EXHIBIT (h)(3)
TRANSFER AGENCY AGREEMENT
AGREEMENT made this 23rd day of September, 2002, between Citizens Funds
(the "Trust"), a Massachusetts business trust having its principal place of
business at 000 Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000, and
Citizens Advisers, Inc. (Citizens Advisers), a New Hampshire corporation
having its principal place of business at 000 Xxxxxxxx Xxx, Xxxxx 000,
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000.
WHEREAS, the Trust desires that Citizens Advisers perform certain
services for the Citizens Government Obligations Fund and Citizens Prime Money
Market Fund, each a series of the Trust (individually referred to herein as a
"Fund" and collectively as the "Funds"); and
WHEREAS, Citizens Advisers is willing to perform such services on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. SERVICES.
Citizens Advisers shall perform for the Funds the transfer agent
services set forth in Schedule A hereto. Citizens Advisers also agrees to
perform for the Funds such special services incidental to the performance of the
services enumerated herein as agreed to by the parties from time to time.
Citizens Advisers shall perform such additional services as are provided on an
amendment to Schedule A hereof, in consideration of such fees as the parties
hereto may agree.
Citizens Advisers may, with the prior written consent of the Trust,
appoint in writing other parties qualified to perform transfer agency services
reasonably acceptable to the Trust (individually, a "Sub-transfer Agent") to
carry out some or all of its responsibilities under this Agreement with respect
to a Fund; provided, however, that the Sub-transfer Agent shall be the agent of
Citizens Advisers and not the agent of the Trust or such Fund, and that Citizens
Advisers shall be fully responsible for the acts of such Sub-transfer Agent and
shall not be relieved of any of its responsibilities hereunder by the
appointment of such Sub-transfer Agent.
2. FEES.
The Trust on behalf of the Funds shall pay Citizens Advisers for the
services to be provided by Citizens Advisers under this Agreement in accordance
with, and in the manner set forth in, Schedule B hereto. Fees for any additional
services to be provided by Citizens Advisers pursuant to an amendment to
Schedule A hereto shall be subject to mutual agreement at the time such
amendment to Schedule A is proposed.
3. REIMBURSEMENT OF EXPENSES.
In addition to paying Citizens Advisers the fees described in Section 2
hereof, the Trust agrees to reimburse Citizens Advisers for reasonable
out-of-pocket expenses in providing services hereunder, including without
limitation, the following:
(a) All freight and other delivery and bonding charges incurred by
Citizens Advisers in delivering materials to and from the
Trust and in delivering all materials to shareholders;
(b) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by Citizens
Advisers in communication with the Trust, the Trust's
investment adviser or custodian, dealers, shareholders or
others as required for Citizens Advisers to perform the
services to be provided hereunder;
(c) Costs of postage, couriers, stock computer paper, statements,
labels, envelopes, checks, reports, letters, tax forms,
proxies, notices or other forms of printed material which
shall be required by Citizens Advisers for the performance
of the services to be provided hereunder;
(d) Any expenses Citizens Advisers shall incur at the written
direction of an officer of the Trust thereunto duly
authorized.
4. EFFECTIVE DATE.
This Agreement shall become effective as of the date first written
above (the "Effective Date").
5. TERM.
This Agreement may be terminated without penalty upon ninety (90) days
written notice by either party.
Upon termination, for so long as Citizens Advisers, with the
written consent of the Trust, in fact continues to perform any one or more of
the services contemplated by this Agreement or any Schedule or exhibit hereto,
the provisions of this Agreement, including without limitation the provisions
dealing with indemnification, shall continue in full force and effect. Fees and
out-of-pocket expenses incurred by Citizens Advisers but unpaid by the Trust
upon such termination shall be due and payable sixty (60) days from notice of
termination. Citizens Advisers shall be entitled to collect from the Trust, in
addition to the fees and disbursements provided by Sections 2 and 3 hereof, the
amount of all of Citizens Advisers' reasonable cash disbursements in connection
with Citizens Advisers' activities in effecting such termination, including
without limitation, the delivery to the Trust and/or its distributor or
investment adviser and/or other parties, of the Trust's property, records,
instruments and documents.
6. UNCONTROLLABLE EVENTS.
Citizens Advisers assumes no responsibility hereunder, and shall not be
liable for any damage, loss of data, delay or any other loss whatsoever caused
by events beyond its reasonable control. In the event of equipment failures,
Citizens Advisers shall, at no additional expense to the Trust, take reasonable
steps to minimize service interruptions. Citizens Advisers shall have no
liability with respect to the loss of data or service interruptions caused by
equipment failure, provided such loss or interruption is not caused by Citizens
Advisers' own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties or obligations under this Agreement.
7. LEGAL ADVICE.
Citizens Advisers shall notify the Trust at any time Citizens Advisers
believes that it is in need of the advice of counsel (other than counsel in the
regular employ of Citizens Advisers or any affiliated companies) with regard to
Citizens Advisers' responsibilities and duties pursuant to this Agreement; and
after so notifying the Trust, Citizens Advisers, at its discretion, shall be
entitled to seek, receive and act upon advice of legal counsel of its choosing,
such advice to be at the expense of the Trust or Funds unless relating to a
matter involving Citizens Advisers' willful misfeasance, bad faith, gross
negligence or reckless disregard with respect to Citizens Advisers'
responsibilities and duties hereunder and Citizens Advisers shall in no event be
liable to the Trust or any Fund or any shareholder or beneficial owner of the
Trust for any action reasonably taken pursuant to such advice.
8. INSTRUCTIONS.
Whenever Citizens Advisers is requested or authorized to take action
hereunder pursuant to instructions from a shareholder, or a properly authorized
agent of a shareholder ("shareholder's agent"), concerning an account in a Fund,
Citizens Advisers shall be entitled to rely upon any certificate, letter or
other instrument or communication, believed by Citizens Advisers to be genuine
and to have been properly made, signed or authorized by an officer or other
authorized agent of the Trust or by the shareholder or shareholder's agent, as
the case may be, and shall be entitled to receive as conclusive proof of any
fact or matter required to be ascertained by it hereunder a certificate signed
by an officer of the Trust or any other person authorized by the Trustees or by
the shareholder or shareholder's agent, as the case may be.
9. STANDARD OF CARE; RELIANCE ON RECORDS AND INSTRUCTIONS;
INDEMNIFICATION.
Citizens Advisers shall use its best efforts to ensure the accuracy of
all services performed under this Agreement, but shall not be liable to the
Trust for any action taken or omitted by Citizens Advisers in the absence of bad
faith, willful misfeasance, negligence or from reckless disregard by it of its
obligations and duties. The Trust agrees to indemnify and hold harmless Citizens
Advisers, its employees, agents, directors, officers and nominees from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees
and other expenses of every nature and character arising out of or in any way
relating to Citizens Advisers' actions taken or nonactions with respect to the
performance of services under this Agreement or based, if applicable, upon
reasonable reliance on information, records, instructions or requests given or
made to Citizens Advisers by the Trust, the investment adviser and on any
records provided by any Fund accountant or custodian thereof; provided that this
indemnification shall not apply to actions or omissions of Citizens Advisers in
cases of its own bad faith, willful misfeasance, negligence or from reckless
disregard by it of its obligations and duties; and further provided that prior
to confessing any claim against it which may be the subject of this
indemnification, Citizens Advisers shall give the Trust written notice of and
reasonable opportunity to defend against said claim in its own name or in the
name of Citizens Advisers.
10. RECORD RETENTION AND CONFIDENTIALITY.
Citizens Advisers shall keep and maintain on behalf of the Trust all
books and records which the Trust or Citizens Advisers is, or may be, required
to keep and maintain pursuant to any applicable statutes, rules and regulations,
including without limitation Rules 31a-1 and 31a-2 under the Investment Company
Act of 1940, as amended (the "1940 Act"), relating to the maintenance of books
and records in connection with the services to be provided hereunder. Citizens
Advisers further agrees that all such books and records shall be the property of
the Trust and to make such books and records available for inspection by the
Trust or by the Securities and Exchange Commission (the "Commission") at
reasonable times and otherwise to keep confidential all books and records and
other information relative to the Trust and its shareholders, except when
requested to divulge such information by duly-constituted authorities or court
process, or requested by a shareholder or shareholder's agent with respect to
information concerning an account as to which such shareholder has either a
legal or beneficial interest or when requested by the Trust, the shareholder, or
shareholder's agent, or the dealer of record as to such account.
11. RIGHTS OF OWNERSHIP.
All computer programs and procedures developed to perform services
required to be provided by Citizens Advisers under this Agreement are the
property of Citizens Advisers. All records and other data except such computer
programs and procedures are the exclusive property of the Trust and all such
other records and data will be furnished to the Trust in appropriate form as
soon as practicable after termination of this Agreement for any reason.
12. RETURN OF RECORDS.
Citizens Advisers may at its option at any time, and shall promptly
upon the Trust's demand, turn over to the Trust and cease to retain Citizens
Advisers' files, records and documents created and maintained by Citizens
Advisers pursuant to this Agreement which are no longer needed by Citizens
Advisers in the performance of its services or for its legal protection. If not
so turned over to the Trust, such documents and records will be retained by
Citizens Advisers for six years from the year of creation. At the end of such
six-year period, such records and documents will be turned over to the Trust
unless the Trust authorizes in writing the destruction of such records and
documents.
13. BANK ACCOUNTS.
The Trust and the Funds shall establish and maintain such bank accounts
with such bank or banks as are selected by the Trust, as are necessary in order
that Citizens Advisers may perform the services required to be performed
hereunder. To the extent that the performance of such services shall require
Citizens Advisers directly to disburse amounts for payment of dividends,
redemption proceeds or other purposes, the Trust and Funds shall provide such
bank or banks with all instructions and authorizations necessary for Citizens
Advisers to effect such disbursements.
14. INSURANCE.
Citizens Advisers shall maintain a fidelity bond covering larceny and
embezzlement and an insurance policy with respect to directors and officers
errors and omissions coverage in amounts that are appropriate in light of its
duties and responsibilities hereunder. Citizens Advisers shall notify the Trust
should its insurance coverage with respect to professional liability or errors
and omissions coverage be canceled or reduced. Such notification shall include
the date of change and the reasons therefor. Citizens Advisers shall notify the
Trust of any material claims against it with respect to services performed under
this Agreement, whether or not they may be covered by insurance, and shall
notify the Trust from time to time as may be appropriate of the total
outstanding claims made by Citizens Advisers under its insurance coverage.
15. COMPLIANCE WITH LAW.
Except for the obligations of Citizens Advisers set forth in Section 10
hereof, the Trust assumes full responsibility for the preparation, contents, and
distribution of each registration statement of the Trust as to compliance with
all applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), the 1940 Act, and any other laws, rules and regulations of governmental
authorities having jurisdiction. Citizens Advisers shall have no obligation to
take cognizance of any laws relating to the sale of the Trust's shares.
16. NOTICES.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: 000 Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxxxxx
00000, or at such other address as such party may from time to time specify in
writing to the other party pursuant to this Section.
17. HEADINGS.
Paragraph headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
18. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable by either of the parties hereto except by the specific written
consent of the other party. This Section 18 shall not limit or in any way affect
Citizens Advisers' right to appoint a Sub-transfer Agent pursuant to Section 1
hereof. This Agreement shall be binding upon, and shall inure to the benefit of,
the parties hereto and their respective successors and permitted assigns.
19. GOVERNING LAW.
This Agreement shall be governed by and provisions shall be construed
in accordance with the laws of the State of New Hampshire.
20. LIMITATION OF LIABILITY.
Each party acknowledges and agrees that all obligations of the Trust on
behalf of a particular Fund under this Agreement are binding only on that Fund;
that any liability of the Trust on behalf of a particular Fund under this
Agreement, or in connection with the transactions contemplated herein, shall be
discharged only out of the assets of that Fund; and that no other series of the
Trust shall be liable with respect thereto.
The obligations of the Trust hereunder shall not be binding upon any of
the Trustees, officers or investors of the Trust personally, but shall bind only
the assets and property of the Trust. Any reference to the Trust hereunder means
and refers to the Trustees from time to time serving under the Declaration of
Trust of the Trust. The execution and delivery of this Agreement has been
authorized by the Trustees, and this Agreement has been signed on behalf of the
Trust by an authorized officer of the Trust, acting as such and not
individually, and neither such authorization by such Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Trust as provided in the Declaration of
Trust.
21. ANTI-MONEY LAUNDERING OBLIGATIONS.
Citizens Advisers acknowledges that it has responsibilities as transfer
agent for the citizens Government Obligations Fund and Citizens Prime Money
Market Fund pursuant to the Citizens Anti-Money Laundering Polices and
Procedures.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CITIZENS FUNDS
By: /s/ Xxxxxx Xxxxxxx
_________________________________
Title: President
______________________________
CITIZENS ADVISERS, INC.
By: /s/ Xxxxxx Xxxxxxx
_________________________________
Title: President
_____________________________
SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
CITIZENS FUNDS
AND
CITIZENS ADVISERS
TRANSFER AGENCY SERVICES
1. SHAREHOLDER TRANSACTIONS
a. Process shareholder purchase and redemption orders;
b. Set up account information, including address, dividend option, taxpayer
identification numbers and wire instructions;
c. Issue confirmations in compliance with Rule 10b-10 under the Securities
Exchange Act of 1934, as amended;
d. Issue periodic statements for shareholders;
e. Process transfers; and
f. Process dividend payments, including the purchase of new shares, through
dividend reimbursement.
2. SHAREHOLDER INFORMATION SERVICES
a. Make information available to shareholder servicing unit regarding trade
date, share price, current holdings, yields, and dividend information;
b. Produce detailed history of transactions through duplicate or special order
statements upon request;
c. Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to current
shareholders; and
d. Notify on a timely basis the investment adviser, accounting agent, and
custodian of Fund activity.
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3. COMPLIANCE REPORTING
a. Provide reports, as applicable, to the Securities and Exchange Commission,
the National Association of Securities Dealers and the States in which
the Fund is registered;
b. Prepare and distribute appropriate Internal Revenue Service forms for
corresponding Fund and shareholder income and capital gains; and
c. Issue tax-withholding reports to the Internal Revenue Service, as
applicable.
4. SHAREHOLDER ACCOUNT MAINTENANCE
a. Maintain all shareholder records for each account in each Fund;
b. Issue customer statements on scheduled cycle, providing duplicate second
and third party copies if required;
c. Record shareholder account information changes;
d. Maintain account documentation files for each shareholder;
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SCHEDULE B
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
CITIZENS FUNDS
AND
CITIZENS ADVISERS
TRANSFER AGENT FEES
ANNUAL FEE PER FUND:
The annual fee for each Fund is $5,000.
OUT-OF-POCKET EXPENSES:
Citizens Advisers shall be entitled to be reimbursed for all reasonable
out-of-pocket expenses including, but not limited to, the expenses set forth in
Section 3 of the Transfer Agency Agreement to which this Schedule B is attached.
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