Exhibit 99.(h)(iv)
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
LM FUND SERVICES, INC.
AND
STATE STREET BANK AND TRUST COMPANY
WESTERN ASSET FUNDS
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TABLE OF CONTENTS
PAGE
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1. Terms of Appointment and Duties 1
2. Representations and Warranties of the Sub-Transfer Agent 2
3. Representations and Warranties of the Transfer Agent 3
4. Data Access and Proprietary Information 3
5. Indemnification 5
6. Standard of Care 6
7. Confidentiality 6
8. Covenants of the Transfer Agent and the Sub-Transfer Agent 7
10. Termination of Agreement 7
11. Assignment and Third Party Beneficiaries 7
12. Subcontractors 8
13. Miscellaneous 8
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SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 30th day of April, 2002, by and between LM FUND
SERVICES, INC., a Maryland corporation, having its principal office and place of
business at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Sub-Transfer
Agent"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company
having its principal office and place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Transfer Agent").
WHEREAS, the Sub-Transfer Agent has been assigned 050229 as its six-digit FINS
number by the Depository Trust Company of New York, NY ("DTC");
WHEREAS, the Sub-Transfer Agent is registered with Securities and Exchange
Commission, its appropriate regulatory authority ("ARA") and has been assigned a
seven digit number (generally beginning with an "84" or an "85") ARA number of
84-5871;
WHEREAS, the Transfer Agent has been assigned 209809 as its six-digit FINS
number by the DTC;
WHEREAS, the Transfer Agent is registered with the Board of Governors of the
Federal Reserve System, its ARA and has been assigned ARA number of 85-05003;
WHEREAS, the Transfer Agent has been appointed by each of the investment
companies (including each series thereof) listed on Schedule A (the "Fund(s)"),
each an open-end diversified management investment company registered under the
Investment Company Act of 1940, as amended, as transfer agent, dividend
disbursing agent and shareholder servicing agent in connection with certain
activities, and the Transfer Agent has accepted each such appointment;
WHEREAS, the Transfer Agent has entered into various Transfer Agency and Service
Agreements with each of the Funds (including each series thereof) listed on
Schedule A pursuant to which the Transfer Agent is responsible for certain
transfer agency and dividend disbursing functions;
WHEREAS, the Sub-Transfer Agent has agreed to act as an independent contractor
for the Transfer Agent and will not be acting as an affiliate or agent of any
Funds or their investment adviser or advisers;
WHEREAS, the Transfer Agent has agreed that the Sub-Transfer Agent shall perform
certain shareholder accounting and servicing functions (collectively
"Shareholder and Record-Keeping Services"); and
WHEREAS, the Sub-Transfer Agent has agreed to perform such Shareholder and
Record-Keeping Services.
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NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF SUB-TRANSFER AGENT
Subject to the terms and conditions set forth in this Agreement, the
Transfer Agent hereby employs and appoints the Sub-Transfer Agent to
act as, and the Sub-Transfer Agent agrees to act as, the agent of the
Transfer Agent for the shares of the Funds in connection with any
accumulation, open-account, retirement plans or similar plan provided
to the shareholders of each Fund ("Shareholders") and set out in the
currently effective prospectus and statement of additional information
("prospectus") of each such Fund, including without limitation any
periodic investment plan or periodic withdrawal program, but only with
respect to services outlined on Schedule 1 (defined below). As used
herein, the term "Shares" means the authorized and issued shares of
common stock, or shares of beneficial interest, as the case may be,
for each of the Funds (including each series thereof) enumerated in
Schedule A. In accordance with procedures established from time to
time by agreement between the Transfer Agent and the Sub-Transfer
Agent, the Sub-Transfer Agent agrees that it will perform Shareholder
and Record-Keeping Services outlined on the attached Sub-Transfer
Agency Services Schedule 1 ("Schedule 1"), which may be amended by the
parties from time to time.
2. REPRESENTATIONS AND WARRANTIES OF THE SUB-TRANSFER AGENT
The Sub-Transfer Agent represents and warrants to the Transfer Agent
that:
2.1 It is a corporation duly organized and existing and in good standing
under the laws of the State of Maryland.
2.2 It is duly qualified to carry on its business in the State of
Maryland.
2.3 It is empowered under applicable laws and by its Articles of
Organization and By-Laws to enter into and perform this Agreement.
2.4 It is a transfer agent fully registered as a transfer agent pursuant
to Section 17A(c)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
2.5 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
2.6 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
2.7 It has and will continue to comply with all laws and regulations
applicable to registered transfer agents.
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3. FEES AND EXPENSES
PAYMENT OF FEES TO SUB-TRANSFER AGENT. No Fees shall be payable by the
Transfer Agent to the Sub-Transfer Agent.
4. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Sub-Transfer Agent
that:
4.1 It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of
Massachusetts.
4.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
4.3 It is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement.
4.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
4.5 It is a transfer agent fully registered as a transfer agent pursuant
to Section 17A(c)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
5. DATA ACCESS AND PROPRIETARY INFORMATION
5.1 The Transfer Agent and the Sub-Transfer Agent acknowledge that any
databases, computer programs, screen formats, report formats,
interactive design techniques, and documentation manuals furnished to
each other as part of the Fund's ability to access certain
Fund-related data ("Customer Data") maintained on databases under the
control and ownership of the Transfer Agent, the Sub-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,
Sub-Transfer Agent, or other third party. In no event shall
Proprietary Information be deemed Customer Data. The Transfer Agent
and the Sub-Transfer Agent agree to treat all Proprietary Information
as proprietary to the each other and further agree that they shall not
divulge any Proprietary Information to any person or organization
except as may be provided hereunder. Without limiting the foregoing,
the Transfer Agent and Sub-Transfer Agent agree for themselves and
their employees and agents to:
(a) Use such programs and databases (i) solely on the each other's
computers, or (ii) solely from equipment at the location agreed to
between them and (iii) solely in accordance with the each other's
applicable user documentation;
(b) Refrain from copying or duplicating in any way (other than in the
normal course of performing processing), the Proprietary Information;
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(c) Refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained,
to inform in a timely manner of such fact and dispose of such
information in accordance with the instructions of the other party;
(d) Refrain from causing or allowing information transmitted from the
computer to the terminal to be retransmitted to any other computer
terminal or other device except as expressly permitted by each other
(such permission not to be unreasonably withheld);
(e) Allow each other to have access only to those authorized
transactions as agreed to; and
(f) Honor all reasonable written requests made by each other to
protect at the requesting parties expense the rights of the requesting
party in Proprietary Information at common law, under federal
copyright law and under other federal or state law.
5.2 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 either party; 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.
5.3 The parties acknowledge that their obligation to protect each other's
Proprietary Information is essential to their business interests and
that the disclosure of such Proprietary Information in breach of this
Agreement would cause 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 parties
shall be entitled to seek and obtain a temporary restraining order,
injunctive relief, or other equitable relief against the continuance
of such breach.
5.4 If either party notifies the other that any of the Data Access
Services do not operate in material compliance with the most recently
issued user documentation for such services, the other party shall
endeavor in a timely manner to correct such failure. Organizations
from which either party may obtain certain data included in the Data
Access Services are solely responsible for the contents of such data
and the parties agree to make no claim against the other 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 parties expressly
disclaim all warranties except those expressly stated herein
including, but not limited to, the implied warranties of
merchantability and fitness for a particular purpose.
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5.5 If the transactions available to the parties include the ability to
originate electronic instructions to the each other 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
parties 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 parties from time to time.
5.6 Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this SECTION 5. The obligations of this
Section shall survive any earlier termination of this Agreement.
6. INDEMNIFICATION
6.1 The Transfer Agent shall not be responsible for, and the Sub-Transfer
Agent shall indemnify and hold the Transfer Agent, harmless from and
against, any and all losses, damages, 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, (including the
defense of any law suit in which the Transfer Agent or affiliate is a
named party), provided that such actions are taken in good faith and
without negligence or willful misconduct;
(b) The Sub-Transfer Agent's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or
warranty of the Sub-Transfer Agent hereunder;
(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
Sub-Transfer Agent, and which have been prepared, maintained or
performed by the Sub-Transfer Agent or each Fund or any other person
or firm on behalf of the Sub-Transfer Agent or each Fund including but
not limited to any broker-dealer, TPA or previous transfer agent or
registrar; (ii) any instructions or requests of the Sub-Transfer Agent
or each 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 after
consultation with such legal counsel; or (iv) any paper or document
reasonably believed to be genuine, authentic, or signed by the proper
person or persons;
(d) The negotiation and processing of any checks including without
limitation for deposit into the Fund's demand deposit account
maintained by the Transfer Agent; or
(e) Upon the Fund's request entering into any agreements required by
the National Securities Clearing Corporation (the "NSCC") for the
transmission of Fund or Shareholder data through the NSCC clearing
systems.
6.2 The Sub-Transfer Agent shall not be responsible for, and the Transfer
Agent shall indemnify and hold the Sub-Transfer Agent, harmless from
and against, any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of or attributable
to:
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(a) All actions of the Sub-Transfer Agent or its agents or
subcontractors required to be taken pursuant to this Agreement,
(including the defense of any law suit in which the Sub-Transfer Agent
or affiliate is a named party), provided that such actions are taken
in good faith and without negligence or willful misconduct;
(b) The Transfer Agent's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or
warranty of the Transfer Agent hereunder;
(c) The reliance upon, and any subsequent use of or action taken or
omitted, by the Sub-Transfer Agent, or its agents or subcontractors
on: (i) any information, records, documents, data, stock certificates
or services, which are received by the Sub-Transfer Agent or its
agents or subcontractors by machine readable input, facsimile, CRT
data entry, electronic instructions or other similar means authorized
by the Transfer Agent, and which have been prepared, maintained or
performed by the Transfer Agent or each Fund or any other person or
firm on behalf of the Transfer Agent or each Fund including but not
limited to any broker-dealer, TPA or previous transfer agent or
registrar; (ii) any instructions or requests of the Transfer Agent or
each 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 Sub-Transfer Agent under this
Agreement which are provided to the Sub-Transfer Agent after
consultation with such legal counsel; or (iv) any paper or document
reasonably believed to be genuine, authentic, or signed by the proper
person or persons;
6.3 In order that the indemnification provisions contained in this SECTION
6 shall apply, upon the assertion of a claim for which the
Sub-Transfer Agent may be required to indemnify the Transfer Agent,
the Transfer Agent shall promptly notify the Sub-Transfer Agent of
such assertion, and shall keep the Sub-Transfer Agent advised with
respect to all developments concerning such claim. The Sub-Transfer
Agent 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 Sub-Transfer Agent may be required to indemnify the Transfer Agent
except with the Sub-Transfer Agent's prior written consent.
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7. STANDARD OF CARE
The Sub-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 due to
errors, including encoding and payment processing errors, unless said
errors are caused by its negligence, bad faith, or willful misconduct
or that of its employees or agents. The parties agree that any
encoding or payment processing errors shall be governed by this
standard of care and Section 4-209 of the Uniform Commercial Code is
superseded by SECTION 7 of this Agreement.
8. CONFIDENTIALITY
The Transfer Agent and the Sub-Transfer Agent 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 Sub-Transfer
Agent, used or gained by the Transfer Agent or the Sub-Transfer Agent
during performance under this Agreement. The Transfer Agent and the
Sub-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 Sub-Transfer Agent or the Transfer Agent and their successors and
assigns. In the event of breach of the foregoing by either party, the
remedies provided by SECTION 5 shall be available to the party whose
confidential information is disclosed. The above prohibition of
disclosure shall not apply to the extent that the Transfer Agent must
disclose such data to its sub-contractor or Fund agent for purposes of
providing services under this Agreement.
9. COVENANTS OF THE TRANSFER AGENT AND THE SUB-TRANSFER AGENT
9.1 The Sub-Transfer Agent hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Transfer Agent
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.
9.2 The Sub-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
Sub-Transfer Agent agrees that all such records prepared or maintained
by the Sub-Transfer Agent relating to the services to be performed by
the Sub-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.
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10. TERMINATION OF AGREEMENT
10.1 TERM. This Agreement may be terminated by either party upon thirty
(30) days' written notice to the other.
10.2 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.
10.3 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.
11. ASSIGNMENT AND THIRD PARTY BENEFICIARIES
11.1 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.
11.2 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 Sub-Transfer Agent and the
Transfer Agent, and the duties and responsibilities undertaken
pursuant to this Agreement shall be for the sole and exclusive benefit
of the Sub-Transfer Agent and the Transfer Agent. This Agreement shall
inure to the benefit of and be binding upon the parties and their
respective permitted successors and assigns.
11.3 This Agreement does not constitute an agreement for a partnership or
joint venture between the Sub-Transfer Agent and the Transfer Agent.
Neither party shall make any commitments with third parties that are
binding on the other party without the other party's prior written
consent.
12. SUBCONTRACTORS
Nothing herein shall impose any duty upon the Transfer Agent or the
Sub-Transfer Agent in connection with or make the Transfer Agent or
Sub-Transfer Agent liable for the actions or omissions to act of
unaffiliated third parties such as, by way of example and not
limitation, Airborne Services, Federal Express, United Parcel Service,
the U.S. Mails, the NSCC and telecommunication companies, provided,
the party who selected such company shall have exercised due care in
selecting the same.
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13. MISCELLANEOUS
13.1 AMENDMENT. This Agreement may be amended or modified by a written
agreement executed by both parties.
13.2
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.
13.3 FORCE MAJEURE. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
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.
13.4 CONSEQUENTIAL DAMAGES. Neither party to this Agreement shall be liable
to the other party for consequential, indirect or special damages
under any provision of this Agreement or for any consequential,
indirect or special damages arising out of any act or failure to act
hereunder.
13.5 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.
13.6 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.
13.7 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.
13.8 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.
13.9 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.
13.10 COUNTERPARTS. This Agreement may be executed by the parties hereto on
any number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
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13.11 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.
13.12 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:
State Street Bank and Trust Company
c/o Boston Financial Data Services, Inc.
0 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
(b) If to the Sub-Transfer Agent, to:
LM Fund Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: D. Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
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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.
LM FUND SERVICES, INC.
BY:
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ATTEST:
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STATE STREET BANK AND TRUST
COMPANY
BY:
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ATTEST:
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SCHEDULE A
The Funds consist of the following investment companies (including each series
thereof):
Western Asset Funds, Inc.
- Western Asset Government Money Market Portfolio
- Western Asset Money Market Portfolio
- Western Asset Intermediate Portfolio
- Western Asset Intermediate Plus Portfolio
- Western Asset Core Portfolio
- Western Asset Core Plus Portfolio
- Western Asset Inflation Indexed Bond Portfolio
- Western Asset High Yield Portfolio
- Western Asset Non-U.S. Fixed Income Portfolio
- Western Asset Global Strategic Income Portfolio
- Western Asset Enhanced Equity Portfolio
LM FUND SERVICES, INC. STATE STREET BANK AND TRUST
COMPANY
BY: BY:
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SCHEDULE 1
SUB-TRANSFER AGENCY SERVICES
The Sub-Transfer Agent will perform the following functions:
1. Establish all new accounts in DST Systems, Inc. ("DST") computer system
TA2000;
2. Establish and maintenance of the Investor file (Statement file);
3. Process account maintenances;
4. Code accounts with NSCC BIN #'s;
5. Approve clients for DST Vision access (DST account Internet access);
6. Respond to all shareholder inquiries via phone, fax and email;
7. Handle all in-kind subscriptions for all funds;
8. Complete audits for existing clients;
9. Mail shareholder reports;
10. Process all fee payments for retirement platforms, brokers and TPA's; and
11. Convert clients from manual trading to NSCC.
LM FUND SERVICES, INC. STATE STREET BANK AND TRUST
COMPANY
BY: BY:
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