▇ ▇▇▇▇▇ Government Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Institutional Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Premier Institutional Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Rated Institutional Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Institutional Tax-Exempt Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Treasury Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Global Allocation Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Global Bond Fund for Investment and Retirement
▇▇▇▇▇▇▇ ▇▇▇▇▇ Global Financial Services Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Global Growth Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Natural Resources Trust (formerly Global Resources Trust)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Global SmallCap Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Global Technology Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Utilities & Telecommunications Fund (formerly Global Utility Fund)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Global Value Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Growth Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Healthcare Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ High Income Municipal Bond Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Index Funds, Inc. (Administration Agreement only)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Intermediate Government Bond Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ International Equity Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ Large Cap Series Funds, Inc. (3 series)
----------
/2/ Costs of Services for this Fund to be billed to and paid by MLIM.
26
▇▇▇▇▇▇▇ ▇▇▇▇▇ Focus Twenty Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Premier Growth Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mid Cap Growth Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Latin America Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Multi-State Limited Maturity Municipal Series Trust (2 series)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Multi-State Municipal Series Trust (17 series)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Municipal Bond Fund, Inc. (3 series) ,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Municipal Series Trust (▇▇▇▇▇▇▇ ▇▇▇▇▇ Municipal Intermediate Term
Fund)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Municipal Strategy Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Pacific Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Focus Value Fund (formerly ▇▇▇▇▇▇▇ ▇▇▇▇▇ Phoenix Fund)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ready Assets Trust
▇▇▇▇▇▇▇ ▇▇▇▇▇ Real Estate Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Retirement Series Trust (▇▇▇▇▇▇▇ ▇▇▇▇▇ Retirement Reserves Money
Fund)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Senior Floating Rate Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Senior Floating Rate Fund II, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Series Fund, Inc. (10 portfolios)
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇-Term Global Income Fund, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Small Cap Value Fund, Inc. (formerly ▇▇▇▇▇▇▇ ▇▇▇▇▇ Special Value
Fund, Inc.)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Equity Income Fund (formerly Strategic Dividend Fund)
▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S. Treasury Money Fund
▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S. High Yield Fund, Inc. (formerly ▇▇▇▇▇▇▇ ▇▇▇▇▇ Corporate High
Yield)
▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S. Government Mortgage Fund (formerly ▇▇▇▇▇▇▇ ▇▇▇▇▇ Federal
Securities Trust) .
▇▇▇▇▇▇▇ ▇▇▇▇▇ U.S.A. Government Reserves
▇▇▇▇▇▇▇ ▇▇▇▇▇ Variable Series Funds, Inc. (20 portfolios)
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Income Fund, Inc.
MuniAssets Fund, Inc.
MuniEnhanced Fund, Inc.
MuniHoldings California Insured Fund, Inc.
MuniHoldings Florida Insured Fund
MuniHoldings Florida Insured Fund V
MuniHoldings Fund, Inc.
MuniHoldings Fund II, Inc.
MuniHoldings Insured Fund, Inc.
MuniHoldings Insured Fund II, Inc.
MuniHoldings Michigan Insured Fund II, Inc.
MuniHoldings New Jersey Insured Fund, Inc.
MuniHoldings New Jersey Insured Fund IV, Inc.
MuniHoldings New York Insured Fund, Inc.
MuniHoldings New York Insured Fund IV, Inc.
MuniInsured Fund, Inc.
27
MuniVest Fund, Inc.
MuniVest Fund II, Inc.
MuniYield Arizona Fund, Inc.
MuniYield California Fund, Inc.
MuniYield California Insured Fund, Inc.
MuniYield California Insured Fund II, Inc.
MuniYield Florida Fund
MuniYield Florida Insured Fund
MuniYield Fund, Inc.
MuniYield Insured Fund, Inc.
MuniYield Michigan Insured Fund, Inc.
MuniYield Michigan Fund, Inc.
MuniYield New Jersey Fund, Inc.
MuniYield New Jersey Insured Fund, Inc.
MuniYield New York Insured Fund, Inc.
MuniYield Pennsylvania Insured Fund
MuniYield Quality Fund, Inc.
MuniYield Quality Fund II, Inc.
Quantitative Master Series Trust
Senior High Income Portfolio, Inc.
Somerset Exchange Fund2
The Asset Program, Inc. (formerly Asset Builder Program, Inc.) (5 series)
The Corporate Fund Accumulation Program, Inc.
The Municipal Fund Accumulation Program, Inc.
The S&P 500 Protected Equity Fund/3/
Worldwide DollarVest Fund, Inc.
----------
/3/ Costs of Services for this Fund to be billed to and paid by MLIM.
28
EXHIBIT 1
---------
Instrument of Accession
Reference is hereby made to the Administrative Services Agreement (the
"Agreement") dated December 29, 2000 by and between STATE STREET BANK AND TRUST
COMPANY ("State Street") and each entity listed on Schedule 1 thereto or which
has or shall become a signatory thereto by execution of an instrument of
accession substantially in the form hereof.
In order that it may become a party to the aforesaid Agreement, including,
without limitation, any and all schedules and exhibits thereto, [Fund Name]
agrees and binds itself to the terms and conditions thereof and acknowledges
that by its execution and delivery of this Instrument it shall assume all of the
obligations and shall be entitled to all of the rights of a Fund (as such term
is defined in the Agreement), as if it were an original party thereto.
This Instrument of Accession shall take effect and shall become a part of said
Agreement immediately upon its execution and delivery.
Executed as of the date set forth below under the laws of the State of New York.
[NAME OF FUND]
By:
-----------------------------------
Name:
Title
Accepted and agreed to:
STATE STREET BANK AND TRUST COMPANY
By:
-----------------------------------
Name:
Title
Date:
--------------------------------
29
EXHIBIT 2
---------
Compliance Monitoring Services Addendum
1. DEFINITIONS.
-----------
For purposes of this addendum (the "Addendum"):
"Contract Year" means the twelve-month period beginning on the commencement
date of the Compliance Monitoring Service in respect of a Portfolio and
each subsequent twelve-month period thereafter.
"Compliance Test" means periodic checks carried out by State Street to
determine or assist in the determination of compliance or non-compliance by
a Portfolio with the investment guidelines, restrictions and policies
specified for such portfolio in a Test Matrix or as required by the Service
Level Agreement, including without limitation the tests to be carried out
pursuant to Section 4.1.9 of the Agreement and Sections 11.1 and 9.11 of
the Service Level Agreement relating to AMPS Compliance and Subchapter "M"
and Subchapter "L" Compliance (as applicable in each case, the "Investment
Criteria")
"Compliance Breach" means, as applicable in relation to the test being
conducted, the failure of a Portfolio to comply with any of the Investment
Criteria specified for such Portfolio in the applicable Test Matrix or the
Service Level Agreement.
"Compliance Monitoring Services" means the performance by State Street of
the Compliance Tests set forth in a Test Matrix or as required by the
Service Level Agreement with respect to one or more Portfolios designated
therein.
"Compliance Report" means, as applicable in relation to the test being
conducted, a report containing the results of the Compliance Tests carried
out by State Street.
"Test Matrix" means State Street's standard form test matrix, together with
any exhibits or attachments thereto, setting forth the Investment Criteria,
Compliance Tests to be carried out, Portfolios to be tested and frequency
of tests, as agreed between State Street and a Fund from time to time.
"Portfolio" means each portfolio of assets of a Fund in respect of which a
Fund has requested State Street to carry out Compliance Tests.
2. COMPLIANCE MONITORING SERVICES.
------------------------------
2.1 Subject to the general terms and conditions of the Agreement and Section 3
below, State Street agrees to carry out the Compliance Tests set forth in a
Test Matrix or the Service Level Agreement, as the case may be, with
respect to one or more Portfolios designated therein as may be agreed from
time to time by State Street and a Fund.
2.2 Unless otherwise specified in a Test Matrix or the Service Level Agreement,
as the case may be, all Compliance Tests will be based on unaudited daily,
monthly or other
30
appropriate period end data obtained from the record keeping systems
employed by State Street and will utilize standard dictionary
classifications with respect to all assets and each Compliance Test.
2.3 State Street shall communicate Compliance Breaches and Compliance Reports
to the relevant Fund at such times and in such manner as may be agreed from
time to time between State Street and the Fund; provided that in carrying
out the Compliance Monitoring Services, State Street shall report
Compliance Breaches to a Fund promptly after becoming aware of any such
breach.
2.4 The Compliance Monitoring Services will commence in respect of a Portfolio
at such time as may be agreed from time to time between State Street and
the Fund.
3. LIABILITY.
---------
3.1 Each Fund acknowledges and agrees that State Street shall assume no duty to
discharge any legal or regulatory obligation imposed on a Fund or its
investment adviser to ensure or otherwise monitor investment or legal
compliance by the Fund.
3.2 Except as expressly set forth in Section 3.2 below, State Street shall have
no liability for any loss, liability, damage, claim, cost or expense, in
contract, tort or otherwise (including, but not limited to, any liability
relating to qualification of a Fund as a regulated investment company or
any liability relating to a Fund's compliance with any federal or state tax
or securities statute, regulation or ruling), whether ordinary, direct,
indirect, consequential, incidental, special, punitive or exemplary arising
out or in connection with the Compliance Monitoring Services or any
decision made or action taken by any party in reliance upon such service,
even if State Street has been advised of the possibility of such loss,
damage or expense and regardless of the form of action in which a claim is
brought.
3.3 In the event a Fund incurs a loss or liability with respect to a Portfolio
by reason of State Street's fraud, bad faith, willful default or negligence
in the performance of the Compliance Monitoring Services, State Street
shall reimburse the Fund an amount in respect of such loss or liability up
to (but not in excess of) the fees paid or accrued and payable by the Fund
for the Compliance Monitoring Services in respect of such Portfolio,
provided, however, that in no event will the aggregate liability of State
Street for the provision of Compliance Monitoring Services in respect of
any Portfolio in any Contract Year exceed the annual fee payable by the
Fund for such services in respect of such Portfolio. For purposes of this
Section 3.2, the annual fee payable by a Fund for Compliance Monitoring
Services shall be deemed to be an amount equal to ten (10) per cent of the
aggregate annual fee payable by such Fund to State Street in respect of the
accounting and administrative services provided pursuant to the Agreement.
3.4 The liability of State Street under Section 3.2 for any loss shall be
limited to the extent of its relative degree of fault in relation to that
of the party responsible for the management of the Portfolio. To the extent
that a Fund and State Street are unable to agree initially as to the
relative degree of fault, the particular matter shall be referred to the
JSC, which
31
shall refer the matter to a committee of representatives of State Street
and the Funds appointed by the JSC. To the extent that the committee is
unable to reach a determination of relative decree of fault, and the
dispute is not subsequently resolved by the JSC, the matter shall be
resolved under the dispute resolution procedures set forth in Section 26 of
the Agreement.
3.5 Notwithstanding ▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇ ▇▇▇▇▇▇ shall be without liability to a
Fund for any loss or liability incurred subsequent to a Fund or the
investment adviser of the Fund becoming aware of a Compliance Breach.
32
