Exhibit (h)(7)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
CGM TRUST
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
PAGE
Article 1 Terms of Appointment........................................... 1
Article 2 Fees and Expenses.............................................. 5
Article 3 Representations and Warranties of the Bank..................... 6
Article 4 Representations and Warranties the Fund........................ 6
Article 5 Indemnification................................................ 7
Article 6 Covenants of the Trust and the Bank............................10
Article 7 Termination of Agreement.......................................11
Article 8 Assignment.....................................................11
Article 9 Amendment......................................................12
Article 10 Massachusetts Law to Apply....................................12
Article 11 Entire Agreement..............................................12
Article 12 Multiple Series...............................................12
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 2nd day of September, 1997, by and between CGM
Trust, a Massachusetts business trust (the "Trust"), having its principal
office and place of business at Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company
having its principal office and place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Bank").
WHEREAS, the Trust, on behalf of CGM Focus Fund, a series of the Trust
(the "Series" or the "Fund") desires to appoint the Bank as the Fund's transfer
agent, dividend disbursing agent and agent in connection with certain other
activities, and the Bank 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
1.01 Subject to the terms and conditions set forth in this Agreement, the
Trust hereby employs and appoints the Bank to act as, and the Bank agrees to
act as its transfer agent for the Fund's authorized and issued shares of
beneficial interest ("Shares"), dividend disbursing agent and agent in
connection with any accumulation, open-account or similar plans 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.
1.02 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Trust and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation
therefor to the authorized custodian of the Fund (the
"Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation
therefor to the Custodian;
(iv) 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;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions; upon
receipt of proper request for transfer and surrender to it
of Share certificates in proper form for transfer, the
Bank is authorized to transfer Shares on the records of
the Trust maintained by it from time to time and upon
cancellation of surrendered certificates to credit a like
amount of Shares to the transferee and to countersign,
issue and deliver new certificates, if requested;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Trust;
(vii) Maintain records of account for and advise the Trust and
its Shareholders an to the foregoing;
(viii) Record the issuance of Shares of the Fund and maintain
pursuant to SEC Rule 17Ad-10(e) a record of the total
number of Shares of the Fund which are issued and
outstanding. Bank shall also provide the Trust on a
regular basis with the total number of Shares which are
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 state blue sky
laws relating to the issue or sale of such Shares which
functions shall be the sole responsibility of the Trust;
and
(ix) If a Shareholder of uncertificated Shares requests the
issuance of a Share certificate or the registration of a
pledge of such Shares, the Bank, as Transfer Agent, shall
countersign and mail by first class mail a Share
certificate to the Shareholder at his address as set forth
on the transfer books of the Trust, subject to any other
instructions for delivery of certificates which the Trust
may give to the Bank with respect to certificates
representing newly purchased Shares, and subject to the
limitation that no certificates representing newly
purchased Shares shall be mailed until the cash purchase
price of the Shares has been deposited in the bank account
of the Fund maintained by the Custodian.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), the Bank shall: (i) perform all of the customary services
of a transfer agent, dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal program),
including but not limited to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, receiving and tabulating proxies,
mailing Shareholder reports and prospectuses to current Shareholders,
withholding taxes on non-resident alien accounts, withholding income dividends,
capital gains distributions and redemption proceeds as required by federal
withholding regulations, 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 and (ii) provide a
system which will enable the Trust to monitor the total number of Shares sold
in each state. The Trust shall (i) identify to the Bank in writing those Fund
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 Bank for the blue sky state registration
status of the Trust and the Fund is solely limited to the initial establishment
of transactions subject to blue sky compliance by the Trust or the Fund, as
appropriate, and the reporting of such transactions to the Trust as provided
above.
Procedures applicable to certain of these services may be established from
time to time by agreement between the Trust and the Bank.
Article 2 Fees and Expenses
2.01 For performance by the Bank pursuant to this Agreement, the Trust
agrees on behalf of each of the Fund, to pay the Bank fees for each Shareholder
account 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 Trust
and the Bank.
2.02 In addition to the fees paid under Section 2.01 above, the Trust
agrees, on behalf of the Fund, to reimburse the Bank for out-of-pocket expenses
or advances incurred by the Bank for the items set out in the fee schedule
attached hereto. In addition, any other expenses incurred by the Bank at the
request or with the consent of the Trust, will be reimbursed by the Trust on
behalf of the Fund.
2.03 The Trust agrees, on behalf of the Fund, to pay all fees and
reimbursable expenses within five days following the mailing of the respective
billing notice. Postage for mailing of dividends, proxies, Fund reports and
other mailings to all shareholder accounts shall be advanced to the Bank by the
Trust on behalf of the Fund at least seven (7) days prior to the mailing date
of such materials.
Article 3 Representations and Warranties of the Bank
The Bank represents and warrants to the Trust that:
3.01 It is a trust company duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
3.03 It is empowered under applicable laws and by its charter and By-laws
to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
3.05 It 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 the Fund
The Fund represents and warrants to the Bank that;
4.01 The Trust is a business trust duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts.
4.02 It to empowered under applicable laws and by the Amended and Restated
Agreement and Declaration of Trust, as amended (the "Declaration of Trust"),
and By-laws of the Trust to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Declaration of Trust and
By-laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is an open-end management investment company registered under the
Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933 in
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.
4.06 The beneficial interest in the Fund la divided into an unlimited
number of Shares of beneficial interest, without a par value.
Article 5 Indemnification
5.01 The Bank shall not be responsible for, and the Trust on behalf of the
Fund shall indemnify and hold the Bank 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 Bank or its agent 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 Trust's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Trust's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Trust hereunder.
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records and documents which (i) are received by
the Bank or its agents or subcontractors and furnished to it by or on behalf of
the Fund, and (ii) have been prepared and/or maintained by the Fund or any
other person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by the Bank 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.
5.02 The Bank shall indemnify and hold the Trust harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or failure or
omission to act by the Bank as a result of the Bank's lack of good faith,
negligence of willful misconduct.
5.03 At any time the Bank may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and the Bank and its agents or subcontractors shall not be liable
and shall be indemnified by the Fund for any action taken or omitted by it
without negligence and in good faith in reliance upon such instructions or upon
the opinion of such counsel. The Bank, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document furnished by or
on behalf of the Trust, 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 Bank or its agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means authorized
by the Trust, and shall not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from the Trust. The
Bank, 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 registrar, or of a co-transfer
agent or co-registrar.
5.04 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 Bank shall use its best efforts to minimize the
likelihood of such damage resulting from the events described in the
immediately preceding sentence and if such damage occurs, the Bank shall use
its best efforts to mitigate the effects of such events.
5.05 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in
any case in which the other party say be required to indemnify it except with
the other party's prior written consent.
Article 6 Covenants of the Trust and the Bank
6.01 The Trust shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the Trustees of the Trust
authorizing the appointment of the Bank and the execution and delivery of this
Agreement
(b) A copy of the Declaration of Trust and By-laws of the Fund and
all amendments thereto.
6.02 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust 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.
6.03 The Bank 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 Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
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.
6.04 The Bank and the Trust 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, and shall not be voluntarily disclosed to any other
person, except as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Trust relating to the Fund, the Bank will endeavor
to notify the Trust and to secure instructions from an authorized officer of
the Trust as to such inspection. The Bank 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 7 Termination of Agreement
7.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
7.02 Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Trust on behalf of the Fund. Additionally, the Bank reserves the right to
charge for any other reasonable expenses associated with such termination.
Article 8 Assignment
8.01 Except as provided in Section 8.03 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
8.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
8.03 The Bank may, without further consent on the part of the Trust,
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) (1) of the Securities Exchange Act
Of 1934 ("Section 17A(c)(1)", (ii) a BFDS subsidiary duly registered as a
transfer agent pursuant to Section 17A(c)(1); provided, however, that the Bank
shall be as fully responsible to the Trust for the acts and omissions of any
subcontractor as it is for its own acts and omissions.
Article 9 Amendment
9.01 This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 10 Massachusetts Law to Apply
10.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
Article 11 Entire Agreement
11.01 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.
Article 12 Multiple Series
Notwithstanding any other provision hereof, the rights, obligations and
remedies under this Agreement of the parties hereto shall constitute rights,
obligations and remedies only with respect to the Series and the assets of the
Series, and no other series of the Trust shall have any rights, obligations or
remedies under this Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
CGM Trust
BY: /s/ Xxxxxx X. Xxxx
------------------------------------
Title: President
ATTEST:
__________________________________
Title:
STATE STREET BANK AND TRUST COMPANY
BY: /s/ Xxxxxx X. Xxxxx
------------------------------------
Title: Executive Vice President
ATTEST:
/s/ Xxxxxxx Xxxxx
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Title: Vice President
A copy of the Declaration of Trust establishing CGM Trust is on file with
the Secretary of The Commonwealth of Massachusetts, and notice is hereby given
that this Agreement is executed with respect to the Series on behalf of the
Trust by officers of the Trust as officers and not individually and that the
obligations of or arising out of this Agreement are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property belonging to the Series.
STATE STREET BANK AND TRUST COMPANY [State Street
Fee Information for Services as Logo]
Plan, Transfer and Dividend Disbursing Agent
CAPITAL GROWTH MANAGEMENT
Annual Account Service Fees
CGM Focus Fund $ 8.00
Closed Account Fee $ 1.50
Annual Maintenance Charges
The per account annual fee will be billed at a rate of 1/12 of the annual fee
for each fund account serviced during the month. Accounts serviced is defined
as all open accounts at month end and accounts which close during the month.
There is a minimum charge of $1,500 per month.
Activity Based Fees
New Account Set-up $ 3.00 each
Telephone Calls $ 1.50 each
ACH $ 0.35 each
Other Fees
Investor Processing $ 1.80/Investor
Disaster Recovery/Emergency
Backup Per Account Serviced, Per Year $ 0.25
XXX Custodian Fees
Acceptance & Set-up $ 5.00/account
Annual Maintenance $10.00/account
Out-of-Pocket Expenses
Out-of-Pocket expenses include but are not limited to: Confirmation statements,
postage, forms telephone retention, transcripts, microfilm, microfiche, proxy
tabulation and expenses incurred at the specific direction of the fund.
*This schedule will not be activated until Fund becomes effective.
CAPITAL GROWTH MANAGEMENT STATE STREET BANK & TRUST CO.
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------- ---------------------------------
Title: President Title: Executive Vice President
-------------------------- ------------------------------
Date: 7/25/97 Date: 7/23/97
--------------------------- -------------------------------
CGM
THIRD PARTY CHECK PROCEDURES
The following is the CGM policy for reviewing THIRD PARTY CHECKS:
DEFINITION: A THIRD PARTY CHECK is any deposit not payable to CGM or State
Street Bank & Trust Co. for new accounts or subsequent investments.
Any $10,000 and over THIRD PARTY CHECK to establish a new account or a
subsequent investment will be rejected by Boston Financial. A front and back
copy of the check will be faxed to CGM for review.
CGM will provide indemnification if a check is to be processed. Operations will
scan the authorization with a copy of the check as a "PURCH". The check will be
deposited to cover this purchase.
When rejecting, CGM will advise Operations in writing and the item will be
scanned as a "CORHOT". A letter along with the check will be forwarded to the
address of record.
NOTE: If CGM does not respond same day or if the check is received late, the
item will be rejected to correspondence and CGM notified the next business day.
EXCEPTIONS:
o All new accounts with THIRD PARTY CHECKS, regardless of amount, will be
automatically rejected. CGM should provide instructions to reject or
indemnification to process before sending applications to Boston Financial.
NOTE: The check fraud list should be checked against any THIRD PARTY INVESTMENT
CHECK that is accepted for processing.
FUND AUTHORIZATION: The Fund shall indemnify and hold BFDS harmless from and
against, any and all losses, damages, costs, charges, counsel, fees, payments,
expenses and liability arising out of or attributing to honoring the above
instructions.
CGM, SSB and BFDS may revoke this indemnity agreement upon prior written
notice, and in case of such revocation, this indemnity agreement shall remain
effective for all refunded checks issued prior thereto.
/s/ Xxxxx X. Xxxxxxx, Treasurer
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Name and Title
/s/ Xxxxxxx Xxx, Divisional Vice President
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Officer Name and Title
