EXHIBIT 8 (b)
TRANSFER AGENCY AGREEMENT
Agreement made as of the 7th of October, 1991 between Xxxxx & Xxxx Equity
Fund, Inc., a Maryland corporation (hereinafter collectively referred to as the
"Fund"), having its principal office and place of business at 000 Xxxx Xxx., Xxx
Xxxx, XX and Investors Financial Services Company, ("IFSC") a Delaware
corporation having its principal office and place of business at 000 Xxxxx
XxXxxxx, Xxxxxxx XX 00000 (hereinafter referred to as the "Transfer Agent").
WITNESSETH:
That for and in consideration of the mutual promises hereinafter set forth, the
parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have the
following meanings:
l. "Approved Institution" shall mean an entity so named in a Certificate.
From time to time the Fund may amend a previously delivered Certificate by
delivering to the Transfer Agent a Certificate naming an additional entity or
deleting any entity named in a previously delivered Certificate.
2. The "Board of Directors" shall mean the Board of Directors of the Fund.
3. "Certificate" shall mean any notice, instruction, or
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other instrument in writing, authorized or required by this
Agreement to be given to the Transfer Agent by the Fund which is
signed by any Officer, as hereinafter defined, and actually
received by the Transfer Agent.
4. "custodian" shall mean the financial institution appointed as custodian
under the terms and conditions of the Custody Agreement between the financial
institution and the Fund, or its successor (s) .
5. "Fund Business Day" shall be deemed to be each day on which the New York
Stock Exchange, Inc. is open for trading.
6. "Officer" shall be deemed to be the Fund's Chairman of the Board, the
Fund's President, any Vice President of the Fund, the Fund's Secretary, the
Fund's Treasurer, the Fund's Controller, any Assistant Controller of the Fund,
any Assistant Treasurer of the Fund and any Assistant Secretary of the Fund, and
any other person duly authorized by the Board of Directors of the Fund to
execute any Certificate, instruction, notice or other instrument on behalf of
the Fund and named in the Certificate annexed hereto as Appendix A, as such
Certificate may be amended from time to time, and any person reasonably believed
by the Transfer Agent to be such a person.
7. "Prospectus" shall mean the last Fund prospectus actually received by
the Transfer Agent from the Fund with respect to which the Fund has indicated a
registration statement under the Federal Securities Act of 1933 has becomes
effective, including the Statement of Additional Information, incorporated by
reference
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therein.
8. "Shares" shall mean all or any part of each class or series of the
shares of beneficial interest of the Fund or Portfolio listed in the
Certificate, as may be amended from time to time, which are authorized and/or
issued by the Fund.
9. "Transfer Agent" shall mean Investors Financial Services Company,
("IFSC"), as transfer agent and dividend disbursing agent under the terms and
conditions of this Agreement, its successor (s) or assign(s).
10. "Out-of-Pocket Expenses" means amounts reasonably necessary and
actually paid to third parties by Transfer Agent in the provision of Transfer
Agent services or pursuant to this Agreement for the following purposes: (i)
postage; (ii) paper stocks and printing costs for statements, checks, envelopes,
tax and other forms; and (iii) such other expenses paid or incurred by Transfer
Agent at the request of the Fund.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. The Fund hereby constitutes and appoints the Transfer Agent as transfer
agent of all the Shares of the Fund and as dividend disbursing agent during the
period of this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer agent and
dividend disbursing agent and agrees to perform duties thereof as hereinafter
set forth.
3. In connection with such appointment, the Fund upon the request of the
Transfer Agent, shall deliver the following
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documents to the Transfer Agent:
(i) A copy of the Articles of Incorporation of the Fund and all
amendments thereto certified by the Secretary of the Fund ;
(ii) A copy of the By-Laws of the Fund certified by the Secretary of
the Fund;
(iii) A copy of a resolution of the Board of Directors of the Fund
certified by the Secretary of the Fund appointing the Transfer Agent and
authorizing the execution of this Transfer Agency Agreement;
(iv) A certificate signed by the Secretary of the Fund specifying: the
number of authorized Shares, the number of such authorized Shares issued,
the number of such authorized Shares issued and currently outstanding; the
names and specimen signatures of the Officers of the Fund; and the name and
address of the legal counsel for the Fund;
(v) Specimen Share certificate for each or series class of Shares in
the form approved by the Board of Directors of the Fund, together with a
Certificate signed by the Secretary of the Fund as to such approval;
(vi) Copies of the Fund's Registration Statement, as amended to date,
and the most recently filed Post-Effective Amendment thereto, filed by the
Fund with the Securities and Exchange commission under the Securities Act
of 1933, as amended, and under the Investment Company Act of 1940, as
amended, together with any applications filed in connection therewith; and
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(vii) Opinion of counsel for the Fund with respect to the validity of
the authorized and outstanding Shares, 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 regulation
(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 therefor.)
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. The Fund shall deliver to the Transfer Agent the following documents on
or before the effective date of any increase or decrease in the total number of
Shares authorized to be issued:
(a) A certified copy of the amendment to the Articles of Incorporation
giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of counsel for the Fund
with respect to the validity of the Shares of the Fund and the status of
such Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (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 therefor); and
(c) In the case of an increase, if the appointment of the Transfer
Agent was theretofore expressly limited, a certified copy of a resolution
of the Board of Directors of the Fund increasing the authority of the
Transfer Agent.
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2. Prior to the issuance of any additional Shares of the Fund pursuant to
stock dividends or stock splits, etc., and prior to any reduction in the number
of shares outstanding, the Fund shall deliver the following documents to the
Transfer Agent:
(a) A certified copy of the resolution(s) adopted by the Board of
Director and/or the shareholders of the Fund authorizing such issuance of
additional Shares of the Fund or such reduction, as the case may be, and
(b) An opinion of counsel for the Fund with respect to the validity of
the Shares of the Fund and the status of such Shares under the Securities
Act of 1933, as amended, and any other applicable federal law or regulation
(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 therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or other
capital adjustment requiring a change in the form of Share certificates, the
Transfer Agent will issue Share certificates in the new form in exchange for, or
upon transfer of, outstanding Share certificates in the old form, upon
receiving:
(a) A Certificate authorizing the issuance of the Share certificates
in the new form;
(b) A certified copy of any amendment to the Articles of Incorporation
with respect to the change;
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(c) Specimen Share certificates for each class of Shares in the new
form approved by the Board of Directors of the Fund, with a Certificate
signed by the Secretary of the Fund as to such approval; and
(d) An opinion of counsel for the Fund with respect to the validity of
the Shares in the new form and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable federal law or
regulation (i.e., if subject to registration, that the Shares have been
registered and that the Registration Statement has become effective or, if
exempt, the specific grounds therefor.)
2. The Fund at its expense shall furnish the Transfer Agent with the
sufficient supply of blank Share certificates in the new form and from time to
time will replenish such supply upon the request of the Transfer Agent. Such
blank Share certificates shall be properly signed by facsimile or otherwise by
Officers of the Fund authorized by law or by the By-Laws to sign Share
certificates and, if required shall bear the corporate Seal or facsimile
thereof. The Fund agrees to indemnify and exonerate, save and hold the Transfer
Agent harmless, from and against any and all claims or demands that may be
asserted against the Transfer Agent with respect to the genuineness of any Share
certificate supplied to the Transfer Agent pursuant to this section.
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ARTICLE V
ISSUANCE,
REDEMPTION AND TRANSFER OF SHARES
i. (a) The Transfer Agent, acknowledges that it has received a copy of the
Fund's prospectus and statement of additional information, which prospectus and
statement of additional information describe how sales and redemption of shares
of the Fund shall be made, and the Transfer Agent agrees to accept purchase
orders and redemption requests with respect to Fund shares on each Fund Business
Day in accordance with such prospectus and statement of additional information.
The Fund agrees to notify the Transfer Agent 30 days in advance of any changes
in the procedures set forth in the prospectus and statement of additional
information regarding such purchase and redemption procedure.
(b) The Transfer Agent shall also accept with respect to each Fund Business
Day, at such times as are agreed upon froro time to time by the Transfer Agent
and the Fund, a computer tape consistent in all respects with the Transfer
Agent's tape layout package, as amended from time to time, which is believed by
the Transfer Agent to be furnished by or on behalf of any Approved Institution.
The Transfer Agent shall not be liable for any losses or damages to the Fund or
its shareholders in the event that a computer tape or electronic data
transmission from an Approved Institution is unable to be processed for any
reason beyond the control of the Transfer Agent, or if any of the information on
such
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tape or transmission is found to be incorrect.
2. On each Fund Business Day the Transfer Agent shall, as of the time at
which the Fund computes the net asset value of the Fund, issue to and redeem
from the accounts specified in a purchase order, redemption request, or computer
tape, which in accordance with the Prospectus is effective on such Fund Business
Day, the appropriate number of full and fractional Shares based on the net asset
value per Share of such Fund specified in an advice received on such Fund
Business Day from the Fund. Notwithstanding the foregoing, if a redemption
specified in a computer tape is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account, the Transfer
Agent shall not effect such redemption in whole or in part: and shall within
twenty-four hours orally advise both the Fund and the Approved Institution which
supplied such tape of the discrepancy.
3. In connection with a reinvestment of a dividend or distribution of
Shares of the Fund, the Transfer Agent shall as of each Fund Business Day, as
specified in a Certificate or resolution described in paragraph I of succeeding
Article VI, issue Shares of the Fund based on the net asset value per Share of
such Fund specified in an advice received from the Fund on such Fund Business
Day.
4. On each Fund Business Day the Transfer Agent shall supply the Fund with
a statement specifying with respect -to the immediately preceding Fund Business
Day: the total -number of Shares of the Fund (including fractional Shares)
issued and
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outstanding at the opening of business on such day; the total number of Shares
of the Fund sold on such day, pursuant to preceding paragraph 2 of this Article;
the total number of Shares of the Fund redeemed from Shareholders by the
Transfer Agent on such day; the total number of Shares of the Fund, if any, sold
on such day pursuant to preceding paragraph 3 of this Article, and the total
number of Shares of the Fund issued and outstanding. On the same day such
statement is received by the Fund, the Fund shall confirm the information
contained therein by delivering to the Transfer Agent a Certificate with respect
to the same.
5. In connection with each purchase and each redemption of Shares, the
Transfer Agent shall send such statements as are prescribed by the Federal
Securities laws applicable to transfer agents or as described in the Prospectus.
If the Prospectus indicates that certificates for Shares are available and if
specifically requested in writing by any shareholder, or if otherwise required
hereunder, the Transfer Agent will countersign, issue and mail to such
shareholder at the address set forth in the records of the Transfer Agent a
Share certificate for any full Share requested.
6. As of each Fund Business Day the Transfer Agent shall furnish the
Custodian with an advice setting forth the number and dollar amount of Shares to
be redeemed on such Fund Business Day in accordance with paragraph 2 of this
Article.
7. Upon receipt of a proper redemption request and moneys paid to it by the
Custodian in connection with a redemption of
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Shares, the Transfer Agent shall cancel the redeemed Shares and after making
appropriate deduction for any withholding of taxes required of it by applicable
law (a) in the case of a redemption of Shares pursuant to a redemption described
in preceding paragraph I (a) of this Article, make payment in accordance with
the Fund's redemption and payment procedures described in the Prospectus, and
(b) in the case of a redemption of Shares pursuant to a computer tape described
in preceding paragraph I (b) of this Article, make payment by directing a
federal funds wire order to the account previously designated by the Approved
institution specified in said computer tape.
8. The Transfer Agent shall not be required to issue any Shares after it
has received from an Officer of the Fund or from an appropriate federal or state
authority written notification that the sale of Shares has been suspended or
discontinued, and the Transfer Agent shall be entitled to rely upon such written
notification.
9. Upon the issuance of any Shares in accordance with this Agreement the
Transfer Agent shall not be responsible for the payment of any original issue or
other taxes required to be paid by the Fund in connection with such issuance of
any Shares.
10. The Transfer Agent shall accept a computer tape consistent with the
Transfer Agent's tape layout package, as amended from time to time, which is
reasonably believed by the Transfer Agent to be furnished by or on behalf of any
Approved Institution and is represented to be instructions with respect to
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the transfer of Shares from one account of such Approved Institution to another
such account, and shall effect the transfers specified in said computer tape.
The Transfer Agent shall not be liable for any losses to the Fund or its
shareholders in the event that a computer tape or electronic data transmission
from an Approved Institution is unable to be processed for any reason beyond the
control of the Transfer Agent, or if any of the information on such tape or
transmission is found to be incorrect.
II. (a) Except as otherwise provided in sub-paragraph (b) of this paragraph
and in paragraph 13 of this Article, Shares will be transferred or redeemed upon
presentation to the Transfer Agent of Share certificates or instructions
properly endorsed for transfer or redemption, accompanied by such documents as
the Transfer Agent deems necessary to evidence the authority of the person
making such transfer or redemption, and bearing satisfactory evidence of the
payment of stock transfer taxes. In the case of small estates where no
administration is contemplated, the Transfer Agent may, when furnished with an
appropriate surety bond, and without further approval of the Fund, transfer or
redeem Shares registered in the name of a decedent where the current market
value of the Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent reserves the
right to refuse to transfer or redeem Shares until it is satisfied that the
endorsement on the stock certificate or instructions is valid and genuine, and
for that purpose it will require, unless otherwise instructed by an authorized
officer of
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the Fund, a guarantee of signature by a member firm of a National Securities
Exchange or by a commercial bank or trust company within the United States
acceptable to the Transfer Agent. The Transfer Agent also reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the requested
transfer or redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions which the
Transfer Agent, in its judgement, deems improper or unauthorized, or until it is
satisfied that there is no basis to any claims adverse to such transfer or
redemption. The Transfer Agent may, in effecting transfers and redemptions of
Shares, rely upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as the same may be
amended from time to time, applicable to the transfer of securities, and the
Fund shall indemnify the Transfer Agent for any act done or omitted by it in
good faith in reliance upon such laws. In no event will the Fund indemnify the
Transfer Agent for any act done by it as a result of willful misfeasance, bad
faith, negligence or reckless disregard of its duties.
(b) Notwithstanding the foregoing or any other provision contained in this
Agreement to the contrary, the Transfer Agent shall be fully protected by the
Fund in not requiring any instruments, documents, assurances, endorsements or
guarantees, including, without limitation, any signature guarantees, in
connection with a redemption, or transfer, of Shares whenever the Transfer Agent
reasonably believes that requiring the same would
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be inconsistent: with the transfer and redemption procedures as described in the
Prospectus.
12. Notwithstanding any provision contained in this agreement to the
contrary, the Transfer Agent shall not be required or expected to require, as a
condition to any transfer of any Shares pursuant to paragraph II of this Article
or any redemption of any Shares pursuant to a computer tape described in this
Agreement, any documents, including, without limitation, any documents of the
kind described in sub-paragraph (a) of paragraph 12 of this Article, to evidence
the authority of the person requesting the transfer or redemption and/or the
payment of any stock transfer taxes, and shall be fully protected in acting in
accordance with the applicable provisions of this Article.
13. (a) As used in this Agreement, the terms "computer tape" and "computer
tape believed by the Transfer Agent to be furnished by an Approved Institution",
shall include any tapes generated by the Transfer Agent to reflect information
believed by the Transfer Agent to have been inputted by an Approved Institution,
via a remote terminal or other similar link, into a data processing, storage, or
collection system, or similar system (the "System"), located on the Transfer
Agent's premises. For purposes of paragraph I of this Article, such a computer
tape shall be deemed to have been furnished at such times as are agreed upon
from time to time by the Transfer Agent and Fund only if the information
reflected thereon was inputted into the System at such times as are agreed upon
from time to time by the Transfer Agent and the Fund.
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(b) Nothing contained in this Agreement shall constitute any agreement or
representation by the Transfer Agent to permit, or to agree to permit, any
Approved Institution to input information into a System.
(c) The Transfer Agent reserves the right to approve, in advance, any
Approved Institution, such approval not to be unreasonably withheld. The
Transfer Agent also reserves the right to terminate any and all automated data
communications, at its discretion, upon a reasonable attempt to notify the Fund
when in the opinion of the Transfer Agent continuation of such communications
would jeopardize the accuracy and/or integrity of the Fund's records on the
System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
I. The Fund shall furnish to the Transfer Agent a copy of a resolution of
its Board of Directors, certified by the Secretary or any Assistant Secretary,
either (i) setting forth the date of the declaration of a dividend or
distribution, the date of accrual or payment, as the case may be, thereof, the
record date as of which Shareholders entitled to payment, or accrual, as the
case may be, shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount, if any, payable to the Transfer
Agent on such payment date, or (ii) authorizing the declaration of dividends and
distributions on a daily or other periodic basis and authorizing the Transfer
Agent
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to rely on a Certificate setting forth the information described
in subsection (i) of this paragraph.
2. Upon the payment date specified in such Certificate or resolution, as
the case may be, the Fund shall, in the case of a cash dividend or distribution,
cause the Custodian to pay to the Transfer Agent an amount of cash, if any,
sufficient for the Transfer Agent to make the payment, as of the payment date,
specified in such Certificate or resolution, as the case may be, to the
Shareholders who were of record on the record date. The Transfer Agent will,
upon receipt of any such cash, make payment of such cash dividends or
distributions to the shareholders of record as of the record date by: (i)
mailing a check, payable to the registered shareholder, to the address of record
or dividend mailing address, or (ii) wiring such amounts to the accounts
previously designated by an Approved Institution, as the case may be. The
Transfer Agent shall not be liable for any improper payments made in good faith
and without negligence, in accordance with a Certificate or resolution described
in the preceding paragraph. If the Transfer Agent shall not receive from the
Custodian sufficient cash to make payments of any cash dividend or distribution
to all shareholders of the Fund as of the record date, the Transfer Agent shall,
upon notifying the Fund, withhold payment to all shareholders of record as of
the record date until sufficient cash is provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be responsible
for the determination of the rate or form of
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dividends or capital gain distributions due to the shareholders. It is expressly
agreed and understood that the Transfer Agent is not liable for any loss as a
result of processing a distribution based on information provided in the
Certificate that is incorrect. The Fund agrees to pay the Transfer Agent for any
and all costs, both direct and out-of-pocket expenses, incurred in such
corrective work as necessary to remedy such error.
4. It is understood that the Transfer Agent shall file such appropriate
information returns concerning the payment of dividend and capital gain
distributions with the proper federal, state and local authorities as are
required by law to be filed by the Fund but shall in no way be responsible for
the collection or withholding of taxes due on such dividends or distributions
due to shareholders, except and only to the extent, required by applicable law.
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a corporation duly organized and existing under the laws of the
State of ___________________.
(b) It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
(c) All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
(d) It is an investment company registered under the
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Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of 1933, as amended,
with respect to the Shares is effective. The Fund shall notify the Transfer
Agent if such registration statement or any state securities registrations have
been terminated or a stop order has been entered with respect to the Shares.
2. Each copy of the Articles of Incorporation of the Fund and copies of
all amendments thereto shall be certified by the Secretary of State (or other
appropriate official) of the state of organization, and if such Articles of
incorporation and/or amendments are required by law also to be filed with a
county or other officer or official body, a certificate of such filing shall be
filed with a 'certified copy submitted to the Transfer Agent. Each copy of the
By-Laws and copies of all amendments thereto, and copies of resolutions of the
Board of Directors of the Fund, shall be certified by the Secretary of the Fund
under seal.
3. The Fund shall promptly deliver to the Transfer Agent written notice of
any change in the Officers authorized to sign Share Certificates, notifications
or requests, together with a specimen signature of each new Officer. In the
event any Officer who shall have signed manually or whose facsimile signature
shall have been affixed to blank Share certificates shall die, resign or be
removed prior to issuance of such Share certificates, the Transfer Agent may
issue such Share certificates of the Fund notwithstanding such death,
resignation or removal, and the Fund shall promptly deliver to the Transfer
Agent such approval,
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adoption or ratification as may be required by law.
4. It shall be the sole responsibility of the Fund to deliver to the
Transfer Agent the Fund's currently effective Prospectus and, for purposes of
this Agreement, the Transfer Agent shall not be deemed to have notice of any
information contained in such Prospectus until a reasonable time after it is
actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
l. The Transfer Agent represents and warrants to the Fund that:
(a) It is a corporation duly organized and existing under the laws of
the State of Delaware.
(b) It is empowered under applicable law and by its Charter and
By-laws to enter into and perform this Agreement.
(c) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under Section 17A of the
Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be indemnified in
acting upon any computer tape, writing or document reasonably believed by it to
be genuine and to have been signed or made by an Officer of the Fund or person
designated by the Fund and shall not be held to have any notice of any change of
authority of any person until receipt of written notice thereof from the Fund or
such person. It shall also be protected in processing Share
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certificates which bear the proper countersignature of the Transfer Agent and
which it reasonably believes to bear the proper manual or facsimile signature
of the Officers of the Fund.
3. The Transfer Agent upon notice to the Fund may establish such additional
procedures, rules and regulations governing the transfer or registration of
Share certificates as it may deem advisable and consistent with such rules and
regulations generally adopted by mutual fund transfer agents.
4. The Transfer Agent shall keep such records as are specified in Schedule
II hereto in the form and manner, and for such period, as it may deem advisable
and is agreeable to the Fund but not inconsistent with the rules and regulations
of appropriate government authorities, in particular Rules 31a-2 and 31a-3 under
the investment Company Act of 1940, as amended. The Transfer Agent acknowledges
that such records are the property of the Fund. The Transfer Agent may deliver
to the Fund from time to time at its discretion, for safekeeping or disposition
by the Fund in accordance with law, such records, papers, documents accumulated
in the execution of its duties as such Transfer Agent, as the Transfer Agent may
deem expedient, other than those which the Transfer Agent is itself required to
maintain pursuant to applicable laws and regulations. The Fund shall assume all
responsibility for any failure thereafter to produce any record, paper,
cancelled Share certificate, or other document so returned, if and when
required. The records specified in Schedule II hereto maintained by the Transfer
Agent pursuant to this paragraph 4,
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which have not been previously delivered to the Fund pursuant to the foregoing
provisions of this paragraph 4, shall be considered to be the property of the
Fund, shall be made available upon request for inspection by the officers,
employees, and auditors of the Fund, and records shall be delivered to the Fund
upon request and in any event upon the date of termination of this Agreement, as
specified in Article IX of this Agreement, in the form and manner kept by the
Transfer Agent on such date of termination or such earlier date as may be
requested by the Fund.
5. The Transfer Agent shall not be liable for any loss or damage, including
counsel fees, resulting from its actions or omissions to act or otherwise,
except for any loss or damage arising out of its bad faith, negligence, willful
misfeasance, or reckless disregard of its duties under this agreement.
6a. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including attorney's fees) and
liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by any prior
transfer agent of the Fund or as a result of any action taken or omitted to be
taken by the Transfer Agent in good faith and without negligence or willful
misconduct or in reliance upon (i) any provision of this Agreement; (ii) the
Prospectus; (iii) any instruction or order including, without limitation, any
computer
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tape reasonably believed by the Transfer Agent to have been received from an
Approved Institution; (iv) any instrument, order of Share certificate reasonably
believed by it to be genuine and to be signed, countersigned or executed by any
duly authorized Officer of the Fund; (v) any Certificate or other instructions
of an Officer; or (vi) any opinion of legal counsel for the Fund or the Transfer
Agent. The Fund shall indemnify and exonerate, save and hold the Transfer Agent
harmless from and against any and all claims (whether with or without basis in
fact or law), demands, expenses (including attorney's fees) and liabilities of
any and every nature which the Transfer Agent may sustain or incur or which may
be asserted against the Transfer Agent by any person by reason of or as a result
of any action taken or omitted to be taken by the Transfer Agent in good faith
in connection with its appointment or in reliance upon any law, act, regulation
or any interpretation of the same even though such law, act or regulation may
thereafter have been altered, changed, amended or repealed.
6b. The Transfer Agent shall not settle any claim, demand, expense or
liability to which it may seek indemnity pursuant to paragraph 6 (a) above
(each, an "Indemnifiable Claim") without the express written consent of an
Officer of the Fund. The Transfer Agent shall notify the Fund within 15 days of
receipt of notification of an Indemnifiable Claim, provided that the failure by
the Transfer Agent to furnish such notification shall not impair its right to
seek indemnification from the Fund unless the Fund is unable to adequately
defend the Indemnifiable Claim as a result of
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such failure, and further provided, that if as a result of the Transfer Agent's
failure to provide the Fund with timely notice of the institution of litigation
a judgment by default is entered, prior to seeking indemnification from the Fund
the Transfer Agent, at its own cost and expense, shall open such judgment. The
Fund shall have the right to defend any Indemnifiable Claim at its own expense,
provided that such defense shall be conducted by counsel selected by the Fund
and reasonably acceptable to the Transfer Agent. The Transfer Agent may join in
such defense at its own expense, but to the extent that it shall so desire the
Fund shall direct such defense. The Fund shall not settle any Indemnifiable
Claim without the express written consent of the Transfer Agent if the Transfer
Agent determines that such settlement would have an adverse effect on the
Transfer Agent beyond the scope of this Agreement, in such event, each of the
Fund and the Transfer Agent shall be responsible for their own defense at their
own cost and expense, and such claim shall not be deemed an Indemnifiable Claim
hereunder. If the Fund shall fail or refuse to defend an Indemnifiable Claim,
the Transfer Agent may provide its own defense at the cost and expense of the
Fund. Anything in this Agreement to the contrary notwithstanding, the Fund shall
not indemnify the Transfer Agent against any liability or expense arising out of
the Transfer Agent's willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations under this Agreement. The Transfer Agent
shall indemnify and hold the Fund harmless from and against any and all losses,
damages, costs,
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charges, counsel fees, payments, expenses and liability arising out of or
attributable to any action or failure or omission to act by the Transfer Agent
as a result of the Transfer Agent's lack of good faith, negligence or willful
misconduct.
7. The Transfer Agent shall not be liable to the Fund with respect to any
redemption check on which the signature of the drawer is forged and which the
Fund's Custodian or Cash Management bank has advised the Transfer Agent to honor
the redemption.
8. There shall be excluded from the consideration of whether the Transfer
Agent has been negligent or has breached this Agreement, any period of time, and
only such period of time, during which the Transfer Agent's performance is
materially affected, by reason of circumstances beyond its control
(collectively, "Causes"), including, without limitation (except as provided
below), (a) mechanical breakdowns of equipment (including any alternative power
supply and operating systems software), flood or catastrophe, acts of God,
failures of transportation, communication or power supply, strikes, lockouts,
work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer of the Fund for
written instructions with respect to any matter arising in connection with the
Transfer Agent's duties and obligations under this Agreement, and the Transfer
Agent shall not be liable for any action taken or permitted by it in good faith
in accordance with such written instructions. Such application by the Transfer
Agent for written instructions from an Officer of the Fund
24
may set forth in writing any action proposed to be taken or omitted by the
Transfer Agent with respect to its duties or obligations under this Agreement
and the date on and/or after which such action shall be taken. The Transfer
Agent shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified therein
unless, prior to taking or omitting any such action, the Transfer Agent has
received written instructions in response to such application specifying the
action to be taken or omitted. The Transfer Agent may consult counsel of the
Fund, or upon notice to the Fund, its own counsel, at the expense of the Fund
and shall be fully protected with respect to anything done or omitted by it in
good faith in accordance with the advice or opinion of counsel to the Fund or
its own counsel.
10. The Transfer Agent may issue new Share certificates in place of
certificates represented to have been lost, stolen, or destroyed upon receiving
written instructions from the shareholder accompanied by proof of an indemnity
or surety bond issued by a recognized insurance institution specified by the
Fund or the Transfer Agent. If the Transfer Agent receives written notification
from the shareholder or broker dealer that the certificate issued was never
received, and such notification is made within 30 days of the date of issuance,
the Transfer Agent may reissue the certificate without requiring a surety bond.
The Transfer Agent may also reissue certificates which are represented as lost,
stolen, or destroyed without requiring a surety bond
25
provided that the notification is in writing and accompanied by an
indemnification signed on behalf of a member firm of the New York Stock
Exchange and signed by an officer of said firm with the signature guaranteed.
Notwithstanding the foregoing, the Transfer Agent will reissue a certificate
upon written authorization from an Officer of the Fund.
11. The Transfer Agent will issue and mail subscription warrants for Shares
of capital stock. Shares representing stock dividends, exchanges or splits, or
act as conversion agent upon receiving written instructions from an Officer and
such other documents as the Transfer Agent may deem necessary.
12. The Transfer Agent will supply shareholder lists to the Fund upon
receiving a request therefor from an Officer of the Fund.
13. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund promptly and to secure instructions from an Officer as to such inspection.
The Transfer Agent reserves the right, however, to exhibit the shareholder
records to any person whenever it receives an opinion from its counsel -that
there is a reasonable likelihood that the Transfer Agent will be held liable for
the failure to exhibit the shareholder records to such person; provided,
however, that in connection with any such disclosure the Transfer Agent shall
promptly notify the Fund that such disclosure has been made or is to be made.
14. At the request of an Officer of the Fund the Transfer Agent will
address and mail such appropriate notices to
26
shareholders as the Fund may direct.
15. Notwithstanding any of the foregoing provisions of this Agreement, the
Transfer Agent shall be under no duty or obligation to inquire into, and shall
not be liable for:
(a) The legality of the issue or sale of any Shares, the sufficiency
of the amount to be received therefor, or the authority of the Approved
institution or of the Fund, as the case may be, to request such sale or
issuance;
(b) The legality of a transfer of Shares, or of a redemption of any
Shares, the propriety of the amount to be paid therefor, or the authority
of the Approved Institution or of the Fund, as the case may be, to request
such transfer or redemption;
(c) The legality of the declaration of any dividend by the Fund, 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 Shares.
16. The Transfer Agent shall be entitled to receive and the Fund hereby
agrees to pay to the Transfer Agent for its performance hereunder, including its
performance of the duties and functions set forth in Schedule I hereto, (i) its
reasonable out-of-pocket expenses (including legal expenses and attorney's fees)
incurred in connection with its performance hereunder and (ii) such compensation
as may be agreed upon in writing from time to time by the Transfer Agent and the
Fund.
17. The Transfer Agent shall have no duties or
27
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against the Transfer Agent.
18. Purchase and Prices of Services.
(a) The Fund will compensate the Transfer Agent for, and Transfer
Agent, will provide, beginning on the execution date of this Agreement and
continuing until the termination of this Agreement as provided hereinafter,
the Services set forth in Schedule 1.
(b) The current unit prices for the Services are set forth in Schedule
III (the "Schedule III Fee Schedule"). After the initial eighteen month
term (as described in Article X hereof) at least once in each term, the
Transfer Agent roay elect to raise the Schedule III Fees by providing
written notice at least 120 days prior to the beginning of that term. Any
increases in prices or one-time charges due to changes in the legal or
regulatory requirements will be subject to the approval of the Fund, which
approval shall not be unreasonably withheld.
19. Billing and Payment.
(a) The Transfer Agent shall xxxx the Fund as follows: (i) monthly in
advance for Accounts maintained and in arrears for any Out-of-Pocket
Expenses incurred by the Transfer Agent, provided, however, that with
respect to Out-of-Pocket Expenses the Transfer Agent shall provide the Fund
monthly with an amount to be advanced to the Transfer Agent for estimated
postage expenses and
28
special services requested by the Fund for the following month. Documentation
to support reconciliation of actual postal charges will be provided to the Fund
monthly. The Transfer Agent may from time to time request the Fund to make
additional advances when appropriate.
(b) The Fund shall pay the Transfer Agent in immediately available
funds at United Missouri Bank in Kansas City, MO (15) days of the receipt
of the xxxx.
ARTICLE IX
TERM AND TERMINATION; OPTION TO CONVERT TO REMOTE SERVICE
l. The initial Term of this agreement shall be eighteen (18) months,
commencing on October 7, 1991. At the expiration of this initial eighteen month
term, this Agreement will automatically renew for successive one (1) year terms
thereafter unless termination notice is provided by either party to the other at
least 90 days prior to the end of any term hereof.
2. Notwithstanding anything herein to the contrary, the Fund may terminate
this Agreement after April 1, 1992 (upon thirty (30) days advance written notice
to the Transfer Agent) provided that one of the following conditions is met
prior to the termination date:
(a) payment to the Transfer Agent in immediately available funds of an
Early Termination Fee of Two Hundred Seventy Thousand Dollars ($270,000);
or
(b) delivery to the Transfer Agent of a remote service agreement in
the form of Exhibit A, attached hereto and
29
incorporated by reference herein, executed by the Fund's successor
transfer agent.
3. In the event this Agreement is terminated as provided herein, the
Transfer Agent, upon the written request of the Fund, shall deliver the records
of the Fund on electromagnetic media to the Fund or its successor transfer
agent. The Fund shall be responsible to- the Transfer Agent for the reasonable
costs and expenses associated with the preparation and delivery of such media.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees that prior to effecting any change in the Prospectus
which would increase or alter the duties and obligations of the Transfer Agent
hereunder, it shall advise the Transfer Agent of such proposed change at least
30 days prior to the intended date of the same, and shall proceed with such
change only if it shall have received the written consent of the Transfer Agent
thereto, which shall not be unreasonably withheld.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address first
above written, or at such other place as the Fund may from time to time
designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Transfer Agent shall be sufficiently given if
addressed to the Transfer Agent and mailed
30
or delivered to the Secretary at 000 Xxxxx XxXxxxx, Xxxxxxx, XX, with a copy to
the President at the same address, or at such other place as the Transfer Agent
may from time to time designate in writing.
4. This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties with the formality of this Agreement.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns. This Agreement shall not be
assignable by either party without the written consent of the other party,
except that the Transfer Agent may assign this Agreement to a corporate
affiliate with advance written notice to the Fund.
6. This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois.
7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
8. The provisions of this Agreement are intended to benefit only the
Transfer Agent and the Fund, and no rights shall be granted to any other person
by virtue of this Agreement.
9. (a) The Transfer Agent will endeavor to assist in resolving shareholder
inquiries and errors relating to the period during which prior transfer agents
acted as such for the Fund. Any such inquiries or errors which cannot be
expediently resolved by the Transfer Agent will be referred to the Fund.
31
(b) The Transfer Agent shall only be responsible for the safekeeping and
maintenance of transfer agency records, cancelled certificates and
correspondence of the Fund created or produced prior to the time of conversion
which are under its control and acknowledged in a writing to the Fund to be in
its possession. Any expenses or liabilities incurred by the Transfer Agent as a
result of shareholder inquiries, regulatory compliance or audits related to such
records and not caused as a result of Transfer Agent's bad faith, willful
malfeasance or negligence shall be the responsibility of the Fund as provided in
Article VIII herein.
IN WITNESS WHEREOF, the parities hereto have caused this Agreement to be
executed by their respective corporate officer, thereunto duly authorized and
their respective corporate seals to be hereunto affixed, as the day and year
first above written.
Investors Financial Services Xxxxx & Xxxx Equity Fund, Inc.
By: /s/ Xxxxx X. Xxxx /s/ Xxxxxxxxxx X. Xxxx
Xxxxx X. Xxxx Xxxxxxxxxx X. Xxxx
Chairman Secretary
October 8, 1991 October 3, 1991
32
SCHEDULE I
DESCRIPTION OF SERVICES
In consideration of the fees to be paid in such manner and at such times as
Fund and Transfer Agent may agree. Transfer Agent will provide the services set
forth below:
Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check: Redemptions, Automatic Withdrawals,
Certificate Issuance, Wire Order Trades, Dividends, Dividend Statements, Dealer
Statements.
DAILY ACTIVITY
Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
Name and Address, including Zip Code
Balance of Uncertificated Shares
Balance of Certificated Shares
Certificate number, number of shares, issuance date of each
certificate outstanding and cancellation date for each certificate
date for each certificate no longer outstanding, if issued
Balance of dollars available for redemption
Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash)
Type of account code
Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available
Original establishment date for accounts opened by exchange
W-9 withholding status and periodic reporting
State of residence code Social Security or taxpayer identification
number, and indication of certification
Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time-to-
33
time
indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.
An alternate or "secondary" account number issued by a dealer (or
bank, etc.) to a customer for use, inquiry and transaction input by
"remote accessors"
FUNCTIONS
Answer investor and dealer telephone and/or written inquiries, except
those concerning Fund policy, or requests for investment advice which
will be referred to the Fund, or those which the Fund chooses to
answer
Deposit Fund share certificates into accounts upon receipt of
instructions from the investor or other authorized person, if issued
Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied
Process and confirm address changes
Process standard account record changes as required, i.e. Dividend
Codes, etc.
Microfilm source documents for transactions, such as account
applications and correspondence
Perform backup withholding for those accounts which federal government
regulations indicate is necessary
Perform withholdings on liquidations, if applicable, for employee
benefit plans. Prepare and mail 5498s and W2Ps
Handle bad purchase check processing by notifying Fund prior to trade
reversal
Solicit missing taxpayer identification numbers
Provide remote access inquiry to Fund records via Fund supplied
hardware
34
REPORTS PROVIDED
Daily Journals Reflecting all shares and
dollar activity for the
previous day
Blue Sky Report Supply information monthly
for Fund's preparation of
Blue Sky Reporting
N-SAR Report Supply monthly correspondence,
redemption and liquidation
information for use in fund's
N-SAR Report
Additionally, the following will be provided at the Fund's request to the Fund
at no charge:
o Shareholder listings:
- by Beneficial Owner Code
- by Tax Status Code
- by State Code
- by Establishment Date
- by Dividend Code
- by Account Plan Type
- Top Ten Shareholders
o Dealer Transaction Totals
o Monthly average daily balance reports
Prepare and mail copies of summary statements to dealers and
investment advisers
Generate and mail confirmation statements for financial transactions
DIVIDEND ACTIVITY
Reinvest or pay in cash including reinvesting in other funds within
the fund group serviced by the Transfer Agent as described in each
Fund prospectus
Distribute capital gains simultaneously with income dividends
DEALER SERVICES
Prepare and mail confirmation statements to dealers daily
35
Prepare and mail copies of statements to dealers, same frequency as
investor statements
ANNUAL MEETINGS
One Proxy mailing per year per fund
Address and mail proxies and related material. Tabulate returned
proxies and supply daily reports when sufficient proxies have been
received (material must be adaptable to mechanical equipment as
reasonably specified by the Transfer Agent)
Prepare certified list of stockholders, hard copy or microform
PERIODIC ACTIVITIES
Mail transaction confirmation statements daily to investors
Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent)
Mail periodic statement to investors
Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1096, 1099DIV, 1099B, 1042 and 1042S
Enclose various marketing material as designated by the Fund in
statement mailings, i.e. monthly and quarterly statements (material
must be adaptable to mechanical equipment as reasonably specified by
the Transfer Agent)
36
SCHEDULE II
RECORDS MAINTAINED BY TRANSFER AGENT
Account applications
Cancelled certificates plus stock powers and supporting documents
Checks including check registers, reconciliation records, any
adjustment records and tax withholding documentation
Indemnity bonds for replacement of lost or missing stock certificates
and checks
Liquidation, redemption, withdrawal and transfer requests including
stock powers, signature guarantees and any supporting documentation
Proxy records for annual meetings held within the previous nine months
State and federal tax records
37
SCHEDULE III
FULL SERVICE FEE SCHEDULE
Base Fee: $45,000 per month, plus out-of-pocket expenses as defined below.
Out-of-pocket expenses shall include but not be limited to, postage (and
first class mail insurance in connection with mailing share certificates),
envelopes, check forms, continuous forms, forms for reports and statements,
stationery, and other similar items, telephone and telegraph charges
incurred in answering inquiries from dealers or shareholders, microfilm
used each year to record the previous year's transactions in shareholder
accounts and computer tapes used for permanent storage of records and cost
of insertion of materials in mailing envelopes, and any special or
exception processing. Any labor costs associated with the foregoing shall
also be considered as out-of-pocket expenses.
In addition, a fee of $300 per Business Day will be charged for processing
buy, sell, exchange, transfer, andNor maintenance transactions currently
received by the Fund and forwarded to the Transfer Agent for processing.
The above fees apply to all the Xxxxx & Xxxx mutual funds which have
entered into Transfer Agency agreements on an aggregate basis and do not
apply to each fund individually.
Fee for use of Institutional interface shall be $1.00 per trade.
REMOTE SERVICE AGREEMENT
AGREEMENT, made as of the 1st day of _____________________, by and between
_______________________ ("User"), a Delaware corporation having a place of
business at _______________________________________________________ and
Investors Financial Services Company ("IFSC"), a Delaware corporation having a
principal place of business at 000 Xxxxx XxXxxxx, Xxxxxxx XX 00000.
SECTION 1. USE OF THE IFSC SYSTEM AND FACILITIES.
1.01 Subject to the provisions of this Agreement, User hereby agrees to use
the computerized data processing recordkeeping system owned by IFSC for
securityholder accounting (the "IFSC System") which is installed on IFSC
hardware located in Kansas City, Missouri and utilizes IFSC software (the "IFSC
Facilities") to maintain certain securityholder records and to generate output
for the registered investment companies set forth on Exhibit A hereto, as
amended from time to time, (the "Funds") that User provides certain services.
Subject to the provisions of this Agreement, IFSC hereby agrees to provide User
the use of such IFSC System and Facilities to maintain records of information
and data transmitted to IFSC by User with respect to such securityholder records
and to deliver or transmit to User such output as is generated by the use of
such IFSC System and Facilities.
1.02 User, with computer equipment and through transmission
1
facilities installed on its premises, shall transmit to the IFSC Facilities in
Kansas City, Missouri, such information and data that User determines is to be
input and that is required to maintain the records and generate the output
required hereunder with respect to the Funds.
1.03 IFSC will make on-line access to the IFSC System available to User
between the hours of 7:00 a.m. and 7:00 p.m. Central Time, Monday through
Friday, except for such holidays as are observed by the New York Stock Exchange.
Access to the System at other times will be by mutual agreement. Reports
generated during or as a result of the nightly processing of the IFSC System
will be available for printing by or before 6:00 a.m. Central Time and reports
completed during nightly processing will be made available for printing when
completed.
1.04 User shall, at its sole expense, arrange with a provider of
communication circuit services (the "Communications Company") for the
communication circuits necessary to enable User to utilize the IFSC System and
interface with the IFSC Facilities. IFSC shall utilize communications network
control and monitoring capabilities to assist User with the identification and
resolution of any problems which appear to be related to communications circuits
and shall use its best efforts to contact, coordinate with and obtain the
correction thereof by the Communications Company, but is not otherwise
responsible for, and shall have no liability for inadequacies or failures to
perform related to or arising out of, such communications circuits prior to
their entry into the IFSC
2
Facilities. Subsequent, to the entry of the conanunication circuits into the
IFSC Facilities, IFSC shall be responsible for the maintenance of all
communications equipment on the premises of IFSC's Facilities.
SECTION 2. TERM AND TERMINATION.
2.01 This Agreement shall remain in force and effect for a minimum period
of one (1) year, the initial term of the Agreement. Thereafter, this Agreement
shall automatically renew for additional one year terms unless terminated by
either party upon six (6) months prior written notice to the other party;
provided, however, that if User does not renew this Remote Service Agreement at
the end of the initial one year term. User shall pay to IFSC a one-time
Non-Renewal Fee of $50,000 in immediately available funds.
2.02 In the event that this Agreement is terminated, IFSC agrees that, in
order to provide for uninterrupted service to User, IFSC, at User's request,
shall offer reasonable assistance to User in converting the records of User from
the IFSC System to whatever service or system is selected by User. IFSC shall
also provide to whatever service company is selected by User, copies in IFSC
machine readable format of all information on the shareholder master file, and
all subfiles, history files, dealer files, fail/free data files, reconciliation
file data, redemption and dividend check data, and debit card information, if
any, for each Fund, to the extent such information is maintained on the IFSC
System. Nothing herein shall obligate IFSC to change the format
3
of any files currently on the IFSC System or to input into the IFSC System any
file, information or data not maintained therein prior to the giving of any
termination notice hereunder. Additionally, all hard copy of User or Fund
records shall be delivered to User which agrees to maintain, preserve and
produce upon request such records in accordance and in compliance with the
requirements of Section 17Ad-7 (g) of the Securities and Exchange Act of 1934
and Section 31a-3 of the Investment Company Act of 1940. IFSC's obligations
under this Section 2.02 shall be subject to its recompense by User for such
assistance at IFSC's standard rates and fees in effect at the time.
2.03 If either of the parties hereto shall breach this Agreement or be in
default in the performance of any of its duties and obligations hereunder the
non-defaulting party may give written notice thereof to the defaulting party and
if such default or breach shall not have been remedied within thirty (30) days
after such written notice is given, then the party giving such written notice
may terminate this Agreement upon ninety (90) days prior written notice.
Termination of this Agreement by one party by reason of default or breach of the
other party shall not constitute a waiver by the terminating party of any other
rights it might have under this Agreement against the other party, including
without limitation rights with reference to services performed prior to such
termination or rights of IFSC to be reimbursed for out-of- pocket expenditures
or equipment or communication circuit termination fees.
4
SECTION 3. FEES AND EXPENSES.
3.01 During the initial term of this Agreement, User shall pay to IFSC upon
receipt of IFSC's statement the fees and charges in the amounts as set out in
Exhibit B annexed hereto and made a part hereof. Following the initial term of
this Agreement and 90 days prior to the anniversary date of this Agreement in
each calendar year, the parties shall negotiate a mutually agreeable fee
schedule to become effective on each respective anniversary date. If a new fee
schedule cannot be agreed upon by the anniversary date, the then-existing fee
schedule shall remain in effect until termination of the Agreement is effected
pursuant to section 2.01 hereof.
3.02 User shall reimburse IFSC, for all out-of-pocket expenses described on
Exhibit B in accordance with the procedures set out therein. User shall also
reimburse IFSC for all out-of- pocket expenses incurred by IFSC at the request
of User or the Fund which are not covered under Exhibit B in accordance with the
procedures set out therein.
3.03 User shall notify IFSC, or cause the appropriate Fund to notify IFSC,
promptly under the circumstances in writing of any disputed charges for
out-of-pocket expenses which it is disputing in good faith. Payment for such
disputed charges shall be due on or before the close of the seventh (7th)
business day after the day on which IFSC provides User with documentation
reasonably substantiating the disputed charges and the dispute is reasonably
resolved. Non-disputed charges shall be paid within 30 days of
5
billing.
3.04 User shall have the right to add new funds to the IFSC System upon
reasonable prior written notice to IFSC provided that: (i) the requirements of
the new funds are generally consistent with services then being provided by IFSC
under this Agreement, and (ii) User or any entity which is controlled by, under
common control with or controlling User shall act as the registered investment
advisor, sponsor or distributor for such fund. Rates or charges for additional
funds shall be as set forth in Exhibit B for the remainder of the contract term
except as such funds use functions, features or characteristics for which IFSC
has imposed an additional charge as part of its standard pricing schedule. In
the latter event, rates and charges shall be in accordance with IFSC's
then-standard pricing schedule.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF IFSC.
IFSC represents and warrants that:
4.01 It is a corporation duly organized and existing and in good standing
under the laws of the State of Delaware and is, and will at all times material
hereto continue to be, registered in good standing as a transfer agent with the
appropriate regulatory agency (as defined in the Securities Exchange Act of
1934);
4.02 It has the requisite power and authority under applicable laws and by
its charter and bylaws and has taken all action necessary to enter into and
perform the services contemplated by this Agreement and this Agreement has been
duly executed and delivered by IFSC and constitutes a legal, valid and
6
binding obligation of IFSC, enforceable in accordance with its
terms;
4.03 It has and will continue to have and maintain the necessary system and
facilities to perform its duties and obligations under this Agreement.
4.04 The IFSC System will function in all material respects in accordance
with the reference manuals provided by IFSC to User, as amended from time to
time provided the IFSC System is operated by User in compliance with such
reference manuals. IFSC also warrants that the IFSC System and IFSC Facilities
will be monitored on an ongoing basis and that any identified, material and
critical problems in the operation of the IFSC System and the IFSC Facilities
(the "Problems") will be addressed promptly and corrected in the shortest time
frame possible. Less than critical and material problems will be addressed in a
timely fashion and corrective action will be implemented as soon as possible
under the circumstances. IFSC will promptly inform User of the existence of any
Problems which adversely affect the ability of User to use the IFSC System and
IFSC Facilities, to transmit information and data to IFSC and to receive the
output generated as a result thereof. The FOREGOING WARRANTY IS IN LIEU OF ALL
OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF USER.
User represents and warrants that:
5.01 It is a corporation duly organized, validly existing and
7
in good standing under the laws of the State of New Jersey and is, and will at
all times material hereto continue to be, registered in good standing as a
transfer agent with the appropriate regulatory agency (as defined in the
Securities Exchange Act of 1934) ;
5.02 It has the requisite power and authority under applicable laws,
agreements with the Funds it services, and its Articles of Incorporation and
bylaws, and has taken all action necessary for it to enter into and employ IFSC
to perform the services contemplated by and to fulfill this Agreement, and this
Agreement has been duly executed and delivered by User and constitutes a legal,
valid and binding obligation of User, enforceable in accordance with its terms;
SECTION 6. INDEMNIFICATION.
6.01 IFSC shall not be responsible for, and User shall indemnify and hold
IFSC harmless from and against, any and all claims, actions, suits, costs,
expenses, losses, damages, charges, counsel fees, payments and liability, which
may be asserted against IFSC or for which it may be liable, arising out of or
attributable to:
(a) All actions of IFSC required to be taken by IFSC pursuant to this
Agreement provided that IFSC has acted in good faith and with due diligence;
(b) User's faiivlre to vise and employ, or User's errors or mistakes in the
use or employ of , the IFSC System, the IFSC Facilities or the appropriate
control procedures relative thereto
8
in accordance with procedures with which User has been provided, or User's
failure to verify within five (5) days reports, information and/or data received
through use of the IFSC System and Facilities;
(c) IFSC's reasonable reliance on, or reasonable use or implementation of,
in performing its duties and obligations hereunder, instructions or requests,
information, data, records and documents received by IFSC from User: and
(d) User's refusal or failure to comply with the terms of this Agreement,
or which arise out of User's negligence or misconduct or which arise out of the
breach of any representation or warranty of User hereunder.
6.02 IFSC shall be responsible for and shall indemnify and hold User
harmless from and against any and all claims, actions, suits, costs, expenses,
losses, damages, charges, counsel fees, payments and liability arising out of or
attributable to IFSC's refusal of failure to comply with the terms of this
Agreement, or which arise out of IFSC's negligence or wilful misconduct or which
arise out of the breach of any representation or warranty of IFSC hereunder.
6.03 in the event IFSC is unable to perform its obligations under the terms
of this Agreement due to causes beyond its control, including but not limited
to, fires, civil disobedience, riots, rebellion, acts of God or other similar
occurrences, IFSC will not be liable for any damages resulting from such causes.
In such event, IFSC will use its best efforts to assist User to obtain
9
alternate sources of service, including, subject to the execution of IFSC's
Confidentiality and Limited License Agreement by such service company, providing
to the service company designated by User a copy of the IFSC System used to
provide to User services hereunder and assisting such service company to install
and operate such IFSC System; provided, however, (i) that such IFSC System shall
not be copied and (ii) promptly upon the correction by IFSC of the Problem and
the restoration of IFSC's ability to perform under this Agreement the IFSC
System, with all documentation relating thereto, shall be returned to IFSC and
User shall resume use of the IFSC System at the IFSC Facilities.
6.04 At any time IFSC may apply to a person indicated on User's "Schedule
of Authorized Personnel" (attached hereto as Exhibit E), for instructions with
respect to any matter arising in connection with this Agreement. IFSC shall not
be liable for, and shall be indemnified by User against, any action taken or
omitted by IFSC in good faith in reliance upon such instructions of User or upon
the opinion of User's legal counsel.
6.05 In the event malfunction of the IFSC System causes an error or mistake
in any record, report, data, information or output provided by IFSC under the
terms of this agreement, IFSC shall at its expense correct and reprocess such
records; provided. User shall promptly notify IFSC in writing of such error or
mistake.
6.06 EXCEPT IN THE CASE OF WILLFUL MISCONDUCT OR A VIOLATION OF SECTIONS
11.02 AND 11.03 HEREOF, IN NO EVENT AND UNDER NO CIRCUMSTANCES SHALL EITHER
PARTY UNDER THIS AGREEMENT BE LIABLE TO
10
THE OTHER PARTY FOR PUNITIVE, INDIRECT, OR OTHER SPECIAL DAMAGES UNDER ANY
PROVISION OF THIS AGREEMENT OR FOR ANY ACT OR FAILURE TO ACT HEREUNDER, EVEN IF
ADVISED OF THE POSSIBILITY THEREOF.
6.07 Within 20 days after the receipt by either party (the "Indemnitee") of
notice of any claim, determination, suit or cause of action with respect to
which any other party is obligated to provide indemnification (the "Indemnifying
Party") pursuant to Section 6 hereof, the Indemnitee shall give the Indemnifying
Party written notice thereof and the Indemnifying Party shall be entitled to
assume control of the defense and the negotiations, if any, regarding settlement
of this matter. If the indemnifying Party assumes such control, the Indemnitee
shall be entitled to participate in the defense and negotiations of such matter
at its own expense. The parties agree to cooperate in such negotiations, defense
or settlement and to give each other full access to any information relevant
thereto. The indemnitee shall not enter into any settlement matter without the
written consent Indemnifying Party, which consent shall not be unreasonably
withheld, and the Indemnifying Party shall not be obligated to indemnify the
Indemnitee for any settlement: entered into without the written consent of the
Indemnifying Party. If the consent of the Indemnitee is required to effectuate
any settlement and the Indemnitee refuses to consent to any settlement
negotiated by the Indemnifying Party, then the liability of the Indemnifying
Party for losses arising out of or due to such matter shall be limited to the
amount of the rejected proposed settlement.
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SECTION 7. COVENANTS OF IFSC.
7.01 IFSC shall maintain -the appropriate computer files of all information
and data transmitted to the IFSC Facilities by User; provided, however, that
IFSC shall not be responsible or liable for any changes, alterations,
modifications therein or failure to maintain the same if User shall have made
such changes, alterations, or modifications or shall be the cause of such
failure to maintain the same. IFSC will notify User of any changes to the IFSC
System and IFSC Facilities which materially, adversely impact upon User's
transmissions to IFSC. It is expressly understood that all such data transmitted
by User and maintained hereunder remains the exclusive property of User.
7.02 Throughout the term of this Agreement, IFSC shall maintain backup
procedures for the protection and safekeeping of the data processing files
containing the information and data transmitted by User as well as reasonable
backup procedures at its Data Center in case of loss of power or water or
failure of a computer.
7.03 IFSC at all times shall use its best efforts to maintain adequate
insurance coverage to satisfy all of its reasonably foreseeable liabilities
hereunder. A schedule of IFSC's current insurance coverage is attached hereto as
Exhibit F. IFSC shall promptly notify User of any changes in such insurance
coverage.
SECTION 8. COVENANTS OF USER
8.01 User shall utilize and employ all reasonable control procedures
available under the IFSC System of which User is advised
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and User shall promptly advise IFSC of any error or mistakes in the data or
information transmitted to IFSC's Facilities, the records maintained or output
generated hereunder and, using normal audit and control procedures. User shall
verify all output received hereunder.
8.02 User shall transmit to the IFSC Facilities, in the formats and form
specified by IFSC, all information and data required in connection therewith so
that the output produced by the system shall be complete and accurate when it is
generated by the IFSC System and Facilities. In the event User shall erroneously
transmit information or shall transmit incorrect information or data to the IFSC
Facilities, or shall have failed to verify within five (5) days of receipt any
such data or information when it is generated by the IFSC System and Facilities,
User shall correct such information and data and retransmit the same to the IFSC
Facilities and shall be responsible and liable for the cost or expense of
regenerating any output. In the event that such error shall have been the result
of, or arise out of, a failure by IFSC to notify User of a change to the IFSC
System of IFSC Facilities or a failure by IFSC to generate any output or
properly to process such information or data, then User shall resubmit such
information or data of IFSC shall regenerate the output at its own cost or
expense. If either party hereto shall request a special computer processing to
be made, which special computer processing is not occasioned by the error,
mistake or negligence of either party, the requesting party shall be liable for
the cost or expense of such
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special computer processing.
8.03 User at all -times shall use its best efforts to maintain adequate
insurance coverage to satisfy all of its reasonable foreseeable liabilities
hereunder.
SECTION 9. CHANGES AND MODIFICATIONS.
9.01 Except as may otherwise be provided in Exhibit C, during the term of
this Agreement, IFSC will make available for User's use all modifications and
improvements to the IFSC System done within the ordinary course of business. No
charges will be assessed therefor unless such modifications and improvements
become part of the standard IFSC pricing schedule as a result substantial system
revisions, significant new features or capabilities or modifications
necessitated by changes in existing laws, rules or regulations. At User's
expense, IFSC will use its best efforts to make any reasonable changes to the
IFSC System requested by User ("Client Requested Software"). Charges attendant
to the development of Client Requested Software shall be at IFSC's standard
rates and fees in effect at the time. If the cost to IFSC of operating the IFSC
System is increased by the addition of Client Requested Software, IFSC shall be
entitled to increase its fees by an amount to be mutually agreed upon.
9.02 IFSC shall have the right, at any time, and from time to time, to
alter and modify any systems, file layouts, programs, procedures or facilities
used or employed in performing its duties and obligations hereunder, provided
that no such alteration or modification shall, without the consent of User,
materially
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adversely change or affect the operations and procedures of User in using or
employing IFSC's System or Facilities hereunder. In the event that IFSC changes
its transmission requirements without at least thirty (30) days prior
notification to User, IFSC will be prepared to accept transmissions in the old
format and manner for up to thirty (30) days after User notifies IFSC of any
problem emanating therefrom.
9.03 IFSC and User will jointly determine the level of dedicated system
resources required to meet User's enhancement priorities. At User's expense,
IFSC agrees to use reasonable efforts to make dedicated programming support
available for all projects requested by User. The amount of the resources
required and the project to which those resources are assigned shall be
determined jointly based upon joint periodic review of project requirements.
Such resources will be charged to User at IFSC's standard rates and fees in
effect at the time. Generally, all projects shall be limited to 320 manhours of
programming resources to complete, and will conform to specific productivity and
quality standards established for all such projects as IFSC completes on its own
behalf. All enhancements, improvements, modifications or new features which are
added to or become part of the basic IFSC System and which do not consist of
stand-alone programs shall be, and shall remain, the confidential, exclusive
property of, and proprietary to, IFSC; any enhancements, improvements,
modifications or new features which are paid for by User and which are a
subsystem of the IFSC System, that is a set of stand-alone programs
15
(the "Subsystem"), will with respect to User not become the exclusive property
of IFSC and, in the event that User shall convert form the IFSC System, a copy
of the programs pertaining to each such Subsystem shall be delivered to User for
their continued use.
SECTION 10. ASSIGNMENT
10.01 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party hereto without the prior written consent of the other,
except to entities controlled by, under common control with or controlling the
assigning party.
10.02 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns (subject to
compliance with the requirements of Section 10.01).
SECTION II. MISCELLANEOUS
11.01 User or its duly authorized independent auditors will have the right
under this Agreement to perform on-site audits of records and accounts directly
pertaining to the securityholder accounts in Funds serviced by User at the IFSC
Facilities in accordance with reasonable procedures and at reasonable
frequencies. At the request and expense of User and upon execution of IFSC's
confidentiality agreement, IFSC, during normal business hours, will make
available to User's auditors or to representatives of the appropriate regulatory
agencies all reasonably requested records, data and access to operating
procedures.
11.02 The parties hereto agree that all tapes, books,
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reference manuals, instructions, records, information and data pertaining to the
business of the other party, the IFSC System and the customers serviced by User
hereunder which are exchanged or received pursuant to the negotiation of and/or
the carrying out of this Agreement are confidential and shall remain not be
voluntarily disclosed to any other person and that all such tapes, books,
reference manuals, instructions, records, information and data in the possession
of each of the parties hereto shall be returned to the party from which it was
obtained upon the termination or expiration of this Agreement.
11.03 Except as otherwise provided in Section 9.03 hereof regarding
Subsystems, User acknowledges that IFSC has proprietary rights in and to the
IFSC System, including without limitation any changes or modifications made at
the request or expense or both of User, and any other IFSC programs, data bases,
supporting documentation, or procedures, but excluding the Subsystems ("IFSC
protected Information" ) which User ' s access to the IFSC System of Facilities
may permit User or its employees or agents to become aware of or to access. User
further acknowledges that the IFSC Protected Information constitutes
confidential material and trade secrets of IFSC. User agrees to maintain the
confidentiality of the IFSC Protected Information. User acknowledges that any
unauthorized use, misuse, disclosure or taking of IFSC Protected Information
which is confidential as provided by law, or which is a trade secret, residing
or existing internal or external to a computer, computer system, or computer
network, or the knowing and
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unauthorized accessing or causing to be accessed of any computer, computer
system, or computer network, may be subject to civil liabilities and criminal
penalties under applicable state law. User will advise all of its employees and
agents who have access to any IFSC will advise all of its employees Protected
Information or to any computer equipment capable of accessing IFSC Facilities of
the foregoing.
11.04 IFSC and User agree that during any term of this agreement, neither
party will solicit for employment or offer employment to any employees of the
other.
11.05 To the extent that any provision herein is inconsistent with or in
violation of any applicable law, rule or regulation, that provision shall be
deemed modified so as to comply with such law, rule or regulation, and shall not
otherwise affect any other provisions of this Agreement. Any provision of this
Agreement that is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
provisions of this Agreement or affecting the validity or enforceability of that
term or any of the provisions of this Agreement in any other jurisdiction.
11.06 The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights resulting from
any breach of any of the terms or conditions of this Agreement, including the
payment of damages, shall not be construed as a continuing or permanent waiver
of any
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such terms, conditions, rights or privileges, but the same shall continue and
remain in full force and effect as if no such forbearance or waiver had
occurred.
11.07 The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
11.08 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all or which together shall constitute one
and the same agreement.
11.09 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 written, and this Agreement may not be modified or
amended except in a written instrument executed by both of the parties hereto.
11.10 This validity, construction and performance of this Agreement shall
be governed by and construed in accordance with the laws of the State of
Missouri, excluding that body of law applicable to choice of law.
11.11 The representations and warranties shall survive the execution of
this Agreement and they, the covenants and the indemnification provisions
contained herein and the provisions of Sections 11.02, 11.03 and 11.10 hereof
shall survive the termination of this Agreement.
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IN WITNESS WHEREOF, -the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and througl- their duly
authorized officers as of the day and year first above
written.
USER
By:
Date:
INVESTORS FINANCIAL SERVICES COMPANY
By:
Dated
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EXHIBIT B
REMOTE FEE SCHEDULE
FEES: $4.00 per account per year subject to a minimuro annua] fee of $125,000,
plus out-of-pocket and other expenses as defined below.
Out-of-pocket expenses shall include but not be limited to, postage (and first
class mail insurance in connection with mailing share certificates), envelopes,
check forms, continuous forms, forms for reports and statements, stationery, and
other similar items, telephone and telegraph charges incurred in answering
inquiries from dealers or shareholders, microfilm used each year to record the
previous year ' s transactions in shareholder accounts anc computer tapes used
for permanent storage of records and cost of insertion of materials in mailing
envelopes, and any special or exception processing. Any labor costs associated
with the foregoing shall also be considered as out-of-pocket expenses.
Fee for use of Institutional interface shall be $1.00 per trade.
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