Exhibit h-2
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
CERTAIN INVESTMENT COMPANIES MANAGED BY XXXX XXXXX
MANAGEMENT INC., AS LISTED ON SCHEDULE A HERETO
AND
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
PAGE
1. Terms of Appointment and Duties ...................................... 1
2. Third Party Administrators for Defined Contribution Plans ............ 8
3. Service Levels ....................................................... 8
4. Fees and Expenses .................................................... 10
5. Representations and Warranties of the Transfer Agent ................. 11
6. Representations and Warranties of the Funds .......................... 11
7. Wire Transfer Operating Guidelines/Articles 4A
of the Uniform Commercial Code ....................................... 12
8. Data Access and Proprietary Information .............................. 14
9. Indemnification ...................................................... 17
10. Standard of Care ..................................................... 18
11. Covenants of the Funds and the Transfer Agent ........................ 19
12. Termination of Agreement ............................................. 19
13. Assignment and Third Party Beneficiaries ............................. 21
14. Subcontractors ....................................................... 22
15. Miscellaneous ........................................................ 22
16. Additional Funds ..................................................... 24
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 22nd day of November, 2004, by and between certain
investment companies managed by Xxxx Xxxxx Management INC., as listed on
Schedule A hereto (each, a "Fund" and collectively, the "Funds"), each having
its principal office and place of business at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxx Xxxxxx 00000, and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company having its principal office and place of business at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Transfer Agent").
WHEREAS, the Funds are authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets;
WHEREAS, the Funds currently have shares outstanding in twenty three (23)
series, three of which are synonymous with the respective Fund. and each such
series shall be named in the attached Schedule A which may be amended by the
parties from time to time (each such series, together with any other series
subsequently established by the Funds and made subject to this Agreement in
accordance with SECTION 16, being herein referred to AS a "Portfolio", and
collectively as the "Portfolios"); and
WHEREAS, each Fund, on behalf of its Portfolios, desires to appoint the Transfer
Agent as its transfer agent, dividend disbursing agent, recordkeeper for certain
retirement plans and agent in connection with certain other activities, each
Fund desires to contract individually for such services and the Transfer Agent
desires to accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. TERMS OF APPOINTMENT AND DUTIES
1.1 TRANSFER AGENCY SERVICES. Subject to the terms and conditions set
forth in this Agreement, each Fund, on behalf of its Portfolios, hereby
appoints the Transfer Agent to act as, and the Transfer Agent agrees to
act as its transfer agent for the Fund's authorized and issued shares of
beneficial interest ("Shares"), dividend disbursing agent, recordkeeper
for certain retirement plans and agent in connection with ANY
accumulation, open-account or similar plan provided to the shareholders
of each of the respective Portfolios of the Fund ("Shareholders") and set
out in the currently effective prospectus and statement of additional
information ("prospectus") of the Fund on behalf of the applicable
Portfolio, including without limitation any periodic investment plan or
periodic withdrawal program. In accordance with procedures established
from time to time by agreement between each Fund, on behalf of each of
its Portfolios, as applicable, and the Transfer Agent, the Transfer Agent
agrees that it will perform the following services for each Fund:
(a) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof to
the Custodian of the Fund
authorized pursuant to the applicable Articles of Incorporation or
Declaration of Trust, as the case may be, of the Fund (the
"Custodian").
(b) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account.
(c) Send to the vendor designated by the Fund a file consisting of
information the vendor will use to generate confirmation
statements in such form as the Fund and the Transfer Agent agree
upon from time to time.
(d) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation thereof to
the Custodian setting forth the number of shares of the applicable
Fund and Portfolio thereof to be redeemed. Such redemptions shall
be reflected on appropriate accounts maintained by the Transfer
Agent reflecting outstanding shares of the Fund and Shares
attributed to individual accounts.
(e) In respect of the transactions in items (a), (b) and (d) above,
execute transactions directly with broker-dealers authorized by
the Funds.
(f) At the appropriate time as and when it receives monies paid to it
by the Custodian with respect to any redemption, pay over or cause
to be paid over in the appropriate manner such monies as
instructed by the redeeming Shareholders in accordance with
procedures described in the Fund's prospectus as most recently
provided by the Fund to the Transfer Agent.
(g) Promptly after Transfer Agent has received written instructions
from the Fund that the sale of Shares of the Fund has been
suspended or discontinued, the Transfer Agent shall prohibit the
issuance of any Shares of the Fund.
(h) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions.
(i) Prepare and transmit payments for dividends and distributions
declared by the Fund, on behalf of the applicable Portfolio. The
Transfer Agent will, on the designated payment date, automatically
reinvest all dividends in additional Shares, unless the
Shareholder has requested otherwise, at net asset values on the
payment date.
(j) Without any further action by the Board of Trustees or any
officer of The China-U.S. Growth Fund or Castle Convertible Fund,
Inc., issue replacement certificates for certificates for Shares
of either such Fund alleged to have been lost, stolen or destroyed
upon receipt by the Transfer Agent of properly executed affidavits
and lost certificate bonds, satisfactory to the Transfer Agent,
naming the Fund and the Transfer Agent as obligors under the bond.
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(k) (i) In the event that any check or other order for the payment of
money is returned unpaid for any reason or is rejected by the
Transfer Agent, (i) give prompt notice of such return to the Fund
and electronically send copies of all check writing drafts the
Transfer Agent is rejecting for review by the Fund; (ii) cancel
the purchase order against all Shares issued in exchange for such
check or order, and (iii) take such other action as the Fund and
Transfer Agent agree is appropriate.
(ii) Issue replacement checks and place stop orders on original
checks based on the 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 of the Fund, and the
Fund shall be responsible for all losses or claims resulting from
such replacement in the absence of the Transfer Agent's
negligence, bad faith or willful misconduct.
(1) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing, which shall include, but not be
limited to, the number of Shares held by each holder of record,
the holder's name or names, address and taxpayer identification
numbers and whether the Shares are held in certificated or
uncertificated form; and
(m) Record the issuance of Shares of the Fund and maintain pursuant to
Securities and Exchange Commission (the "SEC") Rule 17Ad-l0(e) of
the Securities Exchange Act of 1934 a record of the total number
of Shares of the Fund which are authorized, based upon data
provided to it by the Fund, and issued and outstanding. The
Transfer Agent shall also provide the Fund on a regular basis with
the total number of Shares which are authorized and issued and
outstanding and shall have no obligation, when recording the
issuance of Shares, to monitor the issuance of such Shares or to
take cognizance of any laws relating to the issue or sale of such
Shares, which functions shall be the sole responsibility of the
Fund.
(n) Within approximately 15 days of each calendar quarter-end, at the
request of the Funds, the Transfer Agent shall certify in a form
to be determined by the Funds and the Transfer Agent whether it
has complied with the terms of the Agreement, including whether it
has identified and disclosed to the Funds all significant
deficiencies and material weaknesses in the design and operation
of internal controls which are reasonably likely to adversely
affect the Transfer Agent's ability to perform its obligations and
responsibilities under the Agreement.
(O) (i) RETIREMENT ACCOUNTS. With respect to certain retirement plans
or accounts (such as individual retirement accounts ("IRAS"),
SIMPLE IRAs, SEP IRAs, Xxxx IRAs. Xxxxxxxxx Education Savings
Accounts and 403(b) Plans (such accounts, "Retirement
Accounts")), for which one or more Funds are investment options,
the Transfer Agent, at the request of the Funds, may provide or
arrange for the provision of appropriate prototype plans AS well
AS provide or arrange for the provision of various services to
such plans and/or accounts which services may include account
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set-up, maintenance, and disbursement as well as such other
services AS the parties hereto shall mutually agree upon.
(ii) REVIEW AND MAINTENANCE OF FUND PROTOTYPE RETIREMENT PLANS OR
ACCOUNT MATERIALS.
(1) If one or more Fund provides or arranges for the provision of
retirement plan prototypes or account materials (the "Fund
Prototype(s)") for use in connection with a Retirement Account or
Accounts, such Funds will appoint an affiliate of Xxxx Xxxxx
Management, Inc. as custodian or trustee.
(2) Each such Fund agrees that its Fund Prototypes will comply
with applicable sections of the Internal Revenue Code of 1986, AS
amended (the "Code"), and regulations promulgated thereunder as in
effect at the time. Each such Fund will be responsible for
establishing, maintaining, and updating its Fund Prototypes in
compliance with the Code and all other applicable federal or state
law or regulations, when changes in the law require such updating,
and may rely on the provider of the Fund Prototypes to maintain
and update the Fund Prototypes.
(3) Each such Fund agrees that its Fund Prototypes are the
responsibility of the Fund and further agrees that it will
indemnify, defend, and hold harmless the Transfer Agent, its
affiliates, successors, representatives, and assigns from and
against any and all losses, damages, costs, charges, expenses,
including reasonable fees for counsel, taxes, penalties and
liabilities (collectively, "Losses") arising out of or
attributable to the use of a Fund Prototype by the Funds, its
agents, employees, representatives, or any other person acting on
the Fund's behalf to the extent the provider of the Fund Prototype
so indemnifies the Funds, except however to the extent that such
Losses arise out of or are attributable to the negligence, bad
faith, or willful misconduct of the Transfer Agent (or its agents,
affiliates, successors, or assigns), unless such negligence is a
result of complying with a Fund Prototype. This indemnification
obligation will survive termination of this Agreement.
(4) Each such Fund agrees that any modifications made by the Funds
to a Fund Prototype without the Transfer Agent's written consent
shall not increase the liabilities or responsibilities of the
Transfer Agent or that of such affiliate as custodian or limit the
Transfer Agent's ability or that of such affiliate to resign as
custodian as provider hereunder. The Fund will furnish the
Transfer Agent with a copy of each Fund Prototype. The Transfer
Agent or its affiliates shall not be required to review, comment,
or advise on such Fund Prototypes.
(p) GERMAN REGISTERED FUNDS. The Transfer Agent agrees to provide
certain services for Funds registered for sale in Germany, said
Funds and services as set forth on Schedule 1.1(p) attached
hereto.
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(q) Cooperate with each Fund by providing systems access, reports and
file transmissions that the Fund may use to monitor the sales
practices of such Fund in accordance with (a) procedures described
in the applicable Fund's prospectus and statement of additional
information, and (b) applicable federal and state securities laws
and the rules and regulations of applicable regulatory agencies
and authorities, such as the Securities and Exchange Commission
and the National Association of Securities Dealers, Inc. Such
sales practices shall included, but not be limited to, provisions
relating to frequent or short-term trading, and late trading.
(r) CLOSED-END FUND. The Transfer Agent agrees to provide the
following additional services for Castle Convertible Fund, Inc., a
closed-end fund:
(i) Act as agent for Shareholders pursuant to dividend
reinvestment plans, and other investment programs as amended from
time to time in accordance with the terms of the agreements
relating thereto to which the Transfer Agent is or will be a
party;
(ii) Receive all payments made to the Fund or the Transfer Agent
under any dividend reinvestment plan, direct stock purchase plan,
and other investment plans and make all payments required to be
made under such plans, including all payments required to be made
to the Fund.
1.2 ADDITIONAL SERVICES. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraph, the
Transfer Agent shall perform the following services:
(a) OTHER CUSTOMARY SERVICES. Perform the customary services of a
transfer agent, dividend disbursing agent, recordkeeper of certain
retirement plans and, as relevant, agent in connection with
accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining all
Shareholder accounts, including purging all closed accounts as the
Fund directs, preparing Shareholder meeting lists, Shareholder
reports and prospectuses to current Shareholders, withholding
taxes on U.S. resident and non-resident alien accounts, preparing
and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders,
preparing and mailing activity statements for Shareholders, and
providing Shareholder account information;
(b) CONTROL BOOK (ALSO KNOWN AS "SUPER SHEET"). Maintain a daily
record and produce a daily report for each Fund of all
transactions and receipts and disbursements of money and
securities and to use its best efforts to deliver a copy of such
report for the Fund for each business day to each Fund no later
than 9:00 AM Eastern Time, or such earlier time as each Fund may
reasonably require, on the next business day;
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(c) "BLUE SKY" REPORTING. Each open-end Fund shall (i) identify to the
Transfer Agent in writing those transactions and assets to be
treated as exempt from blue sky reporting for each state and (ii)
verify the establishment of transactions for each State on the
system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of the Transfer Agent
for the Fund's blue sky State registration status is solely
limited to the initial establishment of transactions subject to
blue sky compliance by the Fund and providing a system which will
enable the Fund to monitor the total number of Shares sold in each
State:
(d) NATIONAL SECURITIES CLEARING CORPORATION (THE "NSCC"). (i) accept
and effectuate the registration and maintenance of accounts
through Networking and the purchase, redemption, transfer and
exchange of shares in such accounts through Fund/SERV (Networking
and Fund/SERV being programs operated by the NSCC on behalf of
NSCC's participants, including the Funds), in accordance with,
instructions transmitted to and received by the Transfer Agent by
transmission from NSCC on behalf of broker-dealers and banks which
have been established by, or in accordance with the instructions
of authorized persons, as hereinafter defined on the dealer file
maintained by the Transfer Agent; (ii) issue instructions to
Fund's banks for the settlement of transactions between the Fund
and NSCC (acting on behalf of its broker-dealer and bank
participants); (iii) provide account and transaction information
from the affected Fund's records on DST Systems, Inc. computer
system TA2000 ("TA2000 System") in accordance with NSCC's
Networking and Fund/SERV rules for those broker-dealers; (iv)
maintain Shareholder accounts on TA2000 System through Networking;
and (v) maintain the current version of NSCC functionality and any
other future mutual fund processing capabilities provided by NSCC;
(e) SHAREHOLDER/BROKER SERVICES. Respond as appropriate to all
inquiries and communications from Shareholders/Brokers relating to
Shareholder accounts with respect to its duties hereunder and as
may be from time to time mutually agreed upon between the Transfer
Agent and each Fund. The Transfer Agent shall provide each Fund
with reports concerning shareholder inquiries and the responses
thereto by the Transfer agent, in such form and at such times as
are agreed to by the Fund and the Transfer Agent;
(f) NEW PROCEDURES. New procedures as to who shall provide certain of
these services in SECTION 1 may be established in writing from
time to time by agreement between each Fund and the Transfer
Agent. The Transfer Agent may at times perform only a portion of
these services and each Fund or its agent may perform these
services on each Fund's behalf;
(g) TELEPHONE SUPPORT SERVICES. If the parties elect to have the
Transfer Agent provide telephone suppon services under this
Agreement, the parties will agree to such services, fees and
sub-contracting as stated in Schedule 1.2(G) entitled "Telephone
Support Services" attached hereto;
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(h) ANTI-MONEY LAUNDERING ("AML") DELEGATION. If the Funds elect to
delegate to the Transfer Agent certain AML duties under this
Agreement, the parties will agree to such duties and terms as
stated in the attached schedule ("Schedule 1.2(h) entitled "AML
Delegation") which may be changed from time to time subject to
mutual written agreement between the parties. In consideration of
the performance of the duties by the Transfer Agent pursuant to
this section 1.2(h), each Fund agrees to pay the Transfer Agent
for the reasonable administrative expense that may be associated
with such additional duties in the amount as the parties may from
time to time agree in writing in accordance with SECTION 4 (Fees
and Expenses) below;
(i) RECORD KEEPING AND OTHER INFORMATION. (i) The Transfer Agent shall
create and maintain all necessary records in accordance with all
applicable law, rules and regulations, including but not limited
to, records of all issued and unpaid redemption checks, records
required by Section 31(a) of the Investment Company Act of 1940,
as amended (the "1940 Act"), and those records pertaining to the
various functions performed by the Transfer Agent under this
Agreement. All records shall be available for inspection and use
by the Funds during regular business hours. Where applicable, the
records shall be maintained by the Transfer Agent for the periods
and in the places required by Rule 31a-2 under the 1940 Act. (ii)
Upon reasonable notice by a Fund, the Transfer Agent shall make
available during regular business hours such of its facilities and
premises employed in connection with the performance of its duties
under this Agreement for reasonable visitation by the Fund, or any
other person retained by the Fund as may be necessary for the Fund
to evaluate the quality of the services performed by the Transfer
Agent pursuant hereto. The Transfer Agent will provide each Fund
with remote access to its various systems, including but not
limited to, TA2000, AWD, Power Select and DST vision. (iii) The
Transfer Agent agrees that all such records prepared or maintained
by the Transfer Agent hereunder are the property of the Fund and
will be preserved, maintained and made available for inspection
and use by the Fund in accordance with such Section and Rules, and
will be surrendered promptly to the Fund on and in accordance with
its request;
(j) CORPORATE ACTIONS. To the extent that a Fund elects to engage the
Transfer Agent to provide the following services, the Fund shall
engage the Transfer Agent to provide such services upon terms and
fees to be agreed upon by the parties: corporate actions
(including inter alia, odd lot buy backs, exchanges, mergers,
redemptions, subscriptions, capital reorganization, coordination
of post-merger services and special meetings); and
(k) In addition to the duties set forth herein, the Transfer Agent
shall perform such other duties and functions, and shall be paid
such amounts therefore, as may from time to time be agreed upon in
writing between the Fund and the Transfer Agent.
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2. THIRD PARTY ADMINISTRATORS FOR DEFINED CONTRIBUTION PLANS
2.1 One or more Funds may decide to make available to certain of their
customers a qualified plan program (the "Program") pursuant to which the
customers ("Employers") may adopt certain plans of deferred compensation
("Plan or Plans") for the benefit of the individual Plan participant (the
"Plan Participant"), such Plan(s) being qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended ("Code") and administered
by third party administrators which may be plan administrators as defined
in the Employee Retirement Income Security Act of 1974, as amended (the
"TPA(s)").
2.2 In accordance with the procedures established in the initial Schedule
2.1 entitled "Third Party Administrator Procedures", as may be amended by
the Transfer Agent and each Fund from time to time ("Schedule 2.1", the
Transfer Agent shall:
(a) Treat Shareholder accounts established by the Plans in the name of
the Trustees, Plans or TPA's as the case may be as omnibus
accounts;
(b) Maintain omnibus accounts on its records in the name of the TPA or
its designee as the Trustee for the benefit of the Plan; and
(c) Perform all services under Section 1 as Transfer Agent of the
Funds and not as a record-keeper for the Plans.
2.3 Transactions identified under SECTION 2 of this Agreement shall be
deemed exception services ("Exception Services") when such transactions:
(a) Require the Transfer Agent to use methods and procedures other
than those usually employed by the Transfer Agent to perform
services under Section 1 of this Agreement;
(b) Involve the provision of information to the Transfer Agent after
the commencement of the nightly processing cycle of the TA2000
System; or
(c) Require more manual intervention by the Transfer Agent, either in
the entry of data or in the modification or amendment of reports
generated by the TA2000 System than is usually required by
non-retirement plan and pre-nightly transactions.
3. SERVICE LEVELS
3.1 SERVICE LEVEL SCHEDULE. Schedule 3.1 to this Agreement specifies key
performance indicators and delivery benchmarks in respect of the services
to be provided by the Transfer Agent pursuant to this Agreement (the
"Services"), and reflects the performance goals of the parties from time
to time (the "Service Levels").
3.2 PERFORMANCE OF SERVICES; QUALITY LEVEL. The Transfer Agent shall provide
the Services (a) in a professional and workmanlike manner, (b) with
commercially reasonable care and
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skill, (c) with customer and technical support in accordance with the
standards set forth in Schedule 3.1 and (d) at a minimum, at the Service
Levels set forth in Schedule 3.1. The Transfer Agent understands that
timely performance by the Transfer Agent of all Services and timely
delivery of all deliverables required hereunder is required by each Fund.
3.3 ADJUSTMENT OF SERVICE LEVELS. Each Fund and the Transfer Agent may,
at any time upon notice to the other, initiate negotiations to review
and, upon written agreement by both the Transfer Agent's account manager
and each Fund's designated representative, amend Schedule 3.1 to alter
any Service Level which either party, in good faith, believes is
inappropriate at the time.
3.4 ROOT-CAUSE ANALYSIS. Without limiting each Fund's rights and remedies
hereunder, at law or in equity, Transfer Agent will use its best efforts
within three (3) business days of receipt of a notice from a Fund with
respect to any material failure by the Transfer Agent to provide the
Services at the appropriate Service Levels, the Transfer Agent shall, as
part of the Services, (a) perform a root-cause analysis to identify the
cause of such failure, (b) provide the Fund with a report detailing the
cause of, and procedure for correcting, such failure and (c) to the
extent possible correct such failure in accordance with the Service
Levels.
3.5 MEASUREMENT AND MONITORING. As part of the Services, the Transfer Agent
shall implement the necessary measurement and monitoring tools and
procedures required to measure and report the Transfer Agent's
performance of the Services against the applicable Service Levels. Such
measurement and monitoring shall permit reporting at a level of detail
sufficient to verify compliance with the Service Levels and shall be
subject to audit by each Fund in accordance with this Agreement. The
Transfer Agent shall provide each Fund with information and access to
such tools and procedures upon request, for purposes of verification, and
shall furnish each Fund with monthly reports setting forth the Transfer
Agent's performance of the Services against the applicable Service
Levels. Through the term of this Agreement, and as a part of the
Services, the Transfer Agent shall maintain and provide to each Fund (a)
all reports in content and format specified by each Fund and reasonably
agreed to by the Transfer Agent in writing from time to time, in both a
hardcopy and an electronic form and (b) such documentation and
information as may be reasonably requested by each Fund from time to time
in order to verify the accuracy of the reports. At each Fund's request,
the Transfer Agent shall promptly correct any material errors or
inaccuracies in the reports.
3.6 LIABILITY RELATING TO SERVICE LEVELS. Notwithstanding anything contained
in Sections 4.6 and 12.4(e) herein, the fact that the Transfer Agent has
met the Service Levels shall not relieve the Transfer Agent of any
liability that it might otherwise have under this Agreement in the
performance of its duties hereunder.
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4. FEES AND EXPENSES
4.1 FEE SCHEDULE. For the performance by the Transfer Agent pursuant to this
Agreement, each Fund agrees to pay the Transfer Agent an annual
maintenance fee for each Shareholder account as set forth in the attached
fee schedule ("Schedule 4.1"). Such fees and out-of-pocket expenses and
advances identified under SECTION 4.2 below may be changed from time to
time subject to mutual written agreement between each Fund and the
Transfer Agent.
4.2 OUT-OF-POCKET EXPENSES. In addition to the fee paid under SECTION 4.1
above, each Fund agrees to reimburse the Transfer Agent for out-of-pocket
expenses, including but not limited to: those arising in connection with
the German registered funds, escheatment processing, Literature Orders
and AWD licensing fees, confirmation statements, investor statements,
postage, long distance telephone calls, records retention, AMUCIP,
customized programming/enhancements requested in writing by the Fund,
NSCC charges, fax in line, state tax reporting, Fan Web, Fan Mail, TA
2000, federal wire fees, transcripts. microfilm, microfiche, hardware at
the Fund's facilities, telecommunications/network configuration, mailing
and tabulating proxies, records storage, or advances incurred by the
Transfer Agent for the items set out in Schedule 3.1 attached hereto. In
addition, any other expenses incurred by the Transfer Agent at the
request or with the consent of the Fund, will be reimbursed by the Fund.
4.3 POSTAGE. Postage for mailing of dividends, proxies, Fund reports and
other mailings to all Shareholder accounts shall be advanced to the
Transfer Agent by the Funds at least seven (7) days prior to the mailing
date of such materials.
4.4 INVOICES. Each Fund agrees to pay all of its fees and reimbursable
expenses within thirty (30) days following the receipt of the respective
invoice, except for any fees or expenses that are subject to good faith
dispute. In the event of such a dispute, the Fund may only withhold that
portion of the fee or expense subject to the good faith dispute. The Fund
shall notify the Transfer Agent in writing within twenty-one (21)
calendar days, following the receipt of each invoice, if the Fund is
disputing any amounts in good faith. If the Fund does not provide such
notice of dispute within the required time, the invoice will be deemed
accepted by the Fund. The Fund shall settle such disputed amounts within
five (5) 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.
4.5 LATE PAYMENTS. If any undisputed amount in an invoice of the Transfer
Agent (for fees or reimbursable expenses) is not paid when due, the Fund
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
agreed to by the Fund and the Transfer Agent) on the first day of
publication during the month when such amount was
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due. Notwithstanding any other provision hereof, such interest rate shall
be no greater than permitted under applicable provisions of Massachusetts
law.
4.6 COST OF LIVING ADJUSTMENT. Following the Initial Term, unless the parties
shall otherwise agree and provided that the service mix and volumes
remain consistent as previously provided in the Initial Term, the total
fee for all services shall equal the fee that would be charged for the
same services based on a fee rate (as reflected in a fee rate schedule)
increased by the percentage increase for the twelve-month period of such
previous calendar year of the Consumer Price Index for Urban Wage Earners
and Clerical Workers, for the Boston area, as published bimonthly by the
United States Department of Labor, Bureau of Labor Statistics, or, in the
event that publication of such Index is terminated, any successor or
substitute index, appropriately adjusted, acceptable to both parties.
5. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT.
The Transfer Agent represents and warrants to the Funds that:
5.1 It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
5.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
5.3 It is empowered under applicable laws and by its Charter and By-Laws to
enter into and perform this Agreement.
5.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
5.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
5.6 The various procedures and systems which it has implemented with regard
to safeguarding from loss or damage attributable to fire, theft or any
other cause, the Funds' records and other data and the Transfer Agent's
records, data equipment facilities and other property used in the
performance of its obligations hereunder are adequate and that it will
make such changes therein from time to time as may be reasonably
necessary for the secure performance of its obligations thereunder.
6. REPRESENTATIONS AND WARRANTIES OF THE FUNDS.
Each Fund represents and warrants to the Transfer Agent that:
6.1 It is a business trust duly organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts with the exception of
Castle Convertible Fund, Inc.
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which is a corporation duly organized and existing and in good standing
under the laws of the State of Delaware.
6.2 It is empowered under applicable laws and by the applicable Articles of
Incorporation or Declaration of Trust, as the case may be, and By-Laws to
enter into and perform this Agreement.
6.3 All corporate proceedings required by said Articles of Incorporation or
Declaration of Trust, as the case may be, and By-Laws have been taken to
authorize it to enter into and perform this Agreement.
6.4 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, with the exception
of Castle Convertible Fund, Inc., which is a closed-end management
investment company registered under the Investment Company Act of 1940.
6.5 A registration statement under the Securities Act of 1933, as amended, is
currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with
respect to all Shares of each of the Funds being offered for sale.
7. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM COMMERCIAL
CODE
7.1 OBLIGATION OF SENDER. The Transfer Agent is authorized to promptly debit
the appropriate Fund account(s) upon the receipt of a payment order in
compliance with the selected security procedure (the "Security
Procedure") chosen for funds transfer and in the amount of money that the
Transfer Agent has been instructed by the Fund to transfer. The Transfer
Agent shall execute payment orders in compliance with the Security
Procedure and with the Fund instructions on the execution date provided
that such payment order is received by the customary deadline for
processing such a request, unless the payment order specifies a later
time. All payment orders and communications received after the customary
deadline will be deemed to have been received the next business day.
7.2 SECURITY PROCEDURE. Each Fund acknowledges that the Security Procedure it
has designated on the Fund Selection Form was selected by the Fund from
security procedures offered by the Transfer Agent. The Fund shall
restrict access to confidential information relating to the Security
Procedure to authorized persons as communicated to the Transfer Agent in
writing. The Fund must notify the Transfer Agent immediately if it has
reason to believe unauthorized persons may have obtained access to such
information or of any change in the Fund's authorized personnel. The
Transfer Agent shall verify the authenticity of all Fund instructions
according to the Security Procedure.
7.3 ACCOUNT NUMBERS. The Transfer Agent shall process all payment orders on
the basis of the account number contained in the payment order. In the
event of a discrepancy between any name indicated on the payment order
and the account number, the account number shall take precedence and
govern.
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7.4 REJECTION. The Transfer Agent reserves the right to decline to process or
delay the processing of a payment order which (a) is in excess of the
collected balance in the account to be charged at the time of the
Transfer Agent's receipt of such payment order; (b) if initiating such
payment order would cause the Transfer Agent, in the Transfer Agent's
sole judgment, to exceed any volume, aggregate dollar, network, time,
credit or similar limits which are applicable to the Transfer Agent; or
(c) if the Transfer Agent, in good faith, is unable to satisfy itself
that the transaction has been properly authorized.
7.5 CANCELLATION AMENDMENT. The Transfer Agent shall use reasonable efforts
to act on all authorized requests to cancel or amend payment orders
received in compliance with the Security Procedure provided that such
requests are received in a timely manner affording the Transfer Agent
reasonable opportunity to act. However, the Transfer Agent assumes no
liability if the request for amendment or cancellation cannot be
satisfied unless the Transfer Agent has acted in bad faith, with
negligence or willful misconduct.
7.6 ERRORS. The Transfer Agent shall assume no responsibility for failure to
detect any erroneous payment order provided that the Transfer Agent
complies with the payment order instructions as received and the Transfer
Agent complies with the Security Procedure unless the Transfer Agent has
acted in bad faith, with negligence or willful misconduct. The Security
Procedure is established for the purpose of authenticating payment orders
only and not for the detection of errors in payment orders.
7.7 INTEREST. The Transfer Agent shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized
payment order, unless the Transfer Agent is notified of the unauthorized
payment order within thirty (30) days of notification by the Transfer
Agent of the acceptance of such payment order.
7.8 ACH CREDIT ENTRIES/PROVISIONAL PAYMENTS. When a Fund initiates or
receives Automated Clearing House credit and debit entries pursuant to
these guidelines and the rules of the National Automated Clearing House
Association and the New England Clearing House Association, the Transfer
Agent will act as an Originating Depository Financial Institution and/or
Receiving Depository Financial Institution, as the case may be, with
respect to such entries. Credits given by the Transfer Agent with respect
to an ACH credit entry are provisional until the Transfer Agent receives
final settlement for such entry from the Federal Reserve Bank. If the
Transfer Agent does not receive such final settlement, the Fund agrees
that the Transfer Agent shall receive a refund of the amount credited to
the Fund in connection with such entry provided that the Transfer Agent
has acted in good faith and without negligence or willful misconduct, and
the party making payment to the Fund via such entry shall not be deemed
to have paid the amount of the entry.
7.9 CONFIRMATION. Confirmation of Transfer Agent's execution of payment
orders shall ordinarily be provided within twenty four (24) hours notice
of which may be delivered through the Transfer Agent's proprietary
information systems, or by facsimile or call-
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back. A Fund must report any objections to the execution of an order
within thiny (30) days.
8. DATA ACCESS AND PROPRIETARY INFORMATION.
8.1 Each Fund and the Transfer Agent agree that the Proprietary Information
(defined below) and the contents of this Agreement (collectively the
"Confidential Information") are confidential information of the Funds and
the Transfer Agent and their respective licensors. Each Fund and the
Transfer Agent shall exercise at least the same degree of care, but not
less than reasonable care, to safeguard the confidentiality of the
Confidential Information of the other as it would exercise to protect its
own confidential information of a similar nature. The Funds and the
Transfer Agent shall not duplicate, sell or disclose to others the
Confidential Information of the other, in whole or in part, without the
prior written permission of the other party. The Funds and the Transfer
Agent may, however, disclose Confidential Information to their respective
parent corporation, their respective affiliates, their subsidiaries and
affiliated companies and employees, provided that each shall use
reasonable efforts to ensure that the Confidential Information is not
duplicated or disclosed in breach of this Agreement. Proprietary
Information means:
(a) any data or information that is competitively sensitive material,
and not generally known to the public, including, but not limited
to, information about product plans, marketing strategies,
finance, operations, customer relationships, customer lists,
customer profiles, sales estimates, business plans, and internal
performance results relating to the past, present or future
business activities of the Funds or the Transfer Agent, their
respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of them;
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable
and secret in the sense that its confidentiality affords the Funds
or the Transfer Agent a competitive advantage over its
competitors; and
(c) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code,
flow charts, databases, inventions, know-how, show-how and trade
secrets, whether or not patentable or copyrightable.
8.2 Without limiting the foregoing, each Fund agrees for itself and its
employees and agents to:
(a) Use such Proprietary Information (i) solely on the Fund's
computers, or (ii) solely from equipment at the location agreed to
between the Fund and the Transfer Agent and (iii) solely in
accordance with the Transfer Agent's applicable user
documentation;
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(b) Refrain from copying or duplicating in any way (other than in the
normal course of performing processing on the Fund's computer(s)),
the Proprietary Information;
(c) Refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently
obtained, to inform in a timely manner of such fact and dispose of
such information in accordance with the: Transfer Agent's
instructions;
(d) Refrain from causing or allowing information transmitted from the
Transfer Agent's computer to the Fund's terminal to be
retransmitted to any other computer terminal or other device
except as expressly permitted by the Transfer Agent (such
permission not to be unreasonably withheld);
(e) Allow the Fund to have access only to those authorized
transactions as agreed to between the Fund and the Transfer Agent;
and
(f) Honor all reasonable written requests made by the Transfer Agent
to protect at the Transfer Agent's expense the rights of the
Transfer Agent in Proprietary Information at common law, under
federal copyright law and under other federal or state law.
8.3 Proprietary Information shall not include all or any portion of any of
the foregoing items that: (i) are or become publicly available without
breach of this Agreement; (ii) are released for general disclosure by a
written release by the Transfer Agent; or (iii) are already in the
possession of the receiving party at the time of receipt without
obligation of confidentiality or breach of this Agreement.
8.4 The Transfer Agent and each Fund 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 Fund, used or gained by the transfer agent or the Fund during
performance under this Agreement. Each Fund 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
Fund and their successors and assigns. In the event of breach of the
foregoing by either party, the remedies provided by Section 8.5 shall be
available to the party whose confidential information is disclosed. The
above prohibition of disclosure shall not apply to the extent that the
Transfer Agent must disclose such data to its sub-contractor or a Fund's
agent for purposes of providing services under this Agreement.
8.5 Each Fund and the Transfer Agent acknowledge that their obligation to
protect each other's Proprietary Information is essential to their
business interests and that the disclosure of such Proprietary
Information in breach of this Agreement would cause the
15
non-breaching party immediate, substantial and irreparable harm, the
value of which would be extremely difficult to determine. Accordingly,
each Fund and the Transfer Agent agree that, in addition to any other
remedies that may be available in law, equity, or otherwise for the
disclosure or use of the Proprietary Information in breach of this
Agreement, the non-breaching party shall be entitled to seek and obtain a
temporary restraining order, injunctive relief, or other equitable relief
against the continuance of such breach.
8.6 If any Fund or the Transfer Agent becomes legally compelled (including by
deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, the Fund will provide the Transfer Agent or vice versa, as
the case may be, with prompt prior written notice of such requirements so
that the Fund or the Transfer Agent may seek a protective order or other
appropriate remedy. If such protective order or other remedy is not
obtained, the Fund and the Transfer Agent agree to disclose only that
portion of the Confidential Information which they are advised by opinion
of counsel is legally required to be disclosed and to take all reasonable
steps to preserve the confidentiality of the Confidential Information
(including by obtaining an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Confidential
Information). In addition, each Fund and the Transfer Agent agree to not
oppose any action (and will, if and to the extent requested by the Fund
or the Transfer Agent, cooperate with, assist and join with the Fund or
the Transfer Agent, as the case may be, at the other party's expense, in
any reasonable action) by the other party to obtain an appropriate
protective order or other reliable assurance that confidential treatment
will be accorded the Confidential Information.
8.7 Notwithstanding anything herein to the contrary, the Transfer Agent shall
not, with respect to any "non-public personal information" (as such term
is defined in Regulation S-P) pertaining to the Funds' investors,
disclose such information to any unaffiliated third party or use such
information other than for the purpose of providing the services
contemplated by this Agreement, or otherwise permitted under Regulation
S-P,or under another agreement covering such information.
8.8 If a Fund notifies the Transfer Agent that any of the Data Access
Services do not operate in material compliance with the most recently
issued user documentation for such services, 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 Data
Access Services are solely responsible for the contents of such data and
the Fund 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. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND
SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN
AS IS, AS AVAILABLE BASIS. THE TRANSFER AGENT EXPRESSLY DISCLAIMS ALL
WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING,
16
BUT NOT LIMITED TO, THE IMPLIED WARRANTEES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE.
8.9 If the transactions available to a Fund include the ability to originate
electronic instructions to the Transfer Agent in order to (i) effect the
transfer or movement of cash or Shares 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
instruction without undertaking any further inquiry as long as such
instruction is undertaken in conformity with Security Procedures.
8.10 Each of the Funds and the Transfer Agent shall take reasonable efforts to
advise its employees of their obligations pursuant to this Section 8. The
obligations of this Section shall survive any earlier termination of this
Agreement.
9. INDEMNIFICATION
9.1 Each Fund shall indemnify the Transfer Agent and the Transfer Agent shall
indemnify each Fund (the "Indemnified Party") from and against, any and
all losses, damages, costs, charges, reasonable counsel fees and
expenses, payments, expenses and liability arising out of or attributable
to any claim, demand, action or suit or other proceeding (a "Claim")
relating to this Agreement or such Indemnified Party's duties under this
Agreement, including the breach of any representation, covenant, warranty
or agreement set forth herein, unless such Claim has resulted from
negligence or willful misconduct on the part of the Indemnified Party in
the performance of its duties hereunder. In addition, the Transfer Agent
shall not be responsible for, and the applicable Fund shall indemnify and
hold the Transfer Agent harmless from and against, any Claim which may be
asserted against the Transfer Agent or for which the Transfer Agent may
be held to be liable arising out of or attributable to any of the
following:
(a) All actions of the Transfer Agent or its agents or subcontractors
required to be taken pursuant to this Agreement (including the defense of
any law suit in which the Transfer Agent or affiliate is a named party),
provided that such actions are taken in good faith and without negligence
or willful misconduct;
(b) The Fund's lack of good faith, negligence or willful misconduct in
performing its responsibilities under the terms of this Agreement;
(c) Provided that the Transfer Agent has acted in good faith and without
negligence or willful misconduct, the reliance upon, and any subsequent
use of or action taken or omitted, by the Transfer Agent, or its agents
or subcontractors on: (i) any information, records, documents, data,
stock certificates or services, which are received by the Transfer Agent
or its agents or subcontractors by machine readable input, facsimile, CRT
data entry, electronic instructions or other similar means authorized by
the Fund, and which have been prepared, maintained or performed by the
Fund or any other person or firm on behalf of the Fund including but not
limited to any broker-dealer, TPA or previous transfer agent: (ii) any
instructions or requests of the Fund or any of its officers;
17
(iii) any instructions or opinions of legal counsel with respect to any
matter arising in connection with the services to be performed by the
Transfer Agent under this Agreement which are provided to the Transfer
Agent after consultation with such legal counsel; or (iv) any paper or
document, reasonably believed to be genuine, authentic, or signed by the
proper person or persons;
(d) The offer or sale of Shares in violation of federal or state
securities laws or regulations requiring that such Shares be registered
or in violation of any stop order or other determination or ruling by any
federal or any state agency with respect to the offer or sale of such
Shares;
(e) In the absence of negligence, bad faith or willful misconduct by the
Transfer Agent, the negotiation and processing of any checks including
without limitation for deposit into the Fund's demand deposit account
maintained by the Transfer Agent;
(f) Upon a Fund's request entering into any agreements required by the
NSCC for the transmission of Fund or Shareholder data through the NSCC
clearing systems; or
(g) Upon a Fund's request, entering into any sub-servicing agreements to
service certain German registered Funds, as set forth on Schedule 1.l(p).
9.2 In order that the indemnification provisions contained in this Section 9
shall apply, upon the assertion of a claim for which the Indemnifying
Party may be required to indemnify the Indemnified Party, the Indemnified
Party shall promptly notify the Indemnifying Party of such assertion, and
shall keep the Indemnifying 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 in 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 the Indemnified Party except with the
Indemnifying Party's prior written consent.
10. STANDARD OF CARE
The Transfer Agent shall at all times act in good faith and agrees to use
its best efforts within commercially reasonable limits to ensure 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,
including encoding and payment processing errors, unless said errors are
caused by its negligence, bad faith, or willful misconduct or that of its
employees or agents. The parties agree that any encoding or payment
processing errors shall be governed by this standard of care and Section
4-209 of the Uniform Commercial Code is superseded by SECTION 10 of this
Agreement. This standard of care also shall apply to Exception Services,
as defined in Section 2.3 herein, but such application shall take into
consideration the manual processing involved in, and time-sensitive
nature of, Exception Services. Notwithstanding the foregoing, the
Transfer Agent's aggregate liability during any term of this Agreement
with respect to, arising from or arising in
18
connection with this Agreement, or from all services provided or omitted
to be provided by the Transfer Agent under this Agreement, whether in
contract, or in tort, or otherwise, is limited to, and shall not exceed,
the aggregate of the amounts actually received hereunder by the Transfer
Agent as fees and charges, but not including reimbursable expenses, with
respect to the applicable Fund, during the six (6) calendar months
immediately preceding the event for which recovery from the Transfer
Agent is being sought.
11. COVENANTS OF THE FUNDS AND THE TRANSFER AGENT
11.1 Each Fund shall promptly furnish to the Transfer Agent the following:
(a) A certified copy of the resolution of the Board of Trustees or
Directors of the Fund, as applicable, authorizing the appointment
of the Transfer Agent and the execution and delivery of this
Agreement.
(b) A copy of the Declaration of Trust or Articles of Incorporation,
as applicable, and By-Laws of the Fund and all amendments thereto.
(c) A certificate as to the Shares authorized, issued and outstanding
as well as any authorized but unissued shares reserved for
specific purposes.
11.2 The Transfer Agent hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to each Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if
any, and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
11.3 In case of any requests or demands for the inspection of Shareholder
records of a Fund, the Transfer Agent will notify the Fund of such
request and secure written instructions as to the handling of such
request, unless in its reasonable opinion the Transfer Agent believes it
is legally required to allow the inspection of the records.
12. TERMINATION OF AGREEMENT.
12.1 TERM. The initial term of this Agreement (the "Initial Term") shall be
five years from the date first stated above unless terminated pursuant to
the provisions of this SECTION 12. Unless a party gives written notice to
the other party one hundred and twenty (120) days before the expiration
of the Initial Term or any Renewal Term, this Agreement will renew
automatically from year to year each such year-to-year renewal term a
"Renewal Term." One hundred and twenty (120) days before the expiration
of the Initial Term or a Renewal Term the parties to this Agreement will
agree upon a Fee Schedule for the upcoming Renewal Term. Otherwise, the
fees shall be increased pursuant to SECTION 4.6 of this Agreement.
Notwithstanding the termination or non-renewal of this Agreement, the
terms and conditions of this Agreement shall continue to apply until the
completion of Deconversion, defined below.
19
12.2 DECONVERSION. In the event that this Agreement is terminated or not
renewed with respect to a Fund, the Transfer Agent agrees that, in order
to provide for uninterrupted service to the Funds, the Transfer Agent, at
the Fund's request, shall offer reasonable assistance in converting or
transferring the Fund's records from the Transfer Agent's systems or
facilities to whatever services, systems or facilities are designated by
the Fund (the "Deconversion") (subject to the recompense of the Transfer
Agent for such assistance at its standard rates and fees in effect at the
time within a reasonable time frame agreed to by the parties). As used
herein "reasonable assistance" and "transitional assistance" shall not
include requiring the Transfer Agent (i) to assist any new service or
system provider to modify, to alter, to enhance, or to improve such
provider's system, or to provide any new functionality to such provider's
system, (ii) to disclose any protected information of the Transfer Agent,
or (iii) to develop Deconversion software, to modify any of the Transfer
Agent's software, or to otherwise alter the format of the data as
maintained on any provider's systems.
12.3 EARLY TERMINATION. Should services be converted to a successor service
provider prior to the expiration of the Initial Term, then the remaining
Funds that are parties to the Agreement will pay to the Transfer Agent an
amount equal to the Transfer Agent's cost for the initial conversion and
implementation of the remaining Funds, pro rated among the number of
accounts remaining for the respective Fund, which will be subject to a
pro rata reduction over the Initial Term, on the date notice of
termination was given to the Transfer Agent, and the payment of all fees
to the Transfer Agent as set forth herein shall be accelerated to the
business day immediately prior to the Deconversion or termination of
services.
12.4 TERMINATION BY EACH FUND. Each Fund may terminate this Agreement and the
appointment of the Transfer Agent with immediate effect and without any
penalty at any time if:
(a) The Transfer Agent shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or
against the Transfer Agent seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property; or the Transfer Agent shall take any corporate action to
authorize any of the preceding actions;
(b) With respect to any particular Fund, such Fund has substantially
liquidated or distributed its assets to Shareholders or a
successor following a vote of such Shareholders or other action to
dissolve the Fund;
20
(c) The Transfer Agent shall breach in any material respect any
representation, warranty or covenant set forth in this Agreement;
(d) A Change of Control shall occur with respect to the Transfer Agent
or Xxxx Xxxxx Management Inc. "Change in Control" means (i) a
consolidation or merger of an entity, or its parent corporation,
into or with any other entity where the original entity, or its
parent corporation, is not the surviving entity (but excluding any
such merger or consolidation of any entity as to which at least
fifty percent (50%) of the outstanding voting securities of the
surviving entity are owned by the owners of the original entity.
or its parent corporation, immediately prior to the merger or
consolidation), (ii) a sale, transfer or other disposition of all,
or substantially all, of the assets of an entity, or its parent
corporation, in a single transaction or series of related
transactions, to any person, or group of related persons, not
controlled by the transferring entity or its parent corporation or
(iii) the acquisition by any person of beneficial ownership of
more than fifty percent (50%) of the outstanding shares of stock
of an entity or its parent corporation; or
(e) The Transfer Agent has consistently failed to meet the Service
Levels;
12.5 EXPIRATION OF TERM. During the Initial Term or Renewal Term, whichever
currently is in effect, should any Fund or the Transfer Agent exercise
its right to terminate, all out-of-pocket expenses or costs associated
with the movement of records and material will be borne by the party
terminating this Agreement. Additionally, the Transfer Agent reserves the
right to charge for any other reasonable expenses associated with such
termination.
12.6 CONFIDENTIAL INFORMATION. Upon termination of this Agreement with respect
to a Fund, the Funds and the Transfer Agent shall return to the other
party all copies of confidential or proprietary materials or information
received from such other party hereunder, other than materials or
information required to be retained by such party under applicable laws
or regulations.
12.7 UNPAID INVOICES. The Transfer Agent may terminate this Agreement with
respect to a Fund immediately upon an unpaid invoice payable by the Fund
to the Transfer Agent being outstanding for more than ninety (90) days,
except with respect to any amount subject to a good faith dispute within
the meaning of SECTION 4.4 of this Agreement.
12.8 BANKRUPTCY. Each Fund and the Transfer Agent party hereto may terminate
this Agreement by notice to the other party, effective at any time
specified therein, in the event that (a) the other party ceases to carry
on its business or (b) an action is commenced by or against the other
party under Title 11 of the United States Code or a receiver, conservator
or similar officer is appointed for the other party and such suit,
conservatorship or receivership is not discharged within thirty (30)
days.
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13. ASSIGNMENT AND THIRD PARTY BENEFICIARIES
13.1 Except as provided in SECTION 14.1 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by any party without the
written consent of the counterparty. Any attempt to do so in violation of
this Section shall be void. Unless specifically stated to the contrary in
any written consent to an assignment, no assignment will release or
discharge the assignor from any duty or responsibility under this
Agreement.
13.2 Except as explicitly stated elsewhere in this Agreement, nothing under
this Agreement shall be construed to give any rights or benefits in this
Agreement to anyone other than the Transfer Agent and the Funds, and the
duties and responsibilities undertaken pursuant to this Agreement shall
be for the sole and exclusive benefit of the Transfer Agent and the
Funds. This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
13.3 This Agreement does not constitute an agreement for a partnership or
joint venture between the Transfer Agent and any Fund or Funds. Other
than as provided in Section 14.1 and Schedule 1.2(f), neither the Funds
nor the Transfer Agent shall make any commitments with third parties that
are binding on the other party without the other party's prior written
consent.
14. SUBCONTRACTORS
14.1 The Transfer Agent may, without further consent on the part of a Fund,
subcontract for the performance hereof, with respect to that Fund, with
(i) Boston Financial Data Services, Inc., a Massachusetts corporation
("Boston Financial") which is duly registered as a transfer agent
pursuant to Section 17A(c)(2) of the Securities Exchange Act of 1934, as
amended, (ii) a Boston Financial subsidiary duly registered as a transfer
agent, (iii) a Boston Financial affiliate duly registered as a transfer
agent, (iv) EquiServe Limited Partnership or its successor; provided,
however, that the Transfer Agent shall be fully responsible to each Fund
for the acts and omissions of Boston Financial or its subsidiary or
affiliate or of EquiServe Limited Partnership or its successor as it is
for its own acts and omissions and/or (v) Continental Funds Services, its
successors or affiliates pursuant to an sub-servicing agreement which the
Transfer Agent has agreed to entered into at the direction of the Funds.
The Transfer Agent may not, without the prior written consent of each
Fund, subcontract for the performance of services hereunder to any party
other than those listed in this paragraph.
14.2 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, Federal Express, United Parcel
Service, the U.S. Mails, the NSCC and telecommunication companies,
provided, if the Transfer Agent selected such company, the Transfer Agent
shall have exercised due care in selecting the same.
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15. MISCELLANEOUS
15.1 AMENDMENT. This Agreement may be amended or modified, with respect to a
Fund, by a written agreement executed by the parties and authorized or
approved by a resolution of the Board of Trustees or Directors, as
applicable, of the Fund.
15.2 MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of
The Commonwealth of Massachusetts.
15.3 FORCE MAJEURE. In the event that a Fund or the Transfer Agent is unable
to perform its obligations under the terms of this Agreement because of
acts of God, strikes, equipment or transmission failure or damage
reasonably beyond its control, or other causes reasonably beyond its
control, such party shall not be liable for damages to the other for any
damages resulting from such failure to perform or otherwise from such
causes.
15.4 CONSEQUENTIAL DAMAGES. Neither any Fund nor the Transfer Agent shall be
liable to each other for special, indirect or consequential damages under
any provision of this Agreement or for any special, indirect or
consequential damages arising out of any act or failure to act hereunder.
15.5 SURVIVAL. All provisions regarding indemnification, warranty, liability,
and limits thereon, and confidentiality and/or protections of proprietary
rights and trade secrets shall survive the termination of this Agreement.
15.6 SEVERABILITY. If any provision or provisions of this Agreement shall be
held invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
15.7 PRIORITIES CLAUSE. 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.
15.8 WAIVER. No waiver by any party of any breach or default of any of the
covenants or conditions herein contained and performed by the other party
shall be construed as a waiver of any succeeding breach of the same or of
any other covenant or condition.
15.9 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.
15.10 COUNTERPARTS. This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
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15.11 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules, exhibits,
attachments and amendments hereto may be reproduced by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other
similar process. The Funds and the Transfer Agent each agree that any
such reproduction shall be admissible in evidence as the original itself
in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party
in the regular course of business, and that any enlargement, facsimile or
further reproduction shall likewise be admissible in evidence.
15.12 NOTICES. All notices and other communications as required or permitted
hereunder shall be in writing and sent by first class mail, postage
prepaid, addressed as follows or to such other address or addresses of
which the respective party shall have notified the other.
(a) If to State Street Bank and Trust Company, to:
Boston Financial Data Services, Inc.
0 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Legal Department
Facsimile: 000-000-0000
(b) If to a Fund, to:
(Name of Fund)
00 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Legal Department
Facsimile: 000-000-0000
15.13 DISCLAIMER OF TRUSTEE OR SHOREHOLDER LIABILITY. The Transfer Agent
understands and agrees that the obligations of each Fund under this
Agreement that is organized as a Massachusetts business trust are not
binding upon any Trustee or shareholder of that Fund personally, hut bind
only the Fund and the Fund's property; the Transfer Agent represents that
it has notice of the provisions of the Declaration of Trust of each such
Fund disclaiming Trustee or shareholder liability for acts or obligations
of the Fund.
16. ADDITIONAL FUNDS.
In the event that a Fund establishes one or more series of Shares, in
addition to those listed on the attached Schedule A, with respect to
which it desires to have the Transfer Agent render services as transfer
agent under the terms hereof, it shall so notify the Transfer Agent in
writing to the effect that the Fund appoints the Transfer Agent as
transfer agent for the new series. The notice must be received by the
Transfer Agent within a reasonable period of time prior to the
commencement of operations of the new series in order to allow the
Transfer Agent in the ordinary course of its business to
24
prepare to perform its duties for the new series. Such series of Shares
shall become a Portfolio hereunder.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
STATE STREET BANK AND TRUST THE XXXXX AMERICAN FUND
COMPANY
By: /s/ Xxxxxx X. Xxxxxx By:
--------------------------
Name: Xxxxxx X. Hoooley Name: Xxxxxxxxx X. Xxxx
Title: Executive Vice President Title: Treasurer
Attest: /s/ Xxxxxx Xxxxxx Attest:
Name: Xxxxxx Xxxxxx Name: Xxxxxxxxx X. Xxxx
THE XXXXX INSTITUTIONAL FUNDS
By:
Name: Xxxxxxxxx X. Xxxx
Title: Treasurer
Attest:
Name: Xxxxxxxxx X. Xxxx
SPECTRA FUND
By:
Name: Xxxxxxxxx X. Xxxx
Title: Treasurer
Attest:
Name: Xxxxxxxxx X. Xxxx
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
STATE STREET BANK AND TRUST THE XXXXX AMERICAN FUND
COMPANY
By: By: /s/ Xxxxxxxxx X. Xxxx
Name: Name: Xxxxxxxxx X. Xxxx
Title: Title: Treasurer
Attest: Attest: /s/ Xxxxxxxxx X. Xxxx
Name: Name: Xxxxxxxxx X. Xxxx
THE XXXXX INSTITUTIONAL FUNDS
By: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
Title: Treasurer
Attest: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
SPECTRA FUND
By: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
Title: Treasurer
Attest: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
27
THE CHINA-U.S. GROWTH FUND
By: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
Title: Treasurer
Attest: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
CASTLE CONVERTIBLE FUND, INC.
By: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
Title: Treasurer
Attest: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
THE XXXXX FUNDS
By: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
Title: Treasurer
Attest: /s/ Xxxxxxxxx X. Xxxx
Name: Xxxxxxxxx X. Xxxx
28
SCHEDULE A
The Xxxxx Funds
Xxxxx Balanced Fund
Xxxxx Capital Appreciation Fund
Xxxxx Health Sciences Fund
Xxxxx Large Cap Growth Fund
Xxxxx XxxXxx Growth Fund
Xxxxx SmallCap & MidCap Growth Fund
Xxxxx SmallCap Growth Fund
Xxxxx Money Market Fund
The Xxxxx American Fund
Xxxxx American Balanced Portfolio
Xxxxx American Growth Portfolio
Xxxxx American Income & Growth Portfolio
Xxxxx American Leveraged All-Cap Portfolio
Xxxxx American MidCap Growth Portfolio
Xxxxx American Small Capitalization Portfolio
The Xxxxx Institutional Funds
Xxxxx Balanced Institutional Fund
Xxxxx Capital Appreciation Institutional Fund
Xxxxx LargeCap Growth Institutional Fund
Xxxxx XxxXxx Growth Institutional Fund
Xxxxx SmallCap Growth Institutional Fund
Xxxxx Socially Responsible Growth lnstitutional Fund
Spectra Fund
The China-U.S. Growth Fund
Castle Convertible Fund, Inc.
SCHEDULE 1.2(g)
TELEPHONE SUPPORT FEES AND SERVICES
Dated_____________________
a. SERVICES
i. Telephone Support Functions
1. Answer telephone inquiries from 8:30 a.m. to 7 p.m. Boston time
Monday through Friday, except New York Stock Exchange holidays,
from existing customers and prospective customers of the Fund for
sales literature.
2. Answer questions to the extent that such questions are
answerable based upon the information supplied to the Transfer
Agent by the Fund.
3. The Transfer Agent will receive calls and take oral requests
from shareholders and brokers of record of the Fund. Calls and
oral requests to be answered by the Transfer Agent include:
telephone redemptions, telephone purchases, account maintenance,
telephone exchanges, confirmed transactions, account balances and
general inquiries. Some inquiries may result in research which
will be done by the Transfer Agent. Calls relating to matters not
described in the previous sentence, or to the extent questions
cannot be answered based upon information supplied to the Transfer
Agent by the Funds, may be referred directly to the Fund.
ii. Maintain prospect detail information for six (6) months
thereafter, and provide such information to the Funds in the form
that the Funds may reasonably request;
iii. Send any and all orders for literature from the Transfer Agent to
the Fund's fulfillment vendor a minimum of one transmission per
day at a mutually agreed upon time;
iv. Provide the Fund with monthly telephone reports detailing the
calls received, abandon rate, calls to the VRU and Service Factor
during the monthly period;
v. Provide the Fund with monthly conversion reports as selected by
the Funds from DST's standard report package.
b. SUBCONTRACTORS
i. The Transfer Agent may, with consent on the part of the Fund,
subcontract ministerial telephone support services for the
performance hereof.
c. FEES
See Schedule 4.1
SCHEDULE 1.2(h)
AML DELEGATION
1. Delegation. In connection with the enactment of the Uniting and
Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 and the regulations
promulgated thereunder (collectively, the "USA PATRIOT Act"), the Funds
have developed and implemented a written anti-money laundering program
(the "AML Program"), which is designed to satisfy the requirements of the
USA PATRIOT Act. Under the USA PATRIOT Act, a mutual fund can elect to
delegate certain duties with respect to the implementation and operation
of its AML Program to a service provider, including its transfer agent.
Each Fund is desirous of having the Transfer Agent perform certain
delegated duties pursuant to the AML Program and the Transfer Agent
desires to accept such delegation.
2. Limitation on Delegation. Each Fund acknowledges and agrees that in
accepting the delegation hereunder, the Transfer Agent is agreeing to
perform only those duties that have been expressly delegated on this
Schedule 1.2(h) (the "Delegated Duties"), as may be amended from time to
time, and is not undertaking and shall not be responsible for any other
aspect of the AML Program or for the overall compliance by the Fund with
the USA PATRIOT Act or for any other matters that have not been delegated
hereunder. Additionally, the parties acknowledge and agree that the
Transfer Agent shall only be responsible for performing the Delegated
Duties with respect to the ownership of, and transactions in, shares in
the Funds for which the Transfer Agent maintains the applicable
shareholder information. Nevertheless, the Transfer Agent represents
that, in its opinion, its performance of the Delegated Duties constitutes
a comprehensive AML program in compliance with the USA PATRIOT Act, as
applicable to mutual funds.
3. Consent to Examination. In connection with the performance by the
Transfer Agent of the Delegated Duties, the Transfer Agent understands
and acknowledges that each Fund remains responsible for assuring
compliance with the USA PATRIOT Act and that the records the Transfer
Agent maintains for the Funds relating to the AML Program may be subject,
from time to time, to examination and/or inspection by federal regulators
in order that the regulators may evaluate such compliance. The Transfer
Agent hereby consents to such examination and/or inspection and agrees to
cooperate with such federal examiners in connection with their review.
For purposes of such examination and/or inspection, the Transfer Agent
will use its best efforts to make available, during normal business hours
and on reasonable notice all required records and information for review
by such examiners.
4. Delegated Duties
4.1 Consistent with the services provided by the Transfer Agent and with
respect to the ownership of shares in the Funds for which the Transfer
Agent maintains the applicable Shareholder information, the Transfer
Agent shall:
SCHEDULE 1.2(h)
AML DELEGATION
(CONTINUED)
(a) Submit all financial and non-financial transactions through the
Office of Foreign Assets Control ("OFAC") database and such other
lists or databases as may be required from time to time by
applicable regulatory authorities;
(b) Review special payee checks through OFAC database;
(c) Review redemption transactions that occur within thirty (30) days
of account establishment or maintenance;
(d) Review wires, including the identity of the transmitter and
recipient of wires, that are sent pursuant to banking
instructions; and verify the identity of transmitters and
recipients that are not on file with the Transfer Agent;
(e) Review accounts with small balances followed by large purchases;
(f) Review accounts with frequent activity within a specified date
range followed by a large redemption;
(g) On a daily basis, review purchase and redemption activity per tax
identification number ("TIN") within the Funds to determine if
activity for that TIN exceeded the $100,000 threshold on any given
day;
(h) Monitor and track cash equivalents under $10,000 for a rolling
twelve-month period and file IRS Form 8300 and issue the
Shareholder notices required by the IRS;
(i) Determine when a suspicious activity report ("SAR") should be
filed as required by regulations applicable to mutual funds;
prepare and file the SAR. Provide the Fund with a copy of the SAR
within a reasonable time after filing; notify the fund if any
further communication is received from U.S. Department of the
Treasury or other law enforcement agencies regarding the SAR;
(j) Compare account information to any FinCEN request received by a
Fund and provided to the Transfer Agent pursuant to USA PATRIOT
Act SEC. 314(a). Provide the Fund with documents/information
necessary to respond to requests under USA PATRIOT Act SEC. 314(a)
within required time frames;
(k) In accordance with procedures agreed upon by the parties (which
may be amended from time to time by mutual agreement of the
parties) (i) verify the identity of any person seeking to open an
account with a Fund, (ii) maintain records of the information used
to verify the person's identity and (iii) determine whether the
person appears on any lists of known or suspected terrorists or
terrorists organizations provided to the Funds by any government
agency;
SCHEDULE 1.2(h)
AML DELEGATION
(CONTINUED)
(l) Establish policies, procedures and internal controls to achieve
compliance with the Bank Secrecy Act and implementing regulations;
(m) Establish policies, procedures and internal controls to detect the
opening of correspondent accounts for foreign banks, the opening
of private banking accounts, and the necessary filing of reports
of foreign bank and financial accounts; and
(n) Determine when transactions require the filing of Currency
Transaction Reports ("CTRs") and/or the filing of International
Transportation of Currency or Monetary Instruments Reports
("CIMRs"); prepare and file such reports.
4.2 In the event that the Transfer Agent detects activity as a result of the
foregoing procedures, which necessitates the filing by the Transfer Agent
of a SAR, a Form 8300 or other similar report or notice to OFAC, then the
Transfer Agent shall also immediately notify the Funds, unless prohibited
by applicable law.
SCHEDULE 2.1
THIRD PARTY ADMINISTRATOR(S) PROCEDURES
Dated_____________
1. On each day on which both the New York Stock Exchange and the applicable
Fund are open for business (a "Business Day"), the TPA(s) shall receive,
on behalf of and as agent of the Fund, Instructions (as hereinafter
defined) from the Plan. Instructions shall mean as to each Fund (i)
orders by the Plan for the purchases of Shares, and (ii) requests by the
Plan for the redemption of Shares; in each case based on the Plan's
receipt of purchase orders and redemption requests by Participants in
proper form by the time required by the terms of the Plan, but not later
than the time of day as of which the net asset value of the Fund is
calculated, as described from time to time in that Fund's prospectus.
Each Business Day on which the TPA receives Instructions shall be a
"Trade Date".
2. The TPA(s) shall communicate the TPA(s)'s acceptance of such
Instructions, to the applicable Plan.
3. On the next succeeding Business Day following the Trade Date on which it
accepted Instructions for the purchase and redemption of Shares, (TD+1),
the TPA(s) shall notify the Transfer Agent of the net amount of such
purchases or redemptions, as the case may be, for each of the Plans. In
the case of net purchases by any Plan, the TPA(s) shall instruct the
Trustees of such Plan to transmit the aggregate purchase price for Shares
by wire transfer to the Transfer Agent on (TD+1). In the case of net
redemptions by any Plan, the TPA(s) shall instruct the Fund's custodian
to transmit the aggregate redemption proceeds for Shares by wire transfer
to the Trustees of such Plan on (TD+1). The times at which such
notification and transmission shall occur on (TD+1) shall be as mutually
agreed upon by each Fund, the TPA(s), and the Transfer Agent.
4. The TPA(s) shall maintain separate records for each Plan, which record
shall reflect Shares purchased and redeemed, including the date and price
for all transactions, and Share balances. The TPA(s) shall maintain on
behalf of each of the Plans a single master account with the Transfer
Agent and such account shall be in the name of that Plan, the TPA(s), or
the nominee of either thereof as the record owner of Shares owned by such
Plan.
5. The TPA(s) shall maintain records of all proceeds of redemptions of
Shares and all other distributions not reinvested in Shares.
6. The TPA(s) shall prepare, and transmit to each of the Plans, periodic
account statements showing the total number of Shares owned by that Plan
as of the statement closing date, purchases and redemptions of Shares by
the Plan during the period covered by the statement, and the dividends
and other distributions paid to the Plan on Shares during the statement
period (whether paid in cash or reinvested in Shares).
SCHEDULE 2.1
THIRD PARTY ADMINISTRATOR(S) PROCEDURES
(continued)
7. The TPA(s) shall, at the request and expense of each participating Fund,
transmit to the Plans prospectuses, proxy materials, reports, and other
information provided by each Fund for delivery to its shareholders.
8. The TPA(s) shall, at the request of a Fund, prepare and transmit to the
Fund or any agent designated by it such periodic reports covering Shares
of the Fund as the Fund shall reasonably conclude are necessary to enable
the Fund to comply with state Blue Sky requirements.
9. The TPA(s) shall transmit to the Plans confirmation of purchase orders
and redemption requests placed by the Plans; and
10. The TPA(s) shall, with respect to Shares, maintain account balance
information for the Plan(s) and daily and monthly purchase summaries
expressed in Shares and dollar amounts.
11. Plan sponsors may request, or the law may require, that prospectuses,
proxy materials, periodic reports and other materials relating to each
Fund be furnished to Participants in which event the Transfer Agent or
each Fund shall mail or cause to be mailed such materials to
Participants. With respect to any such mailing, the TPA(s) shall, at the
request of the Transfer Agent or each Fund, provide at the TPA(s)'s
expense a complete and accurate set of mailing labels with the name and
address of each Participant having an interest through the Plans in
Shares.
SCHEDULE 3.1
SERVICE LEVELS
The availability, service and performance levels and standards represent the
levels and standards which the Transfer Agent is, and has for some time been,
generally achieving in its day-to-day operations and which each Fund may
reasonably expect the Transfer Agent to generally achieve. Notwithstanding
anything in the Agreement or any supplement to the contrary, this does not mean,
and, the Transfer Agent neither represents, warrants, or covenants that, nor
does the Fund expect, that the Transfer Agent shall always meet, fulfill or
comply with the following levels and standards at all times. Rather, it is the
expectation of the Parties that, in the event of failure to meet, fulfill or
comply with the foregoing levels and standards, the Fund shall promptly notify
the Transfer Agent thereof and the Transfer Agent and the Fund shall coordinate
and cooperate to correct the inadequacies. In such event, the Transfer Agent
shall provide the resources reasonably necessary to restore its compliance with
the foregoing levels and standards as quickly as reasonably practical under the
circumstances.
CUSTOMER SERVICE
--------------------------------------------------------------------------------
ACTIVITIES TRANSFER AGENT TIMELINESS STANDARD
--------------------------------------------------------------------------------
TELEPHONE SERVICING
--------------------------------------------------------------------------------
Speed of Answer 15 seconds
--------------------------------------------------------------------------------
Abandonment Rate 2% or less
--------------------------------------------------------------------------------
Service Level 85%
--------------------------------------------------------------------------------
ACCOUNT RESEARCH
--------------------------------------------------------------------------------
Financial 2 days
--------------------------------------------------------------------------------
Non-Financial 3 days
--------------------------------------------------------------------------------
Transcripts 5 days
--------------------------------------------------------------------------------
CORRESPONDENCE
--------------------------------------------------------------------------------
Financial 3 days
--------------------------------------------------------------------------------
Non-Financial 7 days
--------------------------------------------------------------------------------
XXX/Account Transfer Request
--------------------------------------------------------------------------------
Notices (LOA) 3 days
--------------------------------------------------------------------------------
XXX/Account Transfer Reminder Notices 30, 45 days
--------------------------------------------------------------------------------
TRANSACTION PROCESSING
--------------------------------------------------------------------------------
ACTIVITIES TRANSFER AGENT TIMELINESS STANDARD
--------------------------------------------------------------------------------
Transactions/Types
--------------------------------------------------------------------------------
New Accounts Same day
--------------------------------------------------------------------------------
Purchases Same day
--------------------------------------------------------------------------------
Redemptions Same day
--------------------------------------------------------------------------------
Exchanges Same day
--------------------------------------------------------------------------------
Transfers Next day
--------------------------------------------------------------------------------
Adjustments 3 days
--------------------------------------------------------------------------------
Maintenance - Financial 3 days
--------------------------------------------------------------------------------
Maintenance - Non-Financial 6 days
--------------------------------------------------------------------------------
SCHEDULE 3.1
SERVICE LEVELS
(CONTINUED)
COMMISSIONS
--------------------------------------------------------------------------------
ACTIVITIES TRANSFER AGENT TIMELINESS STANDARD
--------------------------------------------------------------------------------
12b-1 STANDARDS
Funding Letter to Xxxxx Funds 3 days after Cycle end date
Mailing and delivery of payment via
Commserve 3 days after funding is received from
Xxxxx Funds
REGULAR COMMISSION
Funding Letter to Xxxxx Funds 3 days after Cycle end date
Mailing and delivery of payment via
Commserve 3 days after funding is received from
Xxxxx Funds
PROCESSING ACCURACY
Overall Transaction Quality 96%
Measured and reported by Boston Financial
QAT Process (Based on NQR "best-in-class"
standards by NQR for BFDS clients -
updated at least annually)
SHAREHOLDER AND DEALER STATEMENTS
The Transfer Agent shall send an accurate monthly and quarterly statement file
to the print/mail vendor by the first business day after each month end.
DAILY CONFIRMATION FILE
The Transfer Agent shall send an accurate daily confirmation file to the
print/mail vendor each business day for the trades processed the previous
business day. The Transfer Agent shall use its best efforts to deliver this file
no later than 8:00 a.m. each business day for the trades processed the previous
business day.
SCHEDULE 4.1
FEES
EFFECTIVE: NOVEMBER 22, 2004 TO NOVEMBER 22, 2009
GENERAL:
Fees are based on an annual per Shareholder account charge for account
maintenance plus transaction and out-of-pocket expenses. Fees are billable on a
monthly basis at the rate of 1/12 of the annual fee. A charge is made for an
account in the month that an account opens or closes.
ACCOUNT SERVICE FEES:
Open Account Fee
Direct Accounts $10.75/account
NSCC - Level III $8.50/account
Closed Accounts $2.50/account
ACTIVITY FEES:
Telephone calls $3.00/call
IRAs $2.00/plan
IMPLEMENTATION CONVERSION FEES:
Data mapping, conversion programming, data Fee waived
conversion, two mock conversions, and a dress
rehearsal.
One-man month of "Train the Trainer" for each Fee waived
Fund's associates at its facility.
Programming hours for systems modifications Fee waived
(capped at 2,000 hours)
Image conversion required prior to implementation Capped at $200,000
Out of Pocket expenses for implementation, Capped at $75,000
including travel expenses for all associates of
the Transfer Agent and affiliates.
OUT-OF POCKET EXPENSES:
To be paid by the Funds - See Section 4 (Page 10)
GERMAN SHAREHOLDER PROCESSING
For so long as the Sub-servicing Agreement dated November 10, 2004 between State
Street Bank and Trust Company and Continental Fund Services, S.A. shall remain
in effect, Xxxxx Smallcap Growth Fund, Xxxxx XxxXxx Growth Fund and Xxxxx
LargeCap Growth Fund shall individually pay the following account service fees
to State Street Bank and Trust Company:
USD $4 per account per year
USD $5 per transaction per year
These fees are subject to change upon mutual agreement of Xxxxx SmallCap Growth
Fund, Xxxxx XxxXxx Growth Fund and Xxxxx LargeCap Growth Fund, respectively, and
the Transfer Agent relative to any changes in fees that are agreed upon between
State Street Bank and Trust Company and Continental Fund Services, S.A. under
the Sub-Servicing Agreement dated November 10, 2004 as it may be amended from
time to time.
SCHEDULE 1.1(p)
GERMAN REGISTERED FUNDS
SERVICES AS SET OUT ON THIS SCHEDULE 5 WILL BE PROVIDED FOR:
Xxxxx SmallCap Growth Fund
Xxxxx XxxXxx Growth Fund
Xxxxx LargeCap Growth Fund
COMMUNICATIONS:
State Street to provide VPN access to Sub T/A for TA2000 to support data
entry.
State Street will process data in the event of communication failure to
Sub T/A provided that data is received by market close, in U.S. dollars ("USD")
and in English language.
GERMAN SAVINGS PLAN PROCESS:
State Street will generate a file to the Funds' German Paying Agent,
Merck Xxxxx, on the first business day of the month and will process their
return file upon receipt of a wire in USD. The return file is expected to be
received on the second business day.
SYSTEMATIC WITHDRAWAL PLANS (SWIPS):
State Street will process German SWIPS as indicated by prospectus.
Payments for shareholders may be in the form of a bulk wire to the Funds' German
Paying Agent.
DAILY AND QUARTERLY STATEMENTS:
State Street will create a print-ready, multi-lingual statement file
extract for daily and quarterly statements for the Funds' designated print
vendor.
NORAMCO INFORMATION PROCESSING SYSTEM (NIPS):
State Street will send the NIPS extract files on a daily basis using
standard TA2000 TIP files to provide data to the Funds' German Distributor.
COMMISSIONS:
State Street will process a bi-monthly Dealer concession commission and a
quarterly 12b-1 trail commission file. Payments will be made to Dealers
accordingly.
FONDSPOLICE:
State Street will support the monthly purchases into the Fondspolice
accounts for the Funds. These purchases settle T+4; all other transactions
settle T+2.
