TRANSFER AGENCY AND SERVICE AGREEMENT
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 7th day of APRIL, 2010, by and between each Trust (hereinafter the “Trust”) listed on Appendix I hereto and each Series of the Trust listed on Appendix I hereto (as such Appendix be amended from time to time), and THE BANK OF NEW YORK MELLON, a New York banking company having its principal office and place of business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Bank”).
WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS, the Trust will ordinarily issue for purchase and redeem shares of the Trust (the “Shares) only in aggregations of Shares known as “Creation Units” (currently 50,000 shares) (each a “Creation Unit”) principally in kind;
WHEREAS, The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York (“DTC”), or its nominee (Cede & Co.), will be the registered owner (the “Shareholder”) of all Shares; and
WHEREAS, the Trust desires to appoint the Bank as its transfer agent, dividend disbursing agent, and agent in connection with certain other activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
| I. | Terms of Appointment; Duties of the Bank |
1.1 Subject to the terms and conditions set forth in this Agreement, the Trust hereby employs and appoints the Bank to act as, and the Bank agrees to act as, its transfer agent for the authorized and issued Shares, and as the Trust’s dividend disbursing agent.
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with the terms and conditions of the form of Participant Agreement prepared by the Distributor, a copy of which is attached hereto as Exhibit A, the Bank shall:
(i) Perform and facilitate the performance of purchases and redemption of Creation Units;
(ii) Prepare and transmit by means of DTC’s book-entry system payments for dividends and distributions on or with respect to the Shares declared by the Trust on behalf of the applicable Trust;
(iii) Maintain the record of the name and address of the Shareholder and the number of Shares issued by the Trust and held by the Shareholder;
(iv) Record the issuance of Shares of the Trust and maintain a record of the total number of Shares of the Trust which are outstanding, and, based upon data provided to it by the Trust, the total number of authorized Shares. The Bank shall have no obligation, when recording the issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which functions shall be the sole responsibility of the Trust.
(v) Prepare and transmit to the Trust and the Trust’s administrator and to any applicable securities exchange (as specified to the Bank by the Trust or its administrator) information with respect to purchases and redemptions of Shares;
(vi)On days that the Trust may accept orders for purchases or redemptions, calculate and transmit to Bank and the Trust’s administrator the number of outstanding Shares;
(vii) On days that the Trust may accept orders for purchases or redemptions (pursuant to the Participant Agreement), transmit to the Bank, the Trust and DTC the amount of Shares purchased on such day;
(viii) Confirm to DTC the number of Shares issued to the Shareholder, as DTC may reasonably request;
(ix) Prepare and deliver other reports, information anti documents to DTC as DTC may reasonably request;
(x) Extend the voting rights to the Shareholder for extension by DTC to DTC participants and the beneficial owners of Shares in accordance with policies and procedures of DTC for book-entry only securities;
(xi) Maintain those books and records of the Trust specified by the Trust in Schedule A attached hereto;
(xii) Prepare a monthly report of all purchases and redemptions of Shares during such month on a gross transaction basis, and identify on a daily basis the net number of Shares either redeemed or purchased on such Business Day and with respect to each Authorized Participant purchasing or redeeming Shares, the amount of Shares purchased or redeemed;
(xiii) Receive from the Distributor (as defined in the Participant Agreement) or from its agent purchase orders from Authorized Participants (as defined in the Participant Agreement) for Creation Unit Aggregations of Shares received in good form and accepted by or on behalf of the Trust by the Distributor, transmit appropriate trade instructions to the National Securities Clearance Corporation, if applicable, and pursuant to such orders issue the appropriate number of Shares of the Trust and hold such Shares in the account of the Shareholder for each of the respective Trusts;
(xiv) Receive from the Authorized Participants redemption requests, deliver the appropriate documentation thereof to The Bank of New York as custodian for the Trust, generate and transmit or cause to he generated and transmitted confirmation of receipt of such redemption requests to the Authorized Participants submitting the same; transmit appropriate trade instructions to the National Securities Clearance Corporation, if applicable, and redeem the appropriate number of Creation Unit Aggregations of Shares held in the account of the Shareholder; and
(xv) Confirm the name, U.S taxpayer identification number and principle place of business of each Authorized Participant.
(b) In addition to the services set forth in the above sub-section 1.2(a), the Bank shall: perform the customary services of a transfer agent and dividend disbursing agent including, but not limited to, maintaining the account of the Shareholder, obtaining at the request of the Trust from the Shareholder a list of DTC participants holding interests in the Global Certificate, anti those services set forth on Schedule A attached hereto.
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(c) The following shall he delivered to DTC participants as identified by DTC as the Shareholder for book-entry only securities:
(i) Annual and semi-annual reports of the Trust;
(ii) Trust proxies, proxy statements and other proxy soliciting materials;
(iii) Trust prospectus and amendments and supplements thereto, including stickers; and
(iv) Other communications as the Trust may from time to time identify as required by law or as the Trust may reasonably request
(v) The Bank shall provide additional services, if any, as may he agreed upon in writing by the Trust and the Bank.
(d) The Bank shall keep records relating to the services to he performed hereunder, in the form and manner required by applicable laws, rules, and regulations under the 1940 Act and to the extent required by Section 31 of the 1940 Act and the rules thereunder (the “Rules”), all such books and records shall be the property of the Trust, will be preserved, maintained and made available in accordance with such Section and Rules, and will he surrendered promptly to the Trust on and in accordance with its request.
| 2. | Fees and Expenses |
2.1 The Bank shall receive from the Trust such compensation for the Transfer Agent’s services provided pursuant to this Agreement as may he agreed to from time to time in a written fee schedule approved by the parties. The fees are accrued daily and billed monthly and shall be due and payable upon receipt of the invoice. Upon the termination of this Agreement before the end of any month, the fee for the part of the month before such termination shall be prorated according to the proportion which such part bears to the full monthly period and shall he payable upon the date of termination of this Agreement.
2.2 In addition to the fee paid under Section 2.1 above, the Trust agrees to reimburse the Bank for reasonable out-of-pocket expenses, including but not limited to confirmation production, postage, forms, telephone, microfilm, microfiche, tabulating proxies, records storage, or advances incurred by the Bank for the items set out in the fee schedule attached hereto or relating to dividend distributions and reports (whereas all expenses related to creations and redemptions of Trust securities shall be borne by the relevant authorized participant in such creations and redemptions). In addition, any other expenses incurred by the Bank at the request or with the consent of the Trust, will he reimbursed by the Trust.
2.3 The Trust agrees to pay all fees and reimbursable expenses within ten business days following the receipt of the respective xxxxxxx notice accompanied by supporting documentation, as appropriate. Postage for mailing of dividends, proxies, Trust reports and other mailings to all shareholder accounts shall he advanced to the Bank by the Trust at least seven (7) days prior to the mailing date of such materials.
| 3. | Representations and Warranties of the Bank |
The Bank represents and warrants to the Trust that:
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It is a banking company duly organized and existing and in good standing under the laws of the State of New York.
It is duly qualified to carry on its business in the State of New York.
It is empowered under applicable laws and by its Charter and By-Laws to act as transfer agent and dividend disbursing agent and to enter into, and perform its obligations under, this Agreement.
All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.
It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.
| 4. | Representations and Warranties of the Trust |
The Trust represents and warrants to the Bank that:
It is duly organized and existing and in good standing under the laws of Delaware.
It is empowered under applicable laws and by its Declaration of Trust and By-Laws to enter into and perform this Agreement.
It is an open-end management investment company registered under the 1940 Act.
A registration statement under the Securities Act of 1933, as amended, on behalf of each of the Trusts has become effective, will remain effective, and appropriate state securities law filings have been made and will continue to he made, with respect to all Shares of the Trust being offered for sale.
| 5. | Indemnification |
5.1 The Bank shall not I)e responsible for, and the Trust shall indemnify and hold the Bank harmless from and against, any and all losses, damages, costs, charges, counsel fees, including, without limitation, those incurred by the Bank in a successful defense of any claims by the Trust, payments, expenses and liability (“Losses”) which may sustain or incur or which may be asserted against the Bank in connection with or relating to this Agreement or the Bank’s actions or omissions with respect to this Agreement, except for any Losses for which the Bank has accepted liability pursuant to Article 6 of this Agreement.
5.2 This indemnification provision shall apply to actions taken pursuant to this Agreement or the Participant Agreement.
5.3 If in any case the Trust is asked to indemnify or hold the Bank harmless, the Bank shall promptly advise the Trust of the pertinent facts concerning the situation in question, and will use reasonable care to notify the Trust promptly concerning any situation which appears likely to present the potential for a claim for indemnification. If it is finally determined by a court of competent jurisdiction that the Bank was not entitled to indemnification (e.g. due to its gross negligence or willful misconduct) it must repay advances or other expenses paid by the Trust. The Trust shall he entitled to participate at its own expense or, if it so elects, to assume the defense of any suit brought to enforce any claims subject to this
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indemnification provision. If the Trust elects to assume the defense of any such claim, the defense shall be conducted by counsel chosen by the Trust and approved by the Bank, whose approval shall not he unreasonably withheld. If the Trust elects to assume the defense of any claim and retains counsel, the Bank shall hear the fees and expenses of any additional counsel retained by it, If the Trust (toes not elect to assume the defense of a claim, it will reimburse the Bank for the fees and expense of any counsel it retains. None of the parties hereto shall settle or compromise any action, suit, proceeding or claim if such settlement or compromise provides for admission of liability on the part of the indemnified party without such indemnified party’s written consent.
| 6. | Standard of Care and Limitation of Liability |
The Bank shall have no responsibility and shall not he liable for any Losses, except that the Bank shall he liable to the Trust for direct money damages caused by its own negligence or willful misconduct or that of its employees, or its breach of any of its representations. In no event shall the Bank be liable for special, indirect or consequential damages, regardless of the form of action and even if the same were foreseeable. For purposes of this Agreement, none of the following shall be or be deemed negligence or willful misconduct:
(a) The conclusive reliance on or use by the Bank or its agents or subcontractors, in good faith, of information, records, documents or services which (i) are received by the Bank or its agents or subcontractors, and (ii) have been prepared, maintained or performed by the Trust or any other person or firm on behalf of the Trust including hut not limited to any previous transfer agent or registrar.
(b) The conclusive reliance on, or the carrying out by the Bank or its agents or subcontractors of, in good faith, any instructions or requests of the Trust or instructions or requests on behalf of the Trust.
(c) The offer or sale of Shares by or for the Trust in violation of any requirement under the federal securities laws or regulations, or the securities laws or regulations of any state that such Shares he registered in such state, or any violation of any stop order or other determination or ruling by any federal agency, or by any state with respect to the offer or sale of Shares in such state.
| 7. | Concerning the Bank |
7.1
(a) The Bank may employ agents or attorneys-in-fact which are not affiliates of the Bank with the prior written consent of the Trust (which consent shall not he unreasonably withheld), and shall not be liable for any loss or expense arising out of, or in connection with, the actions or omissions to act of such agents or attorneys-in-fact, provided that the Bank acts in good faith and with reasonable care in the selection and retention of such agents or attorneys-in-fact.
(b) The Bank may, without the prior consent of the Trust, enter into subcontracts, agreements and understandings with any Bank affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Bank from its obligations hereunder.
7.2 The Bank shall he entitled to conclusively rely upon any written or oral instruction actually received by the Bank and reasonably believed by the Bank to he duly authorized and delivered. The Trust agrees to forward to the Bank written instructions confirming oral instructions by the close of business of the same day that such oral instructions are given to the Bank. The Trust agrees that the fact that such
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confirming written instructions are not received or that contrary written instructions are received by the Bank shall in no way affect the validity or enforceability of transactions authorized by such oral instructions and effected by the Bank. If the Trust elects to transmit written instructions through an online communication system offered by the Bank, Trust’s use thereof shall be subject to the terms and conditions attached hereto as Appendix A.
7.3 The Bank shall establish and maintain a disaster recovery plan and back-up system satisfying the requirements of its regulators (the “Disaster Recovery Plan and Back-Up System”). The Bank shall not he responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its control which are not a result of its negligence, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruption, loss or malfunctions of transportation, computer (hardware or software) or communication services; labor disputes; acts of civil or military authority; governmental actions; or inability to obtain labor, material, equipment or transportation, provided that the Bank has established and is maintaining the Disaster Recovery Plan and Back-Up System, or if not, that such delay or failure would have occurred even if the Bank had established and was maintaining the Disaster Recovery Plan and Back-Up System. Upon the occurrence of any such delay or failure the Bank shall use commercially reasonable best efforts to resume performance as soon as practicable tinder the circumstances.
7.4 The Bank shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and the Participation Agreement, and no covenant or obligation shall he implied against the Bank in connection with this Agreement, except as set forth in this Agreement and the Participation Agreement.
7.5 At any time the Bank may apply to an officer of the Trust for written instructions with respect to any matter arising in connection with the Bank’s duties and obligations under this Agreement, and the Bank, its agents, and subcontractors shall not he liable for any action taken or omitted to he taken in good faith in accordance with such instructions. Such application by the Bank for instructions from an officer of the Trust may, at the option of the Bank, set forth in writing any action proposed to he taken or omitted to he taken by the Bank with respect to its duties or obligations under this Agreement and the date on and/or after which such action shall he taken, and the Bank shall not be liable for any action taken or omitted to he taken in accordance with a proposal included in any such application on or after the date specified therein unless, prior to taking or omitting to take any such action, the Bank has received written or oral instructions in response to such application specifying the action to be taken or omitted.
7.6 The Bank, its agents and subcontractors may act upon any paper or document, reasonably believed to he genuine and to have been signed by the proper person or persons, or upon any instruction, information, data, records or documents provided to the Bank or its agents or subcontractors by or on behalf of the Trust by machine readable input, telex, CRT data entry or other similar means authorized by the Trust, and shall not he held to have notice of any change of authority of any person, until receipt of written notice thereof from the Trust.
7.7 Notwithstanding any provisions of this Agreement to the contrary, the Bank shall be under no duty or obligation to inquire into, and shall not he liable for:
(a) The legality of the issue, sale or transfer of any Shares, the sufficiency of time amount to he received in connection therewith, or the authority of the Trust to request such issuance, sale or transfer;
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(b) The legality of the purchase of any Shares, the sufficiency of the amount to he paid in connection therewith, or the authority of the Trust to request such purchase;
(c) The legality of the declaration of any dividend by the Trust, or the legality of the issue of any Shares in payment of any stock dividend; or
(d) The legality of any recapitalization or readjustment of the Shares.
| 8. | Providing of Documents by the Trust and Transfers of Shares |
8.1 The Trust shall promptly furnish to the Bank with a copy of its Declaration of Trust and all amendments thereto.
8.2 In the event that DTC ceases to he the Shareholder, the Bank shall re-register the Shares in the name of the successor to DTC as Shareholder upon receipt by the Bank of such documentation and assurances as it may reasonably require.
8.3 The Bank shall have no responsibility whatsoever with respect to of any beneficial interest in any of the Shares owned by the Shareholder.
8.4 The Trust shall deliver to the Bank the following documents on or before the effective date of any increase, decrease or other change in the total number of Shares authorized to be issued:
(a) A certified copy of the amendment to the Trust’s Declaration of Trust with respect to such increase, decrease or change; and
(b) An opinion of counsel for the Trust, in a form satisfactory to the Bank, with respect to (i) the validity of the Shares, the obtaining of all necessary governmental consents, whether such Shares are fully paid and non-assessable and the status of such Shares under the Securities Act of 1933, as amended, and any other applicable federal law or regulations (i.e., if subject to registration, that they have been registered and that the Registration Statement has become effective or, if exempt, the specific grounds therefore), (ii) the status of the Trust with regard to the 1940 Act, and (iii) the due and proper listing of the Shares on all applicable securities exchanges.
8.5 Prior to the issuance of any additional Shares pursuant to stock dividends, stock splits or otherwise, and prior to any reduction in the number of Shares outstanding, the Trust shall deliver to the Bank:
(a) A certified copy of the order or consent of each governmental or regulatory authority required by law as a prerequisite to the issuance or reduction of such Shares, as the case may be, and an opinion of counsel for the Trust that no other order or consent is required; and
(b) An opinion of counsel for the Trust, in a form satisfactory to the Bank, with respect to (i) the validity of the Shares, the obtaining of all necessary governmental consents, whether such Shares are fully paid and non-assessable and the status of such Shares under the Securities Act of 1933, as amended, anti any other applicable federal law or regulations (i.e., if subject to registration, that they have been registered and that the Registration Statement has become effective or, if exempt, the specific grounds therefore), (ii) the status of the Trust with regard to the 1940 Act, and (iii) the clue and proper listing of the Shares on all applicable securities exchanges.
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8.6 The Bank and the Trust agree that all books, records, confidential, non-public, or proprietary information and data pertaining to the business of (he other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any person other than its auditors, accountants, regulators, employees or counsel, except as may be, or may become required by law, by administrative or judicial order or by rule.
8.7 In case of any requests or demands for the inspection of the Shareholder records of the Trust, the Bank will promptly employ reasonable commercial efforts to notify the Trust and secure instructions from an authorized officer of the Trust as to such inspection. The Bank reserves the right, however, to exhibit the Shareholder records to any person whenever it is advised by its counsel that it may be held liable for the failure to exhibit the Shareholder records to such person.
| 9. | Termination of Agreement |
9.1 The term of this Agreement shall he one year commencing upon the date hereof (the “Initial Term) and shall automatically renew for additional one-year terms (each a “Subsequent Term”) unless either party provides written notice of termination at least ninety (90) days prior to the end of any one year term or, unless earlier terminated as provided below:
(a) Either party hereto may terminate this Agreement prior to the expiration of the Initial Term in the event the other party breaches any material provision of this Agreement, including, without limitation in the case of the Trust, its obligations under Section 2.1, provided that the non-breaching party gives written notice of such breach to the breaching party and the breaching party does not cure such violation within 90 days of receipt of such notice.
(b) The Trust may terminate this Agreement at any time upon ninety (90) days’ prior written notice.
9.2 Should the Trust exercise its right to terminate, all out-of-pocket expenses associated with the movement of records and material will be borne by the Trust.
9.3 The terms of Article 2 (with respect to fees and expenses incurred prior to termination), and of Article 5 shall survive any termination of this Agreement.
| 10. | Additional Series |
In the event that the Trust establishes one or more additional series of Shares with respect to which it desires to have the Bank render services as transfer agent under the terms hereof, it shall SO notify the Bank in writing, and if the Bank agrees in writing to provide such services, such additional issuance shall become Shares hereunder.
| 11. | Assignment |
11.1 Neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party.
11.2 This Agreement shall inure to the benefit of and he binding upon the parties and their respective permitted successors and assigns.
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| 12. | Severability and Beneficiaries |
12.1 In case any provision in or obligation under this Agreement shall he invalid, illegal or unenforceable in any jurisdiction, the validity, the legality and enforceability of the remaining provisions shall not in any way be affected thereby provided obligation of the Trust to pay is conditioned upon provision of services.
13.2 This Agreement is solely for the benefit of the Bank and the Trust, and none of any Participant (as defined in the Participation Agreement), the Distributor, any Shareholder or beneficial owner of any Shares shall he or he deemed a third party beneficiary of this Agreement.
| 13. | Amendment |
This Agreement may he amended or modified by a written agreement executed by both parties.
| 14. | New York Law Apply |
This Agreement shall he construed in accordance with the substantive laws of the Slate of New York, without regard to conflicts of laws principles thereof. The Trust and the Bank hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Trust hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Trust and the Bank each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.
| 15. | Merger of Agreement |
This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or writ
| 16. | Notices |
All notices, requests, consents and other communications pursuant to this Agreement in writing shall he sent as follows:
if to the Trust, at
X.X. Xxx 00000
Xxxx, Xxxxxx 00000
if to the Bank, at
Xxx Xxxx Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
or at such other places as may from time to time be designated in writing. Notices hereunder shall he effective upon receipt.
| 17. | Counterparts |
This Agreement may he executed by the parties hereto in any number of counterparts, and all of said counterparts taken together shall he deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to he executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written.
| EACH TRUST LISTED ON APPENDIX I | ||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | XXXX XXXXXX | |||
| Title: | PRESIDENT | |||
| THE BANK OF NEW YORK MELLON | ||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Managing Director | |||
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APPENDIX I
SCHEDULE A
BOOKS AND RECORDS TO BE MAINTAINED BY THE BANK
Source Documents requesting Creations and Redemptions
Correspondence/AP Inquiries
Reconciliations, bank statements, copies of canceled checks, cash proofs
Daily/Monthly reconciliation of outstanding Shares between the Trust and DTC
Dividend Records
Year-end Statements and Tax Forms
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Exhibit A
Form of Authorized Participant Agreement
Alumnus
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