Exhibit (h)(iii)
FORM OF
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the day of _______, 2004, by and between XXXXX & STEERS
UTILITY FUND, INC., a Maryland corporation, having its principal office and
place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Fund"),
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 Fund desires to appoint the Transfer Agent as its 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:
1. Terms of Appointment and Duties
1.1 Transfer Agency Services. 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 its transfer agent for the Fund's
authorized and issued shares of its common stock ("Shares"), dividend disbursing
agent, custodian of certain retirement plans and agent in connection with any
accumulation, open-account or similar plan provided to the shareholders of the
Fund ("Shareholders") and set out in the currently effective prospectus and
statement of additional information ("prospectus") of the Fund, including
without limitation any periodic investment plan or periodic withdrawal program.
In accordance with procedures established from time to time by agreement between
the Fund and the Transfer Agent, the Transfer Agent agrees that it will perform
the following services:
(a) Receive for acceptance, orders for the purchase of Shares, and promptly
deliver payment and appropriate documentation thereof to the Custodian of the
Fund authorized pursuant to the Articles of Incorporation of the Fund (the
"Custodian");
(b) Pursuant to purchase orders, issue the appropriate number of Shares and hold
such Shares in the appropriate Shareholder account;
(c) Receive for acceptance redemption requests and redemption directions and
deliver the appropriate documentation thereof to the Custodian;
(d) In respect to the transactions in items (a), (b) and (c) above, the Transfer
Agent shall execute transactions directly with broker-dealers authorized by the
Fund;
(e) 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;
(f) Effect transfers of Shares by the registered owners thereof upon receipt of
appropriate instructions;
(g) Prepare and transmit payments for dividends and distributions declared by
the Fund;
(h) 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;
(i) Maintain records of account for and advise the Fund and its Shareholders as
to the foregoing; and
(j) Record the issuance of Shares of the Fund and maintain pursuant to SEC Rule
17Ad10(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
and shall have no obligation, when recording the issuance of Shares, to monitor
the issuance of such Shares or to take cognizance of any laws relating to the
issue or sale of such Shares, which functions shall be the sole responsibility
of the Fund.
1.2 Additional Services. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraph, the Transfer
Agent shall perform the following services:
(a) Other Customary Services. Perform the customary services of a transfer
agent, dividend disbursing agent, custodian of certain retirement plans 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, mailing 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
2
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 brokerdealers and banks which have been established by,
or in accordance with the instructions of authorized persons, as hereinafter
defined on the dealer file maintained by the Transfer Agent; (ii) issue
instructions to Fund's banks for the settlement of transactions between the Fund
and NSCC (acting on behalf of its broker-dealer and bank participants); (iii)
provide account and transaction information from the affected Fund's records on
DST Systems, Inc. computer system TA2000 ("TA2000 System") in accordance with
NSCC's Networking and Fund/SERV rules for those broker-dealers; 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) Additional Telephone Support Services. If the parties elect to have the
Transfer Agent provide additional telephone support services under this
Agreement, the parties will agree to such services, fees and sub-contracting as
stated in Schedule 1.2(f) entitled "Telephone Support Services" attached hereto;
and
(g) 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(g) 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(g),
the Fund agrees to pay the Transfer Agent for the reasonable administrative
expense that may be associated with such additional duties in the amount as the
parties may from time to time agree in writing in accordance with Section 3
(Fees and Expenses) below.
2. Third Party Administrators for Defined Contribution Plans
2.1 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 Plans) being qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended ("Code") and administered by
3
third party administrators which may be plan administrators as defined in the
Employee Retirement Income Security Act of 1974, as amended (the "TPA(s)").
2.2 In accordance with the procedures established in the initial Schedule 2.1
entitled "Third Party Administrator Procedures", as may be amended by the
Transfer Agent and 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 TPA's as the case may be as omnibus accounts;
(b) Maintain omnibus accounts on its records in the name of the TPA or its
designee as the Trustee for the benefit of the Plan; and
(c) Perform all services under Section 1 as transfer agent of the Funds and not
as a recordkeeper for the Plans.
2.3 Transactions identified under Section 2 of this Agreement shall be deemed
exception services ("Exception Services") when such transactions:
(a) Require the Transfer Agent to use methods and procedures other than those
usually employed by the Transfer Agent to perform services under Section 1 of
this Agreement;
(b) Involve the provision of information to the Transfer Agent after the
commencement of the nightly processing cycle of the TA2000 System; or
(c) Require more manual intervention by the Transfer Agent, either in the entry
of data or in the modification or amendment of reports generated by the TA2000
System than is usually required by nonretirement plan and pre-nightly
transactions.
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 an annual maintenance fee
for each Shareholder account as set forth in the attached fee schedule
("Schedule 3.1 "). Such fees and out-of-pocket 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.
3.2 Out-of-Pocket Expenses. In addition to the fee paid under Section 3.1 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, mailing and tabulating proxies, records storage, or
advances incurred by the Transfer Agent for the items set out in Schedule 3.1
attached hereto. In addition, any other expenses incurred by the Transfer Agent
at the request or with the consent of the Fund, will be reimbursed by the Fund.
4
3.3 Postage. Postage for mailing of dividends, proxies, Fund reports and other
mailings to all shareholder accounts shall be advanced to the Transfer Agent by
the Fund at least seven (7) days prior to the mailing date of such materials.
3.4 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 twentyone (21) calendar days following the receipt of each
billing notice 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 billing
notice 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.
3.5 Cost of Living Adjustment. Upon each anniversary of the date first stated
above, unless the parties shall otherwise agree, the total fee for all
services shall equal the fee that would be charged for the same services based
on a fee rate (as reflected in Schedule 3.1) increased by the percentage
increase for the twelve-month period of such previous calendar year of the
Consumer Price Index for Urban Wage Earners and Clerical Workers, for the Boston
area, as published bimonthly by the United States Department of Labor, Bureau of
Labor Statistics, or, in the event that publication of such Index is terminated,
any successor or substitute index, appropriately adjusted, acceptable to both
parties.
3.6 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 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.
5
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 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 corporation duly organized and existing and in good standing under
the laws of the State of Maryland.
5.2 It is empowered under applicable laws and by its Articles of Incorporation
and ByLaws to enter into and perform this Agreement.
5.3 All corporate proceedings required by said Articles of Incorporation and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
5.4 It is an open-end and non-diversified management investment company
registered under the Investment Company Act of 1940, as amended.
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 of the Fund being offered for sale.
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 accounts) 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 this 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 Fund Selection Form was selected by the Fund from security
6
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 judgement, 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 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
7
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 callback. 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 ("Customer 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 Data. 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, or (ii)
solely from equipment at the location agreed to between the Fund and the
Transfer Agent and (iii) solely in accordance with the Transfer Agent's
applicable user documentation;
(b) Refrain from copying or duplicating in any way (other than in the normal
course of performing processing on the Fund's computer(s)), the Proprietary
Information;
(c) Refrain from obtaining unauthorized access to any portion of the Proprietary
Information, and if such access is inadvertently obtained, to inform in a timely
manner of such fact and dispose of such information in accordance with the
Transfer Agent's instructions;
(d) Refrain from causing or allowing information transmitted from the Transfer
Agent's computer to the Fund's terminal to be retransmitted to any other
computer terminal or other device except as expressly permitted by the Transfer
Agent (such permission not to be unreasonably withheld);
(e) Allow the Fund to have access only to those authorized transactions as
agreed to between the Fund and the Transfer Agent; and
(f) Honor all reasonable written requests made by the Transfer Agent to protect
at the
8
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. 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.
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
9
8.1 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, 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 Fund's lack of good faith, negligence or willful 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 after consultation with such
legal counsel; or (iv) any paper or document, reasonably believed to be genuine,
authentic, or signed by the proper person or persons;
(d) The offer or sale of Shares in violation of federal or state securities laws
or regulations requiring that such Shares be registered or in violation of any
stop order or other determination or ruling by any federal or any state agency
with respect to the offer or sale of such Shares;
(e) 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
(f) 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.
10
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 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 9
of this Agreement. This standard of care also shall apply to Exception Services,
as defined in Section 2.3 herein, but such application shall take into
consideration the manual processing involved in, and time sensitive nature of,
Exception Services.
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.
11
10.2 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
endeavor to notify the Fund 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 Directors of the Fund
authorizing the appointment of the Transfer Agent and the execution and delivery
of this Agreement; and
(b) A copy of the Articles of Incorporation and By-Laws 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 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.
12. Termination of Agreement
12.1 Term. The initial term of this Agreement (the "Initial Term") shall be
three years from the date first stated above unless terminated pursuant to the
provisions of this Section 13. Unless a party gives written notice to the other
party sixty (60) days before the expiration of the Initial Term or any Renewal
Term, this Agreement will renew automatically from year to year (each such
year-to-year renewal term a "Renewal Term"). Sixty (60) days before the
expiration of the Initial Term or a Renewal Term the
12
parties to this Agreement will agree upon a Fee Schedule for the upcoming
Renewal Term. Otherwise, the fees shall be increased pursuant to Section 3.5 of
this Agreement. Notwithstanding, the termination or non-renewal of this
Agreement, the terms and conditions of this Agreement shall continue to apply
until the completion of deconversion.
12.2 Early Termination. Notwithstanding anything contained in this Agreement to
the contrary, should the Fund desire to move any of its services provided by the
Transfer Agent hereunder to a successor service provider prior to the expiration
of the then current Initial or Renewal Term, or without the required notice, the
Transfer Agent shall make a good faith effort to facilitate the conversion on
such prior date; however, there can be no guarantee or assurance that the
Transfer Agent will be able to facilitate a conversion of services on such prior
date. In connection with the foregoing, should services be converted to a
successor service provider, or if the Fund is liquidated or its assets merged or
purchased or the like with or by another entity which does not utilize the
services of the Transfer Agent, the Fund shall pay to the Transfer Agent on or
before the termination date all fees hereunder accrued to such termination date
and then unpaid plus a termination fee of twenty-five thousand dollars
($25,000.00).
12.3 Expiration of Term. During the Initial Term or Renewal Term, whichever
currently is in effect, should either party exercise its right to terminate, all
out-of-pocket expenses or costs associated with the movement of records and
material will be borne by the Fund. Additionally, the Transfer Agent reserves
the right to charge for any other reasonable expenses associated with such
termination.
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, except with respect to any
amount subject to a good faith dispute within the meaning of Section 3.4 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.
13. Assignment and Third Party Beneficiaries
13
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 Fund. 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 Fund,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS") which is duly registered as a
transfer agent pursuant to Section 17A(c)(2) of the Securities Exchange Act of
1934, as amended, (ii) a BFDS subsidiary duly registered as a transfer agent or
(iii) a BFDS affiliate duly registered as a transfer agent; provided, however,
that the Transfer Agent shall be fully responsible to the Fund for the acts and
omissions of BFDS or its subsidiary or affiliate as it is for its own acts and
omissions.
14.2 Nothing herein shall impose any duty upon the Transfer Agent in connection
with or make the Transfer Agent liable for the actions or omissions to act of
unaffiliated third parties such as by way of example and not limitation,
Airborne Services, Federal Express, United Parcel Service, the U.S. Mails, the
NSCC and telecommunication companies, provided, if the Transfer Agent selected
such company, the Transfer Agent shall have exercised due care in selecting the
same.
15. Miscellaneous
15.1 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 Directors of the Fund.
14
15.2 Massachusetts Law to Apply. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of The
Commonwealth of Massachusetts.
15.3 Force Majeure. In the event 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.
15.4. 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.
15.5 Survival. All provisions regarding indemnification, warranty, liability,
and limits thereon, and confidentiality and/or protections of proprietary rights
and trade secrets shall survive the termination of this Agreement.
15.6 Severability. If any provision or provisions of this Agreement shall be
held invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
15.7 Priorities Clause. In the event of any conflict, discrepancy or ambiguity
between the terms and conditions contained in this Agreement and any Schedules
or attachments hereto, the terms and conditions contained in this Agreement
shall take precedence.
15.8 Waiver. No waiver by 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.
15.9 Merger of Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject matter hereof whether oral or written.
15.10 Counterparts. This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
15.11 Reproduction of Documents. This Agreement and all schedules, exhibits,
attachments and amendments hereto may be reproduced by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties hereto each agree that any such reproduction shall be
15
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction shall likewise be admissible in
evidence.
15.12 Notices. All notices and other communications as required or permitted
hereunder shall be in writing and sent by first class mail, postage prepaid,
addressed as follows or to such other address or addresses of which the
respective party shall have notified the other.
(a) If to State Street Bank and Trust Company, to:
State Street Bank and Trust Company c/o Boston Financial Data Services, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Legal Department Facsimile: (000) 000-0000
(b) If to the Fund, to:
Xxxxx & Steers Utility Fund, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal Department, Facsimile (000) 000-0000
16
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.
XXXXX & STEERS UTILITY FUND, INC.
BY:
----------------------------------
ATTEST:
STATE STREET BANK AND TRUST COMPANY
BY:
----------------------------------
ATTEST:
17
SCHEDULE 1.2(f)
ADDITIONAL TELEPHONE SUPPORT FEES AND SERVICES
Dated
---------------------------
I. SERVICES
1. Transfer Agent and Telephone Support Functions
a. Answer telephone inquiries from [XXX 8 a.m. to 8 p.m. Boston time Monday
through Friday except Christmas Day XXX] [XXX OTHER HOLIDAY COVERAGE AVAILABLE?
XXX] from [XXX existing customers and prospective customers XXX] of the Fund
[XXX for sales literature XXX] in accordance with the telephone script provided
by the Fund.
b. Answer questions pertaining thereto the extent that such questions are
answerable based upon the information supplied to the Transfer Agent by the
Fund.
c. [XXX As the Fund and the Transfer Agent may agree in writing, the Transfer
Agent will receive calls and take written transaction requests from shareholders
of the Fund. Transfer Agent transactions include: [XXX telephone redemptions,
account maintenance, exchanges, transfers, confirmed purchases, account balances
and general inquiries XXX]. Some transactions may result in research which will
be done by the Fund. Other calls may be referred directly to the Fund. Fax any
referrals to [XXX name of company XXX] on the same day the telephone call is
received XXX].
2. Incorporate new information into the above-referenced script upon written
instructions from the Fund;
3. Maintain prospect detail information for six (6) months thereafter, provide
such information to the Fund in the form that the Fund may reasonably request;
4. Send all literature orders for information from BFDS/DST [XXX [how?] [to
whom?] XXX] a minimum of [XXX one XXX] transmission per day;
5. Provide the Fund with a [XXX daily/weekly/monthly XXX] telephone report
detailing the calls received during the [XXX day/week/month XXX];
6. [XXX Provide the Fund with monthly conversion reports as selected by the Fund
from DST's standard report package. XXX]
7. TARGET SERVICE LEVELS: Average speed of answer is fifteen (15) seconds,
abandon rate of no more than 2%,and an overall service level of 85%. The
averages will be calculated on a weekly basis.
18
II. SUBCONTRACTORS
l. The Transfer Agent may, without further consent on the part of the Fund,
subcontract ministerial telephone support services for the performance hereof.
III. FEES
SCHEDULE 1.2(G)
AML DELEGATION
1. Delegation. In connection with the enactment of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 and the regulations promulgated thereunder, (collectively,
the "USA PATRIOT Act"), the Fund has developed and implemented a written
anti-money laundering program (the "AML Program"), which is designed to satisfy
the requirements of the USA PATRIOT Act. Under the USA PATRIOT Act, a mutual
fund can elect to delegate certain duties with respect to the implementation and
operation of its AML Program to a service provider, including its transfer
agent. The Fund is desirous of having the Transfer Agent perform certain
delegated duties pursuant to the AML Program and the Transfer Agent desires to
accept such delegation.
2. Limitation on Delegation. The Fund acknowledges and agrees that in accepting
the delegation hereunder, the Transfer Agent is agreeing to perform only those
duties that have been expressly delegated on this Schedule 1.2(G) (the
"Delegated Duties"), as may be amended from time to time, and is not undertaking
and shall not be responsible for any other aspect of the AML Program or for the
overall compliance by the Fund with the USA PATRIOT Act or for any other matters
that have not been delegated hereunder. Additionally, the parties acknowledge
and agree that the Transfer Agent shall only be responsible for performing the
Delegated Duties with respect to the ownership of, and transactions in, shares
in the Fund for which the Transfer Agent maintains the applicable shareholder
information.
3. Consent to Examination. In connection with the performance by the Transfer
Agent of the Delegated Duties, the Transfer Agent understands and acknowledges
that the Fund remains responsible for assuring compliance with the USA PATRIOT
Act and that the records the Transfer Agent maintains for the Fund relating to
the AML Program may be subject, from time to time, to examination and/or
inspection by federal regulators in order that the regulators may evaluate such
compliance. The Transfer Agent hereby consents to such examination and/or
inspection and agrees to cooperate with such federal examiners in connection
with their review. For purposes of such examination and/or inspection, the
Transfer Agent will use its best efforts to make available, during normal
business hours and on reasonable notice all required records and information for
review by such examiners.
4. Delegated Duties
4.1 Consistent with the services provided by the Transfer Agent and with
respect to the beneficial ownership of, and transactions in, shares in the
Fund for which the Transfer Agent maintains the applicable shareholder
information, the Transfer Agent shall:
(a) Submit all financial and non-financial transactions through the Office
of Foreign Assets Control ("OFAC") database and such other lists or
databases as may be required from time to time by applicable regulatory
authorities;
(b) Review redemption transactions that occur within thirty (30) days of
account or maintenance;
(c) Review wires sent pursuant to banking instructions other than those on
file;
(d) Review a Shareholder's account for unusual activity when purchases and
redemptions by the Shareholder (based on social security number or other
tax identification number within the Fund's records) hit the $100,000
threshold that has been set on the "Unusual Activity Warning System";
(e) Review accounts to identify those established by known offenders
attempting fraud and once identified, freeze such accounts; and
(f) Monitor and track cash equivalents under $10,000 for a rolling
twelve-month period and file Form 8300 as required by law.
4.2 In the event that the Transfer Agent detects suspicious activity as a
result of the foregoing procedures, which necessitates the filing by the
Transfer Agent of a suspicious activity report, a Form 8300 or other
similar report or notice to OFAC, then the Transfer Agent shall also
immediately notify the Fund, unless prohibited by applicable law.
XXXXX & STEERS UTILITY FUND, INC. STATE STREET BANK AND TRUST
COMPANY
BY: _________________________________ BY: ___________________________
Name: _______________________________
Title: ______________________________
19
SCHEDULE 2.1
THIRD PARTY ADMINISTRATORS PROCEDURES
Dated
1. On each day on which both the New York Stock Exchange and the Fund are open
for business (a "Business Day"), the TPA(s) shall receive, on behalf of and as
agent of the Fund, Instructions (as hereinafter defined) from the Plan.
Instructions shall mean as to each Fund (i) orders by the Plan for the purchases
of Shares, and (ii) requests by the Plan for the redemption of Shares; in each
case based on the Plan's receipt of purchase orders and redemption requests by
Participants in proper form by the time required by the terms of the Plan, but
not later than the time of day at which the net asset value of a Fund is
calculated, as described from time to time in that Fund's prospectus. Each
Business Day on which the TPA receives Instructions shall be a "Trade Date".
2. The TPA(s) shall communicate the TPA(s)'s acceptance of such Instructions, to
the applicable Plan.
3. On the next succeeding Business Day following the Trade Date on which it
accepted Instructions for the purchase and redemption of Shares, (TD+I), the
TPA(s) shall notify the Transfer Agent of the net amount of such purchases or
redemptions, as the case may be, for each of the Plans. In the case of net
purchases by any Plan, the TPA(s) shall instruct the Trustees of such Plan to
transmit the aggregate purchase price for Shares by wire transfer to the
Transfer Agent on (TD+1). In the case of net redemptions by any Plan, the TPA(s)
shall instruct the Fund's custodian to transmit the aggregate redemption
proceeds for Shares by wire transfer to the Trustees of such Plan on (TD+1). The
times at which such notification and transmission shall occur on (TD+1) shall be
as mutually agreed upon by each Fund, the TPA(s), and the Transfer Agent.
4. The TPA(s) shall maintain separate records for each Plan, which record shall
reflect Shares purchased and redeemed, including the date and price for all
transactions, and Share balances. The TPA(s) shall maintain on behalf of each of
the Plans a single master account with the Transfer Agent and such account shall
be in the name of that Plan, the TPA(s), or the nominee of either thereof as the
record owner of Shares owned by such Plan.
5. The TPA(s) shall maintain records of all proceeds of redemptions of Shares
and all other distributions not reinvested in Shares.
6. The TPA(s) shall prepare, and transmit to each of the Plans, periodic account
statements showing the total number of Shares owned by that Plan as of the
statement closing date, purchases and redemptions of Shares by the Plan during
the period covered by the statement, and the dividends and other distributions
paid to the Plan on Shares during the statement period (whether paid in cash or
reinvested in Shares).
20
7. The TPA(s) shall, at the request and expense of each Fund, transmit to the
Plans prospectuses, proxy materials, reports, and other information provided by
each Fund for delivery to its shareholders.
8. The TPA(s) shall, at the request of each Fund, prepare and transmit to each
Fund or any agent designated by it such periodic reports covering Shares of each
Plan as each Fund shall reasonably conclude are necessary to enable the Fund to
comply with state Blue Sky requirements.
9. The TPA(s) shall transmit to the Plans confirmation of purchase orders and
redemption requests placed by the Plans; and
10. The TPA(s) shall, with respect to Shares, maintain account balance
information for the Plans) and daily and monthly purchase summaries expressed in
Shares and dollar amounts.
11. Plan sponsors may request, or the law may require, that prospectuses, proxy
materials, periodic reports and other materials relating to each Fund be
furnished to Participants in which event the Transfer Agent or each Fund shall
mail or cause to be mailed such materials to Participants. With respect to any
such mailing, the TPA(s) shall, at the request of the Transfer Agent or each
Fund, provide at the TPA(s)'s expense a complete and accurate set of mailing
labels with the name and address of each Participant having an interest through
the Plans in Shares.
XXXXX & STEERS UTILITY FUND, INC. STATE STREET BANK AND TRUST COMPANY
BY: BY:
---------------------------------- ----------------------------------
21
SCHEDULE 3.1
FEES
Effective through
General: Fees are calculated on average daily net assets and are billed on
a monthly basis at the rate of 1/12 of the annual fee, subject to a minimum
complex base fee.
Annual Fees
Asset Based Fees 4.318 Basis Points for $0 - $2 Billion
3.249 Basis Points for $2 Billion - $5 Billion
2.098 Basis Points for $5 Billion+
Note: A minimum fee of $500.00/Month/CUSIP applies.
Complex Minimum Base Fee
0-7 CUSIPS $500,000
8-11 CUSIPS $786,000
12-15 CUSIPS $1,008,000
Other Fees
----------
XXX Custodial Fee (if applicable) $10.00/Account
Activity Base Fees
New Account Setup $4.32/each
Financial Transactions (Non NSCC) $4.32/each
Shareholder Service Telephone Calls $1.61/per minute
Out-of-Pocket Expenses Billed as incurred
Out-of-Pocket expenses include but are not limited to: confirmation
statements, investor statements, postage, forms, voice response, telephone,
bank services, records retention, customized programming/enhancements,
federal wire, AML Delegated Duties, transcripts, microfilm, microfiche,
year-end forms, proxy mailing, proxy tabulation, and expenses incurred at
the specific direction of the Fund.
XXXXX & STEERS UTILITY FUND, INC. STATE STREET BANK AND TRUST COMPANY
BY: BY:
---------------------------------- ----------------------------------
22
