Exhibit K.1
Transfer Agency and Service Agreement
Among
AEW REAL ESTATE INCOME FUND
and
EquiServe Trust Company, N.A.
and
EquiServe, Inc.
1
Table of Contents
Section 1. Certain Definitions ........................................................... 4
Section 2. Appointment of Agent .......................................................... 5
Section 3. Standard Services ............................................................. 6
Section 4. Dividend Disbursing Services .................................................. 8
Section 5. Shareholder Internet Account Access Services .................................. 9
Section 6. Optional Services ............................................................. 10
Section 7 Fee and Expenses .............................................................. 10
Section 8. Representations and Warranties of Transfer Agent .............................. 12
Section 9. Representations and Warranties of Customer .................................... 12
Section 10. Indemnification/Limitation of Liability ....................................... 13
Section 11. Damages ....................................................................... 15
Section 12. Responsibilites of the Transfer Agent ......................................... 15
Section 13. Covenants of the Customer and Transfer Agent .................................. 16
Section 14. Data Access and Proprietary Information ....................................... 17
Section 15. Confidentiality ............................................................... 19
Section 16. Term and Terminiation ......................................................... 19
Section 17. Assignment .................................................................... 21
Section 18. Unaffiliated Third Parties .................................................... 21
Section 19. Miscellaneous ................................................................. 21
Section 19.1 Notice ........................................................................ 21
Section 19.2 Successors .................................................................... 22
2
Section 19.3. Amendments .................................................................... 22
Section 19.4. Severability .................................................................. 22
Section 19.5. Governing Law ................................................................. 22
Section 19.6 Force Majeure ................................................................. 22
Section 19.7 Descriptive Headings .......................................................... 22
Section 19.8 Third Party Beneficiaries ..................................................... 22
Section 19.9 Survival ...................................................................... 23
Section 19.10 Priorities .................................................................... 23
Section 19.11. Merger of Agreement ........................................................... 23
Section 19.12 Counterparts .................................................................. 23
Section 19.13 Accountants ................................................................... 23
Section 19.14 Notice ........................................................................ 23
3
AGREEMENT made as of the [__]/th/ day of November, 2002, by and among
each AEW Real Estate Income Fund, a Massachusetts business trust, having a
principal office and place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000
(the "Customer"), and EquiServe, Inc., a Delaware corporation, and its fully
owned subsidiary EquiServe Trust Company, N.A., a federally chartered trust
company doing business at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(collectively, the "Transfer Agent" or individually "EQI" and the "Trust
Company", respectively).
WHEREAS, the Customer desires to appoint the Transfer Agent as its transfer
agent, registrar, and administrator of dividend reinvestment plans, and EQI as
dividend disbursing agent and processor of all payments received or made by
Customer under this Agreement.
WHEREAS, the Trust Company and EQI desire to accept such respective
appointments and perform the services related to such appointments; and
WHEREAS, the Board of Trustees of the Customer has approved appointment of
the Transfer Agent.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Certain Definitions.
(a) "Account" or "Accounts" shall mean the account of each Shareholder,
herein defined, which account shall (i) hold any full or fractional shares of
beneficial interest held by such Shareholder and/or outstanding funds or (ii)
require tax reporting to be done.
(b) "Additional Services" shall mean any and all services which are not
Services as set forth in the Fee and Service Schedule, but performed by Transfer
Agent upon request of Customer.
(c) "Agreement" shall mean this agreement and any and all exhibits or
schedules attached hereto and any and all amendments or modifications, which may
from time to time be executed.
(d) "Annual Period" shall mean each twelve (12) month period commencing on
the Effective Date and, thereafter, on each anniversary of the Effective Date.
(e) "Closed Account" shall mean an account with a zero share balance, no
outstanding funds or no reportable tax information.
(f) "Customer ID(s)" shall have the meaning set forth in Section 14.3.
(g) "Data Access Service" shall have the meaning set forth in Section 14.1.
(h) "Dividend Reinvestment Plan" shall mean the dividend reinvestment plan
of the Customer, as amended from time to time.
4
(i) "Effective Date" shall mean the date first stated above.
(j) "Fee and Service Schedule" shall mean the fees and services set forth in
the "Fee and Service Schedule" attached hereto.
(k) "Password(s)" shall have the meaning set forth in Section 14.3.
(l) "Proprietary Information" shall have the meaning set forth in Section 14.3.
(m) "Security Procedures" shall have the meaning set forth in Section 5.1.
(n) "Services" shall mean any and all services to be performed by the Transfer
Agent hereunder, as further described herein and in the "Fee and Service
Schedule" or other schedules attached hereto.
(o) "Share" shall mean Customer's common shares of beneficial interest, par
value $0.00001 per share authorized by the Customer's Amended and Restated
Agreement and Declaration of Trust (the "Declaration"), and other classes of
Customer's shares for which the Customer may request that the Transfer Agent
provide services pursuant to this Agreement and for which the Transfer Agent
agrees to provide services under this Agreement.
(p) "Shareholder" shall mean the holder of record of Shares.
(q) "Shareholder Data" shall have the meaning set forth in Section 14.2.
(r) "Shareholder Internet Services" shall have the meaning set forth in Section
5.1.
2. Appointment of Agent.
2.1 Appointments. The Customer hereby appoints the Transfer Agent to act
as its transfer agent and registrar for all Shares, and as administrator of the
Dividend Reinvestment Plan in accordance with the terms and conditions hereof
and appoints EQI as dividend disbursing agent and processor of all payments
received or made by or on behalf of the Customer under this Agreement, and the
Transfer Agent and EQI accept the appointments. Customer shall, at the Transfer
Agent's request, provide Transfer Agent with certified copies of resolutions
appointing the Trust Company as Transfer Agent.
2.2 Documents. In connection with the appointing of Transfer Agent as the
transfer agent and registrar for the Customer, the Customer will provide or has
previously provided each of the following documents to the Transfer Agent:
(a) A copy of the Customer's most recent effective registration
statement, filed with the Securities and Exchange Commission for
initial public offerings;
(b) Specimens of all forms of outstanding share certificates, in
forms
5
approved by the Board of Trustees of the Customer;
(c) Specimens of the Signatures of the officers of the Customer
authorized to sign stock certificates and individuals authorized
to sign written instructions and requests; and
2.3 Records. Transfer Agent may adopt as part of its records all lists of
holders, records of Customer's shares, books, documents and records which have
been employed by any former agent of Customer for the maintenance of the ledgers
for the Customer's Shares, provided such ledger is certified by an officer of
Customer or the prior transfer agent to be true, authentic and complete.
2.4 Shares. Customer shall, if applicable, inform Transfer Agent as to (i)
the existence or termination of any restrictions on the transfer of Shares and
in the application to or removal from any certificate of shares of any legend
restricting the transfer of such Shares or the substitution for such certificate
of a certificate without such legend, (ii) any authorized but unissued Shares
reserved for specific purposes, (iii) any outstanding Shares which are
exchangeable for Shares and the basis for exchange, (iv) reserved Shares subject
to option and the details of such reservation and (v) special instructions
regarding dividends and information of foreign holders.
2.5 Customer's Agent. Transfer Agent represents that it is engaged in an
independent business and will perform its obligations under this Agreement as an
agent of Customer.
2.6 Certificates. Customer shall deliver to Transfer Agent an appropriate
supply of share certificates, which certificates shall provide a signature panel
for use by an officer of or authorized xxxxxx for Transfer Agent to sign as
transfer agent and registrar, and which shall state that such certificates are
only valid after being countersigned and registered.
6
3. Standard Services.
3.1 Transfer Agent Services. The Transfer Agent will perform the
following services:
In accordance with the procedures established from time to time by
agreement between the Customer and the Transfer Agent, the Transfer Agent shall:
(a) issue and record the appropriate number of Shares as authorized
and hold such Shares in the appropriate Shareholder account;
(b) effect transfers of Shares by the registered owners thereof
upon receipt of appropriate documentation;
(c) act as agent for Shareholders pursuant to the Dividend
Reinvestment Plan and other investment programs as amended from
time to time in accordance with the terms thereof; and
(d) issue replacement certificates for those certificates alleged
to have been lost, stolen or destroyed upon receipt by the
Transfer Agent of an open penalty surety bond satisfactory to
it and holding it and the Customer harmless, absent notice to
the Customer and the Transfer Agent that such certificates have
been acquired by a bona fide purchaser. The Transfer Agent, at
its option, may issue replacement certificates in place of
mutilated stock certificates upon presentation thereof without
such indemnity. Further, the Transfer Agent may at its sole
option accept indemnification from the Customer to issue
replacement certificates for those certificates alleged to have
been lost, stolen or destroyed in lieu of an open penalty bond.
Those individuals set forth in Appendix A, as amended from time
to time, are authorized persons with respect to this Section
3.1(d).
3.2 EQI Services. In accordance with procedures established from time to
time by agreement between the Customer and EQI, EQI shall:
(a) prepare and transmit payments for dividends and distributions
declared by the Customer, provided good funds for said
dividends or distributions are received by EQI prior to the
scheduled payable date for said dividends or distributions;
(b) issue replacement checks and place stop orders on original
checks based on shareholder's representation that a check was
not received or was lost. Such stop orders and replacements
will be deemed to have been made at the request
7
of Customer, and Customer shall be responsible for all losses or
claims resulting from such replacement; and
(c) receive all payments made to the Customer or the Transfer Agent
under the Dividend Reinvestment Plan, and make all payments
required to be made under such plan, including all payments
required to be made to the Customer.
(d) timely send to the Customer's Shareholders tax forms and other
information, or permissible substitute notice, relating to
dividends and distributions, paid by the Customer as are required
to be filed and mailed by applicable law, rule or regulation.
(e) maintain and file with the United States Internal Revenue Service
and other appropriate taxing authorities reports relating to all
dividends above a stipulated amount (currently $10.00 accumulated
yearly dividends) paid by the Customer to its Shareholders as
required by tax or other law, rule or regulation.
3.3 Customary Services. In addition to and neither in lieu nor in
contravention of the services set forth above in Sections 3.1 and 3.2, the
Transfer Agent shall perform all the customary services of a transfer agent,
agent of dividend reinvestment plan and other investment programs as described
in Section 3.1 consistent with those requirements in effect as of the date of
this Agreement or as otherwise mutually agreed upon from time to time. EQI shall
perform all the customary services of a dividend disbursing agent and a
processor of payments as described in Section 3.2 consistently with those
requirements in effect as of the date of this Agreement, or as otherwise
mutually agreed upon from time to time. The detailed services and definition,
frequency, limitations and associated costs (if any) of the Services to be
performed by the Transfer Agent are set out in the attached Stock Transfer Agent
Fee and Service Schedule (the "Fee and Service Schedule").
3.4 Compliance with Laws. Each of the Trust Company and EQI is obligated
to and the Trust Company and EQI agree to comply with all applicable federal,
state and local laws and regulations, codes, order and government rulesin the
performance of its duties under this Agreement.
3.5 Unclaimed Property and Lost Shareholders. The Transfer Agent shall
report unclaimed property to each state in compliance with state law and shall
comply with Rule17Ad-17 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), for lost Shareholders. If the Customer is not in
compliance with applicable state laws, there will be no charge for the first two
years for this service for such Customer, other than a charge of $3.00 per due
diligence notice mailed; provided that after the first two years of such
non-compliance, the Transfer Agent will charge such Customer its then standard
fee plus any reasonable out-of-pocket expenses.
8
3.6 Compliance with Office of Foreign Asset Control ("OFAC") Regulations.
The Transfer Agent shall ensure compliance with OFAC laws.
4. Dividend Disbursing Services.
4.1 Declaration of Dividends. Upon receipt of a written notice from the
President, the Chief Operating Officer, any Vice President, Secretary, Assistant
Secretary, Treasurer or Assistant Treasurer of Customer declaring the payment of
a dividend, EQI shall disburse such dividend payments provided that in advance
of such payment, Customer furnishes EQI with sufficient funds. The payment of
such funds to EQI for the purpose of being available for the payment of dividend
checks from time to time is not intended by Customer to confer any rights in
such funds on Customer's Shareholders whether in trust or in contract or
otherwise.
4.2 Stop Payments. Customer hereby authorizes EQI to stop payment of
checks issued in payment of dividends, but not presented for payment, when the
payees thereof allege either that they have not received the checks or that such
checks have been mislaid, lost, stolen, destroyed or, through no fault of
theirs, are otherwise beyond their control and cannot be produced by them for
presentation and collection, and EQI shall issue and deliver duplicate checks in
replacement thereof, and Customer shall indemnify Transfer Agent against any
loss or damage resulting from reissuance of the checks.
4.3 Tax Withholding. EQI is hereby authorized to deduct from all dividends
declared by a Customer and disbursed by EQI, as dividend disbursing agent, the
tax required to be withheld pursuant to Sections 1441, 1442 and 3406 of the
Internal Revenue Code of 1986, as amended, or by any Federal or State statutes
subsequently enacted, and to make the necessary return and payment of such tax
in connection therewith.
5. Shareholder Internet Account Access Services.
5.1 Shareholder Internet Services. The Transfer Agent shall provide
internet access to each Customer's shareholders through Transfer Agent's web
site, xxxxxxxxx.xxx ("Shareholder Internet Services"), pursuant to its
established procedures ("Security Procedures"), to allow shareholders to view
their account information and perform certain on-line transaction request
capabilities. The Shareholder Internet Services shall be provided at no
additional charge at this time, other than the transaction fees currently being
charged for the different transactions as described on the Fee and Service
Schedule.
5.2 Scope of Transfer Agent Shareholder Internet Services Obligations.
Transfer Agent shall at all times use reasonable care in performing Shareholder
Internet Services under this Agreement. With respect to any claims for losses,
damages, costs or expenses which may arise directly or indirectly from Security
Procedures which Transfer Agent has implemented or omitted, Transfer Agent shall
be presumed to have used reasonable care if it has followed, in all material
respects, its Security Procedures then in effect, providing such procedures meet
with prevailing standards for such procedures in the industry. All data and
information transmissions accessed via Shareholder Internet Services are for
informational purposes only, and are not intended to satisfy regulatory
requirements or comply with any laws, rules, requirements or standards of any
federal, state or local governmental authority, agency or
9
industry regulatory body, including the securities industry, which compliance is
the sole responsibility of Customer.
5.3 No Other Warranties.
EXCEPT AS OTHERWISE EXPRESSLY STATED IN SECTION 5.2 OF THIS AGREEMENT, THE
SHAREHOLDER INTERNET SERVICES ARE PROVIDED "AS-IS," ON AN "AS AVAILABLE" BASIS,
AND TRANSFER AGENT HEREBY SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, REGARDING SUCH SERVICES PROVIDED BY TRANSFER
AGENT HEREUNDER, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING
OR COURSE OF PERFORMANCE.
10
6. Optional Services.
To the extent that the Customer elects to engage the Transfer Agent to provide
the services listed below the Customer shall engage the Transfer Agent to
provide such services upon terms and fees to be agreed upon by the parties:
(a) Corporate actions (including inter alia, odd lot buy backs,
exchanges, mergers, redemptions, subscriptions, capital
reorganization, coordination of post-merger services and special
meetings).
7. Fees and Expenses.
7.1 Fee and Service Schedules. The Customer agrees to pay Transfer Agent
the fees for Services performed pursuant to this Agreement as set forth in the
Fee and Service Schedule attached hereto, for the initial term of the Agreement
(the "Initial Term").
7.2 COLA/Fee Increases. After the Initial Term of the Agreement, providing
that service mix and volumes remain constant, the fees listed in the Fee and
Service Schedule shall be increased (a) by the accumulated change in the
National Employment Cost Index for Service Producing Industries (Finance,
Insurance, Real Estate) for the preceding years of the contract, as published by
the Bureau of Labor Statistics of the United States Department of Labor or (b)
to the Transfer Agent's minimum fee then in effect, whichever is greater. Fees
will be increased on this basis on each successive contract anniversary
thereafter.
7.3 Adjustments. Notwithstanding Section 7.1 above, fees, and the
out-of-pocket expenses and advances identified under Section 7.4 below, may be
changed from time to time as agreed upon in writing between the Transfer Agent
and the Customer.
7. Out-of-Pocket Expenses. In addition to the fees paid under Section 7.1
above, the Customer agrees to reimburse the Transfer Agent for reasonable
out-of-pocket expenses, including but not limited to postage, forms, telephone,
microfilm, microfiche, taxes, records storage, exchange and broker fees, or
advances incurred by the Transfer Agent for the items set out in Exhibit A
attached hereto. . In addition, any other reasonable expenses incurred by the
Transfer Agent at the request or with the express consent of the Customer, will
be reimbursed by the Customer.
7.4 Postage. Postage for mailing of dividends, proxies, Customer reports
and other mailings to all Shareholder Accounts shall be advanced to the Transfer
Agent by the Customer prior to commencement of the mailing date of such
materials.
7.5 Invoices. The Customer agrees to pay all fees and reimbursable expenses
within 30 days of the date of the respective billing notice, except for any fees
or expenses that are subject to good faith dispute. In the event of such a
dispute, the Customer may only withhold that portion of the fee or expense
subject to the good faith dispute. The Customer shall notify the Transfer Agent
in writing within thirty (30) calendar days following the receipt of each
billing
11
notice if the Customer is disputing any amounts in good faith. If the Customer
does not provide such notice of dispute within the required time, the billing
notice will be deemed accepted by the Customer. The Customer shall settle such
disputed amounts within five (5) business days of the day on which the parties
agree on the amount to be paid by payment of the agreed amount. If no agreement
is reached, then such disputed amounts shall be settled as may be required by
law or legal process.
7.6 Taxes. Customer shall pay all sales or use taxes in lieu thereof
incurred by the Customer with respect to the Services (if applicable) provided
by Transfer Agent under this Agreement; provided, however, that the Transfer
Agent will cooperate with Customer's commercially reasonable efforts to reduce
such taxes.
7.7 Late Payments.
(a) If any undisputed amount in an invoice of the Transfer Agent (for fees
or reimbursable expenses) is not paid when due, the Customer shall pay the
Transfer Agent interest thereon (from the due date to the date of payment) at a
per annum rate equal to one percent (1.0%) plus the Prime Rate (that is, the
base rate on corporate loans posted by large domestic banks) published by The
Wall Street Journal (or, in the event such rate is not so published, a
reasonably equivalent published rate selected by Customer on the first day of
publication during the month when such amount was due). Notwithstanding any
other provision hereof, such interest rate shall be no greater than permitted
under applicable provisions of Massachusetts law.
(b) The failure by Customer to pay an invoice within 90 days after receipt
of such invoice or the failure by the Customer to timely pay two consecutive
invoices shall, provided that, in each case, the Customer does not cure such
failure to pay within thirty days of receipt of written notice of such
non-payment from the Transfer Agent, constitute a material breach pursuant to
Section 16.4(a) below. The Transfer Agent may terminate this Agreement for such
material breach immediately and shall not be obligated to provide the Customer
with 30 days to cure such breach.
7.8 Services Required by Legislation. Services required by legislation
or regulatory mandate that become effective after the Effective Date of this
Agreement shall not be part of the Services, and shall be billed by mutual
agreement of the parties
7.9 Overtime Charges. Overtime charges will be assessed in the event of
a late delivery to the Transfer Agent of Customer material for mailings to
Shareholders, unless the mail date is rescheduled. The mail date for each
shareholder mailing will be set by mutual agreement of the parties. Such
material includes, but is not limited to, proxy statements, quarterly and annual
reports, dividend enclosures and news releases.
7.10 Bank Accounts. The Customer acknowledges that the bank accounts
maintained by EQI in connection with the Services will be in its name and that
EQI may receive investment earnings in connection with the investment at EQI's
risk and for its benefit of funds held in those accounts from time to time.
12
8. Representations and Warranties of Transfer Agent.
8.1 Governance. The Trust Company is a federally chartered limited purpose
national bank duly organized under the laws of the United States and EQI is a
corporation validly existing and in good standing under the laws of the State of
Delaware and each has full corporate power, authority and legal right to
execute, deliver and perform this Agreement. Each of the Trust Company and EQI
is duly qualified to carry on its business in the Commonwealth of Massachusetts.
The execution, delivery and performance of this Agreement by Transfer Agent has
been duly authorized by all necessary corporate action and constitutes the legal
valid and binding obligation of Transfer Agent enforceable against Transfer
Agent in accordance with its terms.
8.2 Compliance. The execution, delivery and performance of the Agreement
by Transfer Agent will not violate, conflict with or result in the breach of any
material term, condition or provision of, or require the consent of any other
party to, (i) any existing law, ordinance, or governmental rule or regulation to
which Transfer Agent is subject, (ii) any judgement, order, writ, injunction,
decree or award of any court, arbitrator or governmental or regulatory official,
body or authority which is applicable to Transfer Agent, (iii) the incorporation
documents or by-laws of, or any material agreement to which, Transfer Agent is
a party.
8.3 Facilities. The Transfer Agent has and will continue to have access to
the necessary facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
8.4 Computer Services. DATA ACCESS SERVICE AND ALL COMPUTER PROGRAMS AND
SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS,
AS AVAILABLE BASIS. TRANSFER AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT
THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CUSTOMER
HEREBY ACKNOWLEDGES THAT THE DATA ACCESS SERVICE MAY NOT BE OR BECOME AVAILABLE
DUE TO ANY NUMBER OF FACTORS INCLUDING WITHOUT LIMITATION PERIODIC SYSTEM
MAINTENANCE, SCHEDULED OR UNSCHEDULED, ACTS OF GOD, TECHNICAL FAILURE,
TELECOMMUNICATIONS INFRASTRUCTURE OR DELAY OR DISRUPTION ATTRIBUTABLE TO
VIRUSES, DENIAL OF SERVICE ATTACKS, INCREASED OR FLUCTUATING DEMAND, AND ACTIONS
AND OMISSIONS OF THIRD PARTIES. THEREFORE TRANSFER AGENT EXPRESSLY DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTY REGARDING SYSTEM AND/OR DATA ACCESS SERVICE
AVAILABILITY, ACCESSABILITY, OR PERFORMANCE.
9. Representations and Warranties of Customer.
13
The Customer represents and warrants to the Transfer Agent that:
9.1 Organization. It is an unincorporated voluntary association duly
organized and existing and in good standing under the laws of Massachusetts;
9.2 Governance. It is empowered under applicable laws and by its
Declaration and Amended and Restated Bylaws to enter into and perform this
Agreement. All corporate proceedings required by said Declaration, By-laws and
applicable law have been taken to authorize it to enter into and perform this
Agreement; and
9.3 Securities Act of 1933. A registration statement under the
Securities Act of 1933, as amended (the "1933 Act") has been filed and is
currently effective, or will be effective prior to the sale of any Shares in a
public offering, and will remain so effective, and all appropriate state
securities law filings have been made with respect to all the Shares of the
Customer being offered for sale, or will be made prior to the sale of any Shares
in a public offering, except for any Shares which are offered in a transaction
or series of transactions which are exempt from the registration requirements of
the 1933 Act and state securities laws. Any information to the contrary will
result in immediate notification to the Transfer Agent.
10. Indemnification/Limitation of Liability.
10.1 Standard of Care. The Transfer Agent shall at all times act in good
faith and agrees to use its best efforts within reasonable time limits to insure
the accuracy of all services performed under this Agreement, but assumes no
responsibility and shall not be liable for loss or damage due to errors unless
said errors are caused by its negligence, bad faith or willful misconduct or
that of its employees as set forth and subject to the limitations set forth in
Section 10.4 below.
10.2 Customer Indemnity. The Transfer Agent shall not be responsible
for, and the Customer shall indemnify and hold the Transfer Agent
harmless from and against, any and all losses, claims, damages,
costs, charges, counsel fees and expenses, payments, expenses and
liability arising out of or attributable to:
(a) All actions of the Transfer Agent or its agents or subcontractors
required to be taken pursuant to this Agreement, provided such actions
are taken in good faith and without negligence or willful misconduct;
(b) The Customer's lack of good faith, negligence or willful misconduct
or the material breach of any representation or warranty of the
Customer hereunder;
(c) The reliance or use by the Transfer Agent or its agents or
subcontractors of information, records and documents which (i) are
received by the Transfer Agent or its agents or subcontractors and
furnished to it by or on behalf of the Customer, and (ii) have been
prepared and /or maintained by the Customer or any other person or firm
on behalf of the Customer;
14
(d) Subject to the provisions of section 10.1 above, the reliance or
use by the Transfer Agent or its agents or subcontractors of any paper
or document reasonably believed to be genuine and to have been signed by
the proper person or persons including Shareholders or electronic
instruction from Shareholders submitted through the shareholder Internet
Services or other electronic means pursuant to security procedures
established by the Transfer Agent;
(e) The reliance on, or the carrying out by the Transfer Agent or its
agents or subcontractors of any instructions or requests of the
Customer;
(f) The offer or sale of Shares in violation of any federal or state
securities laws requiring that such Shares be registered or in violation
of any stop order or other determination or ruling by any federal or
state agency with respect to the offer or sale of such Shares;
(g) Subject to the provisions of 10.1, above, the negotiations and
processing of all checks, including checks made payable to prospective
or existing shareholders which are tendered to the Transfer Agent for
the purchase of Shares (commonly known as "third party checks");
(h) Any actions taken or omitted to be taken by any former agent of
Customer and arising from Transfer Agent's reliance on the certified
list of holders; and
(i) The negotiation, presentment, delivery or transfer of Shares
through the Direct Registration System Profile System
10.3 Instructions. At any time the Transfer Agent may apply to any
authorized officer of the Customer, as set forth in Appendix B, amended from
time to time, for instruction, and may consult with competent external legal
counsel for the Transfer Agent with respect to any matter arising in connection
with the services to be performed by the Transfer Agent under this Agreement,
and Transfer Agent and its agents and subcontractors shall not be liable and
shall be indemnified by the Customer for any action taken or omitted by it in
reliance upon such instructions or upon the advice or opinion of such competent
external counsel; provided that such action is in compliance with the terms of
this Agreement and the Transfer Agent acts in good faith and without negligence.
The Transfer Agent, its agents and subcontractors shall be protected and
indemnified in acting upon any paper or document reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided the Transfer Agent
or its agents or subcontractors by telephone, in person, machine readable input,
telex, CRT data entry or similar means authorized by the Customer, and shall not
be held to have notice of any change of authority of any person, until receipt
of written notice thereof from the Customer. The Transfer Agent, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of officers of the Customer, and the proper
countersignature of any former transfer agent or former registrar, or of a
co-transfer agent or co-registrar.
15
10.4 Transfer Agent Indemnification/Limitation of Liability. Transfer
Agent shall be responsible for and shall indemnify and hold the Customer
harmless from and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of or attributable to
Transfer Agent's refusal or failure to comply with the terms of this Agreement,
or which arise out of Transfer Agent's negligence, bad faith or willful
misconduct or which arise out of the breach of any representation or warranty of
Transfer Agent hereunder for which Transfer Agent is not entitled to
indemnification under this Agreement; provided, however, that Transfer Agent's
aggregate liability during any term of this Agreement with respect to, arising
from, or arising in connection with this Agreement, or from all services
provided or omitted to be provided under this Agreement, whether in contract, or
in tort, or otherwise, is limited to, an amount equal to three years fees to be
paid hereunder. In the event of (i) any loss, damage or expense suffered or
incurred by the Customer caused by or resulting from actions or omissions for
which the Transfer Agent would be liable pursuant to this section or (ii) any
loss, damage or expense suffered or incurred by the Customer caused by or
resulting from investments made by Transfer Agent in connection with the account
arrangements disclosed in Section 7.12 hereof, the Transfer Agent shall promptly
reimburse the Fund in the amount of any such loss, damage or expense.
10.5 Notice. In order that the indemnification provisions contained in
this Section shall apply, upon the assertion of a claim for which one party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
indemnifying party shall have the option to participate with the indemnified
party in the defense of such claim or to defend against said claim in its own
name or the name of the indemnified party. The indemnified party shall in no
case confess any claim or make any compromise in any case in which the
indemnifying party may be required to indemnify it except with the indemnifying
party's prior written consent.
11. Damages.
NO PARTY SHALL BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER, INCLUDING, BUT NOT LIMITED TO,
LOSS OF ANTICIPATED PROFITS, OCCASIONED BY A BREACH OF ANY PROVISION OF THIS
AGREEMENT EVEN IF APPRISED OF THE POSSIBILITY OF SUCH DAMAGES.
12. Responsibilities of the Transfer Agent.
The Transfer Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Customer,
by its acceptance hereof, shall be bound:
12.1 Whenever in the performance of its duties hereunder the Transfer
Agent shall deem it necessary or desirable that any fact or matter be proved or
established prior to taking or suffering any action hereunder, such fact or
matter may be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice
16
President, the Chief Operating Officer, the Treasurer, any Assistant treasurer,
the Secretary or any Assistant Secretary of the Customer and delivered to the
Transfer Agent. Such certificate shall be full authorization to the recipient
for any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
12.2 The Customer agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Transfer Agent for the carrying out, or performing by the Transfer Agent
of the provisions of this Agreement.
12.3 Except as limited by applicable law, Transfer Agent, any of its
affiliates or subsidiaries, and any stockholder, director, officer or employee
of the Transfer Agent may buy, sell or deal in the securities of the Customer or
become pecuniary interested in any transaction in which the Customer may be
interested, or contract with or lend money to the Customer or otherwise act as
fully and freely as though it were not appointed as agent under this Agreement.
Nothing herein shall preclude the Transfer Agent from acting in any other
capacity for the Customer or for any other legal entity.
12.4 No provision of this Agreement shall require the Transfer Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it shall believe in good faith that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
13. Covenants of the Customer and Transfer Agent.
13.1 Customer Corporate Authority. The Customer shall furnish to the
Transfer Agent the following:
(a) A copy of the Declaration;
(b) Copies of all material amendments to its Declaration or
Amended and Restated Bylaws made after the date of this Agreement, promptly
after such amendments are made, to the extent that such amendments would affect
materially the provision of services contemplated by this Agreement; and
(c) A certificate of the Customer as to the Shares authorized,
issued and outstanding, as well as a description of all reserves of
unissued Shares relating to the exercise of options, warrants or a
conversion of debentures or otherwise.
13.2 Transfer Agent Facilities. The Transfer Agent hereby agrees to
establish and maintain facilities and procedures reasonably acceptable to the
Customer for the safekeeping of share certificates, check forms and facsimile
signature imprinting devices, if any, and for the preparation, use, and
recordkeeping of such certificates, forms and devices.
13.3 Records. The Transfer Agent shall keep records relating to the
services to be performed hereunder, in the form and manner as it may deem
advisable. The Transfer Agent
17
agrees that all such records prepared or maintained by it relating to the
services performed hereunder are the property of the Customer and will be
preserved, maintained and made available in accordance with the requirements of
applicable law (in particular, the transfer agent recordkeeping regulations at
17 C.F.R. 240.17Ad-6 and 7), and will be surrendered promptly to the Customer on
and in accordance with its request. The Customer and its representatives shall
have access to such books and records at all times during Transfer Agent's
normal business hours.
13.4 Confidentiality. The Transfer Agent and the Customer agree that all
books, records, information and data pertaining to the business of the 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 other person, except as may be required by law
shall not be used for any purpose not directly related to the Customer's
business without the Customer's prior written consent.
13.5 Non-Solicitation of Transfer Agent Employees. Customer shall not
attempt to hire or assist with the hiring of an employee of EquiServe or its
affiliated companies or encourage any employee to terminate their relationship
with EquiServe or its affiliated companies.
13.6 Notification. Customer shall notify Transfer Agent as soon as
possible in advance of any stock split, stock dividend or similar event which
may affect the Shares, and any bankruptcy, insolvency, moratorium or other
proceeding regarding Customer affecting the enforcement of creditors' rights.
Notwithstanding any other provision of the Agreement to the contrary, Transfer
Agent will have no obligation to perform any Services under the Agreement
subsequent to the commencement of any bankruptcy, insolvency, moratorium or
other proceeding regarding Customer affecting the enforcement of creditor'
rights unless Transfer Agent receives assurance satisfactory to it that it will
receive full payment for such services.
14. Data Access Service and Proprietary Information.
14.1 Transfer Agent has developed a data access service that enables the
Customer to access the Customer's shareholder records maintained on Transfer
Agent's computer system through the Internet or remote access, as the case may
be (the "Data Access Service"). The Customer wishes to use such Data Access
Service subject to the terms and conditions set forth herein. Therefore, the
Customer and Transfer Agent agree as follows:
14.2 Access to Shareholder Data.
The Service provided to the Customer pursuant to this Agreement shall
include granting the Customer, and those individuals set forth in Appendix B, as
amended from time to time, access to the Shareholder, Customer and proxy
information, including information with respect to the activity of Shareholders
and Accounts ("Shareholder Data"), maintained on the records database for the
purpose of examining, maintaining, editing, or processing transactions with
respect to Shareholder Data.
14.3 Procedures for Access.
18
To use the Data Access Service, the Customer must access through the
Internet or remote terminal, as the case may be, pursuant to the procedures
provided by Transfer Agent. Such access is accomplished by entering a unique
Customer identification ("Customer ID(s)") and passwords ("Password(s)")
assigned to the Customer by Transfer Agent. Each Customer ID and Password
assigned to the Customer is for use only by the Customer. The Customer shall
establish and maintain reasonable security and control over all such Customer
IDs and Passwords. Transfer Agent shall maintain reasonable security and control
over each Customer ID. After Transfer Agent assigns the Customer a Password, the
Customer shall change the Password. The Customer recognizes that Transfer Agent
does not have knowledge of the Password, which is selected by the Customer and
is within the Customer's exclusive control after the necessary change. The
Customer may change any Password thereafter at any time. Customer agrees to
notify Transfer Agent immediately if any employee of Customer granted access to
the Data Access Service leaves the employ of the Customer, in order to enable
Transfer Agent to terminate such employee's access.
14.4 Proprietary Information.
The Customer acknowledges that the databases (although not the Shareholder
Data within such databases), computer programs, screen formats, report formats,
interactive design techniques, and documentation manuals furnished to the
Customer by the Transfer Agent as part of the Data Access Service to access
Shareholder Data maintained by the Transfer Agent on data bases under the
control and ownership of the Transfer Agent or other third party constitute
copyrighted, trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to the Transfer Agent or other
third party. In no event shall Proprietary Information be deemed Shareholder
Data; nor shall Shareholder Data be considered Proprietary Information belonging
to the Transfer Agent. The Customer agrees to treat all Proprietary Information
as proprietary to the Transfer Agent and further agrees that it shall not
divulge any Proprietary Information to any person or organization except as may
be provided hereunder. Without limiting the foregoing, the Customer agrees for
itself and its employees and agents:
(a) to refrain from copying or duplicating in any way the Proprietary
Information, other than to print out pages reflecting Shareholder
Data to provide to shareholders or for Customer's internal use;
(b) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently
obtained, to inform Transfer Agent in a timely manner of such fact
and dispose of such information in accordance with Transfer Agent's
instructions;
(c) to refrain from causing or allowing the Proprietary Information from
being retransmitted to any other computer facility or other
location, except with the prior written consent of Transfer Agent;
(d) that the Customer shall have access only to those authorized
transactions agreed upon by the parties; and
19
(e) to honor all reasonable written requests made by Transfer Agent to
protect at Transfer Agent's expense the rights of Transfer Agent
Proprietary Information at common law, under federal copyright law
and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 14.
14.5 Content. If the Customer notifies the Transfer Agent that any part of
the Data Access Service does not operate in material compliance with the user
documentation provided by the Transfer Agent for such service, the Transfer
Agent shall endeavor in a timely manner to correct such failure. Organizations
from which the Transfer Agent may obtain certain data included in the Services
are solely responsible for the contents of such data and, in the absence of bad
faith or negligence of the Transfer Agent, the Customer agrees to make no claim
against the Transfer Agent arising out of the contents of such third party data,
including, but not limited to, the accuracy thereof.
14.6 Transactions. If the transactions available to the Customer include
the ability to originate electronic instructions to the Transfer Agent in order
to (i) effect the transfer or movement of Shares or direct EQI to transfer cash
or (ii) transmit Shareholder information or other information, then in such
event the Transfer Agent shall be entitled to rely on the validity and
authenticity of such instructions without undertaking any further inquiry as
long as such instructions are undertaken in conformity with security procedures
established by the Transfer Agent from time to time; provided, however, that
Transfer Agent shall use reasonable care at all times in connection with
designing and using such procedures.
15. Confidentiality.
15.1 Covenant. The Transfer Agent and the Customer agree that they will
not, at any time during the term of this Agreement or after its termination,
reveal, divulge, or make known to any person, firm, corporation or other
business organization, any customers' lists, trade secrets, cost figures and
projections, profit figures and projections, or any other secret or confidential
information whatsoever, whether of the Transfer Agent or of the Customer, used
or gained by the Transfer Agent or the Customer during performance under this
Agreement. The Customer and the Transfer Agent further covenant and agree to
retain all such knowledge and information acquired during and after the term of
this Agreement respecting such lists, trade secrets, or any secret or
confidential information whatsoever in trust for the sole benefit of the
Transfer Agent or the Customer and their successors and assigns. The above
prohibition of disclosure shall not apply to the extent that the Transfer Agent
must disclose such data to its sub-contractor or agent for purposes of providing
services under this Agreement; provided, however, that Transfer Agent will be
liable for such sub-contractor or agent's violation of this Section.
15.2 Request for Records. In the event that any requests or demands are
made for the inspection of the Shareholder records of the Customer (including
requests or demands made by a Shareholder), other than request for records of
Shareholders pursuant to standard subpoenas from state or federal government
authorities (e.g., in divorce and criminal actions), the Transfer Agent
20
will endeavor to notify the Customer and to secure instructions from an
authorized officer of the Customer as to such inspection. The Transfer Agent
expressly reserves the right, however, to exhibit the Shareholder records to any
person whenever it is advised by competent external counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person or if
required by law or court order.
16. Term and Termination.
16.1 Term. The Initial Term of this Agreement shall be three (3) years from
the date first stated above unless terminated pursuant to the provisions of this
Section 16. After such Initial Term either party may terminate this agreement
upon ninety (90) days prior written notice.
16.2 Early Termination. Notwithstanding anything contained in this
Agreement to the contrary, should Customer desire to move any of its Services
provided by the Transfer Agent hereunder to a successor service provider prior
to the expiration of the Initial Term, or without the required notice period,
the Transfer Agent shall make a good faith effort to facilitate the conversion
on such prior date, however, there can be no guarantee that the Transfer Agent
will be able to facilitate a conversion of Services on such prior date
16.3 Expiration of Term. After the expiration of the Initial Term, should
either party exercise its right to terminate, all reasonable out-of-pocket
expenses or costs associated with the movement of records and material will be
borne by theCustomer. Additionally, the Transfer Agent reserves the right to
charge for any other reasonable expenses associated with such termination and a
de-conversion/transition fee in an amount equal to 15% of the aggregate fees
incurred by Customer during the immediately preceding twelve (12) month period,
provided, however, such fee shall in no event be less than five thousand dollars
or more than seven thousand dollars for standard and reasonable expenses,
however if Customer makes any special request of Transfer Agent then additional
expenses may apply.
16.4 Termination.
This Agreement may be terminated in accordance with the following:
(a) at any time by any party upon a material breach of a
representation, covenant or term of this Agreement by any other
unaffiliated party which is not cured within a period not to exceed
thirty (30) days after the date of written notice thereof by one of
the other parties; and
(b) by any party, at any time, in the event that during the term of
this Agreement, a bankruptcy or insolvency proceeding is filed by or
against any other unaffiliated party hereto or a trustee or receiver
is appointed for any substantial part of such party's property (and in
a case of involuntary bankruptcy, insolvency or receivership
proceeding, there is entered an order for relief, or order appointing
a receiver or some similar order or decree and such party does not
succeed in having such order lifted or stayed within sixty (60) days
from the date of its entry), or any other unaffiliated party hereto
makes an assignment of all or
21
substantially all of its property for the benefit of creditors or
ceases to conduct its operations in the normal course or business.
16.5 Records. Upon receipt of written notice of termination, the parties
will use commercially practicable efforts to effect an orderly termination
of this Agreement. Without limiting the foregoing, Transfer Agent will
deliver promptly to Customer, in machine readable form on media as
reasonably requested by Customer, all Shareholder and other records, files
and data supplied to or compiled by Transfer Agent on behalf of Customer.
17. Assignment.
17.1 Affiliates. Upon proper notice, the Transfer Agent may, without
further consent of the Customer assign its rights and obligations hereunto
to any affiliated transfer agent registered under Section 17A(c)(2) of the
Exchange Act.
17.2 Sub-contractors. Transfer Agent may, without further consent on the
part of Customer, subcontract with other subcontractors for telephone and
mailing services as may be required from time to time; provided, however,
that the Transfer Agent shall be as fully responsible to the Customer for
the acts and omissions of any subcontractor as it is for its own acts and
omissions.
18. Unaffiliated Third Parties.
In the absence of negligence or bad faith of the Transfer Agent, nothing
herein shall impose any duty upon the Transfer Agent in connection with or make
the Transfer Agent liable for the actions or omissions to act of unaffiliated
third parties such as, by way of example and not limitation, airborne services,
the U.S. mails and telecommunication companies, provided, if the Transfer Agent
selected such company, the Transfer Agent shall have exercised due care in
selecting the same.
19. Miscellaneous.
19.1 Notices.
Any notice or communication by the Transfer Agent or the Customer to the
other is duly given if in writing and delivered in person or mailed by first
class mail, postage prepaid, telex, telecopier or overnight air courier
guaranteeing next day delivery, to the other's address:
If to the Customer:
AEW Real Estate Income Fund
c/o CDC IXIS Asset Management Services, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
22
Telecopy No.: 000-000-0000
If to the Transfer Agent:
EquiServe Trust Company, N.A.
c/o EquiServe, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attn: General Counsel
The Transfer Agent and the Customer may, by notice to the other, designate
additional or different addresses for subsequent notices or communications.
19.2 Successors.
All the covenants and provisions of this agreement by or for the benefit of
the Customer or the Transfer Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
19.3 Amendments.
This Agreement may be amended or modified by a written amendment executed
by the parties hereto and, to the extent required, authorized or approved by a
resolution of the Board of Directors of the Customer.
19.4 Severability.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provision, covenants and restrictions
of this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
19.5 Governing Law.
This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts.
19.6 Force Majeure.
Notwithstanding anything to the contrary contained herein, Transfer Agent
shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God,
terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or
malfunction of computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval systems, labor
difficulties, war, or civil unrest. Any other representation, warranty or
disclaimer hereunder notwithstanding, Transfer Agent shall use reasonable care
to minimize the likelihood of damage, loss of data, delays and/or error and
should such damage, loss of data, delays and/or errors occur,
23
Transfer Agent shall use commercially reasonable efforts to mitigate the effects
of such occurrence, at no expense to the Customer.
19.7 Descriptive Headings.
Descriptive headings of the several sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
19.8 Third Party Beneficiaries.
The provisions of this Agreement are intended to benefit only the Transfer
Agent, the Customer and their respective permitted successors and assigns. No
rights shall be granted to any other person by virtue of this agreement, and
there are no third party beneficiaries hereof.
24
19.9 Survival.
All provisions regarding indemnification, warranty, liability and limits
thereon, and confidentiality and protection of proprietary rights and trade
secrets shall survive the termination of this Agreement.
19.10 Priorities.
In the event of any conflict, discrepancy, or ambiguity between the terms
and conditions contained in this Agreement and any schedules or attachments
hereto, the terms and conditions contained in this Agreement shall take
precedence.
19.11 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 written.
19.12 Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
19.13 Accountants
Transfer Agent will cooperate with Customer's independent public
accountants in the performance of its obligations under this Agreement with
respect to its activities hereunder in connection with the preparation of the
Customer's Form N-2, Form N-SAR and other reports filed with the Securities and
Exchange Commission and with respect to any other requirements of the Securities
and Exchange Commission.
19.14 Notice.
A copy of the Amended and Restated Agreement and Declaration of Trust of
the Customer is on file with the Secretary of the Commonwealth of Massachusetts,
and notice is hereby given that this Agreement is executed on behalf of the
Customer by an officer or Trustee of the Customer in his or her capacity as an
officer or Trustee of the Customer and not individually and that the obligations
of or arising out of this instrument are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon the assets and
property of the Customer
25
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by one of its officers thereunto duly authorized, all
as of the date first written above.
AEW Real Estate Income Fund
By:________________________
Name:______________________
Title:_____________________
EquiServe, Inc. EquiServe Trust Company, N.A.
By:_____________________ By:_________________________
Name:___________________ Name:_______________________
Title:__________________ Title:______________________
26
