EXHIBIT NO. 99.7(e)
CUSTODY AND RELATED SERVICES AGREEMENT
This Agreement between MFS SERIES TRUST X (the "Trust"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, with its principal place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 on behalf of each of the series thereof listed on
Exhibit A hereto (each, a "Fund"), and STATE STREET BANK and TRUST COMPANY, a
Massachusetts trust company with its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Custodian"). This Agreement
shall take effect on June 27, 2002.
WITNESSETH:
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust may retain Chase Manhattan Bank. N.A. ("Chase") to
act as the Trust's custodian with respect to the assets of certain Funds (the
"Chase Portfolios") to be held outside of the United States of America, and the
Trust may retain, pursuant to this agreement, the Custodian to act as the
Fund's custodian with respect to the assets of certain Funds (the "State Street
Portfolios") to be held outside of the United States of America: and
WHEREAS, the Trust intends that this Agreement be applicable to the
MFS Conservative Allocation Fund, the MFS Moderate Allocation Fund, the MFS
Aggressive Growth Allocation Fund, and the MFS Growth Allocation Fund as listed
on Exhibit A, together with any other series established by the Trust and made
subject to this Agreement in accordance with Section 15, to be referred to
herein as the "Fund(s)";
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
"1940 ACT" means the Investment Company Act of 1940, as amended.
A "BEARER SECURITY" means a security which is not registered on the books of
the owner and which is payable, therefore, to the holder.
"BOARD" means the Board of Trustees of the Trust.
"CERTIFIED RESOLUTION" means a resolution of the Board signed by an officer of
a Trust and certified by the Secretary or an Assistant Secretary thereof.
"COUNTRY RISK" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment; economic and financial infrastructure
(including any Eligible Securities Depositories operating in the country);
prevailing or developing custody and settlement practices; and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held
in custody in that country.
"DIRECT PAPER" means commercial paper of an issuer for which State Street Bank
and Trust Company acts as issuing and paying agent.
"DIRECT PAPER SYSTEM" means the Direct Paper system of State Street Bank and
Trust Company.
"DIRECT PAPER SYSTEM ACCOUNT" is the Custodian's Direct Paper System account.
"DOMESTIC SECURITIES" means the securities a Fund desires to be held within the
United States.
"ELIGIBLE FOREIGN CUSTODIAN" has the meaning set forth in section (a)(1) of
Rule 17f-5 of the 1940 Act, as amended; the term does not include any Eligible
Securities Depository.
"ELIGIBLE SECURITIES DEPOSITORY" has the meaning set forth in Section (b)(1) of
Rule 17f-7 of the 1940 Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FOREIGN ASSETS" means any of the State Street Portfolios' investments
(including foreign currencies) for which the primary market is outside the
United States and such cash and cash equivalents as are reasonably necessary to
effect the State Street Portfolios' transactions in such investments.
"FOREIGN CUSTODY MANAGER" has the meaning set forth in section (a)(3) of Rule
17f-5, as amended.
"FOREIGN SECURITIES" means those securities a Fund desires to be held outside
the United States which are (i) not held by the Chase Portfolios, and (ii)
described with greater particularity in Section 4 hereof.
"FOREIGN SECURITIES SYSTEM" means an Eligible Securities Depository listed on
Schedule B hereto.
"FOREIGN SUB-CUSTODIAN" means a foreign banking institution serving as an
Eligible Foreign Custodian designated in Schedule A hereto.
"INSTITUTIONAL CLIENTS" means U.S. registered investment companies, or major,
U.S.-based commercial banks, insurance companies, pension funds or
substantially similar financial institutions which as a part of their ordinary
business operations, purchase or sell securities and make use of non-U.S.
custodial services.
"NASD" means The National Association of Securities Dealers, Inc.
"FUND ACCOUNT(S)" means a bank account or accounts in the United States in the
name of each Fund of the Trust.
"PROSPECTUS" means the current prospectus and statement of additional
information of the Trust related to the Funds.
A "REGISTERED SECURITY" means a security, the ownership of which is reflected
on the books of the issuer maintained for such purpose.
"SEC" means the United States Securities and Exchange Commission.
"SHARES" means new or treasury shares of beneficial interest into which the
beneficial interest shall be divided from time to time of each Fund
representing interests in the Funds.
"TRANSFER AGENT" means the transfer agent for a Fund.
"UNITED STATES" or "U.S." means the United States of America.
"U.S. SECURITIES SYSTEM" means a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department of the
Treasury.
"U.S. SECURITIES SYSTEM ACCOUNT" means an account of the Custodian in the U.S.
Securities System.
SECTION 2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Trust hereby employs the Custodian as the custodian of certain of
the assets of the Funds, including Domestic Securities and Foreign
Securities(except those Foreign Securities held by Chase). Each Fund agrees to
deliver or cause to be delivered to the Custodian all Domestic Securities,
Foreign Securities and cash owned by it from time to time, and all payments of
income, payments of principal or capital distributions received by it with
respect to securities held by the Custodian hereunder, and the cash
consideration received by it for such Shares as may be issued or sold from time
to time. The Custodian shall not be responsible for any property of any Fund
held or received by such Fund not delivered to the Custodian. With respect to
uncertificated shares (the "Underlying Shares") of registered investment
companies in the same "group of investment companies" (as defined in Section
12(d)(1)(G) of the 0000 Xxx) as the Trust (the "Underlying Funds"), the
maintenance of Custodian records that identify the Underlying Shares as being
recorded in the Custodian's name on behalf of the Funds will be deemed custody
for purposes hereof.
Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in
Section 7 hereof), the Custodian shall on behalf of the applicable Fund(s) from
time to time employ one or more sub-custodians located in the United States,
provided that the Custodian shall have no more or less responsibility or
liability to the applicable Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian. The
Custodian may employ as sub-custodian for a Fund's Foreign Securities on behalf
of the State Street Fund(s) the Eligible Foreign Custodians and Eligible
Securities Depositories designated in Schedules A and B hereto but only in
accordance with the applicable provisions of Sections 4 and 5 hereof.
SECTION 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUNDS HELD
BY THE CUSTODIAN IN THE UNITED STATES
SECTION 3.1 HOLDING SECURITIES. The Custodian shall hold and segregate
for the account of each Fund all non-cash property to be held by it in the
United States, including all Domestic Securities owned by such Fund other than
(a) securities which are maintained pursuant to Section 3.9 in a U.S.
Securities System, (b) Direct Paper which is deposited and/or maintained in the
Direct Paper System pursuant to Section 3.10, and (c) the Underlying Shares
owned by the Fund which are maintained pursuant to Section 3.8A in an account
with MFS Service Center, Inc., or such other entity which may from time to time
act as a transfer agent for the Underlying Funds and with respect to which the
Custodian is provided with Proper Instructions (the "MFSC Transfer Agent"). The
Custodian shall maintain records of all receipts, deliveries and locations of
such securities, together with a current inventory thereof.
SECTION 3.2 DELIVERY OF SECURITIES. The Custodian shall release and
deliver Domestic Securities owned by a Fund held by the Custodian, in a U.S.
Securities System account of the Custodian, in the Direct Paper System Account,
or in an account at the MFSC Transfer Agent only upon receipt of Proper
Instructions on behalf of the applicable Fund, which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a U.S. Securities System,
in accordance with the provisions of Section 3.9 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 3.8 or into the name or nominee name of any
sub-custodian appointed pursuant to Section 2; or for exchange for
a different number of securities, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new securities are to be
delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided
that 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 in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the delivery
of such securities prior to receiving payment for such securities
except as may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by a
Fund, but only against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Trust on behalf of
a Fund, which may be in the form of cash or obligations issued by
the United States government, its agencies or instrumentalities or
an irrevocable letter of credit, except that in connection with
any loans for which collateral is to be credited to the
Custodian's account in the book-entry system authorized by the
U.S. Department of the Treasury, the Custodian will not be held
liable or responsible for the delivery of securities owned by the
Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowing by the
Trust on behalf of a Fund requiring a pledge of assets by the
Trust on behalf of a Fund, but only against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Trust on behalf of a Fund, the Custodian and a
broker-dealer registered under the Exchange Act and a member of
NASD, relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Trust on behalf of a Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by a Fund;
14) Upon receipt of instructions from the Transfer Agent for delivery
to such Transfer Agent or to the holders of Shares in connection
with distributions in kind, as may be described from time to time
in the Prospectus, in satisfaction of requests by holders of
Shares for repurchase or redemption or in liquidation of Fund
assets;
15) In the case of a sale processed through the MFSC Transfer Agent
for Underlying Shares, in accordance with Section 3.8A hereof; and
16) For any other purpose, but only upon receipt of Proper
Instructions from the Trust on behalf of the applicable Fund
specifying the securities to be delivered and the person or
persons to whom such delivery shall be made.
SECTION 3.3 REGISTRATION OF SECURITIES. Domestic Securities held by
the Custodian (other than bearer securities) shall be registered in the name of
the Fund or in the name of any nominee of the Trust on behalf of a Fund or of
any nominee of the Custodian which nominee shall be assigned exclusively to the
Fund, unless the Trust has authorized by Proper Instructions the appointment of
a nominee to be used in common with other registered investment companies
having the same investment adviser as a Fund, or in the name or nominee name of
any agent appointed pursuant to Section 3.8 or in the name or nominee name of
any sub-custodian appointed pursuant to Section 2. All securities accepted by
the Custodian on behalf of the Fund under the terms of this Agreement shall be
in "street name" or other good delivery form. If, however, the Custodian is
instructed by the Trust in writing to maintain securities in "street name", the
Custodian shall utilize its best efforts only to timely collect income due the
Fund on such securities and to notify the Trust on a best efforts basis only of
corporate actions applying to such securities, including, without limitation,
pendency of calls, maturities, tender or exchange offers.
SECTION 3.4 BANK ACCOUNTS. The Custodian shall open and maintain a
separate Fund Account or Accounts in the United States in the name of each Fund
of the Fund, subject only to draft or order by the Custodian acting pursuant to
the terms of this Agreement, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for the
account of the Fund, other than cash maintained by the Fund in a bank account
established and used in accordance with Rule 17f-3 under the 1940 Act. Monies
held by the Custodian for a Fund may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such other banks or
trust companies as it may in its discretion deem necessary or desirable;
provided, however, that every such bank or trust company shall be qualified to
act as a custodian under the 1940 Act. Such monies shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
SECTION 3.5 COLLECTION OF INCOME. Subject to the provisions of Section
3.3, the Custodian shall collect and deposit in the Fund's Account on a timely
basis all income and other payments with respect to registered Domestic
Securities held hereunder to which each Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall collect and deposit in
the Fund's Account on a timely basis all income and other payments with respect
to bearer Domestic Securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and shall credit such
income, as collected, to such Fund's Account. Without limiting the generality
of the foregoing, the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and when they become
due and shall collect interest and other payments when due on securities held
hereunder. Income due each Fund on securities loaned pursuant to the provisions
of Section 3.2 (10) hereof shall be the responsibility of the Fund; the
Custodian, in its capacity as Custodian, will have no duty or responsibility in
connection therewith, other than to provide the Fund with such information or
data as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Fund is properly entitled.
SECTION 3.6 PAYMENT OF FUND MONIES. Upon receipt of Proper
Instructions on behalf of the applicable Fund, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall pay
out monies of a Fund in the following cases only:
1) Upon the purchase of Domestic Securities, options, futures
contracts or options on futures contracts for the account of the
Fund but only (a) against the delivery of such securities or
evidence of title to such options, futures contracts or options on
futures contracts to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad which
is qualified under the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this purpose)
registered in the name of the Fund or in the name of a nominee of
the Custodian referred to in Section 3.3 hereof or in proper form
for transfer; (b) in the case of a purchase effected through a
U.S. Securities System, in accordance with the conditions set
forth in Section 3.9 hereof; (c) in the case of a purchase of
Underlying Shares, in accordance with the conditions set forth in
Section 3.8A hereof, (d) in the case of a purchase involving the
Direct Paper System, in accordance with the conditions set forth
in Section 3.10; or (e) in the case of repurchase agreements
entered into between the Trust on behalf of a Fund and the
Custodian, or another bank, or a broker-dealer which is a member
of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by the Fund of
securities owned by the Custodian along with written evidence of
the agreement by the Custodian to repurchase such securities from
the Fund;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 3.2 hereof;
3) Upon the purchase of Domestic Securities and prior to receipt of
such securities, but only as set forth in written Proper
Instructions, provided that such Proper Instructions shall also
set forth (i) the purpose for which such payment is made, and (ii)
the person(s) to whom such payment is made;
4) For the redemption or repurchase of Shares issued as set forth in
Section 6 hereof;
5) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the
account of the Fund: interest, taxes, management, distribution,
auditing, administration, accounting, transfer agent and legal
fees, and operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized, accrued or
treated as deferred expenses;
6) For the payment of any dividends on Shares declared pursuant to
the governing documents of the Fund;
7) For payment of the amount of dividends received in respect of
securities sold short;
8) In connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
9) In connection with the borrowing or lending of Domestic
Securities;
10) For any other purpose, but only upon receipt of Proper
Instructions from the Trust on behalf of a Fund specifying the
amount of such payment and naming the person or persons to whom
such payment is to be made.
SECTION 3.7 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED. In any and every case where payment for purchase of Domestic
Securities for the account of a Fund is made by the Custodian in advance of
receipt of the securities purchased in the absence of Proper Instructions from
the Fund on behalf of such Fund to so pay in advance, the Custodian shall be
absolutely liable to the Fund for such securities to the same extent as if the
securities had been received by the Custodian except that in the case of
repurchase agreements entered into by the Trust on behalf of a Fund with a bank
which is a member of the Federal Reserve System, the Custodian may transfer
funds to the account of such bank prior to the receipt of written evidence that
the securities subject to such repurchase agreement have been transferred by
book-entry into a segregated non-proprietary account of the Custodian
maintained with the Federal Reserve Bank of Boston or of the safekeeping
receipt, provided that such securities have in fact been so transferred by
book-entry.
SECTION 3.8 APPOINTMENT OF AGENTS. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this Section 3
as the Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder and the Custodian shall be liable for
the acts or omissions of such agents to the same extent as if such acts or
omissions were performed by the Custodian itself. The MFSC Transfer Agent shall
not be deemed an agent or subcustodian of the Custodian for the purposes of
this Section 3.8 or any other provision of this Agreement.
SECTION 3.8A DEPOSIT OF FUND ASSETS WITH THE MFSC TRANSFER AGENT.
Underlying Shares shall be deposited and/or maintained in an account or
accounts maintained with the MFSC Transfer Agent. The MFSC Transfer Agent shall
be deemed to be acting as if it is a "securities depository" for purposes of
Rule 17f-4 under the 1940 Act. The Trust hereby directs the Custodian to
deposit and/or maintain such securities with the MFSC Transfer Agent, subject
to the following provisions:
1) The Custodian shall keep Underlying Shares owned by a Fund with the
MFSC Transfer Agent provided that such securities are maintained in
a separate account or accounts on the books and records of the MFSC
Transfer Agent in the name of the Custodian as custodian for the
Fund.
2) The records of the Custodian with respect to the Underlying Shares
which are maintained with the MFSC Transfer Agent shall identify by
book-entry those Underlying Shares belonging to each Fund.
3) The Custodian shall pay for Underlying Shares purchased for the
account of a Fund upon (i) a determination by the Custodian that
such Underlying Shares have been purchased and will be transferred
to the account of the Custodian, on behalf of the Fund, on the
books and records of the MFSC Transfer Agent, and (ii) the making
of an entry on the records of the Custodian to reflect such payment
and transfer for the account of the Fund. The Trust acknowledges
that the Custodian will only pay for underlying Shares under this
Section on the basis of standing or periodic Proper Instructions.
The Custodian shall receive confirmation from the MFSC Transfer
Agent of the purchase of such securities and the transfer of such
securities to the Custodian's account with the MFSC Transfer Agent
only after such payment is made. The Custodian shall transfer
Underlying Securities redeemed for the account of a Fund (i) upon a
determination by the Custodian that such securities have been
redeemed and that payment for such securities will be transferred
to the Custodian, and (ii) the making of an entry on the records of
the Custodian to reflect such transfer and payment for the account
of the Fund. The Custodian will receive confirmation from the MFSC
Transfer Agent of the redemption of such securities and payment
therefor only after such securities are redeemed. Copies of all
trade summary sheets from the Custodian reflecting purchases and
sales of Underlying Shares for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian, and
shall be provided upon request to the Trust on behalf of the Funds,
together with any daily or other periodic transaction sheets
reflecting each day's transactions for a Fund as reflected on the
books and records of the MFSC Transfer Agent. The Custodian shall
deliver to the Trust such reports on its system of internal
accounting controls as the Trust may from time to time request.
4) The Custodian shall not be liable to the Trust or any Fund for any
loss or damage to the Trust or any Fund resulting from maintenance
of Underlying Shares with the MFSC Transfer Agent except for losses
resulting directly from the negligence, misfeasance or misconduct
of the Custodian or any of its agents or of any of its or their
employees.
SECTION 3.9 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The Custodian
may deposit and/or maintain securities owned by a Fund in a U.S. Securities
System in accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of a Fund in a U.S. Securities
System provided that such securities are credited to a U.S.
Securities System Account, which account shall not include any
assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of a Fund
which are maintained in a U.S. Securities System shall identify by
book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
a Fund upon (i) receipt of advice from the U.S. Securities System
that such securities have been transferred to the U.S. Securities
System Account, and (ii) the making of an entry on the records of
the Custodian to reflect such payment and transfer for the account
of a Fund. The Custodian shall transfer securities sold for the
account of a Fund upon (i) receipt of advice from the U.S.
Securities System that payment for such securities has been
transferred to the U.S. Securities System Account, and (ii) the
making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies of all
advices from the U.S. Securities System of transfers of securities
for the account of a Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Trust on
behalf of the Funds confirmation of each transfer to or from the
account of a Fund in the form of a written advice or notice, and
shall, on the next succeeding business day, furnish to the Trust on
behalf of the Funds copies of daily transaction sheets reflecting
each day's transactions in the U.S. Securities System for the
account of the Funds;
4) The Custodian shall provide the Trust, upon request, with any
report obtained by the Custodian on the U.S. Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities System;
5) The Custodian shall not act on behalf of a Fund under this Section
3.9 in the absence of a certificate of the Fund's Secretary or
Assistant Secretary indicating the Board's approval of the initial
use of a particular Securities System by such Fund; and
6) Notwithstanding any provision in this Agreement to the contrary,
the Custodian shall be liable to the Trust for the benefit of the
Funds for any loss or damage to the Funds resulting from use of the
U.S. Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any of its
or their employees or from failure of the Custodian or any such
agent to enforce effectively such rights as it may have against the
U.S. Securities System; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of any
such loss or damage if and to the extent that a Fund has not been
made whole for any such loss or damage.
SECTION 3.10 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM.
The Custodian may deposit and/or maintain securities owned by a Fund in the
Direct Paper System subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions from the
Trust on behalf of a Fund;
2) The Custodian may keep securities of a Fund in the Direct Paper
System only if such securities are credited to the Direct Paper
System Account, which account shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
3) The records of the Custodian with respect to securities of a Fund
which are maintained in the Direct Paper System shall identify by
book-entry those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the account of
a Fund upon the making of an entry on the records of the Custodian
to reflect such payment and transfer of securities to the account
of such Fund. The Custodian shall transfer securities sold for the
account of the Fund upon the making of an entry on the records of
the Custodian to reflect such transfer and receipt of payment for
the account of the Fund;
5) The Custodian shall furnish the Trust, upon request, on behalf of
the Funds confirmation of each transfer to or from the account of
the Funds, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall,
on the next succeeding business day, furnish to the Trust on behalf
of the Funds copies of daily transaction sheets reflecting each
day's transaction in the Direct Paper System for the account of the
Funds;
6) The Custodian shall provide the Trust on behalf of the Funds with
any report on its system of internal accounting control as the
Trust may reasonably request from time to time; and
7) The Custodian shall not with respect to a Fund act under this
Section 3.10 in the absence of receipt of an initial certificate of
the Fund's Secretary or an Assistant Secretary that the Board has
approved the initial use of the Direct Paper System for such Fund.
SECTION 3.11 SEGREGATED ACCOUNT. The Custodian shall upon receipt of
Proper Instructions on behalf of each applicable Fund establish and maintain a
segregated account or accounts for and on behalf of each such Fund, into which
account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to Sections 3.9
and 3.10 hereof, (i) in accordance with the provisions of any agreement among
the Trust on behalf of a Fund, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or
any registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by a Fund, (ii) for purposes of segregating liquid assets as
permitted by the SEC in connection with options purchased, sold or written by a
Fund or commodity futures contracts or options thereon purchased or sold by the
Fund, (iii) for the purposes of compliance by the Fund with the procedures
required by Investment Company Act Release No. 10666, or any subsequent release
or releases of the SEC relating to the maintenance of segregated accounts by
registered investment companies and (iv) for any other purpose, but only in
accordance with Proper Instructions from the Trust on behalf of the applicable
Fund.
SECTION 3.12 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to domestic securities of each Fund held by it and in connection
with transfers of securities.
SECTION 3.13 PROXIES. The Custodian shall, with respect to the
Domestic Securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the securities are registered
otherwise than in the name of the Fund or a nominee of the Fund, all proxies,
without indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Fund such proxies, all proxy soliciting materials
and all notices relating to such securities received by the Custodian from,
among other sources, publications and reporting services routinely used by the
Custodian for that purpose. The Custodian shall not execute any such proxy to
vote thereon, or take any other action with respect thereto, except as directed
pursuant to Proper Instructions.
SECTION 3.14 COMMUNICATIONS RELATING TO FUND SECURITIES. Subject to
the provisions of Section 3.3, the Custodian shall transmit promptly to the
Trust for each Fund written information with respect to materials received by
the Custodian (including, without limitation, class action notices, pendency of
calls and maturities of Domestic Securities and expirations of rights in
connection therewith) from issuers of the securities being held for the account
of the Fund or from publications or reporting services routinely used by the
Custodian for that purpose and, with respect to tender or exchange offers, from
issuers of the securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer. If the Fund desires to
take action with respect to any tender offer, exchange offer or any other
similar transaction, the Fund shall notify the Custodian by Proper Instructions
prior to the deadline established by the Custodian in its reasonable discretion
for receipt of such instructions and communicated to the Fund. Upon receipt of
such Proper Instructions, the Custodian shall execute all tender offers,
exchange offers or other similar transactions, provided that (i) the Custodian
is in actual possession of such securities, (ii) the Custodian receives Proper
Instructions with regard to the exercise of any tender, exchange or other
similar transaction, and both (i) and (ii) occur prior to the deadline
established by the Custodian and communicated to the Fund. If the Fund fails to
provide the Custodian with timely instructions with respect to any tender
offer, exchange offer or any other similar transaction, the Custodian shall
take no action in relation to that transaction, except as otherwise agreed in
writing by the Custodian and the Fund or as may be set forth by the Custodian
as a default action with respect to that transaction.
SECTION 4. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER OF THE STATE STREET
PORTFOLIOS
SECTION 4.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
The Trust, by resolution adopted by the Board, hereby delegates to the
Custodian with respect to the State Street Portfolios, subject to Section (b)
of Rule 17f-5, the responsibilities set forth in this Section 4 with respect to
Foreign Assets of the State Street Portfolios held outside the United States,
and the Custodian hereby accepts such delegation, as Foreign Custody Manager
with respect to the State Street Portfolios.
SECTION 4.2 COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the State Street Portfolios, and only with respect to the
countries and custody arrangements for each such country listed from time to
time on Schedule A to this Agreement, which list of countries may be amended
from time to time by the Fund with the agreement of the Foreign Custody
Manager. The Foreign Custody Manager shall list on Schedule A the Eligible
Foreign Custodians selected by the Foreign Custody Manager to maintain the
assets of the State Street Portfolios, which list of Eligible Foreign
Custodians may be amended from time to time in the sole discretion of the
Foreign Custody Manager. The Foreign Custody Manager will provide amended
versions of Schedule A in accordance with Section 4.6 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions
to open an account or to place or maintain Foreign Assets in a country listed
on Schedule A, and the fulfillment by the Fund on behalf of the State Street
Portfolios of the applicable account opening requirements for such country, the
Foreign Custody Manager shall be deemed to have been delegated by the Board on
behalf of the State Street Portfolios responsibility as Foreign Custody Manager
with respect to that country and to have accepted such delegation. Following
the receipt of Proper Instructions directing the Foreign Custody Manager to
close the account of a State Street Portfolio with the Eligible Foreign
Custodian selected by the Foreign Custody Manager in a designated country, the
delegation by the Board on behalf of the State Street Portfolios to the
Custodian as Foreign Custody Manager for that country shall be deemed to have
been withdrawn and the Custodian shall immediately cease to be the Foreign
Custody Manager of the State Street Portfolios with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to
the Fund. Sixty days (or such longer period as the parties may agree to in
writing reasonably and in good faith) after receipt of any such notice by the
Fund, the Custodian shall have no further responsibility as Foreign Custody
Manager to the Fund (or any portfolio thereof) with respect to the country as
to which the Custodian's acceptance of delegation is withdrawn.
SECTION 4.3 SCOPE OF DELEGATED RESPONSIBILITIES.
4.3.1. Selection of Eligible Foreign Custodians. Subject to the
provisions of this Section 4, the Foreign Custody Manager may place and
maintain the Foreign Assets in the care of the Eligible Foreign Custodian
selected by the Foreign Custody Manager in each country listed on Schedule A,
as amended from time to time. In performing its delegated responsibilities as
Foreign Custody Manager to place or maintain Foreign Assets with an Eligible
Foreign Custodian, the Foreign Custody Manager shall determine that the Foreign
Assets will be subject to reasonable care, based on the standards applicable to
custodians in the country in which the Foreign Assets will be held by that
Eligible Foreign Custodian, after considering all factors relevant to the
safekeeping of such assets, including, without limitation, the factors
specified in Rule 17f-5(c)(1).
4.3.2. Contracts With Eligible Foreign Custodians. The Foreign Custody
Manager shall determine that the written contract governing the foreign custody
arrangements with each Eligible Foreign Custodian selected by the Foreign
Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
4.3.3. Monitoring. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian selected by the
Foreign Custody Manager, the Foreign Custody Manager shall establish a system
to monitor (i) the appropriateness of maintaining the Foreign Assets with such
Eligible Foreign Custodian and (ii) the performance under the contract
governing the custody arrangements established by the Foreign Custody Manager
with the Eligible Foreign Custodian. In the event the Foreign Custody Manager
determines that the custody arrangements with an Eligible Foreign Custodian it
has selected are no longer appropriate, the Foreign Custody Manager shall
notify the Board in accordance with Section 4.6 hereunder.
SECTION 4.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For
purposes of this Section 4, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and
maintaining the Foreign Assets in each country for which the Custodian is
serving as Foreign Custody Manager of the State Street Portfolios.
SECTION 4.5 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE STATE
STREET PORTFOLIOS. In performing the responsibilities delegated to it, the
Foreign Custody Manager agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for the safekeeping of assets
of management investment companies registered under the 1940 Act would
exercise.
SECTION 4.6 REPORTING REQUIREMENTS. The Foreign Custody Manager shall
report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian
and the placement of such Foreign Assets with another Eligible Foreign
Custodian by providing to the Board amended Schedule A at the end of the
calendar quarter in which an amendment to such Schedule has occurred. The
Foreign Custody Manager shall make written reports notifying the Board of any
other material change in the foreign custody arrangements of the State Street
Portfolios described in this Section 4 (including without limitation a change
which may, in the Foreign Custody Manager's reasonable belief, cause the
Eligible Foreign Custodian to no longer meet the requirements of Rule 17f-5)
reasonably promptly following the occurrence of the material change.
SECTION 4.7 REPRESENTATIONS WITH RESPECT TO RULE 17f-5. The Foreign
Custody Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the
Board has determined that it is reasonable for the Board to rely on the
Custodian to perform the responsibilities delegated pursuant to this Agreement
to the Custodian as the Foreign Custody Manager of the State Street Portfolios.
SECTION 4.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN
CUSTODY MANAGER. The Board's delegation to the Custodian as Foreign Custody
Manager of the State Street Portfolios shall be effective as of the date of
execution of this Agreement and shall remain in effect until terminated with
respect to any Fund (or any portfolio thereof) at any time, without penalty, by
written notice from the terminating party to the non-terminating party.
Termination will become effective sixty (60) days after receipt by the
non-terminating party of such notice or, in the case of termination by the
Foreign Custody Manager, such longer period as the parties may agree to in
writing reasonably and in good faith. The provisions of Section 4.2 hereof
shall govern the delegation to and termination of the Custodian as Foreign
Custody Manager of the State Street Portfolios with respect to designated
countries.
SECTION 4.9 ELIGIBLE SECURITIES DEPOSITORIES.
4.9.1 ANALYSIS AND MONITORING. The Custodian shall (a)
provide the Fund (or its duly-authorized investment manager or investment
advisor) with an analysis of the custody risks associated with maintaining
assets with the Eligible Securities Depositories set forth on Schedule B hereto
in accordance with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such
risks on a continuing basis, and promptly notify the Fund (or its
duly-authorized investment manager or investment advisor) of any material
change in such risks, in accordance with section (a)(1)(i)(B) of Rule 17f-7.
4.9.2 STANDARD OF CARE. The Custodian agrees to exercise
reasonable care, prudence and diligence in performing the duties set forth in
Section 4.9.1.
SECTION 5. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE STATE
STREET PORTFOLIOS HELD OUTSIDE OF THE UNITED STATES
SECTION 5.1 HOLDING SECURITIES. The Custodian shall identify on its
books as belonging to the State Street Portfolios the foreign securities held
by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may
hold Foreign Securities for all of its customers, including the State Street
Portfolios, with any Foreign Sub-Custodian in an account that is identified as
belonging to the Custodian for the benefit of its customers, provided however,
that (i) the records of the Custodian with respect to Foreign Securities of the
State Street Portfolios which are maintained in such account shall identify
those securities as belonging to the State Street Portfolios and (ii), to the
extent permitted and customary in the market in which the account is
maintained, the Custodian shall require that securities so held by the Foreign
Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian
or of other customers of such Foreign Sub-Custodian.
SECTION 5.2 FOREIGN SECURITIES SYSTEMS. Foreign Securities shall be
maintained in a Foreign Securities System in a designated country only through
arrangements implemented by the Foreign Sub-Custodian or Sub-Custodians in such
country pursuant to the terms of this Agreement.
SECTION 5.3 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
5.3.1. Delivery of Foreign Securities. The Custodian or a Foreign
Sub-Custodian shall release and deliver Foreign Securities of the State Street
Portfolios held by such Foreign Sub-Custodian, or in a Foreign Securities
System account, only upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, and only in the
following cases:
(1) upon the sale of such Foreign Securities for the State Street
Portfolios in accordance with customary market practice generally
accepted by Institutional Clients in the country where such
foreign securities are held or traded, including, if applicable
and without limitation: (A) delivery against expectation of
receiving later payment; or (B) in the case of a sale effected
through a Foreign Securities System in accordance with the rules
governing the operation of the Foreign Securities System;
(2) in accordance with customary market practice generally accepted
by Institutional Clients, in connection with any repurchase
agreement related to Foreign Securities;
(3) to the depository agent in connection with tender or other
similar offers for Foreign Securities of the State Street
Portfolios;
(4) to the issuer thereof or its agent when such Foreign Securities
are called, redeemed, retired or otherwise become payable
provided that, in any such case, the cash or other consideration
is to be delivered to a Foreign Sub-Custodian;
(5) to the issuer thereof, or its agent, for transfer into the name
of the Custodian (or the name of the respective Foreign
Sub-Custodian or of any nominee of the Custodian or such Foreign
Sub-Custodian) or for exchange for a different number of
securities, certificates or other evidence representing the same
aggregate face amount or number of units;
(6) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with customary
market practice generally accepted by Institutional Clients;
provided that in any such case the Foreign Sub-Custodian shall
have no responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for such
securities except as may arise from the Foreign Sub-Custodian's
own negligence or willful misconduct;
(7) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement;
(8) in the case of warrants, rights or similar foreign securities,
the surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(9) for delivery as security in connection with any borrowing by the
State Street Portfolios requiring a pledge of assets by such
Portfolios;
(10) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(11) in connection with the lending of Foreign Securities;
(12) upon receipt of instructions from the Transfer Agent for delivery
to such Transfer Agent or to the holders of Shares in connection
with distributions in kind, as may be described from time to time
in the Prospectus, in satisfaction of requests by holders of
Shares for repurchase or redemption or in liquidation of Fund
assets; and
(13) for any other purpose, but only upon receipt of Proper
Instructions from the Trust on behalf of the applicable Fund
specifying the securities to be delivered and the person or
persons to whom such delivery shall be made.
5.3.2. Payment of Fund Monies. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the parties,
the Custodian shall pay out, or direct the respective Foreign Sub-Custodian or
the respective Foreign Securities System to pay out, monies of a State Street
Portfolio in the following cases only:
(1) upon the purchase of Foreign Securities for the State Street
Portfolio in accordance with customary market practice generally
accepted by Institutional Clients, including, if applicable and
without limitation: (A) delivering money to the seller thereof or
to a dealer therefor (or an agent for such seller or dealer)
against expectation of receiving later delivery of such Foreign
Securities; or (B) in the case of a purchase effected through a
Foreign Securities System, in accordance with the rules governing
the operation of such Foreign Securities System;
(2) in connection with the conversion, exchange or surrender of
Foreign Securities of the State Street Portfolio;
(3) for the payment of any expense or liability of the State Street
Portfolio, including but not limited to the following payments:
interest, taxes, management, distribution, auditing,
administration, accounting, transfer agency fees, fees under this
Agreement, legal fees, accounting fees, and other operating
expenses of the Fund whether or not such expenses are to be in
whole or in part capitalized, accrued or treated as deferred
expenses;
(4) for the purchase or sale of foreign exchange or foreign exchange
contracts for the State Street Portfolio, including transactions
executed with or through the Custodian or its Foreign
Sub-Custodians;
(5) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(6) in connection with the borrowing or lending of Foreign
Securities;
(7) for the redemption or repurchase of shares issued as set forth in
Section 6 hereof;
(8) for the payment of any dividends on shares declared pursuant to
the governing documents of the Fund;
(9) for payment of the amount of dividends received in respect of
securities sold short; and
(10) for any other purpose, but only upon receipt of Proper
Instructions from the Trust on behalf of a Fund specifying the
amount of such payment and naming the person or persons to whom
such payment is to be made.
5.3.3. Market Conditions. Notwithstanding any provision of this
Agreement to the contrary, settlement and payment for securities received for
the account of each applicable State Street Portfolio and delivery of
securities maintained for the account of each such applicable Fund may be
effected in accordance with the customary securities trading or securities
processing practices and procedures generally accepted by Institutional
Clients, including, without limitation, delivering Foreign Assets to the
purchaser thereof or to a dealer therefor (or an agent for such purchaser or
dealer) with the expectation of receiving later payment for such Foreign Assets
from such purchaser or dealer, but in all cases subject to the standard of care
set forth in Section 14 hereof.
The Custodian shall provide to the Board the information with respect
to custody and settlement practices in countries in which the Custodian employs
a Foreign Sub-Custodian, including without limitation information relating to
Foreign Securities Systems, described on Schedule C hereto at the time or times
set forth on such Schedule. The Custodian may revise Schedule C from time to
time, provided that no such revision shall result in the Board being provided
with substantively less information than had been previously provided
hereunder.
SECTION 5.4 REGISTRATION OF FOREIGN SECURITIES. The Foreign Securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable State Street
Portfolio or in the name of the Custodian or in the name of any Foreign
Sub-Custodian or in the name of any nominee of the foregoing, and the Trust on
behalf of such Fund agrees to hold any such nominee harmless from any liability
as a holder of record of such Foreign Securities, absent such nominee's
negligence or willful misconduct. The Custodian or a Foreign Sub-Custodian
shall not be obligated to accept securities on behalf of a State Street
Portfolio under the terms of this Agreement unless the form of such securities
and the manner in which they are delivered are in accordance with customary
market practice generally accepted by Institutional Clients.
SECTION 5.5 BANK ACCOUNTS. The Custodian shall identify on its books
as belonging to the Fund cash (including cash denominated in foreign
currencies) deposited with the Custodian. Where the Custodian is unable to
maintain, or market practice does not facilitate the maintenance of, cash on
the books of the Custodian, a bank account or bank accounts opened and
maintained outside the United States on behalf of a State Street Portfolio with
a Foreign Sub-Custodian shall be subject only to draft or order by the
Custodian or such Foreign Sub-Custodian, acting pursuant to the terms of this
Agreement to hold cash received by or from or for the account of the State
Street Portfolio.
SECTION 5.6 COLLECTION OF INCOME. The Custodian shall use reasonable
commercial efforts to timely collect all income and other payments with respect
to the Foreign Assets held hereunder to which the State Street Portfolios shall
be entitled and shall credit such income, as collected, to the applicable Fund.
In the event that extraordinary measures are required to collect such income,
the Fund and the Custodian shall consult as to such measures and as to the
compensation and expenses of the Custodian relating to such measures.
SECTION 5.7 SHAREHOLDER RIGHTS. With respect to the Foreign Securities
held pursuant to this Agreement, the Custodian will use reasonable commercial
efforts, to facilitate the exercise of voting and other shareholder rights, in
those markets in which such services are offered by the Custodian (as
identified from time to time by the Custodian to the Fund), subject always to
the laws, regulations and practical constraints that may exist in the country
where such securities are issued.
SECTION 5.8 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The
Custodian shall transmit promptly to the Fund written information with respect
to materials received by the Custodian via the Foreign Sub-Custodians
(including, without limitation, pendency of calls and maturities of Foreign
Securities and expirations of rights in connection therewith) from issuers of
the Foreign Securities being held for the account of the State Street
Portfolios or from publications or reporting services routinely used by the
Custodian or Sub-Custodian for that purpose and, with respect to tender or
exchange offers, from issuers of the Foreign Securities whose tender or
exchange is sought or from the party (or its agents) making the tender or
exchange offer. If the Fund desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the Fund shall notify
the Custodian by Proper Instructions prior to the deadline established by the
Custodian in its reasonable discretion for receipt of such instructions and
communicated to the Fund. Upon receipt of such Proper Instructions, the
Custodian or the respective Sub-Custodian shall execute all tender offers,
exchange offers or any other similar transaction, provided that (i) the
Custodian or the respective Foreign Sub-Custodian is in actual possession of
such Foreign Securities or property, (ii) the Custodian receives Proper
Instructions with regard to the exercise of any tender, exchange or other
similar transaction, and both (i) and (ii) occur prior to the deadline for
receipt of Proper Instructions established by the Custodian and communicated to
the Fund. If the Fund fails to provide the Custodian with timely instructions
with respect to any tender offer, exchange offer or any other similar
transaction, the Custodian shall take no action in relation to that
transaction, except as otherwise agreed in writing by the Custodian and the
Fund or as may be set forth by the Custodian as a default action with respect
to that transaction.
SECTION 5.9 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement
pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the
extent possible, require the Foreign Sub-Custodian to exercise reasonable care
in the performance of its duties and, to the extent possible, to indemnify, and
hold harmless, the Custodian from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the Foreign
Sub-Custodian's performance of such obligations. At the Fund's election, the
State Street Portfolios shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a Foreign Sub-Custodian as a
consequence of any such loss, damage, cost, expense, liability or claim if and
to the extent that the State Street Portfolios have not been made whole for any
such loss, damage, cost, expense, liability or claim.
SECTION 5.10 TAX RECLAIMS.
Subject to the provisions of this section, the Custodian shall apply
for a reduction of withholding tax and any refund of any tax paid or tax
credits in respect of income payments on Fund assets that Custodian believes
may be available. The provision of a tax reclamation service by the Custodian
with respect to any Fund is conditional upon Custodian receiving from the Fund
(or Trust on behalf of the Fund) (i) a declaration of its identity and place of
residence and (ii) certain other documentation required for the Custodian to
perform the reclamation service.
The Custodian shall perform tax reclamation services only with respect
to taxation levied by the revenue authorities of the countries advised by the
Custodian to the Funds from time to time and may, by notification in writing,
in its absolute discretion, supplement or amend the countries in which the tax
reclamation services are offered. Other than as expressly provided in this
section 5.10, Custodian shall have no responsibility with regard to a Fund's
tax position or status in any jurisdiction.
SECTION 5.11 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon
request of a Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books and
records of any Foreign Sub-Custodian insofar as such books and records relate
to the performance of such Foreign Sub-Custodian under its agreement with the
Custodian or to the securities or assets of a State Street Portfolio held by
such Foreign Sub-Custodian.
SECTION 5.12 REPORTS. The Custodian will supply to the Fund, from time
to time, as mutually agreed upon, statements in respect of the securities and
other assets of the State Street Portfolio(s) held by Foreign Sub-Custodians,
including but not limited to an identification of entities having possession of
the State Street Portfolio(s) securities and other assets and advices or
notifications of any transfers of securities to or from each account maintained
by a Foreign Sub-Custodian for the Custodian on behalf of the customers of the
Custodian indicating, with respect to securities held for a State Street
Portfolio, the entity having physical possession of such securities if such
securities exist in physical form.
SECTION 5.13 CONFLICT. If the Custodian is delegated the
responsibilities of Foreign Custody Manager pursuant to the terms of Section 4
hereof, in the event of any conflict between the provisions of Sections 4 and 5
hereof, the provisions of Section 4 shall prevail.
SECTION 6. PAYMENTS FOR SALES AND FOR REPURCHASES OR REDEMPTIONS OF SHARES
The Custodian shall receive from the distributor for the Shares or
from the Transfer Agent, and deposit into the Fund's Account such consideration
as is received therefrom for Shares of that Fund issued or sold from time to
time by the Fund. The Custodian will provide timely notification to the Trust
on behalf of each such Fund and the Transfer Agent of any receipt by it of
consideration for Shares of such Fund.
From such funds as may be available for the purpose, the Custodian
shall, upon receipt of instructions from the Transfer Agent, make monies
available for payment to holders of Shares who have delivered to the Transfer
Agent a request for redemption or repurchase of their Shares. In connection
with the redemption or repurchase of Shares, the Custodian is authorized upon
receipt of instructions from the Transfer Agent to wire monies to or through a
commercial bank designated by the redeeming shareholders. In connection with
the redemption or repurchase of Shares, the Custodian shall honor checks drawn
on the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance
with such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
SECTION 7. PROPER INSTRUCTIONS
Proper Instructions as used throughout this Agreement means (i) a
tested telex, (ii) a written (including, without limitation, facsimile
transmission) request, direction, instruction or certification signed or
initialed by or on behalf of the Trust by one or more person or persons as the
Board shall have from time to time authorized (each an "AUTHORIZED PERSON");
(iii) a telephonic or other oral communication by one or more Authorized
Persons; or (iv) a communication effected directly between an
electro-mechanical or electronic device or system (including, without
limitation, computers) by or on behalf of the Trust by one or more Authorized
Persons; provided, however, that communications of the types described in
clauses (iii) and (iv) 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 Trust by tested facsimile or in
writing in the manner set forth in clause (ii) above; each such writing shall
set forth the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. For
purposes of this Section, Proper Instructions shall include instructions
received by the Custodian pursuant to any three-party agreement which requires
a segregated asset account in accordance with Section 3.11 hereof.
SECTION 8. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from
the Trust on behalf of each applicable Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Agreement, provided that (i) such payments will not be in excess of
amounts agreed to in writing from time to time by the Custodian and
the Trust, and (ii) all such payments shall be accounted for to the
Trust on behalf of the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments received by the Custodian for the
account of a Fund; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Funds except as
otherwise directed by the Board.
SECTION 9. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper reasonably
believed by it to be genuine and to have been properly executed by or on behalf
of the Trust. The Custodian may receive and accept a copy of a Certified
Resolution as conclusive evidence (a) of the authority of any person to act in
accordance with such resolution or (b) of any determination or of any action by
the Board as described in such resolution, and such resolution may be
considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.
SECTION 10. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME; TRADE
ALLOCATION AND REBALANCING SERVICES
10.1 Duties with Respect to Books of Account and Calculations of Net
Asset Value. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board to keep the books
of account of each Fund and/or compute the net asset value per Share of the
outstanding Shares or, if directed in writing to do so by the Trust on behalf
of the Funds, shall itself keep such books of account and/or compute such net
asset value per Share. If so directed, the Custodian shall also calculate daily
the net income of the Funds as described in the Prospectus and shall advise the
Fund and the Transfer Agent daily of the total amounts of such net income and,
if instructed in writing by an officer of the Trust to do so, shall advise the
Transfer Agent periodically of the division of such net income among its
various components. The Trust acknowledges and agrees that, with respect to
investments maintained with the MFSC Transfer Agent, the MFSC Transfer Agent is
the primary source of information on the number of Underlying Shares of an
Underlying Fund held by it on behalf of the Custodian in the name of a Fund and
that the Custodian has the right to rely on holdings information furnished by
the MFSC Transfer Agent to the Custodian in performing its duties under this
Agreement including, without limitation, the duties set forth in this Section
10 and in Section11 hereof. [reporting of discrepancies moved to Sec 10.2(4) -
remainder stricken after Tuesday discussion with MFS - State Street not
receiving confirms] The calculations of the net asset value per Share and the
daily income of each Fund shall be made at the time or times described from
time to time in the Prospectus
10.2 Trade Allocation Services.
1) The Trust periodically shall direct the Custodian, through Proper
Instructions, to allocate purchase and/or redemption orders for
Underlying Shares (referred to as "Underlying Share Trades") to the
MFSC Transfer Agent based on the target percentages specified on
Exhibit B hereto, as such Exhibit may be amended from time to time
(the "Target Percentages").
2) The Custodian shall be responsible for monitoring capital stock
activity (which for these purposes means capital stock activity for
each Fund reflected on the distribution of cash page on DST's TA
2000 Report, or other similar report) for the Funds and for
calculating the Underlying Share Trades in accordance with the
Target Percentages. The Custodian shall by 2:00 p.m. Eastern Time
on the day following any capital stock activity for a Fund (the
"Trade Date"), advise the Trust and MFSC Transfer Agent of the
character (e.g., buy/sell) and amount of Underlying Share Trades
that will be placed for shares of the Underlying Funds, and shall
place the Underlying Share Trades through the NSCC Fund/SERV System
prior to 6:00 a.m. Eastern Time on the day following the Trade
Date, and will provide confirmation of the Underlying Share Trades
placed with the MFSC Transfer Agent to the Trust by 9:30 a.m.
Eastern Time the day following the Trade Date. The Custodian will
identify and rectify any failed or rejected Underlying Share Trades
by 11:00 a.m. Eastern Time the day following the Trade Date. The
Custodian and the MFSC Transfer Agent shall settle the Underlying
Share Trades pursuant to, and in accordance with, NSCC rules and
procedures.
3) The MFSC Transfer Agent represents and warrants to the Custodian
that the MFSC Transfer Agent is authorized by the Underlying Funds
to accept Underlying Share Trades for purchases and/or redemptions
of Underlying Fund Shares. Subject to the Custodian's compliance
with the procedures detailed in Section 10.2(2) above, the
Custodian will be considered a limited agent of the MFSC Transfer
Agent for purposes of accepting standing and periodic instructions
from the Trust for Underlying Share Trades, and the MFS Transfer
Agent acknowledges that the price for any Underlying Share Trades
received from the Custodian shall be the Underlying Funds' closing
prices (which shall be their net asset values calculated in the
manner set forth in the Underlying Funds' then current registration
statements) as of the Trade Date.
4) The Custodian will reconcile Underlying Fund Share balances held on
behalf of the Funds with the books and records maintained by the
MFSC Transfer Agent, and will confirm on a daily basis that the
Funds' holdings of Underlying Shares correspond to the holdings
reflected in the Underlying Funds' accounts maintained by the MFSC
Transfer Agent on DST. The Custodian shall deliver such reports on
the results of its reconciliations in the form and manner as the
Trust may from time to time reasonably request. The Custodian shall
report promptly any discrepancies to the MFSC Transfer Agent. The
Custodian shall cooperate with the Trust's auditors in connection
with the auditors' periodic audits, attestations or reviews of the
assets contained in the Funds' accounts.
5) The Custodian acknowledges that the Trust also may from time to
time, through Proper Instructions, direct the Custodian to place
Underlying Share Trades in order to rebalance the Underlying Funds
to their Target Percentages, or for any other reason the Trust
deems necessary or advisable. The Trust acknowledges that
instructions for such trades must be received by the Custodian by
12:00 noon Eastern Time in order for the Custodian to place such
trades in a manner that will result in the trades being effected at
that day's closing price for the Underlying Funds.
10.3 Rebalancing Services. The Trust may direct the Custodian, through
Proper Instructions received by the Custodian at least one (1) business day
prior to date of calculation, to calculate the percentage of each Underlying
Fund held in the Trust and its Funds and to rebalance each Fund's holdings of
the Underlying Shares to their target percentages. The parties agree that the
Custodian will complete the calculation and rebalancing within five (5)
business days after the requested calculation date. If the Custodian's
calculation shows that the percentage of any Underlying Shares in the
Underlying Fund either exceeds or falls below its Target Percentage, the
Custodian is hereby directed, without further Proper Instruction, to rebalance
the Trust by placing Underlying Share Trades in an amount sufficient to return
the percentage of each Underlying Fund to its Target Percentage, or as close
thereto as practicable. The Trust acknowledges and agrees that the Custodian's
rebalancing may not produce the exact percentages specified on Exhibit B due to
the effects of rounding and trading in whole units of the assets.
SECTION 11. RECORDS
The Custodian shall with respect to each Fund create and maintain all
records relating to its activities and obligations under this Agreement in such
manner as will meet the obligations of the Trust under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder. The Custodian shall keep such other books and records of each Fund
as the Trust and the Custodian may agree from time to time. All such records
shall be the property of the Trust and shall at all times during the regular
business hours of the Custodian be open for inspection by duly authorized
officers, employees or agents of the Trust (including without limitation its
independent certified public accountants) and employees and agents of the SEC.
The Custodian shall, at the Trust's request, supply the Trust with a tabulation
of securities owned by each Fund and held by the Custodian and shall, when
requested to do so by the Trust and for such compensation as shall be agreed
upon between the Trust and the Custodian, include certificate numbers in such
tabulations.
SECTION 12. OPINION OF TRUST'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Trust on behalf
of each applicable Fund may from time to time request, to obtain from year to
year favorable opinions from the Trust's independent accountants with respect
to its activities hereunder in connection with the preparation of the Trust's
applicable registration statement or amendments thereto, and Form N-SAR or
other annual reports to the SEC and with respect to any other requirements
thereof.
SECTION 13. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Trust, on behalf of each of the Funds
at such times as the Trust may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on
futures contracts, including securities deposited and/or maintained in a U.S.
Securities System or a Foreign Securities System, relating to the services
provided by the Custodian under this Agreement; such reports, shall be of
sufficient scope and in sufficient detail, as may reasonably be required by the
Trust to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
SECTION 14. RESPONSIBILITY OF CUSTODIAN
The Custodian shall be held to the exercise of reasonable care in
carrying out the provisions of this Agreement and shall not be responsible for
the title, validity or genuineness of any property or evidence of title thereto
received or delivered by it hereunder if it has exercised such reasonable care,
but shall be indemnified and held harmless by the Trust from and against any
and all costs, reasonable expenses, claims, losses, damages, charges,
reasonable counsel fees, payments and liabilities which may be asserted against
the Custodian and shall be without liability to the Trust on behalf of the
Funds (i) in acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and signed by the proper
party or parties, including any futures commission merchant acting pursuant to
the terms of a three-party futures or options agreement, (ii) for any action
taken or omitted by it in good faith without negligence and (iii) except as may
arise from the negligence or willful misconduct of the Custodian or a
subcustodian or agent appointed by the Custodian, (a) in acting in accordance
with any Proper Instruction, or (b) for any acts and omissions of the MFSC
Transfer Agent. It shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Trust) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
The Custodian shall be without liability to the Trust and the Funds for any
loss, liability, claim or expense resulting from or caused by anything which is
part of Country Risk, including without limitation nationalization,
expropriation, currency restrictions, or acts of war, revolution, riots or
terrorism.
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Trust for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances
beyond the reasonable control of the Custodian or any sub-custodian or
Securities System or any agent or nominee of any of the foregoing, including,
without limitation, the interruption, suspension or restriction of trading on
or the closure of any securities market, power or other mechanical or
technological failures or interruptions, computer viruses or communications
disruptions, work stoppages, natural disasters, or other similar events or
acts; (ii) errors by the Trust or the Investment Advisor in their instructions
to the Custodian provided such instructions have been in accordance with this
Agreement; (iii) the insolvency of or acts or omissions by a Securities System;
(iv) any delay or failure of any broker, agent or intermediary, central bank or
other commercially prevalent payment or clearing system to deliver to the
Custodian's sub-custodian or agent securities purchased or in the remittance or
payment made in connection with securities sold; (v) any delay or failure of
any company, corporation, or other body in charge of registering or
transferring securities in the name of the Custodian, the Trust on behalf of
the Funds, the Custodian's sub-custodians, nominees or agents or any
consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security
or Securities System; and (vii) any change to provision of any present or
future law or regulation or order of the United States of America, or any state
thereof, or any other country, or political subdivision thereof or of any court
of competent jurisdiction.
The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 5 hereof) to the same extent as set forth
with respect to sub-custodians generally in this Agreement.
If the Trust on behalf of a Fund requires the Custodian to take any
action with respect to securities, which action involves the payment of money
or which action may, in the opinion of the Custodian, result in the Custodian
or its nominee assigned to the Trust or a Fund being liable for the payment of
money or incurring liability of some other form, the Trust on behalf of the
Fund, as a prerequisite to requiring the Custodian to take such action, shall
provide indemnity to the Custodian in an amount and form satisfactory to it.
If a Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) and such advance is not made pursuant to any other agreement
between the Fund and the Custodian, or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Agreement,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time held
for the account of the applicable Fund shall be security therefor and should
the Fund fail to repay the Custodian promptly, the Custodian shall be entitled
to utilize available cash and to dispose of such Fund's assets to the extent
necessary to obtain reimbursement, provided, however, that the interest of the
Custodian created by this provision shall be a subordinate interest with
respect to 95% of the gross assets of the applicable Fund to the extent that
such interest would make such assets otherwise ineligible to cover such Fund's
"senior security" positions within the meaning of the 1940 Act. Unless the
Custodian determines in good faith that prompt action is required to avoid a
risk of loss by the Custodian, prior to utilizing a Fund's available cash or
disposing of its assets as contemplated by the preceding sentence, the
Custodian shall notify the Trust and provide the Trust with an opportunity to
pay amounts owed by the Fund to the Custodian.
Promptly after receipt by the Custodian under this Section 14 of
notice of commencement of any action, the Custodian will, if a claim in respect
thereof is to be made against the Trust under this Section, notify the Trust of
the commencement thereof; but the omission so to notify the Trust will not
relieve it from any liability which it may have to the Custodian otherwise than
under this Section. In case any such action is brought against the Custodian,
and it notifies the Trust of the commencement thereof, the Trust will be
entitled to participate therein and, to the extent that it may wish, assume the
defense thereof. After notice from the Trust of its intention to assume the
defense of an action, the Custodian shall bear the expense of any additional
counsel obtained by it, and the Trust shall not be liable to the Custodian
under this Section for any legal or other expenses subsequently incurred by the
Custodian in connection with the defense thereof, other than reasonable costs
of investigation. The Custodian shall in no case confess any claim or make any
compromise in any case in which the Trust is asked to indemnify the Custodian
except with the Trust's prior written consent.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
SECTION 15. WAIVERS AND AMENDMENTS
No provisions of this Agreement may be waived or amended except by a
statement in writing signed by the party against which enforcement of such
waiver or amendment is sought; provided, however, that:
(a) Exhibit A listing the Funds of the Trust for which the Custodian
serves as custodian may be amended from time to time to add one or
more series of Shares for one or more Funds, by each such Fund's
execution and delivery to the Custodian of an amended Exhibit A,
and the execution of such amended Exhibit by the Custodian, in
which case such amendment shall take effect upon execution thereof
by the Custodian and such series of Shares shall become a Fund
hereunder;
(b) Exhibit A may be amended from time to time to delete one or more
Funds (but less than all of the Funds) of one or more of the Funds
as provided in Section 16 below;
(c) Exhibit B_may be amended from time to time to change the
rebalancing target percentages referred to in Section 10; and
(d) One or more investment companies (each, a "New Fund") may become
parties to the Agreement by (i) the New Fund's execution and
delivery to the Custodian of (a) a letter agreeing to the
provisions of this Agreement, and (ii) amended Exhibit A, and (ii)
the execution of such letter and amended Exhibit A by the
Custodian, in which case such amendment shall take effect upon
execution by the Custodian and the New Fund shall be a party to
this Agreement.
SECTION 16. EFFECTIVE PERIOD AND TERMINATION
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, and
may be amended at any time by mutual agreement of the parties hereto.
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 the Fund, such termination to take effect not sooner
than 60 days after the date of such delivery; (b) termination by the Trust by
an instrument in writing delivered or mailed to the Custodian, such termination
to take effect no sooner than 60 days after the date of such delivery; or (c)
termination by the Trust by written notice delivered to the Custodian, based
upon such Trust'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 Trust shall designate. In the event of termination pursuant to
this Section by any Fund (a "Terminating Fund"), each Terminating Fund shall
make payment of all accrued fees and unreimbursed expenses 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
termination of a Fund pursuant to this Section shall constitute a termination
of this Agreement only with respect to such Fund and shall not affect the
obligations of the Custodian and the other Funds set forth in Exhibit A, as
amended from time to time.
This Agreement may be terminated as to one or more of the Trust's
Funds (but less than all of its Funds) by delivery of Proper Instructions and
amended Exhibit A deleting such Funds, in which case termination as to such
deleted Funds shall take effect 60 days after the date of the Custodian's
receipt thereof. The delivery of such Proper Instructions and amended Exhibit
which delete one or more Funds shall constitute a termination of this Agreement
only with respect to such deleted Fund(s) and shall not affect the obligations
of the Custodian and the Trust hereunder with respect to the other Funds set
forth on Exhibit A, as amended from time to time.
The Trust shall not amend or terminate this Agreement in contravention
of any applicable federal or state regulations, or any provision of the Trust's
Declaration of Trust.
SECTION 17. SUCCESSOR CUSTODIAN.
The Trust on behalf of one or more of the Funds may at any time
substitute another bank or trust company for the Custodian upon 30 days'
written notice to the Custodian. If a successor custodian for the assets of one
or more Funds shall be appointed by the Board, the Custodian shall, upon
termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities, monies
and other properties of each applicable Fund then held by it hereunder and all
instruments held by the Custodian relative thereto and all other property held
by it under this Agreement on behalf of each applicable Fund, and shall
transfer to an account of the successor custodian all of the securities of each
such Fund held in a Securities System or at the MFSC Transfer Agent and the
records described in Section 11 hereof
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a Certified Resolution, deliver at the
office of the Custodian and transfer such securities, Funds and other
properties in accordance with such resolution.
In the event that no written order designating a successor custodian
or Certified Resolution shall have been delivered to the Custodian on or before
the date when such termination shall become effective, then the Custodian shall
have the right to deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, 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, monies and other properties held by the
Custodian on behalf of each applicable Fund and all instruments held by the
Custodian relative thereto and all other property held by it under this
Agreement on behalf of each applicable Fund, and to transfer to an account of
such successor custodian all of the securities of each such Fund held in any
Securities System or at the MFSC Transfer Agent and the records described in
Section 11 hereof. Thereafter, such bank or trust company shall be the
successor of the Custodian under this Agreement.
In the event that securities, monies and other properties remain in
the possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the Certified Resolution to appoint a successor
custodian, the Custodian shall be entitled to fair compensation for its
services during such period as the Custodian retains possession of such
securities, monies and other properties and the provisions of this Agreement
relating to the duties and obligations of the Custodian shall remain in full
force and effect.
SECTION 18. GENERAL
SECTION 18.1 COMPENSATION OF CUSTODIAN. The Custodian shall be
entitled to reasonable compensation for its services and expenses as Custodian,
as agreed upon from time to time between the Trust on behalf of each applicable
Fund and the Custodian.
SECTION 18.2 MASSACHUSETTS LAW TO APPLY. This Agreement shall be
construed and the provisions thereof interpreted under and in accordance with
laws of The Commonwealth of Massachusetts.
SECTION 18.3 INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection
with the operation of this Agreement, the Custodian and the Trust on behalf of
each of the Funds, may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Trust's Declaration of Trust. No
interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
All references herein to "Fund" mean each of the series severally and
not jointly listed on Exhibit A hereto, as amended from time to time.
SECTION 18.4 PRIOR AGREEMENTS. This Agreement supersedes and
terminates, as of the date hereof, all prior Agreements between the Trust on
behalf of each of the Funds and the Custodian relating to the custody of the
Fund's assets.
SECTION 18.5 ASSIGNMENT. This Agreement may not be assigned by the
Custodian without the written consent of the Board of the Trust, except that
the Custodian may assign its rights and obligations hereunder to a party
controlling, controlled by, or under common control with the Custodian. This
Agreement may not be assigned by the Trust without the written consent of the
Custodian.
SECTION 18.6 NOTICES. Any notice, instruction or other instrument
required to be given hereunder may be delivered in person to the offices of the
parties as set forth herein during normal business hours or delivered prepaid
registered mail or by telecopy, electronic mail, or transmission via generally
accepted electronic securities or trade delivery networks to the parties at the
following addresses or such other addresses as may be notified by any party
from time to time.
To the Trust: MFS SERIES TRUST X
c/o Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer of the MFS Funds
Telephone: 000-000-0000
Telecopy: 000-000-0000
To the Custodian: STATE STREET BANK AND TRUST COMPANY
Lafayette Corporate Center,
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
Such notice, instruction or other instrument shall be deemed to have
been served in the case of a registered letter at the expiration of five
business days after posting, and, in the case of telecopy, electronic mail, or
transmission via generally accepted electronic securities systems or trade
delivery networks (collectively, "Electronic Means"), immediately on dispatch
and if delivered outside normal business hours it shall be deemed to have been
received at the next time after delivery when normal business hours commence;
provided, however, that in the event the sender receives an automatic return
message by Electronic Means that the notice, instruction or other instrument
sent by Electronic Means has not in fact been received, such notice,
instruction or other instrument shall not be deemed to have been served.
Evidence that the notice was properly addressed, stamped and put into the post
shall be conclusive evidence of posting.
SECTION 18.7 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 all/each agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, provided that the original is not in
existence.
SECTION 18.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts taken together shall constitute but one and the same Agreement.
SECTION 18.9 SEVERABILITY. In the event any provision of this
Agreement is held illegal, void or unenforceable, the balance shall remain in
effect.
SECTION 18.10 HEADINGS. Headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
SECTION 18.11 ENTIRE AGREEMENT. This Agreement (including all
schedules, appendices, exhibits and attachments hereto) constitutes the entire
Agreement between the parties with respect to the subject matter hereof.
SECTION 18.12. EFFECT OF AMENDMENTS TO EXHIBITS AND SCHEDULES. Any
duly-authorized amendment to Exhibit A, Exhibit B, Schedule A, Schedule B,
Schedule C or any other exhibit, amendment, appendix or addendum hereto shall
be deemed to be an amendment to this Agreement solely with respect to the
Custodian and the Trust (including its Funds) effected by such amendment, and
not with respect to any Fund or Fund not effected thereby.
SECTION 18.13. EXECUTION OF DOCUMENTS, ETC.
(a) Actions by the Trust. Upon request, the Trust 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 Foreign Sub-Custodian of their respective
obligations hereunder, provided that the exercise by the Custodian or any
Foreign Sub-Custodian of any such rights shall in all events be in compliance
with the terms hereof.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to the Trust or to such other parties as
the Trust may designate in such Proper Instructions, all such documents,
instruments or agreements as may be reasonable in order to effectuate the
transactions contemplated hereby.
SECTION 18.14. SCOPE OF TRUST'S OBLIGATIONS. A copy of each Trust's
Declaration of Fund of is on file with the Secretary of State of The
Commonwealth of Massachusetts. The Custodian acknowledges that the obligations
of or arising out of this Agreement with respect to a Fund are not binding upon
any of the Fund's trustees, officers, employees, agents or shareholders
individually, but are binding solely upon the assets and property of the Fund
in accordance with its proportionate interest hereunder. The Custodian further
acknowledges that the assets and liabilities of each Fund are separate and
distinct, and that the obligations of or arising out of this Agreement are
binding solely upon the assets or property of the Fund on behalf of which the
Trust has executed this instrument. The Custodian also agrees that the
obligations of each Trust and Fund hereunder shall be several and not joint, in
accordance with its proportionate interest hereunder, and agrees not to proceed
against any Fund or portfolio for the obligations of another Fund or portfolio.
SECTION 18.15 SHAREHOLDER COMMUNICATIONS ELECTION. SEC Rule 14b-2
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 Trust to indicate
whether it authorizes the Custodian to provide the Trust's name, address, and
share position to requesting companies whose securities the Trust owns. If the
Trust tells the Custodian "no", the Custodian will not provide this information
to requesting companies. If the Trust tells the Custodian "yes" or does not
check either "yes" or "no" below, the Custodian is required by the rule to
treat the Trust as consenting to disclosure of this information for all
securities owned by the Trust or any monies or accounts established by the
Trust. For the Trust's protection, the Rule prohibits the requesting company
from using the Trust's name and address for any purpose other than corporate
communications. Please indicate below whether the Trust consents or objects by
checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Trust's name,
address, and share positions.
NO [X] The Custodian is not authorized to release the Trust's name,
address, and share positions.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the date first written above
MFS SERIES TRUST X, ON BEHALF OF
EACH OF THE ENTITIES SET FORTH ON ATTESTED TO BY:
EXHIBIT A HERETO
By: XXXXX X. XXXXXXXXX, XX. By: XXXXX X. XXXX
----------------------------- -------------------------
Name: Xxxxx X. Xxxxxxxxx, Xx. Name: Xxxxx X. Xxxx
----------------------- -------------------
Title: Assistant Secretary Title: Assistant Treasurer
---------------------- ------------------
STATE STREET BANK AND TRUST COMPANY ATTESTED TO BY:
By: By:
---------------------------- ------------------------------
Name: Name:
--------------------- -----------------------
Title: Title:
--------------------- -----------------------
MFS SERVICE CENTER, INC. ATTESTED TO BY:
As to Sections 3.8A, 10
And other provisions applicable to it
By: XXXXX X. XXXXXXXX By: XXXXXX X. XXXXX
---------------------------- ------------------------------
Name: Xxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxx
--------------------- -----------------------
Title: President Title: Assistant Secretary
--------------------- -----------------------
EXHIBIT A
MFS SERIES TRUST X FUNDS
MFS Conservative Allocation Fund
MFS Moderate Allocation Fund
MFS Growth Allocation Fund
MFS Aggressive Growth Allocation Fund
EXHIBIT B
Underlying Funds and Target Percentages
MFS
MFS MFS MFS Aggressive
Conservative Moderate Growth Growth
Allocation Allocation Allocation Allocation
Fund Fund Fund Fund
U.S. Stocks 35% 50% 60% 80%
MFS New Discovery Fund 0% 0% 0% 5%
MFS Mid Cap Growth Fund 0% 5% 10% 15%
MFS Mid Cap Value Fund 0% 5% 10% 15%
MFS Strategic Growth Fund 5% 10% 15% 20%
MFS Research Fund 15% 15% 10% 10%
MFS Value Fund 15% 15% 15% 15%
International Stocks 5% 10% 20% 20%
MFS International New 0% 0% 5% 10%
Discovery Fund
MFS Research International Fund 5% 10% 15% 10%
Bonds 50% 35% 20% 0%
MFS High Income Fund 0% 5% 5% 0%
MFS Research Bond Fund 5% 10% 10% 0%
MFS Government Securities Fund 10% 10% 5% 0%
MFS Intermediate Investment 15% 10% 0% 0%
Grade Bond Fund
MFS Limited Maturity Fund 20% 0% 0% 0%
Cash 10% 5% 0% 0%
MFS Money Market Fund 10% 5% 0% 0%
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
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
Belgium Fortis Bank nv-sa
Bermuda The Bank of Bermuda Limited
Bolivia Citibank, N. A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Canada State Street Trust Company Canada
Chile BankBoston, N.A.
People's Republic The Hongkong and Shanghai
of China Banking Corporation Limited,
Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d
Cyprus The Cyprus Popular Bank Ltd.
Czech Republic Eeskoslovenska Obchodni
Banka, A.S.
Denmark Danske Bank A/S
Ecuador Citibank, N.A.
Egypt Egyptian British Bank S.A.E.
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Estonia Hansabank
Finland Xxxxxx Bank Plc.
France BNP Paribas, S.A.
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Hong Kong Standard Chartered Bank
Hungary Citibank Rt.
Iceland Icebank Ltd.
India Deutsche Bank AG
The Hongkong and Shanghai
Banking Corporation Limited
Indonesia Standard Chartered Bank
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas, Italian Branch
Ivory Coast Societe Generale de Banques
en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant
Bank Ltd.
Japan The Fuji Bank, Limited
The Sumitomo Bank, Limited
Jordan HSBC Bank Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
Kenya Barclays Bank of Kenya Limited
Republic of Korea 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 Vilniaus Bankas AB
Malaysia Standard Chartered Bank Malaysia Berhad
Mauritius The Hongkong and Shanghai
Banking Corporation Limited
Mexico Citibank Mexico, S.A.
Morocco Banque Commerciale du Maroc
Namibia Standard Bank Namibia Limited -
Netherlands Fortis Bank (Nederland) N.V.
New Zealand ANZ Banking Group (New Zealand) Limited
Nigeria Stanbic Merchant Bank Nigeria Limited
Norway Christiania Bank og Kreditkasse ASA
Oman HSBC Bank Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG
Palestine HSBC Bank Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Panama BankBoston, N.A.
Peru Citibank, N.A.
Philippines Standard Chartered Bank
Poland Bank Handlowy w Warszawie S.A.
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Romania ING Bank N.V.
Russia Credit Suisse First Boston AO - Moscow
(as delegate of Credit Suisse
First Boston - Zurich)
Singapore The Development Bank of Singapore Limited
Slovak Republic Eeskoslovenska Obchodni Banka, A.S.
Slovenia Bank Austria Creditanstalt d.d. - Ljubljana
South Africa Standard Bank of South Africa Limited
Spain Banco Santander Central Hispano S.A.
Sri Lanka The Hongkong and Shanghai
Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Banken
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
Thailand Standard Chartered Bank
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Ukraine ING Bank Ukraine
United Kingdom State Street Bank and Trust Company,
London Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai
Banking Corporation Limited
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information and
Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depots et
de Virements de Titres, S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e Custodia
Sistema Especial de Liquidacao e de Custodia (SELIC)
Central de Custodia e de Liquidacao Financeira de
Titulos Privados (CETIP)
Bulgaria Central Depository AD
Bulgarian National Bank
Canada Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
People's Republic Shanghai Securities Central Clearing &
of China Registration Corporation
Shenzhen Securities Central Clearing Co., Ltd.
Colombia Deposito Centralizado de Valores
Costa Rica Central de Valores S.A.
Croatia Ministry of Finance
National Bank of Croatia
Sredisnja Depozitarna Agencija d.d.
Czech Republic Stredisko cennych papiru
Czech National Bank
Denmark Vaerdipapircentralen (Danish Securities Center)
Egypt Misr for Clearing, Settlement, and Depository
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland Finnish Central Securities Depository
France Euroclear France
Germany Clearstream Banking AG, Frankfurt
Greece Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Apothetirion Titlon AE - Central Securities
Depository
Hong Kong Central Clearing and Settlement System
Central Moneymarkets Unit
Hungary Kozponti Elszamolohaz es Ertektar
(Budapest) Rt. (KELER)
India National Securities Depository Limited
Central Depository Services India 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 Japan Securities Depository Center (JASDEC)
Bank of Japan Net System
Kazakhstan Central Depository of Securities
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Custodian and Clearing Center of
Financial Instruments for Lebanon
and the Middle East (Midclear) X.X.X.
Banque du Liban
Lithuania Central Securities Depository of Lithuania
Malaysia Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia,
Scripless Securities Trading and Safekeeping
System
Mauritius Central Depository and Settlement Co. Ltd.
Bank of Mauritius
Mexico S.D. INDEVAL
(Instituto para el Deposito de Valores)
Morocco Maroclear
Netherlands Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. (NECIGEF)
New Zealand New Zealand Central Securities
Depository Limited
Nigeria Central Securities Clearing System Limited
Norway Verdipapirsentralen (Norwegian Central
Securities Depository)
Oman Muscat 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
Peru Caja de Valores y Liquidaciones, Institucion de
Compensacion y Liquidacion de Valores S.A
Philippines Philippine Central Depository, Inc.
Registry of Scripless Securities
(XXXX) of the Bureau of Treasury
Poland National Depository of Securities
(Krajowy Depozyt Papierow Wartos<180>ciowych SA)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios
Qatar Central Clearing and Registration (CCR), a
department of the Doha Securities Market
Romania National Securities Clearing, Settlement and
Depository Company
Bucharest Stock Exchange Registry Division
National Bank of Romania
Singapore Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic Stredisko cennych papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Xxxxxx x.x.
South Africa Central Depository Limited
Share Transactions Totally Electronic
(STRATE) Ltd.
Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.
Banco de Espana, Central de Anotaciones en Cuenta
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Securities Central Depository Co., Ltd.
Thailand Thailand Securities Depository Company Limited
Tunisia Societe Tunisienne Interprofessionelle pour la
Compensation et de Depots des Valeurs Mobilieres
Turkey Takas ve Saklama Bankasi A.S. (TAKASBANK)
Central Bank of Turkey
Ukraine National Bank of Ukraine
United Kingdom Central Gilts Office and
Central Moneymarkets Office
Venezuela Banco Central de Venezuela
Zambia XxXX Central Shares Depository Limited
Bank of Zambia
TRANSNATIONAL
Euroclear
Clearstream Banking AG
SCHEDULE C
MARKET INFORMATION
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
(SCHEDULED FREQUENCY)
The Guide to Custody in World An overview of settlement and safekeeping
Markets procedures, (hardcopy custody practices and foreign
annually and regular website investor considerations for the markets in
updates) which State Street offers custodial services.
Global Custody Network Review Information relating to Foreign
(annually) Sub-Custodians in State Street's Global
Custody Network. The Review stands as an
integral part of the materials that State
Street provides to its U.S. mutual fund
clients to assist them in complying with SEC
Rule 17f-5. The Review also gives insight
into State Street's market expansion and
Foreign Sub-Custodian selection processes, as
well as the procedures and controls used to
monitor the financial condition and
performance of our Foreign Sub-Custodian
banks.
Securities Depository Review Custody risk analyses of the Foreign
(annually) Securities Depositories presently operating
in Network markets. This publication is an
integral part of the materials that State
Street provides to its U.S. mutual fund
clients to meet informational obligations
created by SEC Rule 17f-7.
Global Legal Survey With respect to each market in which State
(annually) Street offers custodial services, opinions
relating to whether local law restricts (i)
access of a fund's independent public
accountants to books and records of a Foreign
Sub-Custodian or Foreign Securities System,
(ii) a fund's ability to recover in the event
of bankruptcy or insolvency of a Foreign
Sub-Custodian or Foreign Securities System,
(iii) a fund's ability to recover in the
event of a loss by a Foreign Sub-Custodian or
Foreign Securities System, and (iv) the
ability of a foreign investor to convert cash
and cash equivalents to U.S. dollars.
Subcustodian Agreements Copies of the contracts that State Street has
(annually) entered into with each Foreign Sub-Custodian
that maintains U.S. mutual fund assets in the
markets in which State Street offers
custodial services.
Global Market Bulletin Information on changing settlement and
(daily or as necessary) custody conditions in markets where State
Street offers custodial services. Includes
changes in market and tax regulations,
depository developments, dematerialization
information, as well as other market changes
that may impact State Street's clients.
Foreign Custody Advisories For those markets where State Street offers
(as necessary) custodial services that exhibit special risks
or infrastructures impacting custody, State
Street issues market advisories to highlight
those unique market factors which might
impact our ability to offer recognized
custody service levels.
Material Change Notices Informational letters and accompanying
(presently on a quarterly materials confirming State Street's foreign
basis or as otherwise custody arrangements, including a summary of
necessary) material changes with Foreign Sub-Custodians
that have occurred during the previous
quarter. The notices also identify any
material changes in the custodial risks
associated with maintaining assets with
Foreign Securities Depositories.
