Exhibit 2k.1
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FORM OF
TRANSFER AGENCY AND SERVICE AGREEMENT
among
WESTERN ASSET PREMIER BOND FUND
and
EQUISERVE TRUST COMPANY, N.A.,
and
EQUISERVE, INC.
TABLE OF CONTENTS
Article 1. Terms of Appointment; Duties of the Transfer Agent..................1
Article 2. Fees and Expenses...................................................2
Article 3. Representations and Warranties of the Transfer Agent................2
Article 4. Representations and Warranties of the Fund..........................3
Article 5. Data Access and Proprietary Information.............................3
Article 6. Indemnification.....................................................5
Article 7. Standard of Care....................................................6
Article 8. Covenants of the Fund and the Transfer Agent........................7
Article 9. Termination of Agreement............................................7
Article 10. Assignment.........................................................8
Article 11. Amendment..........................................................8
Article 12. Massachusetts Law to Apply.........................................8
Article 13. Force Majeure......................................................8
Article 14. Consequential Damages..............................................8
Article 15. Merger of Agreement................................................9
Article 16. Miscellaneous......................................................9
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the ____ day of March, 2002, by and between WESTERN
ASSET PREMIER BOND FUND, a Massachusetts business trust having its principal
office and place of business at 000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000
(the "Fund"), EQUISERVE TRUST COMPANY, N.A., a federally chartered trust company
doing business at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (the "Trust Company")
and EQUISERVE, INC., a Delaware corporation ("EQI," and together with the Trust
Company, the "Transfer Agent").
WHEREAS, the Fund desires to appoint the Transfer Agent as its registrar,
transfer agent, dividend disbursing agent, custodian of certain retirement plans
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:
Article 1. Terms of Appointment; Duties of the Transfer Agent
1.01. Subject to the terms and conditions set forth in this Agreement, the
Fund hereby employs and appoints the Transfer Agent to act as, and the Transfer
Agent agrees to act as, registrar, transfer agent for the Fund's authorized and
issued common shares of beneficial interest ("Shares"), dividend disbursing
agent, custodian of certain retirement plans and agent in connection with any
dividend reinvestment plan as set out in the prospectus of the Fund.
1.02. The Transfer Agent agrees that it will perform the following
services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and the Transfer Agent, the Transfer Agent shall:
(i). Issue and record the appropriate number of Shares as authorized
and hold such Shares in the appropriate Shareholder account;
(ii). Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate documentation;
(iii). Execute transactions directly with broker-dealers authorized by
the Fund who shall thereby be deemed to be acting on behalf of
the Fund;
(iv). Prepare and transmit payments for dividends and distributions
declared by the Fund;
(v). Act as agent for Shareholders pursuant to the dividend
reinvestment and cash purchase plan as amended from time to
time in accordance with the terms of the agreement to be
entered into between the Shareholders and the Transfer Agent in
substantially the form attached as Exhibit A hereto;
(vi). 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 as its option, may issue replacement
certificates in place of mutilated stock certificates upon
presentation thereof and without such indemnity.
(b) In addition to and neither in lieu nor in contravention of the services
set forth in the above paragraph (a), the Transfer Agent shall: perform all of
the customary services of a registrar, transfer agent, dividend disbursing
agent, custodian of certain retirement plans and agent of the dividend
reinvestment and cash purchase plan as described in Article 1 consistent with
those requirements in effect as at the date of this Agreement. The detailed
definition, frequency, limitations and associated costs (if any) set out in the
attached fee schedule, include but are not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing proxies,
reviewing and tabulating proxies, mailing Shareholder reports to current
Shareholders, withholding taxes on U.S. resident and non-resident alien accounts
where applicable, preparing and filing U.S. Treasury Department Forms 1099 and
other appropriate forms required by federal authorities with respect to
dividends and distributions for all registered Shareholders.
(c) The Transfer Agent shall provide additional services on behalf of the
Fund (e.g., escheatment services) which may be agreed upon in writing between
the Fund and the Transfer Agent.
Article 2. Fees and Expenses
2.01. For the performance by the Transfer Agent pursuant to this Agreement,
the Fund agrees to pay the Transfer Agent an annual maintenance fee as set out
in the initial fee schedule attached hereto. Such fees and out-of-pocket
expenses and advances identified under Section 2.02 below may be changed from
time to time subject to mutual written agreement between the Fund and the
Transfer Agent.
2.02. In addition to the fee paid under Section 2.01 above, the Fund agrees
to reimburse the Transfer Agent for out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by the
Transfer Agent for the items set out in the fee schedule attached hereto. In
addition, any other expenses not contemplated by this Agreement that are
incurred by the Transfer Agent at the request or with the consent of the Fund,
will be reimbursed by the Fund.
Article 3. Representations and Warranties of the Transfer Agent
The Trust Company and EQI represent and warrant to the Fund that:
3.01. The Trust Company is a federally chartered limited purpose national
bank duly organized under the laws of the United States and EQI is a corporation
validly existing and
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in good standing under the laws of the State of Delaware and each has full
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement by Trust
Company and EQI have been duly authorized by all necessary corporate action and
this Agreement constitutes the legal, valid and binding obligation of Trust
Company and EQI enforceable against Trust Company and EQI in accordance with its
terms.
3.02. Both the Trust Company and EQI are duly qualified to carry on
business in the Commonwealth of Massachusetts.
3.03. The Transfer Agent has and will continue to have access to the
necessary facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
Article 4. Representations and Warranties of the Fund
The Fund represents and warrants to the Transfer Agent that:
4.01. It is an unincorporated voluntary association duly organized and
existing and in good standing under the laws of Massachusetts.
4.02. It is empowered under applicable laws and by its Agreement and
Declaration of Trust, as amended (the "Declaration") and By-Laws to enter into
and perform this Agreement.
4.03. All corporate proceedings required by said Declaration and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
4.04. It is a closed-end, diversified investment company registered under
the Investment Company Act of 1940, as amended.
4.05. To the extent required by federal securities laws, a registration
statement under the Securities Act of 1933, as amended, is currently effective
and, if required, appropriate state securities law filings have been made with
respect to all Shares of the Fund being offered for sale; information to the
contrary will result in immediate notification to the Transfer Agent.
4.06. It shall make all required filings under federal and state securities
laws.
Article 5. Data Access and Proprietary Information
5.01. The Fund acknowledges that the data bases, 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 ("Customer Data") maintained by the
Transfer Agent on data bases 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 Customer Data be deemed Proprietary Information belonging to
the Transfer Agent. The Fund agrees to treat all Proprietary Information as
proprietary to the. Transfer Agent and further agrees
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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:
(a) to access Customer Data solely from locations as may be designated in
writing by the Transfer Agent and solely in accordance with the Transfer Agent's
applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to 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) to refrain from causing or allowing third-party data acquired hereunder
from being retransmitted to any other computer facility or other location,
except with the prior written consent of the Transfer Agent;
(e) that the Fund shall have access only to those authorized transactions
agreed upon by the parties;
(f) to 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.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Article 5. The obligations of this Article shall
survive any earlier termination of this Agreement.
5.02. 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. THE TRANSFER AGENT EXPRESSLY
DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
5.03. 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 (such transactions constituting a "COEFI"),
then in such event the Transfer Agent shall be entitled to rely on the
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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.
Article 6. Indemnification
6.01. The Transfer Agent shall not be responsible for, and the Fund shall
indemnify and hold the Transfer Agent harmless from and against, any and all
losses and damages and any and all reasonable costs, charges, counsel fees,
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 willful misconduct.
(b) The Fund's lack of good faith, negligence or willful misconduct which
arise out of the breach of any representation or warranty of the Fund hereunder.
(c) The reliance on or use by the Transfer Agent or its agents or
subcontractors of information, records, documents or services which (i) are
received by the Transfer Agent or its agents or subcontractors, and (ii) 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 previous transfer agent
or registrar.
(d) The reliance on, or the carrying out by the Transfer Agent or its
agents or subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or regulations of
any state that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such Shares in such state.
(f) The Transfer Agent shall be liable for any and all losses and damages,
and any and all reasonable costs, charges, counsel fees, payments, expenses and
liability directly arising out of or attributable to a breach of this Agreement
by the Transfer Agent or to any action or failure or omission to act by the
Transfer Agent as a result of the Transfer Agent's lack of good faith or its
negligence or willful misconduct. In the event of (i) any loss, damage or
expense suffered or incurred by the Fund caused by or resulting from actions or
omissions for which the Transfer Agent would be liable pursuant to this section
or (ii) any loss, damage or expense suffered or incurred by the Fund caused by
or resulting from investments made by Transfer Agent in connection with the
account arrangements disclosed in Section 7.03 hereof, the Transfer Agent shall
promptly reimburse the Fund in the amount of any such loss, damage or expense.
The Transfer Agent shall not be liable for any special or consequential damages
under any provision of this agreement or for any special or consequential
damages arising out of any act or failure to act hereunder.
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6.02. At any time the Transfer Agent may apply to any officer of the Fund
for instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Transfer Agent
under this Agreement, and the Transfer Agent and its agents or subcontractors
shall not be liable and shall be indemnified by the Fund for any action taken or
omitted by it in reliance upon such instructions or upon the opinion of such
counsel that such actions or omissions comply with the terms of this Agreement
and with all applicable laws, provided the Transfer Agent acts in good faith and
without negligence. The Transfer Agent, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document furnished by or
on behalf of the Fund, reasonably believed to be genuine and to have been signed
by the proper person or persons, or upon any instruction, information, data,
records or documents provided the Transfer Agent or its agents or subcontractors
by telephone, in person, machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. The Transfer Agent, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the officers of
the Fund, and the proper countersignature of any former transfer agent or former
registrar, or of a co-transfer agent or co-registrar.
6.03. In order that the indemnification provisions contained in this
Article 6 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.
Article 7. Standard of Care
7.01. The Transfer Agent shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility and shall
not be liable for loss or damage due to errors unless said errors are caused by
its negligence, bad faith, or willful misconduct or that of its employees.
7.02. Transfer Agent's aggregate liability under this Agreement with
respect to, arising from, or arising in connection with this Agreement, or from
all services provided or omitted to be provided under this Agreement, whether in
contract, or in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid hereunder by the Fund to Transfer Agent as fees- and charges, but
not including reimbursable expenses, during the twenty-four (24) calendar months
immediately preceding the event for which recovery from the Transfer Agent is
being sought.
7.03. The Fund acknowledges that the bank accounts maintained by the
Transfer Agent in connection with the services provided hereunder will be in
Transfer Agent's name and that the Transfer Agent will receive investment
earnings in connection with the investment of
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funds in such accounts at Transfer Agent's risk and for the benefit of Transfer
Agent's funds held in those accounts from time to time.
Article 8. Covenants of the Fund and the Transfer Agent
8.01. The Fund shall promptly furnish to the Transfer Agent the following:
(a) A certified copy of the resolution of the Board of Trustees of the Fund
authorizing the appointment of the Transfer Agent and the execution and delivery
of this Agreement.
(b) A copy of the Declaration and By-Laws of the Fund and all amendments
thereto.
8.02. 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 and to make such changes in said procedures and facilities as
the Fund may from time to time reasonably request.
8.03. The Transfer Agent shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, the Transfer Agent agrees that all such records
prepared or maintained by the Transfer Agent relating to the services to be
performed by the Transfer Agent hereunder are the property of the Fund and will
be preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in accordance with
its request.
8.04. The Transfer Agent and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, shall not be voluntarily disclosed to any other person,
except as may be required by law, and shall not be used by the Transfer Agent
for any purpose not directly related to the business of the Fund, except with
the Fund's written consent.
8.05. In cases of any requests or demands for the inspection of the Shareholder
records of the Fund, the Transfer Agent will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. The Transfer Agent reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
Article 9. Termination of Agreement
9.01. This Agreement may be terminated by either party upon thirty (30)
days written notice to the other.
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9.02. Should the Fund exercise its right to terminate in the absence of a
material breach of this Agreement by the Transfer Agent, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, the Transfer Agent reserves the right to charge for any
other reasonable expenses associated with such termination and/or a charge
equivalent to the average of three (3) month's fees if the Fund terminates the
Agreement within one year of its effectiveness. In the event that the Fund
designates a successor to any of the Transfer Agent's obligations hereunder, the
Transfer Agent shall, at the expense and direction of the Fund, transfer to such
successor a certified list of Shareholders of the Fund, a complete record of the
account of each Shareholder, and all other necessary or relevant books, records
and other data established or maintained by the Transfer Agent hereunder.
Article 10. Assignment
10.01. Except as provided in Section 10.03 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
10.02. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
Article 11. Amendment
11.01. This Agreement maybe amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Fund.
Article 12. Massachusetts Law to Apply
12.01. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
Article 13. Force Majeure
13.01. In the event either party 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. The Transfer Agent shall use reasonable care to minimize the
likelihood or damage, loss of data, delays and/or errors and should such damage,
loss of data, delays and/or errors occur, the Transfer Agent shall use its best
efforts to mitigate the effects of such occurrence.
Article 14. Consequential Damages
14.01. Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
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Article 15. Merger of Agreement
15.01. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written.
Article 16. Miscellaneous
16.01. Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each series of the Fund are separate
and distinct from the assets and liabilities of each other series and that no
series shall be liable or shall be charged for any debt, obligation or liability
of any other series, whether arising under this Agreement or otherwise.
A copy of the Agreement and Declaration of Trust of the Fund, as amended,
is on file with the Secretary of State of the Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed on behalf of the Fund by
an officer or Trustee of the Fund in his or her capacity as an officer or
Trustee of the Fund and not individually and that the obligations of or arising
out of this instrument are not binding upon any of the Trustees, officers or
shareholders individually but are binding only upon the assets and property of
the Fund.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
WESTERN ASSET PREMIER BOND FUND
BY: _______________________________________
Name:______________________________________
Title:_____________________________________
EQUISERVE TRUST COMPANY, N.A.
BY:________________________________________
Name:______________________________________
Title:_____________________________________
EQUISERVE, INC.
BY:________________________________________
Name:______________________________________
Title:_____________________________________
