Exhibit (h)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
EACH OF THE ENTITIES, INDIVIDUALLY AND NOT JOINTLY,
AS LISTED ON SCHEDULE A
AND
BOSTON FINANCIAL DATA SERVICES, INC.
TABLE OF CONTENTS
-----------------
Page
----
1. TERMS OF APPOINTMENT AND DUTIES.................................... 2
2. ALL NON-SAME DAY (TD+1) PROCESSING/SETTLEMENT ENVIRONMENTS......... 10
3. FEES AND EXPENSES.................................................. 11
4. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT............... 14
5. REPRESENTATIONS AND WARRANTIES OF THE FUND......................... 14
6. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM
COMMERCIAL CODE.................................................... 14
7. DATA ACCESS AND PROPRIETARY INFORMATION............................ 16
8. INDEMNIFICATION.................................................... 18
9. STANDARD OF CARE................................................... 19
10. CONFIDENTIALITY.................................................... 20
11. COVENANTS OF THE FUND AND THE TRANSFER AGENT....................... 21
12. TERMINATION OF AGREEMENT........................................... 23
13. ASSIGNMENT AND THIRD PARTY BENEFICIARIES........................... 26
14. SUBCONTRACTORS..................................................... 27
15. CHANGES AND MODIFICATIONS.......................................... 27
16. MISCELLANEOUS...................................................... 28
17. ADDITIONAL PORTFOLIOS/FUNDS........................................ 29
18. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.......... 30
Schedule A Funds and Portfolios
Schedule 1.2(f) AML and CIP Delegation
Schedule 1.2(k) Third Party Check Procedures
Schedule 2.1 Third Party Administrators) Procedures
Schedule 3.1 Fees and Expenses
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
THIS AGREEMENT made as of the 1st day of August 2007, by and between EACH OF
THE ENTITIES, INDIVIDUALLY AND NOT JOINTLY, as listed on Schedule A, having
their principal office and place of business at Xxx Xxxxxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (collectively, the "Funds" and individually, the
"Fund") and BOSTON FINANCIAL DATA SERVICES, INC., a Massachusetts corporation
having its principal office and place of business at 0 Xxxxxxxx Xxxxx, Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Transfer Agent").
WHEREAS, certain Funds may be authorized to issue shares in a separate series,
such series shall be named under the respective Fund in the attached Schedule
A, which may be amended by the parties from time to time, (each such series,
together with all other series subsequently established by a Fund and made
subject to this Agreement in accordance with Section 17, being herein referred
to as a "Portfolio", and collectively as the "Portfolios");
WHEREAS, each Fund is either a statutory or business trust or a corporation
organized under the laws of a state (as set forth on the Schedule A) and
registered with the Securities and Exchange Commission as an investment company
pursuant to the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, it is contemplated that additional Funds and Portfolios may become
parties to this Agreement by written consent of the parties hereto and in
accordance with Section 17; and
WHEREAS, each Fund, on behalf of itself and, where applicable, its Portfolios,
desires to appoint the Transfer Agent as its transfer agent, dividend
disbursing agent and agent in connection with certain other activities, 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 itself and, where
applicable, its Portfolios, hereby employs and appoints the
Transfer Agent to act as, and the Transfer Agent agrees to act as,
its transfer agent for each Fund's authorized and issued shares or
beneficial interest, as the case may be, ("Shares"), dividend
disbursing agent and agent in connection with any accumulation,
open-account or similar plan provided to the shareholders of each
Fund and of any Portfolios of a Fund ("Shareholders"), including
without limitation any periodic investment plan or periodic
withdrawal program. In accordance with procedures established from
time to time by agreement between the Transfer Agent and each of
the Funds and their respective Portfolios, (the "Procedures") with
such changes or deviations there from as have been (or may from
time to time be) agreed upon in writing by the parties, the
Transfer Agent agrees that it will perform the following services:
(a) Establish each Shareholder's account in the Fund on the
Transfer Agent's recordkeeping system and maintain such
account for the benefit of such Shareholder in accordance
with the Procedures;
(b) Receive for acceptance and process orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of the Fund authorized
pursuant to the organizational documents of the Fund (the
"Custodian");
(c) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account;
(d) Receive for acceptance and process redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(e) In respect to items (a) through (d) above, the Transfer Agent
may execute transactions directly with broker-dealers
authorized by the Fund;
(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;
(g) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(h) Prepare and transmit payments for dividends and distributions
declared by the Fund or any Portfolio thereof, as the case
may be;
(i) If applicable, issue replacement certificates for those
certificates alleged to have been lost, stolen or destroyed
upon receipt by the Transfer Agent of indemnification
satisfactory to the Transfer Agent and protecting the
Transfer Agent and the Fund, and the Transfer Agent at its
option, may issue replacement certificates in place of
mutilated stock certificates upon presentation thereof and
without such indemnity;
(j) Issue replacement checks and place stop orders on original
checks based on Shareholder's representation that a check was
not received or was lost. Such stop orders and replacements
will be deemed to have been made at the request of the Fund,
and, as between the Fund and the Transfer Agent, the Fund
shall be responsible for all losses or claims resulting from
such replacement;
(k) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing;
(l) Record the issuance of Shares of the Fund and maintain
pursuant to SEC Rule 17Ad-10(e) 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 but 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;
(m) Accept any information, records, documents, data,
certificates, transaction requests by machine readable input,
facsimile, CRT data entry and electronic instructions,
including e-mail communications, which have been prepared,
maintained or provided by the Fund or third party
administrators ("TPA(s)") and broker-dealers on behalf of
individual Shareholders in connection with Section 2 of this
Agreement. With respect to transaction requests received in
the foregoing manner, the Transfer Agent shall not be
responsible for determining that the original source
documentation is in good order, which includes compliance
with Rule 22c-1 under the 1940 Act, and it will be the
responsibility of the Fund to require that the Fund, the TPAs
and the broker-dealers retain such documentation. E-mail
exchanges on routine matters may be made directly with the
Fund's contact at the Transfer Agent. The Transfer Agent will
not act on any e-mail communications coming to it directly
from Shareholders requesting transactions, including, but not
limited to, monetary transactions, change of ownership, or
beneficiary changes;
(n) Maintain and manage, as agent for the Fund, such bank
accounts as the Transfer Agent shall deem necessary for the
performance of its duties under this Agreement, including but
not limited to, the processing of share purchases and
redemptions and the payment of Fund dividends and
distributions. The Transfer Agent may maintain such accounts
at the bank or banks deemed appropriate by the Transfer
Agent. In connection with the recordkeeping and other
services provided to the Fund hereunder, the Transfer Agent
may receive compensation for the management of such accounts,
and such compensation may be calculated based upon the
average balances of such accounts;
(o) Receive correspondence pertaining to any former, existing or
new Shareholder account, process such correspondence for
proper recordkeeping and respond to Shareholder
correspondence; and
(p) Process any request from a Shareholder to change account
registration, beneficiary, beneficiary information, transfer
and rollovers in accordance with the Procedures.
1.2. Additional Services. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraphs,
the Transfer Agent shall perform the following services:
(a) Other Customary Services. Perform the customary services of a
transfer agent, dividend disbursing agent and, as relevant,
agent in connection with accumulation, open-account or
similar plan (including without limitation any periodic
investment plan or periodic withdrawal program), including
but not limited to: maintaining all Shareholder accounts,
preparing Shareholder meeting lists, arrange for mailing of
Shareholder proxies, 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 confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and
other confirmable transactions in Shareholder accounts,
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 the Fund of all
transactions and receipts and disbursements of money and
securities and deliver a copy of such report for the Fund for
each business day to the Fund no later than 9:00 AM Eastern
Time, or such earlier time as the Fund may reasonably
require, on the next business day;
(c) "Blue Sky" Reporting. The 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
Fund), in accordance with, instructions transmitted to and
received by the Transfer Agent by transmission from NSCC on
behalf of authorized broker-dealers on the Fund 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.'s computer system TA2000 ("TA2000 System") in accordance
with NSCC's Networking and Fund/SERV rules for those
broker-dealers; and (iv) maintain Shareholder accounts on
TA2000 System through Networking;
(e) 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 the Fund and
the Transfer Agent. The Transfer Agent may at times perform
only a portion of these services and the Fund or its agent
may perform these services on the Fund's behalf;
(f) Anti-Money Laundering ("AML") Delegation. If the Fund elects
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(f)
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(f), the Fund
agrees to pay the Transfer Agent for the reasonable
administrative expense that may be associated with such
additional duties;
(g) Call Center Services. Upon request of the Fund, answer
telephone inquiries from 9:00 a.m. to 8:00 p.m., Eastern
Time, each day on which the New York Stock Exchange is open
for trading. The Transfer Agent shall answer and respond to
inquiries from existing Shareholders, prospective
Shareholders of the Fund and broker-dealers on behalf of such
Shareholders in accordance with the telephone scripts
provided by the Fund to the Transfer Agent, such inquiries
may include requests for information on account set-up and
maintenance, general questions regarding the operation of the
Fund, general account information including dates of
purchases, redemptions, exchanges and account balances,
requests for account access instructions and literature
requests. In consideration of the performance of the duties
by the Transfer Agent pursuant to this Section, the Fund
agrees to pay the Transfer Agent the fee set forth on
Schedule 3.1 attached hereto and the reasonable out-of-pocket
expenses that may be associated with these additional duties;
(h) Excessive Trader. Upon request of the Fund, the Transfer
Agent will provide the Fund with periodic reports on trading
activity in the Fund based on parameters provided to the
Transfer Agent by the Fund, as amended from time to time. The
services to be performed by the Transfer Agent for the Fund
hereunder will be ministerial only and the Transfer Agent
shall have no responsibility for monitoring or reviewing
market-timing activities. In consideration of the performance
of the duties by the Transfer Agent pursuant to this Section,
the Fund agrees to pay the Transfer Agent the fee set forth
on Schedule 3.1 attached hereto and the reasonable
Reimbursable Expenses (as defined in Section 3.2 below) that
may be associated with these additional duties;
(i) Escheatment, Orders, Etc. If requested by the Fund (and as
mutually agreed upon by the parties as to any reasonable
Reimbursable Expenses), provide any additional related
services (i.e., pertaining to escheatments, abandoned
property, garnishment orders, bankruptcy and divorce
proceedings, Internal Revenue Service or state tax authority
tax levies and summonses and all matters relating to the
foregoing;
(j) Performance of Certain Services by the Fund or Affiliates or
Agents. New procedures as to who shall provide certain of the
transfer agency and record-keeping related services may be
established in writing from time to time by agreement between
the Fund and the Transfer Agent. The Transfer Agent may at
times perform only a portion of the services and the Fund,
its affiliates or agents may perform certain services on the
Fund's behalf; and
(k) Third Party Check Procedures. The Transfer Agent shall follow
the procedures set forth in Schedule 1.2(k) hereto (the
"Third Party Check Procedures") with respect to the review
and processing of checks for the purchase of shares that are
not payable to the Fund (or Portfolio) or the Transfer Agent
("Third Party Checks").
1.3. Retirement Accounts. The Fund has developed certain retirement
account materials (hereinafter collectively called the "Fund
Prototypes") that may be used by an individual ("Participant") who
desires to establish a Traditional XXX, Xxxx XXX, SEP XXX or
403(b)(7)-retirement account and Profit Sharing & Money Purchase
Plans (collectively, "Retirement Account(s)"). The Fund desires to
appoint the Transfer Agent's bank affiliate, State Street Bank and
Trust Company (the "Custodian"), as custodian of any Retirement
Account established using the Fund Prototypes and the Transfer
Agent on behalf of the Custodian desires to accept such
appointment. The parties agree as follows:
(a) The Custodian of the Retirement Accounts will be designated
as the owner on the records of the Fund;
(b) Records of the Custodian's ownership of Shares of the Fund
will be maintained by the Transfer Agent for such Shares in
the name of the Custodian (or its nominee) and no physical
Shares will be issued;
(c) Under the terms of each Fund Prototype, the Custodian has no
investment responsibility for the selection of investments
for a Retirement Account and the Custodian will have no
liability for any investments made for a Retirement Account
other than to maintain custody of the investments subject to
the terms of this Agreement. The Fund will not state or make
any representations to the contrary hereof;
(d) The Custodian will not serve as trustee or plan administrator
of any Retirement Account, or in any other administrative or
other capacity except as custodian thereof. The Custodian and
the Transfer Agent will not keep records of Retirement
Accounts or maintain any other records except those that are
necessary to serve as custodian or as transfer agent pursuant
to this Agreement. The Fund will not state or make any
representations to the contrary hereof;
(e) The Fund will upon reasonable advance notice make available
access to its facilities and access to or copies of such
records to the Custodian as the Custodian may request in
order that the Custodian may determine that the Fund is
properly performing its duties and obligations hereunder. The
Custodian's right of access under this provision will include
access to any service provider or service bureau performing
any of the Fund's duties and obligations under this Agreement
on behalf of the Fund; and
(f) As agreed by the Fund and the Transfer Agent, the Fund may
share in the annual maintenance fee with respect to each
Retirement Account.
1.4. Review and Maintenance of Fund Prototypes or Account Materials.
(a) The Fund agrees that the Fund Prototypes will comply with
applicable sections of the Internal Revenue Code of 1986 (the
"Code") and regulations promulgated pursuant to the Code in
effect at the time. The Fund will be responsible for
establishing, maintaining and updating the 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.
(b) The Fund agrees that any modifications made by the Fund to
the Fund Prototypes without the Custodian's written consent
shall not increase the liabilities or responsibilities of the
Custodian or limit the Custodian's ability to resign as
custodian as provided under Section 1.5 below. The Fund will
furnish the Transfer Agent with a copy of the Fund
Prototypes. Neither the Transfer Agent nor the Custodian
shall be required to review, comment or advise on such Fund
Prototypes.
1.5. Resignation or Removal of Custodian
(a) If either party chooses to terminate pursuant to Section 13
of the Agreement the Custodian may thereupon resign in
respect to any or all of the Retirement Accounts upon thirty
(30) days' prior written notice to the Fund. In such an
event, the Fund will promptly distribute the notice of the
Custodian's resignation to such persons and in such manner as
are called for under the applicable provisions of the
Retirement Account and in form and content satisfactory to
and signed by the Custodian. The Fund shall be responsible to
obtain a successor custodian for all Retirement Accounts.
(b) If the Fund chooses to discontinue performing any of its
duties and obligations with respect to any or all Retirement
Accounts, it will give the Custodian at least one hundred
twenty (120) days' written notice prior to such
discontinuance. The Custodian may thereupon resign in respect
to any or all Retirement Accounts by providing sixty (60)
days' prior written notice to the Fund. In such an event, the
Fund shall be responsible to obtain a successor custodian for
the Retirement Accounts. Upon written acceptance by the
successor custodian, the Fund will promptly distribute the
notice of the Custodian's resignation to such persons and in
such manner as are called for under the applicable provisions
of the Retirement Account and in form and content
satisfactory to and signed by the Custodian.
(c) If at any time and for any reason the Custodian chooses to
resign from any or all Retirement Accounts, it will give the
Fund at least sixty (60) days' prior written notice. In
connection with the Custodian resignation hereunder or
pursuant to Sections 1.5(a), 1.5(b), the Custodian may, but
is not required to, designate a successor custodian by
written notice to the Fund, and the Fund will be deemed to
have consented to such successor unless the Fund designates a
different successor custodian and provides written notice
thereof together with such a different successor's written
acceptance by such date as the Custodian specifies in its
original notice to the Fund provided that the Fund will have
a minimum of sixty (60) days to designate a different
successor. The Fund will promptly distribute the notice of
the Custodian's resignation as custodian to such persons and
in such manner as are called for under the applicable
provisions of the Retirement Account and in form and content
satisfactory to and signed by the Custodian.
(d) If within sixty (60) days (or such longer time as the
Custodian may agree to in writing) after resignation by the
Custodian, the Fund or the Custodian has not appointed a
successor custodian who has accepted such appointment in
writing, the Fund shall within a further period of thirty
(30) days apply to a court of competent jurisdiction for
appointment of a successor custodian, provided that if (i)
the Fund shall have failed to have made such application
within such period or (ii) the court shall have dismissed
such application without having made such appointment, and
(iii) no successor custodian shall have then accepted
appointment, then (iv) termination of the Custodian's
responsibilities shall be effected by distributing all assets
of the Retirement Account in a single payment in cash or in
kind to each Participant, subject to the Custodian's right as
custodian to reserve such funds as it may deem advisable for
payment of all its fees, compensation, costs and expenses or
for payment of any other liabilities constituting a charge on
or against the assets of Retirement Accounts or on or against
the Custodian. Any amounts remaining after payment of such
costs shall be delivered to the successor custodian, if any.
(e) Upon appointment of and acceptance by a successor custodian
under this Section 1.5, the Custodian shall cause to be
transferred all assets in book entry form relating to the
Retirement Accounts to the successor custodian.
1.6. Applications and Correspondence. The Custodian will execute any
instruments and documents in regard to the Retirement Accounts
(including correspondence with various persons such as employers,
Participants and beneficiaries), which the Fund submits to the
Transfer Agent for that purpose. In no event will the Fund sign
the Custodian's name on any application or other document without
the Custodian's prior written approval.
1.7. Site Visits and Inspections; Regulatory Examinations. During the
term of this Agreement, authorized representatives of the Funds
may conduct periodic site visits of the Transfer Agent's
facilities and inspect the Transfer Agent's records and procedures
solely as they pertain to the Transfer Agent's services for the
Fund under or pursuant to this Agreement. Such inspections shall
be conducted at the Funds' expense (which shall include costs
related to providing materials, copying, faxing, retrieving stored
materials, and similar expenses) and shall occur during the
Transfer Agent's regular business hours and, except as otherwise
agreed to by the parties, no more frequently than twice a year. In
connection with such site visit and/or inspection, the Fund shall
not attempt to access, nor will it review, the records of any
other clients of the Transfer Agent and the Fund shall conduct the
visit/inspection in a manner that will not interfere with the
Transfer Agent's normal and customary conduct of its business
activities, including the provision of services to the Fund and to
other clients. The Transfer Agent shall have the right to
immediately require the removal of any Fund representatives from
its premises in the event that their actions, in the reasonable
opinion of the Transfer Agent, jeopardize the information security
of its systems and/or other client data or otherwise are
disruptive to the business of the Transfer Agent. The Transfer
Agent may require any persons seeking access to its facilities to
provide reasonable evidence of their authority. The Transfer Agent
may also reasonably require any of the Fund's representatives to
execute a confidentiality agreement before granting such
individuals access to its facilities. The Transfer Agent will also
provide reasonable access to the Fund's governmental regulators,
at the Fund's expense, solely to (i) the Fund's records held by
the Transfer Agent and (ii) the procedures of the Transfer Agent
directly related to its provision of services to the Fund under
the Agreement.
2. All Non-Same Day (TD+1) Processing/Settlement Environments
----------------------------------------------------------
2.1. Third Party Administrators for Defined Contribution Plans. The
Fund may decide to make available to certain of its 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. 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 the 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 TPAs 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.
2.2. Additional Non-Same Day (TD+1) Order Processing. The Fund may
authorize broker-dealers and their designated intermediaries to
receive purchase and redemption orders from their customers on the
Fund's behalf for purposes of Rule 22c-1, so that any such
customer will receive the share price next computed by the Fund
after the time at which such customer places its order with the
broker-dealer or the designated intermediary. If the authorized
broker-dealer, is prevented from transmitting Day 1 trades to the
Transfer Agent due to unforeseen circumstances, such as computer
system failures, natural catastrophes, or other emergencies or
human error then the broker-dealer may transmit such trades the
next day (TD+1) at a time mutually agreed upon by the Fund, the
broker-dealer and the Transfer Agent.
2.3. All transactions identified under Sections 1 and 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 transfer agency and recordkeeping services;
(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
normally required.
3. Fees and Expenses
-----------------
3.1. Fee Schedule. For the performance by the Transfer Agent pursuant
to this Agreement, the Fund agrees to pay the Transfer Agent the
fee and expenses as set forth in the attached fee schedule
("Schedule 3.1"). Such fees and Reimbursable Expenses and advances
identified under Section 3.2 below may be changed from time to
time subject to mutual written agreement between the Fund and the
Transfer Agent. The parties agree that the fees set forth on
Schedule 3.1 shall apply with respect to the Funds set forth on
Schedule A hereto as of the date hereof and to any newly created
funds added to this Agreement under Section 17 that have
requirements consistent with services then being provided by the
Transfer Agent under this Agreement. The fees set forth on
Schedule 3.1, however, shall not automatically apply to any funds
resulting from acquisition or merger subsequent to the execution
of this Agreement. In the event that a fund is to become a party
to this Agreement as the result of an acquisition or merger then
the parties shall confer diligently and in good faith, and agree
upon fees applicable to such fund.
3.2. Reimbursable Expenses. In addition to the fees paid under Section
3.1 above, the Fund agrees to reimburse the Transfer Agent for
reimbursable expenses utilized by the Fund, including but not
limited to: AML/CIP annual fee, suspicious activity reporting for
networked accounts, audio response, checkwriting, CIP-related
database searches, commission fee application, data communications
equipment, computer hardware, DST disaster recovery charge,
escheatment, express mail and delivery services, federal wire
charges, forms and production, freight charges, household tape
processing, lost shareholder searches, lost shareholder tracking,
magnetic tapes, reels or cartridges, magnetic tape handling
charges, manual check pulls, microfiche/COOL, microfilm, network
products, new fund implementation, NSCC processing and
communications, postage, offsite records storage, outside mailing
services, P.O. box rental, print/mail services, programming hours,
regulatory compliance fee per CUSIP, reporting (on request and
scheduled), returned checks, Excessive Trader, special mailing,
statements, supplies, tax reporting (federal and state),
telecommunications equipment, telephone (telephone and fax lines),
training, transcripts, travel, T.I.N. certification (W-8 & W-9),
vax payroll processing, year-end processing and other expenses
incurred at the specific direction of the Fund or with advance
written notice to the Fund.
3.3. Increases. The fees and charges set forth on Schedule 3.1 shall
increase or may be increased (i) in accordance with Section 3.6
below; or (ii) upon at least ninety (90) days prior written
notice, if changes in laws applicable to its transfer agency
business or laws applicable to the Fund, which the Transfer Agent
has agreed to abide by and implement, increases the Transfer
Agent's ongoing system utilization costs to provide the affected
function by five percent (5%) or more; or (iii) in connection with
new or additional functions or features or new services or modes
of operation of the TA2000 system, desired by the Fund and agreed
to by the Transfer Agent. If the Transfer Agent notifies the Fund
of a planned increase in fees or charges pursuant to subparagraph
(ii) of this Section 3.3, the parties shall confer, diligently and
in good faith and agree upon a new fee or charges to cover the
amount necessary, but not more than such amount, to reimburse the
Transfer Agent for the increased costs of operation or such new
function. If the Transfer Agent notifies the Fund of a planned
increase in fees under subparagraph (iii) of this Section 3.3, the
parties shall confer, diligently and in good faith and agree upon
a new fee to cover such new function, feature, service or mode of
operation.
3.4. 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 Fund at least seven (7) days prior to
the mailing date of such materials.
3.5. Invoices. The Fund agrees to pay all 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.
3.6. Cost of Living Adjustment. After the first year of the Initial
Term, the total fee for all services for each succeeding year
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 CPI-W (defined below), or,
in the event that publication of such Index is terminated, any
successor or substitute index, appropriately adjusted, acceptable
to both parties. As used herein, "CPI-W" shall mean the Consumer
Price Index for Urban Wage Earners and Clerical Workers for
Boston-Brockton-Nashua, MA-NH-ME-CT, (Base Period: 1982-84=100),
as published by the United States Department of Labor, Bureau of
Labor Statistics.
3.7. 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 selected by the
Transfer Agent) on the first day of publication during the month
when such amount was due. Notwithstanding any other provision
hereof, such interest rate shall be no greater than permitted
under applicable provisions of Massachusetts law.
4. Representations and Warranties of the Transfer Agent
----------------------------------------------------
The Transfer Agent represents and warrants to the Fund that:
4.1. It is a corporation duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts.
4.2. It is a duly registered as a transfer agent under Section
17A(c)(2) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and it will remain so registered for the duration of
this Agreement. It will promptly notify the Fund in the event of
any material change in its status as a registered transfer agent.
4.3. It is duly qualified to carry on its business in The Commonwealth
of Massachusetts.
4.4. It is empowered under applicable laws and by its Articles of
Organization and By-Laws to enter into and perform the services
contemplated in this Agreement.
4.5. All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
4.6. 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. Representations and Warranties of the Fund
------------------------------------------
The Fund represents and warrants to the Transfer Agent that:
5.1. It is a trust or corporation duly organized and existing and in
good standing under the laws of the state of its organization as
set forth on Schedule A.
5.2. It is empowered under applicable laws and by its organizational
documents to enter into and perform this Agreement.
5.3. All corporate proceedings have been taken to authorize it to enter
into and perform this Agreement.
5.4. The Fund is an open-end and diversified management investment
company registered under the 0000 Xxx.
5.5. 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 being offered for
sale by the Fund.
6. Wire Transfer Operating Guidelines/Articles 4A of the Uniform Commercial
------------------------------------------------------------------------
Code
----
6.1. 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 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.
6.2. Security Procedure. The Fund acknowledges that the Security
Procedure it has designated on the 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.
6.3. 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.
6.4. 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.
6.5. 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.
6.6. 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. The Security Procedure is established for the purpose
of authenticating payment orders only and not for the detection of
errors in payment orders.
6.7. 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.
6.8. ACH Credit Entries/Provisional Payments. When the 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's bank affiliate 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, and the party making payment to the Fund via such
entry shall not be deemed to have paid the amount of the entry.
6.9. 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-back. Fund must report any objections to the execution of an
order within thirty (30) days.
7. Data Access and Proprietary Information
---------------------------------------
7.1. The Fund acknowledges that the databases, computer programs,
screen formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Transfer Agent
as part of the Fund's ability to access certain Fund-related data
maintained by the Transfer Agent on databases under the control
and ownership of the Transfer Agent or other third party ("Data
Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information")
of substantial value to the Transfer Agent or other third party.
In no event shall Proprietary Information be deemed Customer
Information (as defined in Section 10.2 below) or the confidential
information of the Fund. The Fund agrees to treat all Proprietary
Information as proprietary to the Transfer Agent and further
agrees that it shall not divulge any Proprietary Information to
any person or organization except as may be provided hereunder.
Without limiting the foregoing, the Fund agrees for itself and its
employees and agents to:
(a) Use such programs and databases (i) solely on the Fund's
computers, (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;
(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 the Transfer Agent 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 computer to be
retransmitted to any other computer 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.
7.2. 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.
7.3. The Fund acknowledges that its obligation to protect the Transfer
Agent's Proprietary Information is essential to the business
interest of the Transfer Agent and that the disclosure of such
Proprietary Information in breach of this Agreement would cause
the Transfer Agent immediate, substantial and irreparable harm,
the value of which would be extremely difficult to determine.
Accordingly, the parties 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 Transfer Agent shall be entitled to seek and
obtain a temporary restraining order, injunctive relief, or other
equitable relief against the continuance of such breach.
7.4. If the 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. EXCEPT THOSE
EXPRESSLY STATED HEREIN THE TRANSFER AGENT EXPRESSLY DISCLAIMS ALL
WARRANTIES INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
7.5. If the transactions available to the 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 established by the Transfer
Agent from time to time.
7.6. Each party shall take reasonable efforts to advise its employees
of their obligations pursuant to this Section 7. The obligations
of this Section shall survive any earlier termination of this
Agreement.
8. Indemnification
---------------
8.1. The Transfer Agent shall not be responsible for, and the Fund
shall indemnify and hold the Transfer Agent, and with respect to
Sections 1.3 and 8.1(f), herein, also Xxxxx Xxxxxx ("Xxxxx
Xxxxxx"), harmless, from and against, any and all losses, damages,
costs, charges, counsel fees (including the defense of any lawsuit
in which the Transfer Agent or affiliate is a named party),
payments, expenses and liability arising out of or attributable
to:
(a) All actions of the Transfer Agent or its agents or
subcontractors required to be taken pursuant to this
Agreement, provided that such actions are taken in good faith
and without negligence or intentional misconduct;
(b) The Fund's lack of good faith, negligence or intentional
misconduct;
(c) 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; (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 by counsel to the Fund after consultation with
such legal counsel and upon which instructions or opinion the
Transfer Agent is expressly permitted to rely or opinions of
legal counsel that are obtained by the Transfer Agent; 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) The acceptance of facsimile transaction requests on behalf of
individual Shareholders received from broker-dealers, TPAs or
the Fund, and the reliance by the Transfer Agent on the
broker-dealer, TPA or the Fund ensuring that the original
source documentation is in good order and properly retained;
(f) The negotiation and processing of any checks, wires and ACH
transmissions including without limitation for deposit into,
or credit to, the Fund's demand deposit accounts maintained
by the Transfer Agent; or
(g) Upon the Fund's request entering into any agreements required
by the NSCC for the transmission of Fund or Shareholder data
through the NSCC clearing systems.
8.2. In order that the indemnification provisions contained in this
Section 8 shall apply, upon the assertion of a claim for which the
Fund may be required to indemnify the Transfer Agent, the Transfer
Agent shall promptly notify the Fund of such assertion, and shall
keep the Fund advised with respect to all developments concerning
such claim. The Fund shall have the option to participate with the
Transfer Agent in the defense of such claim or to defend against
said claim in its own name or in the name of the Transfer Agent.
The Transfer Agent shall in no case confess any claim or make any
compromise in any case in which the Fund may be required to
indemnify the Transfer Agent except with the Fund's prior written
consent.
9. Standard of Care
----------------
The Transfer Agent shall at all times act in good faith and agrees to use
its best efforts within 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 clue 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 that Section 4-209
of the Uniform Commercial Code is superseded by Section 9 of this
Agreement. This standard of care also shall apply to Exception Services,
as defined in Section 2.3 herein, but shall take into consideration and
make allowances for the manual processing and non-standard work involved
in 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 connection with this Agreement, or
from all services provided or omitted to be provided by the Transfer
Agent under this Agreement for all of the Funds subject 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, for all of the Funds covered by this Agreement during the six
(6) calendar months immediately preceding the first event for which
recovery from the Transfer Agent is being sought. The foregoing
limitation on liability shall not apply to any loss or damage resulting
from any fraud committed by the Transfer Agent's employees or any
intentional malevolent acts by the Transfer Agent's employees. For
purposes of this Section 9, "intentional malevolent acts" shall mean
those acts undertaken purposefully under the circumstances in which the
person knows or has reason to believe that such acts violates this
Agreement and are likely to cause damage or harm.
10. Confidentiality
---------------
10.1. The Transfer Agent and the 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. The 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 7.3
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 Fund agent for purposes of providing services
under this Agreement.
10.2. As between the Fund and Transfer Agent, Customer Information (as
defined below) is and will remain the sole and exclusive property
of the Fund, "Customer Information" means all the customer
identifying data however collected or received, including without
limitation, through "cookies" or non-electronic means pertaining
to or identifiable to the Fund's customer(s) or prospective
customer(s) and plan administrators (collectively, "Fund
Customers"), including without limitation, (i) name, address,
email address, passwords, account numbers, personal financial
information, personal preferences, demographic data, marketing
data, data about securities transactions, credit data or any other
identification data; (ii) any information that reflects the use of
or interactions with a Fund service, including the Fund's web
site; or (iii) any data otherwise submitted in the process of
registering for a Fund service. For the avoidance of doubt,
Customer Information shall include all `nonpublic personal
information," as defined under the Xxxxx-Xxxxx-Xxxxxx Act of 1999
(Public Law 106-102, 113 Stat. 1138) ("GLB Act"). This Agreement
shall not be construed as granting any ownership rights in
Transfer Agent to Customer Information.
10.3. The Transfer Agent represents, covenants, and warrants that
Transfer Agent will use Customer Information only in compliance
with (i) the provisions of this Agreement, (ii) its own Privacy
and Information Sharing Policy, as amended and updated from time
to time and (iii) privacy laws applicable to its business,
including the GLB Act as such is applicable to its transfer agency
business.
10.4. In the event that any requests or demands are made for the
inspection of the Shareholder records of the Fund, other than
request for records of Shareholders pursuant to standard subpoenas
from state or federal government authorities (i.e., divorce and
criminal actions), the Transfer Agent will use reasonable efforts
to notify the Fund (except where prohibited by law) and to secure
instructions from an authorized officer of the Fund as to such
inspection. The Transfer Agent expressly reserves the right,
however, to exhibit the Shareholder records to any person whenever
it is advised by counsel that it may be held liable for the
failure to exhibit the Shareholder records to such person or if
required by law or court order.
11. Covenants of the Fund and the Transfer Agent
--------------------------------------------
11.1. The Fund shall promptly furnish to the Transfer Agent the
following:
(a) A certified copy of the resolution of the Board of Trustees
or the Board of Directors, as the case may be, of the Fund
authorizing the appointment of the Transfer Agent and the
execution and delivery of this Agreement; and
(b) A copy of the organizational documents of the Fund and all
amendments thereto.
11.2. The Transfer Agent hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the 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. Records. The Transfer Agent shall keep records relating to the
services to be performed hereunder, in the form, manner and for
such periods, as it may deem advisable and as may be required by
the laws and regulations applicable to its business as a Transfer
Agent, including those set forth in 17 CFR 240.17Ad-6 and 17 CFR
240.17Ad-7, as such regulations may be amended from time to time.
The Transfer Agent shall also maintain customary records in
connection with its agency for the Fund; particularly those
records required to be maintained pursuant to subparagraph (2)(iv)
of paragraph (b) of Rule 31a-1 under the Investment Company Act of
1940. Records maintained by the Transfer Agent on behalf of the
Fund shall be made available for reasonable examinations by the
SEC upon reasonable request and shall be maintained by the
Transfer Agent for such period as required by applicable law or
until such earlier time as the Transfer Agent has delivered such
records into the Fund's possession or destroyed them at the Fund's
request.
11.4. Service Locations. The Transfer Agent may provide the services
hereunder from service locations within or outside of the United
States. The Transfer Agent will provide the Fund with reasonable
prior notice of any proposed change in service location, including
a general description of the services that will be provided at any
new service location and such other information as the Fund may
reasonably request.
11.5. Compliance Program. The Transfer Agent maintains and will contain
to maintain a comprehensive compliance program reasonably designed
to prevent violations of the federal securities laws pursuant to
Rule 38a-1 under the 1940 Act. Pursuant to its compliance program,
the Transfer Agent will provide periodic measurement reports to
the Fund. Upon request of the Fund, the Transfer Agent will
provide to the Fund in connection with any periodic annual or
semi-annual shareholder report filed by the Fund or, in the
absence of the filing of such reports, on quarterly basis, a
sub-certification pursuant to the Xxxxxxxx-Xxxxx Act of 2002 with
respect to the Transfer Agent's performance of the services set
forth in this Agreement and its internal controls related thereto.
In addition, on a quarterly basis, the Transfer Agent will provide
to the Fund a certification in connection with Rule 38a-1 under
the 1940 Act. The Transfer Agent reserves the right to amend and
update its compliance program and the measurement tools and
certifications provided thereunder from time to time in order to
address changing regulatory and industry developments.
11.6. SAS70 Reports. The Transfer Agent will furnish to the Fund, on a
semi-annual basis, a report in accordance with Statements on
Auditing Standards No. 70 (the "SAS70 Report") as well as such
other reports and information relating to the Transfer Agent's
policies and procedures and its compliance with such policies and
procedures and with the laws applicable to its business and its
services, as the Fund may reasonable request.
11.7. Information Security. The Transfer Agent maintains and will
continue to maintain at each service location physical and
information security safeguards against the destruction, loss,
theft or alteration of the Fund's Confidential Information,
including Customer Information, in the possession of the Transfer
Agent that will be no less rigorous than those in place at the
effective date of this Agreement, and from time to time enhanced
in accordance with changes in regulatory requirements. The
Transfer Agent will, at a minimum, update its policies to remain
compliant with regulatory requirements. The Transfer Agent will
meet with the Fund, at its request, on an annual basis to discuss
information security safeguards. If the Transfer Agent or its
agents discover or are notified that someone has violated security
relating to the Fund's Confidential Information, including
Customer Information, the Transfer Agent will promptly (a) notify
the Fund of such violation, and (b) if the applicable Confidential
Information was in the possession or under the control of the
Transfer Agent or its agents at the time of such violation, the
Transfer Agent will promptly (i) investigate, contain arid address
the violation, and (ii) provide the Fund with assurance reasonably
satisfactory to the Fund that such violation will not recur.
11.8. Business Continuity. The Transfer Agent will maintain a
comprehensive business continuity plan and will provide an
executive summary of such plan upon reasonable request of the
Fund. The Transfer Agent will test the adequacy of its business
continuity plan at least annually and upon request, the Fund may
participate in such test. Upon request by the Fund, the Transfer
Agent will provide the Fund with a letter assessing the most
recent business continuity test results. In the event of a
business disruption that materially impacts the Transfer Agent's
provision of services under this Agreement, the Transfer Agent
will promptly notify the Fund of the disruption and the steps
being implemented under the business continuity plan.
12. Termination of Agreement
------------------------
12.1. Term. The initial term of this Agreement (the "Initial Term")
shall be five (5) years from the date first stated above unless
terminated pursuant to the provisions of this Section 12. The term
may be renewed by mutual agreement of the Transfer Agent and the
individual Fund for successive periods of one year each ("Renewal
Term"). Either the Transfer Agent or the Fund shall give written
notice to the other party one hundred twenty (120) days before the
expiration of the Initial Term or of a Renewal Term if such party
desires not to renew the term for an additional one year period
and in the absence of such notice the Agreement shall renew
automatically for such one year term. In the event a Fund wishes
to terminate this Agreement as to the Fund prior to the expiration
of the Initial Term or a Renewal Term, the Fund shall give one
hundred twenty (120) days prior written notice to the Transfer
Agent and shall be subject to the terms of this Section, including
the payments applicable under Section 12.3. One hundred twenty
(120) days before the expiration of the Initial Term or a Renewal
Term, the Transfer Agent and the Fund will agree upon a Fee
Schedule for the upcoming Renewal Term. In the event the parties
fail to agree upon a new Fee Schedule as of such date, the Fee
Schedule set forth as Schedule 3.1 hereto shall remain in effect
subject to increase under Section 3.6. 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).
12.2. Deconversion. In the event that this Agreement is terminated or
not renewed for any reason by the Fund, the Transfer Agent agrees
that, in order to provide for uninterrupted service to the Fund,
the Transfer Agent, at Fund's request, shall offer reasonable
assistance to the Fund in converting the Fund's records from the
Transfer Agent's systems to whatever services or systems are
designated by Fund (the "Deconversion"). Such Deconversion is
subject to the recompense of the Transfer Agent for such
assistance at its standard rates and fees in effect at the time
and to a reasonable time frame for performance as 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, including the
Proprietary Information as defined in Section 7.1, 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. Termination or Non Renewal.
(a) Outstanding Fees and Charges. In the event of termination or
non-renewal of this Agreement by the Fund, the Fund will
promptly pay the Transfer Agent all fees and charges for the
services provided under this Agreement (i) which have been
accrued and remain unpaid as of the date of such notice of
termination or non-renewal and (ii) which thereafter accrue
for the period through and including the date of Fund's
Deconversion.
(b) Deconversion Costs and Post-Deconversion Support Fees. In the
event of termination or non-renewal of this Agreement by the
Fund, the Fund shall pay the Transfer Agent for the
Deconversion costs as noted in Section 12.2 and all
reasonable fees and expenses for providing any support
services that the Fund requests the Transfer Agent to provide
post Deconversion, including but not limited to tax reporting
and open issue resolution.
(c) Early Termination for Convenience. In addition to the
foregoing, in the event that the Fund terminates this
Agreement prior to the end of the Initial Term or any Renewal
Term other than due to the Transfer Agent's bankruptcy under
Section 12.6 or for cause under Section 12.7, the Fund shall
pay the Transfer Agent an amount equal to the average monthly
fee paid by the Fund to the Transfer Agent under the
Agreement multiplied by the number of months remaining in the
Initial or Renewal Term and calculated as set forth on the
then current Fee Schedule, on the date notice of termination
was given to the Transfer Agent (the "Early Termination
Payment"). Notwithstanding the foregoing or anything
contained in this Agreement to the contrary, in the event
that the Fund receives any discount in fees the Early
Termination Payment shall be increased by the pro rata amount
of the aggregate of all discounts on fees received by the
Fund which would, other than for such discounts, have been
due and owed by the Fund during the affected Initial or
Renewal Term. The Transfer Agent may, in its discretion,
waive the Early Termination Payment in the event of a
termination by one or more Funds in connection with the
liquidation or merger of such Fund in the ordinary course of
business, so long as the total number of CUSIPS and accounts
remaining to be serviced by the Transfer Agent under this
Agreement immediately after such liquidation or merger are
not substantially less than the number in effect as of the
date of the most recent Fee Schedule.
12.4. Confidential Information. Upon termination of this Agreement, each
party 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.
12.5. Unpaid Invoices. The Transfer Agent may terminate this Agreement
immediately upon an unpaid invoice payable by the Fund to the
Transfer Agent being outstanding for more than ninety (90) days
after receipt by the Fund, except with respect to any amount
subject to a good faith dispute within the meaning of Section 3.5
of this Agreement.
12.6. Bankruptcy. Either 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.
12.7. Cause. If either of the parties hereto becomes in default in the
performance of its duties or obligations hereunder and such
default has a material adverse effect on the other party, then the
non-defaulting party may give notice to the defaulting party
specifying the nature of the default in sufficient detail to
permit the defaulting party to identify and cure such default. If
the defaulting party fails to cure such default within thirty (30)
days of receipt of such notice, or within such other period of
time as the parties may agree is necessary for such cure, then the
non-defaulting party may terminate this Agreement upon notice of
not less than five (5) days to the defaulting party.
12.8. In the event that the Fund terminates this Agreement prior to the
end of the Initial Term or any Renewal Term, other than by reason
of the Transfer Agent's bankruptcy under Section 12.6 or for cause
under Section 12.7, then effective as of the first day of any
month in which the Transfer Agent receives notice of such
termination, all discounts of fees and charges or fee concessions
provided under this Agreement and any related agreements shall
cease and shall be recoverable retroactively to the date such
discount or fee concession was first granted and the Fund shall
return the amount of any such discounts and fee concessions and
thereafter pay full, undiscounted fees and charges for the
services.
12.9. The parties agree that the effective date of any Deconversion as a
result of termination hereof shall not occur during the period
from December 15th through March 1st of any year to avoid
adversely impacting a year-end.
12.10. Within thirty (30) days after completion of a Deconversion, the
Funds will give notice to the Transfer Agent containing reasonable
instructions regarding the disposition of tapes, data files,
records, original source documentation or other property belonging
to the Fund and then in the Transfer Agent's possession and shall
make payment for the Transfer Agent's reasonable costs to comply
with such notice. If the Fund fails to give that notice within
thirty (30) days after termination of this Agreement, then the
Transfer Agent may dispose of such property as it sees fit. The
reasonable costs of any such disposition or of the continued
storage of such tapes, data files, records, original source
documentation or other properties shall be billed to, and within
thirty (30) days of receipt of such invoice paid by, the Fund.
Failure to pay such sums when due shall incur a late charge in
accordance with Section 3.7 of this Agreement. In no event shall
the Transfer Agent be required to keep archived versions of Fund
records beyond the requirements of law applicable to its transfer
agency business and the terms of this Section 12.10. In the event
the Fund terminates this Agreement and later requests that the
Transfer Agent search for, recover and provide to the Funds any
records that at such time are in the Transfer Agent's possession
and which relate to the prior services performed by the Transfer
Agent for the Fund, the Fund agrees to pay the reasonable
administrative costs for the search, recovery and provision of any
such records.
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 either
party without the written consent of the other party. 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 Fund, and the duties and responsibilities undertaken
pursuant to this Agreement shall be for the sole and exclusive
benefit of the Transfer Agent and the Fund. 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 the Trust. Other
than as provided in Section 14.1 and Schedule 1.2(f), neither
party 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 the
Funds, subcontract for the performance hereof with an affiliate of
the Transfer Agent which is duly registered as a transfer agent
pursuant to Section 17A(c)(2) of the 1934 Act or, with regard to
print/mail services, to DST Output, Inc., an affiliate of the
Transfer Agent; provided, however, that the Transfer Agent shall
be fully responsible to the Funds for the acts and omissions of
its affiliate as it is for its own acts and omissions. The
foregoing shall not be deemed to apply to any direct contracts
between the Fund and any affiliate of the Transfer Agent as to
which the Transfer Agent is not a party.
14.2. For purposes of this Agreement, 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, shall not be deemed to be
subcontractors of the Transfer Agent.
15. Changes and Modifications
-------------------------
15.1. During the term of this Agreement the Transfer Agent will use on
behalf of the Fund, without additional cost, all modifications,
enhancements, or changes which its affiliate DST Systems, Inc. may
make to the TA2000 System in the normal course of its business and
which are applicable to functions and features offered by the
Fund, unless substantially all clients of the Transfer Agent are
charged separately for such modifications, enhancements or
changes, including, without limitation, substantial system
revisions or modifications necessitated by changes in existing
laws, rules or regulations. The Fund agrees to pay the Transfer
Agent promptly for modifications and improvements which are
charged for separately at the rate provided for in the Transfer
Agent's standard pricing schedule which shall be identical for
substantially all clients, if a standard pricing schedule shall
exist. If there is no standard pricing schedule, the parties shall
mutually agree upon the rates to be charged.
15.2. The Transfer Agent shall have the right, at any time and from time
to time, to alter and modify any systems, programs, procedures or
facilities used or employed in performing its duties and
obligations hereunder; provided that the Fund will be notified as
promptly as possible prior to implementation of such alterations
and modifications and that no such alteration or modification or
deletion shall materially adversely change or affect the
operations and procedures of the Fund in using or employing the
TA2000 System or the Transfer Agent's facilities hereunder or the
reports to be generated by such system and facilities hereunder,
unless the Fund is given thirty (30) days prior notice to allow
the Fund to change its procedures and unless the Transfer Agent
provides the Fund with revised operating procedures and controls.
15.3. All enhancements, improvements, changes, modifications or new
features added to the TA2000 System however developed or paid for
shall be, and shall remain, the confidential and exclusive
property of, and proprietary to, DST Systems, Inc., an affiliate
of the Transfer Agent.
16. Miscellaneous
-------------
16.1. Amendment. This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a
resolution of the Board of Trustees or the Board of Directors, as
the case may be, of the Fund.
16.2. 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.
16.3. Force Majeure. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of
God, acts of war or terrorism, 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.
16.4. Consequential Damages. Neither party to this Agreement shall be
liable to the other party 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.
16.5. 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.
16.6. 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.
16.7. 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.
16.8. Waiver. No waiver by either party or 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.
16.9. 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.
16.10. 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.
16.11. 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 parties hereto 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.
16.12. 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 the Transfer Agent, to:
Boston Financial Data Services, Inc.
0 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
(b) If to the Funds, to:
CGM Capital Development Fund and
CGM Trust
c/o Capital Growth Management Limited Partnership
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, President
Facsimile: (000) 000-0000
And to:
CGM Funds
00 Xxxxxxx Xx., 0xx xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx,
Chief Compliance Officer and Legal Counsel
17. Additional Portfolios/ Funds
----------------------------
17.1. Additional Portfolios. 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, and if the Transfer
Agent agrees in writing to provide such services, such series of
Shares shall become a Portfolio hereunder by the parties amending
the Schedule A to include the additional series.
17.2. Additional Funds. In the event that an entity affiliated with the
Funds, in addition to those listed on the Schedule A, desires to
have the Transfer Agent render services as transfer agent under
the terms hereof and the Transfer Agent agrees to provide such
services, upon completion of an amended Schedule A signed by all
parties to the Agreement, such entity shall become a Fund
hereunder and any series thereof shall become a Portfolio
hereunder.
17.3. Conditions re: Additional Funds/Portfolios. In the event that the
Transfer Agent is to become the transfer agent for new funds or
portfolios, the Transfer Agent shall add them to the TA2000 System
upon at least thirty (30) days' prior written notice to the
Transfer Agent provided that the requirements of such funds or
portfolios are generally consistent with services then being
provided by the Transfer Agent under this Agreement, in which case
the fees and expenses for such additional funds or portfolios shall
be as set forth on Schedule 3.1 for the remainder of the
then-current term. To the extent such funds or portfolios use
functions, features or services not set forth in Section 1.1,
Section 1.2 or Schedule 3.1, the rates and charges applicable to
such new functions, features or characteristics may be established
or increased in accordance with Section 3.3.
18. Limitations of Liability of the Trustees and Shareholders
---------------------------------------------------------
In the case where the Fund is a trust, a copy of the trust instrument
(if applicable) is on file with the Secretary of the State of the
state of its organization, and notice is hereby given that this
instrument is executed on behalf of the trustees of the trust as
trustees and not individually and that the obligations of this
instrument are not binding upon any of the trustees or Shareholders
individually but are binding only upon the assets and property of the
trust.
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.
EACH OF THE ENTITIES, INDIVIDUALLY AND NOT
JOINTLY, AS LISTED ON SCHEDULE A
By: /s/ Xxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxx X. Xxxx
------------------------------------
Title: President
------------------------------------
As an Authorized Officer on behalf of each
of the Funds indicated on Schedule A
ATTEST:
/s/ Xxxxx X. Xxxxxx
------------------------------
BOSTON FINANCIAL DATA SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------------
Title: Vice President
--------------
ATTEST:
/s/ Xxxxx X. Xxxxxxxx
------------------------------
SCHEDULE A
Fund Type of Entity State of Organization
---- -------------- ---------------------
CGM Capital Development Fund Business Trust Massachusetts
CGM Capital Development Fund
CGM Trust Business Trust Massachusetts
CGM Mutual Fund
CGM Realty Fund
CGM Focus Fund
EACH OF THE ENTITIES, INDIVIDUALLY BOSTON FINANCIAL DATA SERVICES,
AND NOT JOINTLY, AS LISTED ON INC.
SCHEDULE A
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------- ----------------------------------------
Name: Xxxxxx X. Xxxx Name: Xxxxx X. Xxxxxx
---------------------- ------------------------------------
Title: President Title: Vice President
---------------------- ------------------------------------
As an Authorized Officer on behalf of each of
the Funds indicated on Schedule A
