TRANSFER AGENCY AND SHAREHOLDER SERVICES AGREEMENT
This Transfer Agency And Shareholder Services Agreement ("AGREEMENT") is
made as of September 30, 2011 ("EFFECTIVE DATE") by and between BNY Mellon
Investment Servicing (US) Inc. ("BNYM"), and the First Trust Series Fund (the
"INVESTMENT COMPANY"). Capitalized terms, and certain noncapitalized terms, not
otherwise defined shall have the meanings set forth in Schedule A (Schedule A
also contains an index of defined terms providing the location of all defined
terms).
BACKGROUND
A. The Investment Company is registered as an open-end management investment
company under the 1940 Act.
B. The Investment Company wishes to retain BNYM to serve as its transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent, or, if
applicable, to serve as the transfer agent, registrar, dividend disbursing agent
and shareholder servicing agent for each of its Portfolios listed on Schedule B
attached hereto and made a part hereof, as such Schedule B may be amended from
time to time, and BNYM wishes to furnish such services. The term "FUND" as used
hereinafter in this Agreement means, as applicable, the Investment Company, if
no Portfolios are listed on Schedule B, or the Investment Company and each
Portfolio listed on Schedule B considered in its individual and separate
capacity.
TERMS
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree to the statements made in the preceding paragraphs and as follows:
1. APPOINTMENT. The Fund hereby appoints BNYM to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to the Fund
and BNYM accepts such appointments and agrees in connection with such
appointments to furnish the services expressly set forth in Section 3. BNYM
shall be under no duty to provide any service to or on behalf of the Fund except
as specifically set forth in Section 3 or as BNYM and the Fund may specifically
agree in a written amendment hereto. BNYM shall not bear, or otherwise be
responsible for, any fees, costs or expenses charged by any third party service
providers engaged by the Fund or by any other third party service provider to
the Fund not engaged by BNYM.
2. RECORDS; VISITS. The books and records pertaining to the Fund, which are in
the possession or under the control of BNYM, shall be the property of the Fund.
The Fund and Authorized Persons shall have access to such books and records at
all times during BNYM's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by BNYM to the
Fund or to an Authorized Person, at the Fund's expense.
3. SERVICES.
(a) TRANSFER AGENT, REGISTRAR, DIVIDEND DISBURSING AGENT AND SHAREHOLDER
SERVICING:
(1) Services to be provided on an ongoing basis to the extent applicable to a
particular Fund:
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(i) Calculate 12b-1 payments;
(ii) Maintain shareholder registrations;
(iii) Review new applications and correspond with shareholders to complete
or correct information;
(iv) Direct payment processing of checks or wires;
(v) Prepare and certify shareholder lists in conjunction with proxy
solicitations;
(vi) Countersign share certificates;
(vii) Prepare and mail to shareholders confirmation of activity;
(viii) Provide toll-free lines for direct shareholder use, plus customer
liaison staff for on-line inquiry response;
(ix) Mail duplicate confirmations to broker-dealers of their clients'
activity, whether executed through the broker-dealer or directly
with BNYM;
(x) Provide periodic shareholder lists and statistics to the Fund;
(xi) Provide detailed data for underwriter/broker confirmations;
(xii) Prepare periodic mailing of year-end tax and statement information;
(xiii) Notify on a timely basis the Fund's investment adviser, accounting
agent, and custodian ("FUND CUSTODIAN") of Share activity;
(xiv) Perform other participating broker-dealer shareholder services as
may be agreed upon from time to time;
(xv) Accept and post daily Share purchases and redemptions;
(xvi) Accept, post and perform shareholder transfers and exchanges;
(xvii) Issue and cancel certificates (when requested in writing by the
shareholder); and
(xviii) Remediation Services, as required; and
(xviii) Perform certain administrative and ministerial duties relating to
opening, maintaining and processing transactions for shareholders
or financial intermediaries that trade shares through the NSCC.
(2) Purchase of Shares. BNYM shall issue and credit an account of an investor,
in the manner described in the Fund's prospectus, once it receives:
(i) A purchase order in completed proper form;
(ii) Proper information to establish a shareholder account; and
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(iii) Confirmation of receipt or crediting of funds for such order to the
Fund Custodian.
(3) Redemption of Shares. BNYM shall process requests to redeem Shares as
follows:
(i) All requests to transfer or redeem Shares and payment therefor
shall be made in accordance with the Fund's prospectus, when the
shareholder tenders Shares in proper form, accompanied by such
documents as BNYM reasonably may deem necessary.
(ii) BNYM reserves the right to refuse to transfer or redeem Shares until
it is satisfied that the endorsement on the instructions is valid
and genuine and that the requested transfer or redemption is legally
authorized, and it shall incur no liability for the refusal, in good
faith, to process transfers or redemptions which BNYM, in its good
judgment, deems improper or unauthorized, or until it is reasonably
satisfied that there is no basis to any claims adverse to such
transfer or redemption.
(iii) When Shares are redeemed, BNYM shall deliver to the Fund Custodian
and the Fund or its designee a notification setting forth the number
of Shares redeemed. Such redeemed Shares shall be reflected on
appropriate accounts maintained by BNYM reflecting outstanding
Shares of the Fund and Shares attributed to individual accounts.
(iv) BNYM shall, upon receipt of the monies provided to it by the Fund
Custodian for the redemption of Shares, pay such monies as are
received from the Fund Custodian, all in accordance with the
procedures established from time to time between BNYM and the Fund.
(v) When a broker-dealer notifies BNYM of a redemption desired by a
customer, and the Fund Custodian provides BNYM with funds, BNYM
shall prepare and send the redemption check to the broker-dealer and
made payable to the broker-dealer on behalf of its customer, unless
otherwise instructed in writing by the broker-dealer.
(vi) BNYM shall not process or effect any redemption requests with
respect to Shares of the Fund after receipt by BNYM or its agent of
notification of the suspension of the determination of the net asset
value of the Fund.
(4) Dividends and Distributions. Upon receipt by BNYM of Written Instructions
containing all requisite information that may be reasonably requested by BNYM,
including payment directions and authorization, BNYM shall issue Shares in
payment of the dividend or distribution, or, upon shareholder election, pay such
dividend or distribution in cash, if provided for in the Fund's prospectus. If
requested by BNYM, the Fund shall furnish a certified resolution of the Fund's
Board of Directors declaring and authorizing the payment of a dividend or other
distribution but BNYM shall have no duty to request such. Issuance of Shares or
payment of a dividend or distribution as provided for in this Section 3(a)(4),
as well as payments upon redemption as described in Section 3(a)(3), shall be
made after deduction and payment of any and all amounts required to be withheld
in accordance with any applicable tax laws or other laws, rules or regulations.
BNYM shall (i) mail to the Fund's shareholders such tax forms and other
information, or permissible substitute notice, relating to dividends and
distributions paid by the Fund as are required to be filed and mailed by
applicable law, rule or regulation; and (ii) prepare, maintain and file with the
IRS and other appropriate taxing authorities reports relating to all dividends
by the Fund paid to its shareholders (above threshold amounts stipulated by
applicable law) as required by tax or other laws, rules or regulations;
provided, however, notwithstanding the foregoing and notwithstanding any other
provision of this Section 3(a)(4) or this Agreement: (A) BNYM's exclusive
obligations with respect to any written statement that Section 19(a) of the 1940
Act may require to be issued with respect to the Fund shall be, upon receipt of
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specific Written Instructions to such effect, to receive from the Fund the
information which is to be printed on the statement, to print such information
on appropriate paper stock and to mail such statement to shareholders, and (B)
BNYM's sole obligation with respect to any dividend or distribution that Section
19(a) of the 1940 Act may require be accompanied by such a written statement
shall be to act strictly in accordance with the first three sentences of this
Section 3(a)(4).
(5) Shareholder Account Services. BNYM may arrange, in accordance with the
prospectus:
(i) for issuance of Shares obtained through:
(A) Any pre-authorized check plan; and
(B) Direct purchases through broker wire orders, checks and
applications.
(ii) for a shareholder's:
(A) Exchange of Shares for shares of another fund with which the
Fund has exchange privileges;
(B) Automatic redemption from an account where that shareholder
participates in an automatic redemption plan; and/or
(C) Redemption of Shares from an account with a checkwriting
privilege.
(6) Communications to Shareholders. Subject to receipt by BNYM of timely Written
Instructions where appropriate, BNYM shall mail all communications by the Fund
to its shareholders, including:
(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of Fund shares;
(iii) Monthly or quarterly statements;
(iv) Dividend and distribution notices; and
(v) Tax form information.
(7) Records. BNYM shall maintain records of the accounts for each shareholder
showing the following information:
(i) Name, address and United States Tax Identification or Social Security
number;
(ii) Number and class of Shares held and number and class of Shares for
which certificates, if any, have been issued, including certificate
numbers and denominations;
(iii) Historical information regarding the account of each shareholder,
including dividends and distributions paid and the date and price
for all transactions on a shareholder's account;
(iv) Any stop or restraining order placed against a shareholder's account;
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(v) Any correspondence relating to the current maintenance of a
shareholder's account;
(vi) Information with respect to withholdings; and
(vii) Any information required in order for BNYM to perform any
calculations required by this Agreement.
(8) Lost or Stolen Certificates. BNYM shall place a stop notice against any
certificate reported to be lost or stolen and comply with all applicable federal
regulatory requirements for reporting such loss or alleged misappropriation. A
new certificate shall be registered and issued only upon:
(i) The shareholder's pledge of a lost instrument bond or such other
appropriate indemnity bond issued by a surety company approved by
BNYM; and
(ii) Completion of a release and indemnification agreement signed by the
shareholder to protect BNYM and its affiliates.
(9) Shareholder Inspection of Stock Records. Upon a request from any Fund
shareholder to inspect stock records, BNYM will notify the Fund and the Fund
will issue instructions granting or denying each such request. Unless BNYM has
acted contrary to the Fund's instructions, the Fund agrees to and does hereby
release BNYM from any liability for refusal of permission for a particular
shareholder to inspect the Fund's stock records.
(10) Withdrawal of Shares and Cancellation of Certificates. Upon receipt of
Written Instructions, BNYM shall cancel outstanding certificates surrendered by
the Fund to reduce the total amount of outstanding shares by the number of
shares surrendered by the Fund.
(11) Lost Shareholders.
(A) BNYM shall perform such services as are required in order to comply
with Rule 17Ad-17 of the 1934 Act (the "LOST SHAREHOLDER RULE"),
including, but not limited to, those set forth below. BNYM may, in its
sole discretion, use the services of a third party to perform some of or
all such services.
(i) documentation of search policies and procedures;
(ii) execution of required searches;
(iii) tracking results and maintaining data sufficient to comply with the
Lost Shareholder Rule; and
(iv) preparation and submission of data required under the Lost
Shareholder Rule.
(B) For purposes of clarification: (i) Section 3(a)(11)(A) does not
obligate BNYM to perform the services described therein for
broker-controlled accounts, omnibus accounts and similar accounts with
respect to which BNYM does not receive or maintain information which would
permit it to determine whether the account owner is a "lost
securityholder", as that term is defined in the Lost Shareholder Rule; and
(ii) no provision of this Agreement, including without limitation Section
3(a)(11)(A), obligates BNYM to perform any escheat services or abandoned
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property services for any Fund or any accounts hereunder - the Fund agrees
and acknowledges that the Fund alone is responsible for compliance with
applicable escheat and abandoned property laws.
(12) Tax Advantaged Accounts.
(A) Certain definitions:
(i) "ELIGIBLE ASSETS" means shares of the Fund and such other assets as
the Fund and BNYM may mutually agree.
(ii) "PARTICIPANT" means a beneficial owner of a Tax Advantaged Account.
(iii) "TAX ADVANTAGED ACCOUNT" means any of the following accounts: (i) a
Traditional, SEP, Xxxx, or SIMPLE individual retirement account,
(ii) an account in a money purchase or profit sharing plan, (iii) a
single participant "k" plan account, and (iv) a Xxxxxxxxx
educational savings accounts, all within the meaning of Sections
408, 401, or 530 of the Code; which is facilitated or sponsored by
the Fund or affiliates of the Fund and with respect to which the
contributions of Participants are used to purchase or invest in
solely Eligible Assets.
(B) To the extent requested by the Fund, BNYM shall provide the following
administrative services to Tax Advantaged Accounts, to the extent a
particular administrative service is appropriate to the Tax Advantaged
Account under the Code:
(i) Establish a record of types and reasons for distributions (i.e.,
attainment of age 59-1/2, disability, death, return of excess
contributions, etc.);
(ii) Record method of distribution requested and/or made;
(iii) Receive and process designation of beneficiary forms requests;
(iv) Examine and process requests for direct transfers between
custodians/trustees; transfer and pay over to the successor assets
in the account and records pertaining thereto as requested;
(v) Prepare any annual reports or returns required to be prepared and/or
filed by a custodian of Tax Advantaged Accounts, including, but not
limited to, an annual fair market value report, Forms 1099R and
5498; and file same with the Internal Revenue Service and provide
same to the Participant or Participant's beneficiary, as applicable;
and
(vi) Perform applicable federal withholding and send to the Participant
or Participant's beneficiary, as applicable, an annual TEFRA notice
regarding required federal tax withholding.
(C) BNYM shall arrange for XXXX Xxxxx, XXX Xxxxxx Bank or other qualified
institution (which may be an Affiliate of BNYM) to serve as custodian (the
"CUSTODIAN") for the Tax Advantaged Accounts ("CUSTODIED ACCOUNTS"). In
consideration for such service, the Fund agrees:
(i) The Fund will provide sixty (60) days advance written notice to
BNYM, the Custodian and Participants in connection with a Fund
liquidation or any other event or circumstance or act or course of
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conduct involving the Fund or assets held in a Custodied Account
that would result in an involuntary liquidation of any asset held in
a Custodied Account or would otherwise materially affect the
Custodied Account, its operation, the rights or obligations of a
Participant, any asset in a Custodied Account or the terms or
provisions of a Custodied Account ("MATERIAL EVENT"), regardless of
whether the Material Event was or was not described in an amendment
to the Fund's prospectus or statement of additional information, and
reimburse BNYM and BNYM Trust for all reasonable costs, including
costs of legal counsel, incurred in determining, in consideration of
the Material Event, an appropriate course of conduct under the law,
including the Code, and under agreements with Participants and in
implementing the course of conduct determined to be appropriate;
(ii) The Fund will, at its own cost and expense, at the request of BNYM
and in accordance with all applicable provisions of the Code:
(aa) appoint and provide for a qualified successor custodian for all
Custodied Accounts in the event this Agreement expires or is
terminated or if any other event or circumstance occurs which
constitutes commercially reasonable cause for the Custodian to
resign as custodian of the Custodied Accounts or seek
appointment of a successor custodian,
(bb) provide for any interim custodial or transfer arrangements made
appropriate by any of the circumstances governed by clause
(aa), and
(cc) cause all Custodied Accounts and all assets in the Custodied
Accounts to transfer to such successor or interim custodians;
(iii) The Custodian may require Participants and all employers, advisors
or other parties involved in any manner in the creation, sponsorship
or administration of Custodied Accounts or their relevant plans or
involved in any other capacity with Custodied Accounts or their
relevant plans ("RELATED PARTIES") to adopt, execute or otherwise
agree to disclosure documents, custodial agreements, account
agreements and such other forms, agreements and materials which it
reasonably determines to be appropriate for the establishment and
administration of the Custodied Accounts or relevant plans under
applicable law, including the Code ("ACCOUNT DOCUMENTATION") or for
the services provided as custodian; and
(iv) The Custodian may directly furnish Account Documentation and all
other written notifications, materials and communications which it
reasonably determines to be appropriate to its role as custodian
("RELATED CUSTODIAN MATERIALS") to Participants and Related Parties
and the Fund will upon the reasonable request of BNYM or the
Custodian coordinate joint mailings of Account Documentation and
Related Custodian Materials with Fund materials.
(D) In consideration for BNYM or the Custodian furnishing any one or more
of the services provided for in this Section 3(a)(12), whether alone or in
combination with others, the Fund shall pay to BNYM the related Fees and
Reimbursable Expenses as set forth in the Fee Agreement. The Fund may
direct BNYM to collect such Fees and Reimbursable Expenses from the assets
in relevant Tax Advantaged Accounts upon appropriate disclosure to
Participants, but shall remain responsible for such Fees and Reimbursable
Expenses to the extent it does not so direct BNYM or such amounts are not
collectable from the Tax Advantaged Accounts.
Page 7
(13) Print Mail. The Fund hereby engages BNYM as its exclusive print/mail
service provider with respect to those items and for such fees as may be agreed
to from time to time in writing by the Fund and BNYM.
(b) ANTI-MONEY LAUNDERING PROGRAM SERVICES. BNYMIS will perform one or more of
the services described in subsections (1) through (6) of this Section 3(b) if
requested by the Fund ("AML SERVICES").
(1) Anti-Money Laundering.
(A) To the extent the other provisions of this Agreement require BNYM to
establish, maintain and monitor accounts of investors in the Fund
consistent with the Securities Laws, BNYM shall perform reasonable actions
necessary to assist the Fund in complying with Section 352 of the USA
PATRIOT Act, as follows: BNYM shall: (a) establish and implement written
internal policies, procedures and controls reasonably designed to help
prevent the Fund from being used to launder money or finance terrorist
activities; (b) provide for independent testing, by an employee who is not
responsible for the operation of BNYM's anti-money laundering ("AML")
program or by an outside party, for compliance with BNYM's written AML
policies and procedures; (c) designate a person or persons responsible for
implementing and monitoring the operation and internal controls of BNYM's
AML program; and (d) provide ongoing training of BNYM personnel relating
to the prevention of money-laundering activities.
(B) Upon the reasonable request of the Fund, BNYM shall provide to the
Fund: (x) a copy of BNYM's written AML policies and procedures; (y) at the
option of BNYM, a copy of a written assessment or report prepared by the
party performing the independent testing for compliance, or a summary
thereof, or a certification that the findings of the independent party are
satisfactory; and (z) a summary of the AML training provided for
appropriate BNYM personnel.
(C) Without limiting or expanding subsections (A) or (B) above, the
parties agree this Section 3(b)(1) relates solely to Fund compliance with
Section 352 of the USA PATRIOT Act and does not relate to any other
obligation the Fund may have under the USA PATRIOT Act, including without
limitation Section 326 thereof.
(2) Foreign Account Due Diligence.
(A) To assist the Fund in complying with requirements regarding a due
diligence program for "foreign financial institution" accounts in
accordance with applicable regulations promulgated by U.S. Department of
Treasury under Section 312 of the USA PATRIOT Act ("FFI REGULATIONS"),
BNYM will do the following:
(i) Implement and operate a due diligence program that includes
appropriate, specific, risk-based policies, procedures and controls
that are reasonably designed to enable the Fund to detect and
report, on an ongoing basis, any known or suspected money
laundering activity conducted through or involving any
correspondent account established, maintained, administered or
managed by the Fund for a "foreign financial institution" (as
defined in 31 CFR 103.175(h))("FOREIGN FINANCIAL INSTITUTION");
(ii) Conduct due diligence to identify and detect any Foreign Financial
Institution accounts in connection with new accounts and account
maintenance;
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(iii) Assess the money laundering risk presented by each such Foreign
Financial Institution account, based on a consideration of all
appropriate relevant factors (as generally outlined in 31 CFR
103.176), and assign a risk category to each such Foreign Financial
Institution account;
(iv) Apply risk-based procedures and controls to each such Foreign
Financial Institution account reasonably designed to detect and
report known or suspected money laundering activity, including a
periodic review of the Foreign Financial Institution account
activity sufficient to determine consistency with information
obtained about the type, purpose and anticipated activity of the
account;
(v) Include procedures to be followed in circumstances in which the
appropriate due diligence cannot be performed with respect to a
Foreign Financial Institution account;
(vi) Adopt and operate enhanced due diligence policies for certain
Foreign Financial Institution accounts in compliance with 31 CFR
103.176(b);
(vii) Record due diligence program and maintain due diligence records
relating to Foreign Financial Institution accounts; and
(viii) Report to the Fund about measures taken under (i)-(vii) above.
(B) Nothing in Section 3(b)(2) shall be construed to require BNYM to
perform any course of conduct that is not required for Fund compliance
with the FFI Regulations.
(C) Without limiting or expanding subsections (A) or (B) above, the
parties agree this Section 3(b)(2) relates solely to Fund compliance with
Section 312 of the USA PATRIOT Act and does not relate to any other obligation
the Fund may have under the USA PATRIOT Act, including without limitation
Section 326 thereof.
(3) Customer Identification Program.
(A) To assist the Fund in complying with requirements regarding a customer
identification program in accordance with applicable regulations
promulgated by U.S. Department of Treasury under Section 326 of the USA
PATRIOT Act ("CIP REGULATIONS"), BNYM will do the following:
(i) Implement procedures which require that prior to establishing a new
account in the Fund BNYM obtain the name, date of birth (for natural
persons only), address and government-issued identification number
(collectively, the "DATA ELEMENTS") for the "CUSTOMER" (defined for
purposes of this Agreement as provided in 31 CFR 103.131) associated
with the new account.
(ii) Use collected Data Elements to attempt to reasonably verify the
identity of each new Customer promptly before or after each
corresponding new account is opened. Methods of verification may
consist of non-documentary methods (for which BNYM may use
unaffiliated information vendors to assist with such verifications)
and documentary methods (as permitted by 31 CFR 103.131), and may
Page 9
include procedures under which BNYM personnel perform enhanced due
diligence to verify the identities of Customers the identities of
whom were not successfully verified through the first-level (which
will typically be reliance on results obtained from an information
vendor) verification process(es).
(iii) Record the Data Elements and maintain records relating to
verification of new Customers consistent with 31 CFR 103.131(b)(3).
(iv) Regularly report to the Fund about measures taken under (a)-(c)
above.
(v) If BNYM provides services by which prospective Customers may
subscribe for shares in the Fund via the Internet or telephone, work
with the Fund to notify prospective Customers, consistent with 31
CFR 103.131(b)(5), about the program conducted by the Fund in
accordance with the CIP Regulations.
(B) Nothing in Section 3(b)(3) shall be construed to require BNYM to
perform any course of conduct that is not required for Fund compliance
with the CIP Regulations, including by way of illustration not limitation
the collection of Data Elements or verification of identity for
individuals opening Fund accounts through financial intermediaries which
use the facilities of the National Securities Clearing Corporation.
(4) FinCEN Requests Under USA PATRIOT Act Section 314(a). The Fund hereby
engages BNYM to provide certain services as set forth in this subsection (b)
with respect to FinCEN Section 314(a) information requests ("INFORMATION
REQUESTS") received by the Fund. Upon receipt by BNYM of an Information Request
delivered by the Fund in full compliance with all 314(a) Procedures (as defined
below), BNYM will compare appropriate information contained in the Information
Request against relevant information contained in account records maintained for
the Fund. Information relating to potential matches resulting from these
comparisons, after review by BNYM for quality assurance purposes ("COMPARISON
RESULTS"), will be made available to the Fund in a timely manner. The Fund will
retain responsibility for filing reports with FinCEN that may be appropriate
based on the Comparison Results. In addition, a potential match involving a tax
identification number will be analyzed by BNYM in conjunction with other
relevant activity contained in records for the particular relevant account, and
if, after such analysis, BNYM determines that further investigation is warranted
because the activity might constitute "suspicious activity", as that term is
used for purposes of the USA Patriot Act, then BNYM will deliver a suspicious
activity referral to the Fund. "314(A) PROCEDURES" means the procedures adopted
from time to time by BNYM governing the delivery and processing of Information
Requests transmitted by BNYM's clients to BNYM, including without limitation
requirements governing the timeliness, content, completeness, format and mode of
transmissions to BNYM.
(5) U.S. Government List Matching Services.
(A) BNYM will compare Appropriate List Matching Data (as defined in
subsection (C) below) contained in BNYM databases which are maintained for
the Fund pursuant to this Agreement ("FUND DATA") to "U.S. GOVERNMENT
LISTS", which is hereby defined to mean the following:
(i) data promulgated in connection with the list of Specially Designated
Nationals published by the Office of Foreign Asset Control of the
U.S. Department of the Treasury ("OFAC") and any other sanctions
lists or programs administered by OFAC to the extent such lists or
programs remain operative and applicable to the Fund ("OFAC LISTS");
Page 10
(ii) data promulgated in connection with the list of Non-Cooperative
Countries and Territories ("NCCT LIST") published by the Financial
Action Task Force;
(iii) data promulgated in connection with determinations by the Director
(the "DIRECTOR") of the Financial Crimes Enforcement Network of the
U.S. Department of the Treasury that a foreign jurisdiction,
institution, class of transactions, type of account or other matter
is a primary money laundering concern ("PMLC DETERMINATION"); and
(iv) data promulgated in connection with any other lists, programs or
determinations (A) which BNYM determines to be substantially similar
in purpose to any of the foregoing lists, programs or
determinations, or (B) which BNYM and the Fund agree in writing to
add to the service described in this subsection (a).
(B) In the event that following a comparison of Fund Data to a U.S.
Government List as described in subsection (a) BNYM determines that any
Fund Data constitutes a "match" with the U.S. Government List in
accordance with the criteria applicable to the particular U.S. Government
List, BNYM:
(i) will notify the Fund of such match;
(ii) will send any other notifications required by applicable law or
regulation by virtue of the match;
(iii) if a match to an OFAC List, will to the extent required by
applicable law or regulation assist the Fund in taking appropriate
steps to block any transactions or attempted transactions to the
extent such action may be required by applicable law or regulation;
(iv) if a match to the NCCT List or a PMLC Determination, will to the
extent required by applicable law or regulation conduct a suspicious
activity review of accounts related to the match and if suspicious
activity is detected will deliver a suspicious activity referral to
the Fund;
(v) if a match to a PMLC Determination, will assist the Fund in taking
the appropriate special measures imposed by the Director; and
(vi) will assist the Fund in taking any other appropriate actions
required by applicable law or regulation.
(C) "APPROPRIATE LIST MATCHING DATA" means (A) account registration and
alternate payee data, to the extent made appropriate by statutes, rules or
regulations governing the U.S. Government Lists, (ii) data determined by
BNYM in good faith in light of statutes, rules or regulations governing
the U.S. Government Lists to be necessary to provide the services
described in this Section 3(b)(5), and (iii) data the parties agree in
writing to be necessary to provide the services described in this Section
3(b)(5).
(6) Foreign Account Tax Compliance Act
(A) In accordance with regulations promulgated by U.S. Department of
Treasury under Section 1471, 1472, 1473 and 1474 of the Internal Revenue
Page 11
Code of 1986, as amended, ("FATCA REGULATIONS"), which may become
applicable to the Fund in the future, BNYM will make reasonable efforts to
assist the Fund in complying with such requirements.
(7) Legal Process. The Fund hereby engages BNYM to provide certain services as
set forth in this subsection (6) with respect to legal process (civil and
criminal subpoenas, civil or criminal seizure orders, IRS civil or criminal
notices including notices of lien or levy, other functionally equivalent legal
process as the parties mutually agree) received by the Fund and furnished to
BNYM Regulatory Management at a time and in a manner affording BNYM Regulatory
Management reasonable opportunity to act on it ("LEGAL PROCESS"). The Fund shall
have the sole and exclusive obligation to furnish the information, documentation
or other material requested by the Legal Process but BNYM will assist the Fund
in complying with the Legal Process after reviewing appropriate customer account
activity. In addition, if BNYM, after a review of the Legal Process based on
preliminary criteria, determines an investigation of potential suspicious
activity is warranted, (i) BNYM will perform an analysis of other activity
contained in records for the particular relevant account(s), and (ii) if, after
such analysis, BNYM determines that the Legal Process together with activity
contained in relevant account records could indicate the existence of
"suspicious activity", then BNYM will deliver a suspicious activity referral to
the Fund.
(8) BNYM agrees to permit governmental authorities with jurisdiction over the
Fund to conduct examinations of the operations and records relating to the
services performed by BNYM under this Section 3(b) upon reasonable advance
request and during normal business hours and to furnish copies at the Fund's
cost and expense of information reasonably requested by the Fund or such
authorities and relevant to the services.
(9) For purposes of clarification: All Written Procedures relating to the
services performed by BNYM pursuant to this Section 3(b) and any information,
written matters or other recorded materials relating to such services and
maintained by BNYM shall constitute Confidential Information of BNYM, except to
the extent, if any, such materials constitute Fund records under the Securities
Laws.
(10) The Fund is solely and exclusively responsible for determining the
applicability to the Fund of the Bank Secrecy Act, the USA PATRIOT Act,
regulations of FinCEN, and all other laws and regulations, as they may be
constituted from time to time ("FUND APPLICABLE LAWS"), for complying with the
Fund Applicable Laws, for determining the extent to which the AML Services
assist the Fund in complying with the Fund Applicable Laws, and for furnishing
any supplementation or augmentation to the AML Services it determines to be
appropriate, and acknowledges that BNYM has given no advice and makes no
representations with respect to such matters. Section 3(b) of the Agreement
shall not be construed to impose on BNYM any obligation other than to engage in
the specific course of conduct specified by the provisions therein, and in
particular shall not be construed to impose any other obligation on BNYM to
design, develop, implement, administer, or otherwise manage compliance
activities of the Fund. The services provided pursuant to this Section 3(b) may
be changed at any time and from time to time by BNYM in its reasonable sole
discretion to include commercially reasonable provisions appropriate to the
relevant requirements of the Fund Applicable Laws and the description of
services contained in Section 3 shall be deemed revised accordingly without
written amendment pursuant to Section 16(a).
(c) RED FLAGS SERVICES. In the event the Fund elects to receive the Red Flags
Services, the provisions of Schedule C, which is hereby incorporated by
reference into this Agreement as if fully set forth herein, shall apply.
(c) ACCESS TO AND USE OF THE BNYM SYSTEM. The terms of Schedule D to this
Agreement shall apply to the Fund's access to and use of any component of the
BNYM System (as defined in Schedule D).
Page 12
4. CONFIDENTIALITY.
(a) Each party shall keep the Confidential Information (as defined in subsection
(b) below) of the other party in confidence and will not use or disclose or
allow access to or use of such Confidential Information except in connection
with the activities contemplated by this Agreement or as otherwise expressly
agreed in writing. Each party acknowledges that the Confidential Information of
the disclosing party will remain the sole property of such party. In complying
with the first sentence of this subsection (a), each party will use the same
degree of care it uses to protect its own confidential information, but in no
event less than a commercially reasonable degree of care.
(b) Subject to subsections (c) and (d) below, "CONFIDENTIAL INFORMATION" means
(i) this Agreement and its contents, all compensation agreements, arrangements
and understandings (including waivers) respecting this Agreement, disputes
pertaining to the Agreement, and information about a party's exercise of rights
hereunder, performance of obligations hereunder or other conduct of a party in
connection with the Agreement, (ii) information and data of, owned by or about a
disclosing party or its affiliates, customers, or subcontractors that may be
provided to the other party or become known to the other party in the course of
the relationship established by this Agreement, regardless of form or content,
including but not limited to (A) competitively sensitive material, and not
generally known to the public, including, but not limited to, studies, plans,
reports, surveys, summaries, documentation and analyses, regardless of form,
information about product plans, marketing strategies, finances, operations,
customer relationships, customer profiles, customer lists, sales estimates,
business plans, and internal performance results relating to the past, present
or future business activities of the Company or BNYM, their respective
subsidiaries and Affiliates and the customers, clients and suppliers of any of
them; (B) scientific, technical or technological information, a design, process,
procedure, formula, or improvement that is commercially valuable and secret in
the sense that its confidentiality affords the Company or BNYM a competitive
advantage over its competitors; (C) a confidential or proprietary concept,
documentation, report, data, specification, computer software, source code,
object code, flow chart, database, invention, know how, trade secret, whether or
not patentable or copyrightable; (D) information related to security, disaster
recovery, business continuity and any other operational plans, procedures,
practices and protocols, and (E) anything designated as confidential, and (iii)
to any extent not included within clause (i) or clause (ii) above, with respect
to BNYM, the Proprietary Items (as defined in Schedule D).
(c) Information or data that would otherwise constitute Confidential Information
under subsection (b) above shall not constitute Confidential Information to the
extent it:
(i) is already known to the receiving party at the time it is obtained;
(ii) is or becomes publicly known or available through no wrongful act of the
receiving party;
(iii) is rightfully received from a third party who, to the receiving party's
knowledge, is not under a duty of confidentiality;
(iv) is released by the protected party to a third party without restriction;
or
(v) has been or is independently developed or obtained by the receiving
party without reference to the Confidential Information provided by the
protected party.
(d) Confidential Information of a disclosing party may be used or disclosed by
the receiving party in the circumstances set forth below but except for such
permitted use or disclosure shall remain Confidential Information subject to all
applicable terms of this Agreement:
(i) as appropriate in connection with activities contemplated by this
Agreement;
Page 13
(ii) as required pursuant to a court order, subpoena, governmental or
regulatory or self-regulatory authority or agency, law, regulation, or
binding discovery request in pending litigation (provided the receiving
party will provide the other party written notice of such requirement,
to the extent such notice is permitted, and subject to proper
jurisdiction, if applicable);
(iii) as requested by a governmental, regulatory or self-regulatory authority
or agency or independent third party in connection with an inquiry,
examination, audit or other review; or
(iv) the information or data is relevant and material to any claim or cause
of action between the parties or the defense of any claim or cause of
action asserted against the receiving party.
(e) Subject to the exceptions in (d), each party agrees not to publicly
disseminate Confidential Information of the other party or mutual Confidential
Information.
(f) The provisions of this Section 4 shall survive termination of this Agreement
for a period of three (3) years after such termination.
5. PRIVACY. Each party hereto acknowledges and agrees that, subject to the reuse
and re-disclosure provisions of Xxxxxxxxxx X-X, 00 XXX Part 248.11, it shall not
disclose the non-public personal information of investors in the Fund obtained
under this Agreement, except disclosures in connection with carrying out the
services set forth in this Agreement or as otherwise permitted by law or
regulation. BNYM agrees to implement and maintain appropriate security measures
to protect "personal information", as that term is defined in 201 CMR 17.00:
Standards For The Protection Of Personal Information Of Residents Of The
Commonwealth ("MASSACHUSETTS PRIVACY REGULATION"), consistent with the
Massachusetts Privacy Regulation and any applicable federal regulations.
6. COOPERATION WITH ACCOUNTANTS. BNYM shall cooperate with the independent
public accountants for the Fund and shall take commercially reasonable measures
to furnish or to make available to such accountants information relating to this
Agreement and BNYM's performance of the obligations hereunder as requested by
such accountants and necessary for the expression of their opinion.
7. OWNERSHIP RIGHTS. Ownership rights to property utilized in connection with
the parties' use of the BNYM System shall be governed by applicable provisions
of Schedule D which are hereby incorporated by reference into this Section 7,
and shall apply, as if fully set forth herein. Notwithstanding the foregoing,
the parties acknowledge the Fund shall retain all ownership rights in Fund data
which resides on the BNYM system.
8. DISASTER RECOVERY. BNYM shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available. In the event of equipment failures, BNYM shall, at no
additional expense to the Fund, take reasonable steps to minimize service
interruptions. BNYM shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure, provided such loss or
interruption is not caused by BNYM's own intentional misconduct, willful
misfeasance, bad faith or reckless disregard in the performance of its duties
under this Agreement.
9. COMPENSATION.
(a) As compensation for services rendered by BNYM during the term of this
Agreement, the Fund will pay to BNYM such fees and charges (the "FEES") as may
be agreed to from time to time in writing by the Fund and BNYM (the "FEE
AGREEMENT"). In addition, the Fund agrees to pay, and will be billed separately
in arrears for, reasonable expenses incurred by BNYM in the performance of its
Page 14
duties hereunder ("REIMBURSABLE EXPENSES").
(b) BNYM may establish demand deposit accounts or cash management accounts in
its own name for the benefit of the Fund at third party financial institutions
("THIRD PARTY INSTITUTION"), including without limitation Third Party
Institutions that may be an affiliate of BNYM ("AFFILIATED THIRD PARTY
INSTITUTIONS") or a client of BNYM, for the purpose of administering funds
received by BNYM in the course of performing its services hereunder ("SERVICE
ACCOUNTS"). In connection with the Service Accounts, the Company acknowledges
that one or more or a combination of one or more of the following may apply:
(i) BNYM may receive (i) earnings from sweeping certain funds in the Service
Accounts overnight into investment accounts or bank accounts at Third
Party Institutions; and (ii) balance credits with respect to the funds
in the Service Accounts not swept as described in clause (i). On a
monthly basis, BNYM may offset Banking Charges (as defined below) posed
on the Service Accounts by the Third Party Institutions (which are
passed to the Fund) with imputed balance credits calculated on average
balances held in the Service Accounts without reduction for amounts that
might be swept as described in clause (i). The Fund shall be obligated
to pay BNYM any amount by which the Banking Charges for the relevant
month exceed the imputed balance credits. Subject to the immediately
foregoing sentence, BNYM may retain for its own account any sweep
earnings and balance credits received from Third Party Institutions with
respect to the Service Accounts. "BANKING CHARGES" means the bank
charges and bank service fees imposed by Third Party Institutions for
the establishment and maintenance of the Fund's Service Account and
related banking services.
(ii) BNYM may establish Service Accounts primarily or exclusively with
Affiliated Third Party Institutions and retain funds primarily or
exclusively in the Service Accounts at Affiliated Third Party
Institutions. BNYM and its Affiliated Third Party Institutions may
derive a benefit from the funds placed on deposit with the Affiliated
Third Party Institutions in Service Accounts due to the availability of
the funds for use by the Affiliated Third Party Institutions in their
business. In the event an Affiliated Third Party Institution does not
issue or pay balance credits or other credits or earnings on funds in
the Service Accounts, BNYM will calculate for each calendar month an
"IMPUTED ACCOUNT CREDIT", which is hereby defined to be the amount
determined by multiplying (i) the average daily balance in the Fund's
Service Account during the relevant month, times (ii) the number of days
in the month divided by 365, times (iii) the 3-month Treasury Xxxx rate
for secondary markets for the relevant month as reported by the Board of
Governors of the Federal Reserve System at its Web site. BNYM shall pay
the Banking Charges on the Service Accounts for the relevant month up to
the amount of the Imputed Account Credit and the Fund shall be obligated
to pay BNYM any amount by which the Banking Charges for the relevant
month exceed the Imputed Account Credit.
(c) In connection with BNYM's performance of cash settlement and other cash
administration services, the Fund acknowledges and agrees:
(i) that in order to satisfy a Fund's same day settlement obligations with
the NSCC or to satisfy any other another payment obligation of the Fund,
BNYM may have to transfer out of a Fund's Service Account an amount of
funds which exceeds the amount of funds then available for transfer in
the relevant Service Account ("OVERDRAFT AMOUNT");
(ii) that BNYM is not obligated to transfer out of a Fund's Service Accounts
any funds representing Overdraft Amounts and may in its sole discretion
decline without liability hereunder to transfer out of a Fund Service
Account funds representing Overdraft Amounts;
Page 15
(iii) that notwithstanding the absence of an obligation to do so, BNYM may
elect to transfer out of the Fund's Service Accounts funds representing
Overdraft Amounts as a courtesy to a Fund and to maintain BNYM's good
standing with the NSCC and other participants in the financial services
industry and that by electing to transfer funds representing Overdraft
Amounts BNYM does not, even if it has transferred such funds as part of
a regular pattern of conduct, waive any rights under this Section 9(c)
or assume the obligation it has expressly disclaimed in clause (ii)
above and BNYM may at any time in its sole discretion and without notice
decline to continue to make such transfers;
(iv) that BNYM may reverse and cancel any shareholder transaction without
liability hereunder in order to adjust the amount of funds owed by a
Fund to the NSCC in same day funds settlement or to any other third
party to be equal to or less than the amount then available for transfer
in the relevant Service Account or to recover from the NSCC or other
transferees funds already transferred thereto; and
(v) that the Fund is at all times obligated to pay to BNYM an amount of
money equal to the Overdraft Amounts that have not been offset by
credits posted to the relevant Service Account subsequent to the
transfer of the Overdraft Amount and such amounts are payable, and shall
be paid, by the Fund immediately upon demand by BNYM.
(d) The undersigned hereby represents and warrants to BNYM that (i) the terms of
this Agreement, (ii) the fees and expenses associated with this Agreement, and
(iii) any benefits accruing to BNYM or to the adviser or sponsor to the Fund in
connection with this Agreement, including but not limited to any fee waivers,
conversion cost reimbursements, up front payments, signing payments or periodic
payments made or to be made by BNYM to such adviser or sponsor or any affiliate
of the Fund relating to the Agreement have been fully disclosed to the Board of
Directors of the Fund and that, if required by applicable law, such Board of
Directors has approved or will approve the terms of this Agreement, any such
fees and expenses, and any such benefits.
(e) No termination of this Agreement shall cause, and no provision of this
Agreement shall be interpreted in any manner that would cause, BNYM's right to
receive payment of its fees and charges for services actually performed
hereunder, and Fund's obligation to pay such fees and charges, to be barred,
limited, abridged, conditioned, reduced, abrogated, or subject to a cap or other
limitation or exclusion of any nature.
(f) To the extent that any service or course of conduct of BNYM or the Custodian
provided hereunder is configured or performed as it is in whole or in part due
to parameters set forth in Shareholder Materials, standards imposed by clearing
corporations or other industry-wide service bureaus or organizations, Fund
policies or laws, rules or regulations in effect on the Effective Date and due
to new or amended provisions of any of the foregoing after the Effective Date
BNYM or the Custodian develops, implements or provides significantly modified,
different, or new processes, procedures, resources or functionalities to perform
such service or course of conduct or to perform a related new service or course
of conduct, BNYM shall be entitled to fees appropriate for such processes,
procedures, resources or functionalities or as otherwise mutually agreed by the
parties.
(g) While the Fee Agreement sets forth the Fees and certain of the expenses
constituting Reimbursable Expenses, BNYM's rights hereunder to receive
compensation and the reimbursement of expenses from the Fund for services or a
course of conduct performed in accordance with the Agreement shall not be
diminished to any degree solely due to such fees and reimbursable expenses not
being expressly set forth in the Fee Agreement, including by way of illustration
Page 16
and not limitation fees and reimbursable expenses arising from a service or a
course of conduct performed pursuant to Non-Standard Instructions and other Fund
Communications, in connection with a Response Failure, and responding to Fund
Error.
(h) In the event the Investment Company or any Portfolio of the Investment
Company is liquidated, ceases operations, dissolves or otherwise winds down
operations not including a reorganization or merger into another investment
company ("DISSOLUTION EVENT") and effects a final distribution to shareholders
(a "FINAL DISTRIBUTION"), the Investment Company and each relevant Portfolio
shall be responsible for paying to BNYM all fees and reimbursing BNYM for all
reasonable expenses associated with services to be provided by BNYM following
the Final Distribution, whether provided pursuant to a specific request of the
Investment Company or the Portfolio or provided by BNYM due to industry
standards or due to obligations under applicable law or regulation by virtue of
the services previously performed for the Investment Company or the Portfolio
("FINAL EXPENSES"). In connection with the foregoing, the Investment Company or
the relevant Portfolio shall (i) notify BNYM as promptly as practicable
following first approval of the Dissolution Event or any aspect of the
Dissolution Event by its Board of Directors or Trustees, as appropriate, and
furnish BNYM with copies of all materials filed with the SEC or distributed to
shareholders related thereto, (ii) calculate, set aside, reserve and withhold
from the Final Distribution all amounts necessary to pay the Final Expenses and
shall notify BNYM as far in advance as practicable of any deadline for
submitting materials appropriate or necessary for the determination of such
amounts, and (iii) provide sufficient staff or other accommodations to ensure
timely payment of Final Expenses as they come due.
10. INSTRUCTIONS.
(a) Unless the terms of this Agreement or Written Procedures expressly provide,
in the reasonable discretion of BNYM, all requisite details and directions for
it to take a specific course of conduct, BNYM may, prior to engaging in a course
of conduct on a particular matter, require the Fund to provide it with Written
Instructions with respect to the matter. BNYM's obligation to engage in a course
of conduct pursuant to the Written Instructions so provided by the Fund shall be
determined exclusively by the further provisions of this Section 10. BNYM shall
be obligated to engage in a particular course of conduct pursuant to
communications received from the Fund other than those described in the two
immediately preceding sentences only if the communication constitutes a Written
Instruction and only to the extent provided for in the further provisions of
this Section 10.
(b) Whether received from the Fund in response to a request described in Section
10(a) or otherwise, BNYM shall be obligated to act only on "STANDARD
INSTRUCTIONS", which is hereby defined to mean (i) Instructions it receives
which direct a course of conduct substantially similar in all material respects
to a course of conduct provided for in Written Procedures, or (ii) if Written
Procedures provide for a particular form of instructions to be used in
connection with a matter ("FORM"), Instructions it receives on the Form or
conforming in all material respects to the Form in the BNYM's sole judgment.
(c) BNYM may in its sole discretion decline to follow any course of conduct
contained in an Instruction that is not a Standard Instruction (such course of
conduct being a "NON-STANDARD INSTRUCTION") for a bona fide legal, commercial or
business reason ("BONA FIDE REASON"), including by way of example and not
limitation the following: (i) the course of conduct is not consistent or
compliant with, is in conflict with, or requires a deviation from an Industry
Standard, (ii) the course of conduct is not reasonably necessary or appropriate
to or consistent with the services contemplated by this Agreement, (iii) the
course of conduct requires a deviation from or conflicts or is inconsistent with
Written Procedures, (iv) the course of conduct is in conflict or inconsistent
with or violates a law, rule, regulation, or order or legal process of any
nature, (v) the course of conduct is in conflict or inconsistent with or xxxx
Xxxx 17
violate a provision of this Agreement, constitutes a unilateral amendment of the
Agreement or a material change to a service, or (vi) the course of conduct
imposes on BNYM a risk, liability or obligation not contemplated by this
Agreement, including without limitation sanction or criticism of a governmental,
regulatory or self-regulatory authority, civil or criminal action, a loss or
downgrading of membership, participation or access rights or privileges in or to
organizations providing common services to the financial services industry,
out-of-pocket costs and expenses the Fund does not agree to reimburse, requires
performance of a course of conduct customarily performed pursuant to a separate
service or fee agreement, requires a material increase in required resources, or
is reasonably likely to result in a diversion of resources, disruption in
established work flows, course of operations or implementation of controls, or
(vii) BNYM lacks sufficient information, analysis or legal advice to determine
that the conditions in clauses (iv) and (vi) do not exist.
(d) Notwithstanding the right reserved to BNYM by subsection (c) above:
(i) BNYM may in good faith consider implementing a Non-Standard Instruction
if the Fund agrees in a prior written authorization to reimburse BNYM
for: the costs and expenses incurred in consulting with and obtaining
the opinions or other work product of technical specialists, legal
counsel or other third party advisors, consultants or professionals
reasonably considered by BNYM to be appropriate to fully research,
develop and implement the policies, procedures, operational structure
and controls required to perform the Non-Standard Instruction ("EXTERNAL
RESEARCH"), the costs and expenses associated with utilizing or
expanding internal resources to research, develop and implement the
policies, procedures, operational structure and controls required to
perform the Non-Standard Instruction ("INTERNAL RESEARCH", and together
with the External Research, the "RESEARCH"), and the fees and charges
reasonably established by BNYM for performing the Non-Standard
Instruction following its implementation. The Fund may, in place of
agreeing to reimburse BNYM for the costs of Research, agree in such
written authorization to provide BNYM at the Fund's cost and expense
with all Research reasonably requested by BNYM.
(ii) Following receipt of all requested Research, BNYM may, in its sole
discretion, as an accommodation and not pursuant to any obligation,
agree to follow a Non-Standard Instruction if it subsequently receives a
Written Instruction containing terms satisfactory to it in its sole
discretion, including without limitation terms constituting additional
agreements with respect to fees, charges, and expenses, terms
constituting appropriate warranties, representations and covenants,
terms specifying with reasonable particularity the course of conduct
constituting the Non-Standard Instruction and a provision providing for
greater indemnification rights than provided for in the Agreement.
(iii) BNYM reserves the right following receipt of all External Research and
Internal Research and notwithstanding such receipt to continue to
decline to perform the Non-Standard Instruction for a Bona Fide Reason.
(e) BNYM will also not be obligated to act on any Instruction with respect to
which it has reasonable uncertainty about the meaning of the Instruction or
which appears to conflict with another Instruction. BNYM will advise the Fund if
it has uncertainty about the meaning of an Instruction or if it appears to
conflict with another Instruction, but BNYM will have no liability for any delay
between issuance of the initial Instruction and its receipt of a clarifying
Instruction.
(f) In addition to any other provision of this Agreement that may be applicable
to a particular Instruction, BNYM may include in a form of instruction
constituting a Standard Instruction, in addition to appropriate functional terms
and provisions, indemnification terms that are substantially similar in all
material respects to indemnification terms of this Agreement and representations
Page 18
and covenants that BNYM reasonably believes to be appropriate due to risks,
liabilities or obligations incurred by on it by virtue of acting in an agency
capacity for the Fund or imposed on it by law, regulation, or governmental,
regulatory or self-regulatory authority by virtue of its agency conduct. In
addition, BNYM may require third parties who purport to be authorized, or who
the Fund indicates has been authorized, to act on behalf of or for the benefit
of the Fund in connection with this Agreement to execute an instrument
containing indemnification terms, representations and covenants as BNYM may
reasonably require prior to accepting the authority of the persons to so act or
prior to engaging in a course of conduct with them.
(g) BNYM shall not be under any duty or obligation to inquire into and shall not
be liable for the validity or invalidity, authority or lack thereof,
truthfulness or accuracy or lack thereof, or genuineness or lack thereof of any
Instruction, direction, notice, instrument or other information or communication
from the Fund which BNYM reasonably believes to have been given by the Fund
("FUND COMMUNICATION"). BNYM shall have no liability for engaging in a course of
conduct in accordance with any of the foregoing provided it otherwise acts in
compliance with the Agreement. BNYM shall be entitled to rely upon any
Instruction it receives from an Authorized Person or from a person BNYM
reasonably believes to be an Authorized Person relating to this Agreement. BNYM
may assume that any Instruction received hereunder is not in any way
inconsistent with the provisions of organizational documents of the Fund or this
Agreement or of any vote, resolution or proceeding of the Fund's Board of
Directors or of the Fund's shareholders.
(h) BNYM may, in its discretion, decline to accept Oral Instructions with
respect to a particular matter under this Agreement and may require Written
Instructions before engaging in a course of conduct with respect to a particular
matter under this Agreement. In the event BNYM accepts Oral Instructions, the
Fund agrees as a condition to BNYM's acceptance of the Oral Instructions, to
deliver to BNYM, for receipt by 5:00 PM (Eastern Time) on the same business day
as the day the Oral Instructions were given, Written Instructions which confirm
the Oral Instructions. In the event Written Instructions confirming Oral
Instructions are received late, are never received, or fail to contain terms
which confirm the Oral Instructions in all material respects: (i) the validity,
authorization and enforceability of the Oral Instructions, all actions,
transactions, and conduct occurring as a result of the Oral Instructions, and
BNYM's ability to rely on the Oral Instructions shall not be abridged,
abrogated, nullified or adversely impacted in any manner; and (ii) BNYM's
memorialization of the Oral Instructions shall be conclusively presumed to be
the controlling.
(i) In the event facts, circumstances, or conditions exist or events occur,
other than due to a breach by BNYM of its Standard of Care, including without
limitation situations contemplated by Section 10(e), and BNYM reasonably
determines that it must take a course of conduct in response to such situation
and must receive an Instruction from the Fund to direct its conduct, and BNYM so
notifies the Fund, and the Fund fails to furnish adequate Instructions or
unreasonably delays furnishing adequate Instructions ("RESPONSE FAILURE"):
(i) BNYM will first endeavor to utilize internal resources to determine the
appropriate course of conduct in response to the situation but will be
entitled, at the Fund's sole cost and expense, to consult with legal
counsel or other third parties reasonably determined by BNYM to be
appropriate to determine the appropriate course of conduct and the Fund
will reimburse BNYM for out-of-pocket expenses so incurred upon being
invoiced for same; and
(ii) BNYM may implement a course of conduct on behalf of the Fund and BNYM
will have all rights hereunder with respect to such course of conduct as
if such course of conduct was taken pursuant to and contained in Written
Instructions. The Fund will pay BNYM all fees reasonably charged by
BNYM, if any, for engaging in the particular course of conduct and
reimburse BNYM for all reasonably related out-of-pocket expenses
incurred upon being invoiced for same.
Page 19
11. TERMS RELATING TO LIABILITY.
(a) BNYM shall be liable to the Fund (or any person or entity claiming through
the Fund) for Loss the recovery of which is not otherwise excluded by another
provision of this Agreement only to the extent the Loss is caused by BNYM's
gross negligence, intentional misconduct or reckless disregard in the
performance of its duties under this Agreement ("STANDARD OF CARE") and only if
the Fund provides BNYM with written notice of the Loss containing a reasonably
detailed description of the amount of Loss, the conduct alleged to constitute a
breach of the Standard of Care and the provision of the Agreement the Fund
claims to have been breached. In the absence of a finding to the contrary, the
acceptance, processing and/or negotiation of a fraudulent payment for the
purchase of Shares shall be presumed not to have been a failure of BNYM to meet
its Standard of Care.
(b) BNYM's maximum aggregate cumulative liability to the Fund and all persons or
entities claiming through the Fund, considered as a whole, for all Losses the
recovery of which is not otherwise excluded by another provision of this
Agreement shall not exceed: (i) the fees actually paid to BNYM by the Fund for
services provided hereunder during the twelve (12) months immediately prior to
the last Loss Date; or (ii) if the last Loss Date occurs during the period
commencing with the Effective Date and ending on the first anniversary of the
Effective Date, the greater of the amount calculated in accordance with clause
(i) or $500,,000.
(c) Notwithstanding any other provision, and for all purposes, of this
Agreement: Neither party nor its Affiliates shall be liable for any Loss
(including Loss caused by delays, failure, errors, interruption or loss of data)
or breach hereunder occurring directly or indirectly by reason of any event or
circumstance, whether foreseeable or unforeseeable, which despite the taking of
commercially reasonable measures is beyond its reasonable control, including
without limitation: natural disasters, such as floods, hurricanes, tornados,
earthquakes and wildfires; epidemics; action or inaction of civil or military
authority; war, terrorism, riots or insurrection; criminal acts; job action by
organized labor; interruption, loss or malfunction of utilities, transportation,
computer or communications capabilities; non-performance by third parties (other
than subcontractors of BNYM for causes other than those described herein); or
functions or malfunctions of the internet, firewalls, encryption systems or
security devices caused by any of the foregoing (all and any of the foregoing
being an "EVENT BEYOND REASONABLE CONTROL") . Upon the occurrence of an Event
Beyond Reasonable Control, the affected Party shall be excused from any
non-performance caused by the Event Beyond Reasonable Control (i) for so long as
the Event Beyond Reasonable Control or damages caused by it prevail and such
party continues to use commercially reasonable efforts to attempt to perform the
obligation so impacted.
(d) BNYM shall not be liable for any Loss arising out of any action, omission or
conduct of any prior service provider of the Fund or for any failure to discover
any action, omission or conduct of any prior service provider of the Fund that
caused or could cause Loss.
(e) NOTWITHSTANDING ANY OTHER PROVISION OF THE AGREEMENT, IN NO EVENT SHALL
BNYM, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS OR SUBCONTRACTORS BE LIABLE UNDER ANY THEORY OF TORT, CONTRACT, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS, FOR EXEMPLARY,
PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR FOR ANY
OTHER DAMAGES WHICH ARE NOT DIRECT DAMAGES REGARDLESS OF WHETHER SUCH DAMAGES
WERE OR SHOULD HAVE BEEN FORESEEABLE AND REGARDLESS OF WHETHER ANY ENTITY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ALL AND EACH OF WHICH DAMAGES
IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES. FOR PURPOSES OF CLARIFICATION:
NO OTHER PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED TO CONDITION, LIMIT,
MODIFY, NULLIFY OR OTHERWISE PREVAIL IN WHOLE OR IN PART OVER THIS SECTION
11(e).
Page 20
(f) No party may assert a claim or cause of action (or, if applicable, commence
an arbitration or other alternate dispute resolution proceeding) against BNYM or
any of its affiliates more than 15 months after the first event or occurrence
comprising the conduct or alleged conduct upon which the cause of action is
based.
(g) Each party shall have a duty to mitigate damages for which the other party
may become responsible.
(h) With respect to securities data, information and research furnished to BNYM
by third parties and included in the BNYM System ("SECURITIES DATA"), Company
acknowledges that BNYM and such third parties make no warranty concerning the
Securities Data and BNYM disclaims all responsibility for the Securities Data,
including its content, accuracy, completeness, availability or timeliness of
delivery, and BNYM shall not be liable for Loss caused by Securities Data not
being provided to it with the content and at the time which is standard for the
industry or which is required for performance of any service provided for
herein, including without limitation performance of the Licensed Services (as
defined in Schedule D) and other BNYM services provided for in Schedule D.
(i) This Section 11 shall survive termination of this Agreement.
12. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold harmless BNYM and its
affiliates, and to indemnify and hold harmless the Custodian and its affiliates
in connection with services it provides pursuant to Section 3(a)(12), and the
respective directors, trustees, officers, agents and employees of each, from any
Loss and any reasonable attorneys' fees, court costs and other reasonable
out-of-pocket costs and expenses incurred by such indemnified party related to
any Claim arising from: (a) any material breach of duties by the Fund, Fund
contractor or subcontractor in connection with activities contemplated by this
Agreement (b) conduct of BNYM as agent of the Fund not constituting a breach of
its Standard of Care; (c) conduct of BNYM pursuant to a Fund Communication
provided BNYM's performance of the conduct shall remain subject to the Standard
of Care; (d) a course of conduct taken by BNYM pursuant to Section 10(i) due to
a Response Failure; and (e) a Fund Error. BNYM shall have no liability to the
Fund or any person claiming through the Fund for any Loss caused in whole or in
part by any conduct described in the preceding sentence. This Section 12(a)
shall survive termination of this Agreement.
(b) BNYM agrees to indemnify, defend and hold harmless the Fund and its
affiliates, directors, trustees, officers, and employees in connection with the
services BNYM provides pursuant to this Agreement, from any Loss and any
reasonable attorneys' fees, court costs and other reasonable out-of-pocket costs
and expenses incurred by such indemnified party related to any Claim arising
from: (a) any material breach of duties by BNYM, BNYM contractor or
subcontractor in connection with activities contemplated by this Agreement; and
(b) any conduct of BNYM constituting a breach of its Standard of Care; provided
however, BNYM shall have no obligation under this Section 12(b) with respect to
any Losses, attorneys' fees, court costs, and other reasonable out-of-pocket
costs and expenses related to any Claim arising from the Fund's intentional
misconduct or material breach of activities contemplated by this Agreement. This
Section 12(b) shall survive termination of this Agreement.
13. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the Effective Date and continue, unless
validly terminated pursuant to this Section 13 prior thereto, until the date
which is the second (2nd)anniversary of the Service Effective Date (the "INITIAL
TERM").
Page 21
(b) This Agreement shall automatically renew on the final day of the Initial
Term and thereafter each successive June 12 for an additional one (1) year term
(each such additional term being a "RENEWAL TERM"), unless the Fund or BNYM
gives written notice to the other party of its intent not to renew and such
notice is received by the other party not less than ninety (90) days prior to
the expiration of the Initial Term or the then-current Renewal Term (a
"NON-RENEWAL NOTICE"). In the event a party provides a Non-Renewal Notice, this
Agreement shall terminate at 11:59 PM (Eastern Time) on the last day of the
Initial Term or Renewal Term, as applicable.
(c) If a party materially breaches this Agreement (a "DEFAULTING PARTY") the
other party (the "NON-DEFAULTING PARTY") may give written notice thereof to the
Defaulting Party ("BREACH NOTICE"), and if such material breach shall not have
been remedied within thirty (30) days after the Breach Notice is given, then the
Non Defaulting Party may terminate this Agreement by giving written notice of
termination to the Defaulting Party ("BREACH TERMINATION NOTICE"), in which case
this Agreement shall terminate as of 11:59 PM (Eastern Time) on the 30th day
following the date the Breach Termination Notice is given, or such later date as
may be specified in the Breach Termination Notice (but not later than the last
day of the Initial Term or then-current Renewal Term, as appropriate). In all
cases, termination by the Non-Defaulting Party shall not constitute a waiver by
the Non-Defaulting Party of any other rights it might have under this Agreement
or otherwise against the Defaulting Party.
(d) Notwithstanding anything contained in this Agreement to the contrary, if in
connection with a Change in Control the Fund gives notice to BNYM terminating
this Agreement or terminating it as the provider of any of the services
hereunder or if the Fund otherwise terminates this Agreement or any of such
services before the expiration of, as appropriate, the Initial Term or the
then-current Renewal Term ("EARLY TERMINATION") (in all cases, other than in
accordance with Sections 13(b) or (c) above) the following terms shall apply:
(i) BNYM shall, if requested by the Fund, make a good faith effort to
facilitate a conversion to the Fund's successor service provider;
provided that BNYM does not guarantee that it will be able to effect a
conversion on the date(s) requested by the Fund.
(ii) Before the effective date of the Early Termination and before any
conversion of Fund records and accounts to a successor service provider,
the Fund shall pay to BNYM an amount equal to all fees and other amounts
("EARLY TERMINATION FEE") calculated as if BNYM were to provide all
services hereunder until the expiration of, as appropriate, the Initial
Term or the then-current Renewal Term. The Early Termination Fee shall
be calculated using the average of the monthly fees and other amounts
due to BNYM under this Agreement during the last three calendar months
before the date of the notice of Early Termination (or, if not given,
the date services are terminated hereunder).
(iii) The Fund expressly acknowledges and agrees that the Early Termination
Fee is not a penalty but reasonable compensation to BNYM for the
termination of services before the expiration of, as appropriate, the
Initial Term or the then-current Renewal Term.
(iv) For purposes of this Section 13(d), "CHANGE IN CONTROL" means a merger,
consolidation, adoption, acquisition, change in control, re-structuring,
or re-organization of or any other similar occurrence involving the Fund
or any affiliate of the Fund other than the liquidation of a Fund or
Portfolio, the deregistration of the Fund or a Portfolio or the merger
or reorganization of the Fund or a Portfolio with and into an
unaffiliated investment company
Page 22
(v) If the Fund gives notice of Early Termination (or an Early Termination
without such notice occurs) after expiration of the notice period
specified in Section 13(b), the references above to "expiration of, as
appropriate, the Initial Term or the then-current Renewal Term" shall be
deemed to mean "expiration of the Renewal Term immediately following, as
appropriate, the Initial Term or the then-current Renewal Term."
(vi) If any of the accounts serviced by BNYM under this Agreement, or assets
in such accounts, are removed from the coverage of this Agreement other
than pursuant to a shareholder transaction ("REMOVED ASSETS") and are
subsequently serviced by another service provider (including the Fund or
an affiliate of the Fund): (i) the Fund will be deemed to have caused an
Early Termination with respect to such Removed Assets as of the day
immediately preceding the first such removal of assets and be obligated
to BNYM for an Early Termination Fee calculated as if the Removed Assets
constituted a "Fund"; and, (ii) at, BNYM's option, either (a) the Fund
will also be deemed to have caused an Early Termination with respect to
all non-Removed Assets as of a date selected by BNYM resulting in the
Fund owing BNYM the Early Termination Fee, or (b) this Agreement will
remain in full force and effect with respect to all non-Removed Assets.
(e) In the event of termination, all reasonable expenses ("CONVERSION EXPENSES")
associated with movement of records and materials and conversion thereof to a
successor transfer agent ("CONVERSION ACTIONS") will be borne by the Fund and
paid to BNYM prior to any such conversion, including without limitation (i)
reasonable expenses incurred by BNYM associated with de-conversion to a
successor service provider, (ii) reasonable expenses associated with the
transfer or duplication of records and materials, (iii) reasonable expenses
associated with the conversion of records or materials and (iv) reasonable
trailing expenses (expenses or fees incurred in BNYM providing services after
accounts have been transferred to a successor service provider, such as
answering shareholder inquiries, furnishing shareholder account information and
providing tax services with respect to transactions occurring before such
transfer). In addition, in the event of termination, if BNYM continues to
perform any Conversion Actions or provides any other services hereunder, beyond
any termination date or time specified in any notice or in any other manner, the
Fund shall be obligated to pay BNYM immediately upon being invoiced therefor,
all reasonable Conversion Expenses and all other Fees and Reimbursable Expenses
associated with the services BNYM continues to provide hereunder during such
period. BNYM's performance of any Conversion Actions is conditioned on the prior
full performance by the Fund, to BNYM's reasonable satisfaction, of its
obligations under Section 3(a)(12)(C)(ii).
(f) Notwithstanding any other provision of this Agreement, BNYM may in its sole
discretion terminate this Agreement immediately by sending notice thereof to the
Fund upon the happening of any of the following: (i) the Fund commences as
debtor any case or proceeding under any bankruptcy, insolvency or similar law,
or there is commenced against the Fund any such case or proceeding; (ii) the
Fund commences as debtor any case or proceeding seeking the appointment of a
receiver, conservator, trustee, custodian or similar official for the Fund or
any substantial part of its property or there is commenced against the Fund any
such case or proceeding; (iii) the Fund makes a general assignment for the
benefit of creditors; or (iv) the Fund states in any medium, written, electronic
or otherwise, any public communication or in any other public manner its
inability to pay debts as they come due. BNYM may exercise its termination right
under this Section 13(f) at any time after the occurrence of any of the
foregoing events notwithstanding that such event may cease to be continuing
prior to such exercise, and any delay in exercising this right shall not be
construed as a waiver or other extinguishment of that right. Any exercise by
BNYM of its termination right under this Section 13(f) shall be without any
prejudice to any other remedies or rights available to BNYM and shall not be
subject to any fee or penalty, whether monetary or equitable. Notwithstanding
clause (iii) of Section 15, notice of termination under this Section 13(f) shall
be considered given and effective when given, not when received.
14. POLICIES AND PROCEDURES.
Page 23
(a) The parties acknowledge that the services described in and to be provided
under this Agreement involve processes, actions, functions, instructions,
consents, choices, the exercise of rights or performance of obligations,
communications and other components, both internal to BNYM and interactive
between the parties, necessitated or made appropriate by business or by legal or
regulatory considerations, or both, that in most cases are far too numerous and
minutely detailed to expressly include in this Agreement and that, accordingly,
the parties agree that BNYM shall perform the services provided for in this
Agreement in accordance with the written policies, procedures, manuals,
documentation and other operational guidelines of BNYM governing the performance
of the services in effect at the time the services are performed ("STANDARD
PROCEDURES"), that BNYM may from time to time revise its Standard Procedures,
and that the Standard Procedures are expressly intended to supplement the
description of services provided for herein, but that the express terms of this
Agreement will always prevail in any conflict with the Standard Procedures. BNYM
may embody in its Standard Procedures any course of conduct which it reasonably
determines is commercially reasonable or consistent with generally accepted
industry practices, principles or standards ("INDUSTRY STANDARD") and in making
such determination may rely on such information, data, research, analysis and
advice, including legal analysis and advice, as it reasonably determines
appropriate under the circumstances.
(b) Notwithstanding any other provision of this Agreement, the following terms
of this Section 14(b) shall apply in the event facts, circumstances or
conditions exist or events occur, other than due to a breach by BNYM of its
Standard of Care, which would require a service to be provided hereunder other
than in accordance with BNYM's Standard Procedures, or if BNYM is requested by
the Fund, or a third party authorized to act for the Fund, to deviate from a
Standard Procedure in connection with the performance of a service hereunder or
institute a procedure with respect to which there is no Standard Procedure
(collectively, "NON-STANDARD PROCEDURES"):
(i) BNYM shall not under any circumstances be obligated to act in accordance
with any communication, Written Instructions, processes or other
direction or set of procedures which it determines in good faith in its
discretion to constitute or require a Non-Standard Procedure. BNYM
reserves the right prior to evaluating, developing or implementing a
Non-Standard Procedure, incurring out-of-pocket expenses in connection
with a Non-Standard Procedure or devoting internal resources to a
Non-Standard Procedure to require that the Fund agree in writing to
reimburse BNYM for all reasonable costs and expenses incurred in
connection with evaluating, developing and implementing a Non-Standard
Procedure, including without limitation costs associated with consulting
with and obtaining the opinions of programmers, specialists, legal
counsel, consultants or other third parties reasonably considered by
BNYM to be appropriate in light of the Non-Standard Procedure requested
("EXCEPTION RESEARCH") and the costs associated with utilizing internal
resources to develop and implement the Non-Standard Procedure, and to
pay the fees and charges established by BNYM for performing the
Non-Standard Procedure. The Fund may, in place of agreeing to reimburse
BNYM for the costs of Exception Research, agree in such written
authorization to provide BNYM with all Exception Research reasonably
requested by BNYM at the Fund's cost and expense.
(ii) Following receipt of all requested Exception Research, BNYM may, in its
sole discretion, as an accommodation and not pursuant to any obligation,
agree to provide a Non-Standard Procedure if it receives a Written
Instruction containing terms and conditions satisfactory to it in its
sole discretion, including without limitation a provision providing
indemnification greater and broader than that contained in the
Agreement, terms constituting additional agreements with respect to
fees, charges, and expenses, terms constituting appropriate warranties,
representations and covenants, and terms specifying with particularity
the course of conduct constituting the Non-Standard Procedure.
Page 24
(iii) BNYM reserves the right following receipt of all Exception Research and
not withstanding such receipt to continue to decline to perform the
Non-Standard Procedure for a Bona Fide Reason.
(c) In the event that Fund requests documentation, analysis or verification in
whatsoever form regarding the commercial reasonableness or industry acceptance
of conduct provided for in a Standard Procedure, BNYM will cooperate to furnish
such materials as it may have in its possession at the time of the request
without cost to the Fund, but the Fund agrees to reimburse BNYM for all out of
pockets costs and expenses incurred, including the costs of legal or expert
advice or analysis, in obtaining additional materials in connection with the
request.
15. NOTICES. Notices permitted or required by this Agreement shall be in writing
and:
(i) addressed as follows, unless a notice provided in accordance with this
Section 19 shall specify a different address or individual:
(A) if to BNYM, to BNY Mellon Investment Servicing (US) Inc., 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President;
with a copy to BNY Mellon Investment Servicing (US) Inc., 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Senior
Counsel - Transfer Agency; and
(B) if to the Fund, at 000 X. Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: W. Xxxxx Xxxxxxx;
(ii) delivered: by hand (personal delivery by an Authorized Person to
addressee); private messenger, with signature of recipient; U.S. Postal
Service (with return receipt or other delivery verification provided);
overnight national courier service, with signature of recipient,
facsimile sending device providing for automatic confirmation of
receipt; and
(iii) deemed given on the day received by the receiving party.
16. AMENDMENTS.
(a) This Agreement, or any term thereof, including without limitation the
Schedules, Exhibits and Appendices hereto, may be changed or waived only by a
written amendment, signed by the party against whom enforcement of such change
or waiver is sought.
(b) Notwithstanding subsection (a) above, in the event an officer of the
Investment Company or other person acting with apparent authority on behalf of
the Investment Company requests that BNYM perform some or all of the services
provided for in this Agreement for a Portfolio not listed on Schedule B, as
amended, and such Portfolio accepts such services and the relevant Investment
Company or Portfolio pays amounts provided for in the Fee Agreement as Fees and
Reimbursable Expenses, then in the absence of an express written statement to
the contrary such services are provided in accordance with the terms of this
Agreement and the Portfolio shall be bound by the terms of this Agreement with
respect to all matters addressed herein, except that BNYM may terminate such
amendment by convenience to this Agreement if within 60 days of the first such
acceptance of services by the Portfolio the Investment Company and BNYM do not
execute an written amendment to Schedule B on terms mutually acceptable to BNYM
and the Investment Company in their respective sole discretion. BNYM and the
Investment Company each reserve the right to negotiate terms appropriate to such
additional Portfolios which differ from the terms herein.
17. DELEGATION; ASSIGNMENT. Except as expressly provided in this Section 17, no
party may assign or transfer this Agreement or assign or transfer any right or
Page 25
obligation hereunder without the written consent of the other party and any
attempt at such assignment or transfer, or any such assignment or transfer,
shall be void. A merger, a sale of a majority or more of the assets, equity
interests or voting control, or a transfer by operation of law shall be
considered a "transfer" under this Section. Notwithstanding the foregoing: To
the extent appropriate under rules and regulations of the NSCC, BNYM may satisfy
its obligations with respect to services involving the NSCC through an Affiliate
that is a member of the NSCC by delegation or subcontracting; BNYM may assign or
transfer this Agreement to an Affiliate or transfer this Agreement in connection
with a sale of a majority or more of its assets, equity interests or voting
control, provided that BNYM gives the Investment Company thirty (30) days' prior
written notice of such assignment or transfer and such assignment or transfer
does not impair the Investment Company's receipt of services under this
Agreement in any material respect, and the assignee or transferee agrees to be
bound by all terms of this Agreement in place of BNYM; and BNYM may subcontract
with, hire, engage or otherwise outsource to any third party with respect to the
performance of any one or more of the functions, services, duties or obligations
of BNYM under this Agreement but any such subcontracting, hiring, engaging or
outsourcing shall not relieve BNYM of any of its liabilities hereunder.
18. FACSIMILE SIGNATURES; COUNTERPARTS. This Agreement may be executed in one
more counterparts; such execution of counterparts may occur by manual signature,
facsimile signature, manual signature transmitted by means of facsimile
transmission or manual signature contained in an imaged document attached to an
email transmission; and each such counterpart executed in accordance with the
foregoing shall be deemed an original, with all such counterparts together
constituting one and the same instrument. The exchange of executed copies of
this Agreement or of executed signature pages to this Agreement by facsimile
transmission or as an imaged document attached to an email transmission shall
constitute effective execution and delivery hereof and may be used for all
purposes in lieu of a manually executed copy of this Agreement.
19. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the final, complete, exclusive and
fully integrated record of the agreement of the parties on the subject matter
herein and supersedes all prior agreements and understandings relating to such
subject matter, provided that the parties may embody in one or more separate
documents their agreement, if any, with respect to delegated duties.
(b) Non-Solicitation. During the effectiveness of this Agreement and for one
year thereafter, the Fund shall not, directly or indirectly, knowingly solicit
or recruit for employment or hire, or make a recommendation, or referral or
otherwise knowingly assist or facilitate the solicitation or recruitment of any
BNYM employee, for employment by any other entity. To "knowingly" solicit,
recruit, hire, assist or facilitate, within the meaning of this provision, does
not include, and therefore does not prohibit, solicitation, recruitment or
hiring of a BNYM employee by another entity if the BNYM employee was identified
solely as a result of the BNYM employee's response to a general advertisement in
a publication of trade or industry interest or other similar general
solicitation.
(c) No Changes that Materially Affect Obligations. Notwithstanding any other
provision of this Agreement, the Fund agrees not to make any modifications to
its registration statement or other Shareholder Materials or to adopt any
policies which would affect materially the obligations or responsibilities of
BNYM hereunder without the prior written approval of BNYM, which approval shall
not be unreasonably withheld or delayed. Such approval, if given, shall not
constitute a waiver or abridgment of any rights under this Agreement. The scope
of services to be provided by BNYM under this Agreement shall not be increased
as a result of new or revised regulatory or other requirements that may become
applicable with respect to the Fund, unless the parties hereto expressly agree
in writing to any such increase.
Page 26
(d) Captions. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(e) Information. The Fund will provide such information and documentation as
BNYM may reasonably request in connection with services provided by BNYM to the
Fund.
(f) Governing Law. This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law, without regard to its principles of
conflicts of law that would apply the law of another jurisdiction. This
Agreement will not be governed by the United Nations Convention on Contracts for
the International Sale of Goods. The Uniform Computer Information Transaction
Act drafted by the National Conference Of Commissioners On Uniform State Laws,
or a version thereof, or any law based on or similar to such Act ("UCITA"), if
and as adopted by the jurisdiction whose laws govern with respect to this
Agreement in any form, shall not apply to this Agreement or the activities
contemplated hereby. To the extent UCITA is applicable notwithstanding the
foregoing, the Parties agree to opt out of the applicability of UCITA pursuant
to the "opt out" provisions contained therein.
(g) Partial Invalidity. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
(h) Parties in Interest. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Except with respect to those certain provisions providing for rights of
the Custodian or obligations of the Fund with respect to the Custodian, and
those certain provisions benefitting affiliates of the parties, this Agreement
is not for the benefit of any other person or entity and (ii) there shall be no
third party beneficiaries hereof.
(i) No Representations or Warranties. Except as expressly provided in this
Agreement, BNYM hereby disclaims all representations and warranties, express or
implied, made to the Fund or any other person, including, without limitation,
any warranties regarding quality, suitability, merchantability, fitness for a
particular purpose or otherwise (irrespective of any course of dealing, custom
or usage of trade), of any services or any goods provided incidental to services
provided under this Agreement. BNYM disclaims any warranty of title or
non-infringement except as expressly set forth in this Agreement.
(j) Customer Identification Program Notice. To help the U.S. government fight
the funding of terrorism and money laundering activities, U.S. Federal law
requires each financial institution to obtain, verify, and record certain
information that identifies each person who initially opens an account with that
financial institution on or after October 1, 2003. Certain of BNYM's affiliates
are financial institutions, and BNYM may, as a matter of policy, request (or may
have already requested) the name, address and taxpayer identification number or
other government-issued identification number of the Fund or others, and, if
such other is a natural person, that person's date of birth. BNYM may also ask
(and may have already asked) for additional identifying information, and BNYM
may take steps (and may have already taken steps) to verify the authenticity and
accuracy of these data elements.
(k) Compliance with Law. Each of BNYM and the Fund agrees to comply in all
material respects with the respective laws, rules, regulations and legal process
applicable to the operation of its business ("APPLICABLE LAWS"). The Fund agrees
that BNYM is not obligated to assist the Fund with compliance, or to bring the
Fund into compliance, with the Fund's Applicable Laws, and that the Fund is
solely responsible for such compliance, except where BNYM has expressly agreed
to provide that compliance service as a service hereunder.
Page 27
(l) Use of "Fund". In the event "Fund" as used in this Agreement refers to
Portfolios listed on Schedule B, notwithstanding such use, the Investment
Company bears to the extent permitted by law all responsibilities, obligations,
liabilities and duties of all such Portfolios to the extent not performed by
such Portfolios.
(m) Additional Fund Adoption. Notwithstanding anything in this Agreement to the
contrary, if BNYM is requested orally or in writing to provide services under
this Agreement to any investment company that is not a party to this Agreement
or any class, tier, portfolio, series or other subdivision of an investment
company that is not party to this Agreement ("ADDITIONAL FUND"), and BNYM
provides such services under this Agreement to such Additional Fund, then, from
the date BNYM commences providing such services, such Additional Fund shall be
deemed a party to and bound by the terms and conditions of this Agreement with
respect to all matters addressed herein even in the absence of a writing by such
Additional Fund agreeing to be so bound by this Agreement and the such
Additional Fund.
(n) Requests to Transfer Information to Third Parties. In the event that the
Fund, whether pursuant to Written Instructions or otherwise, requests or
instructs BNYM to send, deliver, mail, transmit or otherwise transfer to a third
party which is not a subcontractor of BNYM and which is not the DTCC, NSCC or
other SEC-registered clearing corporation, or to make available to such a third
party for retrieval from within the BNYM System, information which constitutes
Confidential Information of the Fund or non-public personal information of
current or former investors in the Fund: BNYM may decline to provide the
information requested on the terms contained in the request, but will in good
faith discuss the request and attempt to accommodate the Fund with respect to
the request due to legal or regulatory concerns, transmission specifications not
supported by BNYM, or other good faith reasons and BNYM will not be obligated to
act on any such request unless it agrees in writing to the terms of the
information transfer. In the event BNYM so agrees in writing to transfer
information or make it available within the BNYM System: the Fund shall pay a
reasonable fee for such activities upon being invoiced for same by BNYM; BNYM
shall have no liability or duty with respect to such information after it
releases the information or makes it available within the BNYM System, provided
BNYM has acted in accordance with its Standard of Care in executing the express
instructions of the written information transfer request; and BNYM shall be
entitled to the indemnification provided for at Section 12 in connection with
the activities contemplated by any such written information transfer request.
(o) Service Indemnifications; Survival. Any indemnification provided to BNYM by
the Fund in connection with any service provided under the Agreement, including
by way of illustration and not limitation, indemnifications provided in
connection with Non-Standard Instructions and indemnifications contained in any
agreements regarding Non-Standard Procedures ("SERVICE INDEMNIFICATIONS"), shall
survive any termination of this Agreement. In addition, Sections 4, 5, 7, 9(d),
9(f), 9(g), 11, 12 and provisions necessary to the interpretation of such
Sections and any Service Indemnifications and the enforcement of rights
conferred by any of the foregoing shall survive any termination of this
Agreement. In the event the Board of the Fund authorizes a liquidation of the
Fund or termination of the Agreement, BNYM may require as a condition of any
services provided in connection with such liquidation or termination that the
Fund make provisions reasonably satisfactory to BNYM for the satisfaction of
contingent liabilities outstanding at the time of the liquidation or
termination.
(p) Further Actions. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
Page 28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BNY Mellon Investment Servicing (US) Inc. First Trust Series Fund
By: /s/ Xxxxxxx XxXxxxxx By: /s/ Xxxxx X. Xxxxx
------------------------------ ----------------------------
Name: Xxxxxxx XxXxxxxx Name: Xxxxx X. Xxxxx
------------------------------ ----------------------------
Title: Managing Director Title: President
------------------------------ ----------------------------
Page 29
SCHEDULE A
DEFINITIONS
As used in this Agreement:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1940 Act" means Investment Company Act of 1940, as amended.
"Affiliate" means an entity controlled by, controlling or under common control
with the subject entity, with "control" for this purpose defined to mean direct
or beneficial ownership of 50% or more of the equity interests of an entity and
possession of the power to elect 50% or more of the entity's directors, trustees
or similar persons performing policy-making functions.
"Authorized Person" means, with respect to the Fund, any officer of the Fund and
any other person duly authorized by the Fund in a manner reasonably satisfactory
to BNYM to give Instructions on behalf of the Fund, and, with respect to BNYM,
employees designated in writing as authorized to receive emails as Written
Instructions (as provided in the definition of that term). Any limitation on the
authority of an Authorized Person to give Instructions must be expressly set
forth in a written document signed by both parties.
"BNY Mellon Bank" means The Bank of New York Mellon, a New York chartered
commercial bank and affiliate of BNYM, and its lawful successors and assigns.
"BNYM Trust" means BNY Mellon Investment Servicing Trust Company, an affiliate
of BNYM, and its lawful successors and assigns.
"Claim" means any claim, demand, suit, action, obligation, liability, suit,
controversy, breach, proceeding or allegation of any nature, including any
threat of any of the foregoing (including but not limited to those arising out
of or related to this Agreement) and regardless of the form of action or legal
theory or forum.
"Code" means the Internal Revenue Code of 1986, as amended.
"conduct" or "course of conduct" means a single act, two or more acts, a single
instance of an action not being taken or of forbearance given, two or more
instances of an action not being taken or of forbearance given, or any
combination of the foregoing.
"FinCEN" means the Financial Crimes Enforcement Network of the U.S. Department
of the Treasury.
"Fund Error" means the Fund or a third party acting on behalf of the Fund or
conveying Fund data or information committing an error, furnishing inaccurate,
incorrect or incomplete data or information to BNYM or BNYM Trust or by other
act or omission requiring Remediation.
"Fund Shares" (see "Shares")
"Instructions" means Oral Instructions and Written Instructions considered
collectively or individually.
Page 30
"Intellectual Property Rights" means copyright, patent, trade secret, trademark
and any other proprietary or intellectual property rights.
"Loss" and "Losses" means any one, or any series of related, losses, costs,
damages, expenses, awards, judgments, assessments, fines, penalties, payments,
reimbursements, adverse consequences, liabilities or obligations of any nature,
including without limitation any of the foregoing arising out of any Claim and
all costs of litigation or threatened litigation such as but not limited to
court costs, costs of counsel, discovery, experts, settlement and investigation.
"Loss Date" means the date of occurrence of the event or circumstance causing a
particular Loss, or the date of occurrence of the first event or circumstance in
a series of events or circumstances causing a particular Loss.
"Oral Instructions" means oral instructions received by BNYM from an Authorized
Person or from a person reasonably believed by BNYM to be an Authorized Person.
BNYM may, in its sole discretion in each separate instance, consider and rely
upon instructions it receives from an Authorized Person via electronic mail as
Oral Instructions.
"Portfolio" means each separate subdivision of the Investment Company, whether
characterized or structured as a portfolio, class, tier, series or otherwise,
listed on Schedule B hereto or included within this Agreement by virtue of the
operation of Section 16(b) or 20(l).
"Remediation Services" means the additional services required to be provided
hereunder by BNYM or BNYM Trust in connection with a Fund Error in order to
correct, remediate, adjust, reprocess, repeat, reverse or otherwise modify
conduct previously taken in accordance with the Agreement to achieve the outcome
originally intended by the previous conduct.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Laws" means the 1933 Act, the 1934 Act and the 1940 Act.
"Service Effective Date" means the date, following the completion of all
implementation services, in the event the Fund is a new start-up Fund, or
following the completion of all conversion services, in the event BNYM will be
providing services to the Fund as a successor to a prior service provider, that
the first live transaction is processed by the BNYM System for the Fund on a
production basis.
"Shareholder Materials" means the Fund's prospectus, statement of additional
information and any other materials relating to the Fund provided to Fund
shareholders by the Fund.
"Shares" or "Fund Shares" means the shares or other units of beneficial interest
of each Fund.
"Written Instructions" means (1) written instructions (i) which are signed by an
Authorized Person of the Fund (or a person reasonably believed by BNYM to be an
Authorized Person of the Fund), (ii) which are agreed to in writing by BNYM on
the instrument containing the written instructions, (iii) which are addressed to
and received by BNYM, and (iv) which are delivered by (A) hand (personally
delivery by the Authorized Person), (B) private messenger, U.S. Postal Service
or overnight national courier which provides confirmation of receipt with
respect to the particular delivery, or (C) facsimile sending device which
provides automatic confirmation of the standard details of receipt, (2) trade
instructions transmitted to and received by BNYM by means of an electronic
Page 31
transaction reporting system which requires use of a password or other
authorized identifier in order to gain access; and (3) electronic mail or
"email" sent by an Authorized Person of the Fund to, and acknowledged by, an
Authorized Person of BNYM.
"Written Procedures" means, collectively, (i) Standard Procedures, and (ii)
Non-Standard Procedures with respect to which BNYM has received the Written
Instruction required by Section 14(b)(2).
--------------------------------------------------------------------------------
INDEX OF DEFINED TERMS
(includes defined terms through Schedule C; excludes terms defined in Schedule D solely for Schedule D)
---------------------------------------------------- ------------------------------------------------
Term Location
---- --------
---------------------------------------------------- ------------------------------------------------
1933 Act Schedule A
---------------------------------------------------- ------------------------------------------------
1934 Act Schedule A
---------------------------------------------------- ------------------------------------------------
1940 Act Schedule A
---------------------------------------------------- ------------------------------------------------
314(a) Procedures ss. 3(b)(4)
---------------------------------------------------- ------------------------------------------------
Account Schedule C, ss. (b)(i)(G)
---------------------------------------------------- ------------------------------------------------
Account Documentation ss. 3(a)(12)(C)(iii)
---------------------------------------------------- ------------------------------------------------
Additional Fund ss. 19(m)
---------------------------------------------------- ------------------------------------------------
Affiliate Schedule A
---------------------------------------------------- ------------------------------------------------
Affiliated Third Party Institutions ss. 9(b)
---------------------------------------------------- ------------------------------------------------
Agreement Preamble
---------------------------------------------------- ------------------------------------------------
AML ss. 3(b)(l)
---------------------------------------------------- ------------------------------------------------
AML Services ss. 3(b)
---------------------------------------------------- ------------------------------------------------
Applicable Laws ss. 19(k)
---------------------------------------------------- ------------------------------------------------
Appropriate List Matching Data ss. 3(b)(5)(C)
---------------------------------------------------- ------------------------------------------------
Audit Report Schedule C, ss. (b)(iv)
---------------------------------------------------- ------------------------------------------------
Authorized Person Schedule A
---------------------------------------------------- ------------------------------------------------
Banking Charges ss. 9(b)(i)
---------------------------------------------------- ------------------------------------------------
BNYM Preamble
---------------------------------------------------- ------------------------------------------------
BNY Mellon Bank Schedule A
---------------------------------------------------- ------------------------------------------------
BNYM Trust Schedule A
---------------------------------------------------- ------------------------------------------------
BNYM System ss. 3(d)
---------------------------------------------------- ------------------------------------------------
Bona Fide Reason ss. 10(c)
---------------------------------------------------- ------------------------------------------------
Breach Notice ss. 13(c)
---------------------------------------------------- ------------------------------------------------
Breach Termination Notice ss. 13(c)
---------------------------------------------------- ------------------------------------------------
Change in Control ss. 13(d)(iv)
---------------------------------------------------- ------------------------------------------------
CIP Regulations ss. 3(b)(3)(A)
---------------------------------------------------- ------------------------------------------------
Claim Schedule A
---------------------------------------------------- ------------------------------------------------
Code Schedule A
---------------------------------------------------- ------------------------------------------------
conduct Schedule A
---------------------------------------------------- ------------------------------------------------
Confidential Information ss. 4(b)
---------------------------------------------------- ------------------------------------------------
Comparison Results ss. 3(b)(4)
---------------------------------------------------- ------------------------------------------------
Controls Schedule C, ss. (b)(i)
---------------------------------------------------- ------------------------------------------------
Conversion Actions ss. 13(e)
---------------------------------------------------- ------------------------------------------------
Conversion Expenses ss. 13(e)
---------------------------------------------------- ------------------------------------------------
course of conduct Schedule A
---------------------------------------------------- ------------------------------------------------
Covered Account Schedule C, ss. (b)(i)(F)
---------------------------------------------------- ------------------------------------------------
Covered Person Schedule C, ss. (b)(i)(D)
---------------------------------------------------- ------------------------------------------------
Custodian ss. 3(a)(12)(C)
---------------------------------------------------- ------------------------------------------------
Customer ss. 3(b)(3)(A)(i)
---------------------------------------------------- ------------------------------------------------
Page 32
Custodied Account ss. 3(a)(12)(C)
---------------------------------------------------- ------------------------------------------------
Data Elements ss. 3(b)(3)(A)(i)
---------------------------------------------------- ------------------------------------------------
Defaulting Party ss. 13(c)
---------------------------------------------------- ------------------------------------------------
Direct Account Schedule C, ss. (b)(i)(E)
---------------------------------------------------- ------------------------------------------------
Director ss. 3(b)(5)(A)(iii)
---------------------------------------------------- ------------------------------------------------
Dissolution Event ss. 9(h)
---------------------------------------------------- ------------------------------------------------
Early Termination ss. 13(d)
---------------------------------------------------- ------------------------------------------------
Early Termination Fee ss. 13(d)(ii)
---------------------------------------------------- ------------------------------------------------
Effective Date Preamble
---------------------------------------------------- ------------------------------------------------
Eligible Assets ss. 3(a)(12)(A)(i)
---------------------------------------------------- ------------------------------------------------
Event Beyond Reasonable Control ss. 11(c)
---------------------------------------------------- ------------------------------------------------
Exception Research ss. 14(b)(i)
---------------------------------------------------- ------------------------------------------------
External Research ss. 10(d)(i)
---------------------------------------------------- ------------------------------------------------
Fee Agreement ss. 9(a)
---------------------------------------------------- ------------------------------------------------
Fees ss. 9(a)
---------------------------------------------------- ------------------------------------------------
FFI Regulations ss. 3(b)(2)(A)
---------------------------------------------------- ------------------------------------------------
Final Distribution ss. 9(h)
---------------------------------------------------- ------------------------------------------------
Final Expenses ss. 9(h)
---------------------------------------------------- ------------------------------------------------
FinCEN Schedule A
---------------------------------------------------- ------------------------------------------------
Foreign Financial Institution ss. 3(b)(2)(A)(i)
---------------------------------------------------- ------------------------------------------------
Form ss. 10(b)
---------------------------------------------------- ------------------------------------------------
Fund Background
---------------------------------------------------- ------------------------------------------------
Fund Applicable Laws ss. 3(b)(9)
---------------------------------------------------- ------------------------------------------------
Fund Communication ss. 10(g)
---------------------------------------------------- ------------------------------------------------
Fund Custodian ss. 3(a)(1)(xiii)
---------------------------------------------------- ------------------------------------------------
Fund Data ss. 3(b)(5)(A)
---------------------------------------------------- ------------------------------------------------
Fund Error Schedule A
---------------------------------------------------- ------------------------------------------------
Fund Registry Schedule C, ss. (b)(i)(C)
---------------------------------------------------- ------------------------------------------------
Fund Shares Schedule A
---------------------------------------------------- ------------------------------------------------
Identity Theft Schedule C, ss. (b)(i)(B)
---------------------------------------------------- ------------------------------------------------
Imputed Account Credit ss. 9(b)(ii)
---------------------------------------------------- ------------------------------------------------
Industry Standard ss. 14(a)
---------------------------------------------------- ------------------------------------------------
Information Requests ss. 3(b)(4)
---------------------------------------------------- ------------------------------------------------
Initial Term ss. 13(a)
---------------------------------------------------- ------------------------------------------------
Instructions Schedule A
---------------------------------------------------- ------------------------------------------------
Intellectual Property Rights Schedule A
---------------------------------------------------- ------------------------------------------------
Internal Research ss. 10(d)(i)
---------------------------------------------------- ------------------------------------------------
Investment Company Preamble
---------------------------------------------------- ------------------------------------------------
Legal Process ss. 3(b)(6)
---------------------------------------------------- ------------------------------------------------
Loss, Losses Schedule A
---------------------------------------------------- ------------------------------------------------
Loss Date Schedule A
---------------------------------------------------- ------------------------------------------------
Lost Shareholder Rule ss. 3(a)(11)(A)
---------------------------------------------------- ------------------------------------------------
Massachusetts Privacy Regulation ss. 5
---------------------------------------------------- ------------------------------------------------
Material Event ss. 3(a)(12)(C)(i)
---------------------------------------------------- ------------------------------------------------
NCCT List ss. 3(b)(5)(A)(ii)
---------------------------------------------------- ------------------------------------------------
Non-Defaulting Party ss. 13(c)
---------------------------------------------------- ------------------------------------------------
Non-Renewal Notice ss. 13(b)
---------------------------------------------------- ------------------------------------------------
Non-Standard Instruction ss. 10(c)
---------------------------------------------------- ------------------------------------------------
Non-Standard Procedures ss. 14(b)
---------------------------------------------------- ------------------------------------------------
Page 33
OFAC ss. 3(b)(5)(A)(i)
---------------------------------------------------- ------------------------------------------------
OFAC Lists ss. 3(b)(5)(A)(i)
---------------------------------------------------- ------------------------------------------------
Oral Instructions Schedule A
---------------------------------------------------- ------------------------------------------------
Overdraft Amount ss. 9(c)(i)
---------------------------------------------------- ------------------------------------------------
Participant ss. 3(a)(12)(A)(ii)
---------------------------------------------------- ------------------------------------------------
PMLC Determination ss. 3(b)(5)(A)(iii)
---------------------------------------------------- ------------------------------------------------
Portfolio Schedule A
---------------------------------------------------- ------------------------------------------------
Possible Identity Theft Schedule C, ss. (b)(iii)
---------------------------------------------------- ------------------------------------------------
Red Flag Schedule C, ss. (b)(i)(A)
---------------------------------------------------- ------------------------------------------------
Red Flags Requirements Schedule C, ss. (c)
---------------------------------------------------- ------------------------------------------------
Red Flags Section Schedule C, ss. (a)
---------------------------------------------------- ------------------------------------------------
Red Flags Services Schedule C, ss. (b)
---------------------------------------------------- ------------------------------------------------
Registered Owner Schedule C, ss. (b)(i)(C)
---------------------------------------------------- ------------------------------------------------
Reimbursable Expenses ss. 9(a)
---------------------------------------------------- ------------------------------------------------
Related Custodian Materials ss. 3(a)(12)(C)(iv)
---------------------------------------------------- ------------------------------------------------
Related Parties ss. 3(a)(12)(C)(iii)
---------------------------------------------------- ------------------------------------------------
Remediation Services Schedule A
---------------------------------------------------- ------------------------------------------------
Removed Assets ss. 13(d)(vi)
---------------------------------------------------- ------------------------------------------------
Renewal Term ss. 13(b)
---------------------------------------------------- ------------------------------------------------
Research ss. 10(d)(i)
---------------------------------------------------- ------------------------------------------------
Response Failure ss. 10(i)
---------------------------------------------------- ------------------------------------------------
SEC Schedule A
---------------------------------------------------- ------------------------------------------------
Securities Data ss. 11(h)
---------------------------------------------------- ------------------------------------------------
Securities Laws Schedule A
---------------------------------------------------- ------------------------------------------------
Service Accounts ss. 9(b)
---------------------------------------------------- ------------------------------------------------
Service Effective Date Schedule A
---------------------------------------------------- ------------------------------------------------
Service Indemnifications ss. 19(o)
---------------------------------------------------- ------------------------------------------------
Shareholder Materials Schedule A
---------------------------------------------------- ------------------------------------------------
Shares Schedule A
---------------------------------------------------- ------------------------------------------------
Standard Instructions ss. 10(b)
---------------------------------------------------- ------------------------------------------------
Standard of Care ss. 11(a)
---------------------------------------------------- ------------------------------------------------
Standard Procedures ss. 14(a)
---------------------------------------------------- ------------------------------------------------
Tax Advantaged Account ss. 3(a)(12)(A)(iii)
---------------------------------------------------- ------------------------------------------------
Third Party Institution ss. 9(b)
---------------------------------------------------- ------------------------------------------------
UCITA ss. 19(f)
---------------------------------------------------- ------------------------------------------------
U.S. Government Lists ss. 3(b)(5)(A)
---------------------------------------------------- ------------------------------------------------
Written Instructions Schedule A
---------------------------------------------------- ------------------------------------------------
Written Procedures Schedule A
---------------------------------------------------- ------------------------------------------------
[End of Schedule A]
Page 34
SCHEDULE B
(Dated: September 30, 2011 Amended: November 1,
2012)
THIS SCHEDULE B is Schedule B to that certain Transfer Agency Services
Agreement dated as of September 30, 2011 and amended November 1, 2012, between
BNY Mellon Investment Servicing (US) Inc. and First Trust Series Fund.
PORTFOLIOS
First Trust Floating Rate Fund
First Trust Preferred Securities and Income Fund First
Trust/Confluence Small Cap Value Fund
First Trust Short Duration High Income Fund
[First Trust Municipal Bond Fund]
Page 35
SCHEDULE C
RED FLAGS SERVICES
(a) The provisions of this Schedule C shall apply in the event the Fund elects
to receive Red Flags Services. Section 3(e) of the Agreement together with this
Schedule C is referred to collectively as the "RED FLAGS SECTION".
(b) BNYM agrees, commencing as of the effective date of the Red Flags
Requirements (as defined in Section (b) below) or the Execution Date, whichever
is later, to provide the Fund with the "RED FLAGS SERVICES", which
is hereby defined to mean the following services:
(i) BNYM will maintain written controls reasonably designed to detect the
occurrence of Red Flags (as defined below) in connection with (i)
account opening and other account activities and transactions conducted
directly through BNYM with respect to Direct Accounts (as defined
below), and (ii) transactions effected directly through BNYM by Covered
Persons (as defined below) in Covered Accounts (as defined below). Such
controls, as they may be revised from time to time hereunder, are
referred to herein as the "CONTROLS". Solely for purposes of the Red
Flags Section, the capitalized terms below will have the respective
meaning ascribed to each:
(A) "RED FLAG" means a pattern, practice, or specific activity or a
combination of patterns, practices or specific activities which may
indicate the possible existence of Identity Theft (as defined below)
affecting a Registered Owner (as defined below) or a Covered Person.
(B) "IDENTITY THEFT" means a fraud committed or attempted using the
identifying information of another person without authority.
(C) "REGISTERED OWNER" means the owner of record of a Direct Account on
the books and records of the Fund maintained by BNYM as registrar of
the Fund (the "FUND REGISTRY").
(D) "COVERED PERSON" means the owner of record of a Covered Account on
the Fund Registry.
(E) "DIRECT ACCOUNT" means an Account established directly with and
through BNYM as a registered account on the Fund Registry and
through which the owner of record has the ability to directly
conduct account and transactional activity with and through BNYM ..
(F) "COVERED ACCOUNT" means an Account established by a financial
intermediary for another as the owner of record on the Fund Registry
and through which such owner of record has the ability to conduct
transactions in Fund shares directly with and through BNYM.
(G) "ACCOUNT" means (1) an account holding Fund Shares with respect to
which a natural person is the owner of record, and (2) any other
account holding Fund Shares with respect to which there is a
reasonably foreseeable risk to the particular account owner's
customers from identity theft, including financial, operational,
compliance, reputation, or litigation risks.
(ii) BNYM will provide the Fund with a printed copy of or Internet viewing
access to the Controls.
(iii) BNYM will notify the Fund of Red Flags which it detects and reasonably
determines to indicate a significant risk of Identity Theft to a
Page 36
Registered Owner or Covered Person ("POSSIBLE IDENTITY THEFT") and
assist the Fund in determining the appropriate response of the Fund to
the Possible Identity Theft.
(iv) BNYM will (A) engage an independent auditing firm or other similar firm
of independent examiners to conduct an annual evaluation of the Controls
and issue a report on the results of the testing (the "AUDIT REPORT"),
and (B) furnish a copy of the Audit Report to the Company; and
(v) Upon Fund request, issue a certification in a form determined to be
appropriate by BNYM in its reasonable discretion, certifying to BNYM's
continuing compliance with the Controls after the date of the most
recent Audit Report.
(b) The Fund agrees it is responsible for complying with and determining the
applicability to the Fund of Section 114 of the Fair and Accurate Credit
Transaction Act of 2003 and regulations promulgated thereunder by the Federal
Trade Commission (the "Red Flags Requirements"), for determining the extent to
which the Red Flags Services assist the Fund in complying with the Red Flags
Requirements, and for furnishing any supplementation or augmentation to the Red
Flags Services it determines to be appropriate, and that BNYM has given no
advice and makes no representations with respect to such matters. This Red Flags
Section shall not be interpreted in any manner which imposes a duty on BNYM to
act on behalf of the Fund or otherwise, including any duty to take any action
upon the occurrence of a Red Flag, other than as expressly provided for in this
Red Flags Section. The Controls and the Red Flags Services may be changed at any
time and from time to time by BNYM in its reasonable sole discretion to include
commercially reasonable provisions appropriate to the Red Flags Requirements, as
they may be constituted from time to time. The Fund shall pay BNYM the fee for
Red Flags Services as established by BNYM in the Fee Agreement.
(c) Notwithstanding any other provision of the Agreement:
(i) In no event shall BNYM, its affiliates or any of its or their directors,
officers, employees, agents or subcontractors be liable under any theory
of tort, contract, strict liability or other legal or equitable theory
for lost profits, for exemplary, punitive, special, incidental, indirect
or consequential damages, or for any other damages which are not direct
damages regardless of whether such damages were or should have been
foreseeable and regardless of whether any entity has been advised of the
possibility of such damages.
(i) BNYM's cumulative, aggregate liability to the Fund for any and all Loss
caused directly or indirectly by any act, omission or conduct related to
the terms of this Red Flags Section, the recovery of which is not
otherwise excluded or barred by another provision of this Agreement,
shall not exceed the greater of (i) $25,000, or (ii) fees received by
BNYM for the Red Flags Services during the six (6) months immediately
prior to the last relevant Loss Date, up to a maximum of $50,000.
(ii) In the event of a material breach of this Red Flags Section by BNYM, a
Fund's sole and exclusive termination remedy shall be to terminate the
Red Flags Services by complying with any notice and cure period
provisions in the Agreement applicable to a material breach of the
Agreement, but the Fund shall not be entitled to terminate any other
provision of the Agreement. For purposes of clarification: The foregoing
provision is not intended to restrict, modify or abrogate any remedy
available to a Fund under another provision of the Agreement for a
breach of the Red Flags Section by BNYM other than the termination
remedy.
[End of Schedule C]
Page 37
SCHEDULE D
TERMS AND CONDITIONS GOVERNING USE OF THE BNYM
SYSTEM
SECTION 0. GENERAL
0.1 CAPITALIZED TERMS. Capitalized terms not defined in this Schedule D shall
have the meaning ascribed to them in the Main Agreement. Capitalized terms
defined in this Schedule D shall have that meaning solely in this Schedule D and
not in any other part of the Agreement unless expressly stated otherwise in a
specific instance. References to Section numbers in this Schedule D shall mean
Sections of this Schedule D unless expressly stated otherwise in a specific
instance. References to the "Agreement" in this Schedule D means the Main
Agreement and this Schedule D.
0.2 PURPOSE. BNYM utilizes some components of the BNYM System to perform the
Core Services. But BNYM does not utilize all components of the BNYM System to
provide the Core Services. Some components of the BNYM System are maintained by
BNYM and offered to customers solely to permit customers to access the data and
information maintained in the BNYM System in connection with the Core Services
and put it to additional uses. Consequently, the Company is given rights
pursuant to this Schedule D (i) to access and use components of the BNYM System,
from the Company System (as defined in Section 2.7), to engage in activities
that are separate and distinct and apart from the activities engaged in by BNYM
to provide the Core Services, and (ii) to authorize third parties, the
"Permitted Users", to access and use certain Component Systems to engage in
activities that are also separate and distinct and apart from the activities
engaged in by BNYM to provide the Core Services. Such access and use of the BNYM
System by the Company from the Company System and by Permitted Users may include
the ability to input data and information into the BNYM System that BNYM
utilizes in performing the Core Services but which is not required for BNYM to
perform the Core Services. The foregoing activities by the Company and Permitted
Users represent services supplemental to the Core Services. This Schedule D
governs solely those supplemental activities engaged in by the Company and
Permitted Users. No part of this Schedule D is intended to apply to the use of
the BNYM System by BNYM or by the Company in connection with BNYM's performance
of the Core Services; only the Main Agreement is applicable to such use.
SECTION 1. CERTAIN DEFINITIONS
"AUTHORIZED PERSON" means the employees of Company and Permitted Users who have
been authorized by the Company in accordance with the applicable Documentation
and procedures of BNYM to access and use the Licensed System or specific
Component Systems and in connection with such access and use to be issued
Security Codes (as defined at Section 2.6(b) below).
"BNYM WEB APPLICATION" means with respect to a relevant Component System the
collection of electronic documents and files, content, text, graphics,
processes, functions, and software code, including, but not limited to, HTML and
XML files, Java and JavaScript files, graphics files, animation files, data,
technology, scripts, programs, interfaces and databases residing on a computer
system maintained by or for BNYM, accessible via the Internet at an Internet
address furnished by BNYM for use of the particular Component System.
"COMPANY" means the Investment Company.
"COMPANY DATA" means (i) data and information regarding each Fund and the
shareholders and shareholder accounts of each Fund which is inputted into the
Licensed System and the content of records, files and reports generated from
such data and information by the Licensed System, and (ii) Company 22c-2 Data
(as defined in Section 6.16(a) of this Schedule D).
"COMPANY WEB APPLICATION" means the collection of electronic documents and
files, content, text, graphics, processes, functions, and software code,
including, but not limited to, HTML and XML files, Java and JavaScript files,
graphics files, animation files, data, technology, scripts, programs, interfaces
and databases residing on a computer system maintained by or for the Company,
connected to the Internet and utilized by the Company in connection with its use
of a Component System as contemplated by applicable Documentation.
"COMPONENT SYSTEM" means, as of its relevant License Effective Date, each Listed
System and each Support Function that is part of the Licensed System and,
Page 38
subsequent to a relevant License Effective Date, such Listed Systems and Support
Functions as they may be changed as provided in subsection (b) of the definition
of Licensed System.
"COPY", whether or not capitalized, means any paper, disk, tape, film, memory
device, or other material or object on or in which any words, object code,
source code or other symbols are written, recorded or encoded, whether permanent
or transitory.
"CORE SERVICES" means the services described in the Main Agreement that BNYM is
obligation to perform for Company (for clarification: excluding the products and
services provided pursuant to this Schedule D).
"DOCUMENTATION" means any user manuals, reference guides, specifications,
documentation, instruction materials and similar recorded data and information,
whether in electronic or physical output form, that BNYM makes available to,
provides access to or provides to the Company, and that describe how the
Licensed System is to be operated by users and set forth the features,
functionalities, user responsibilities, procedures, commands, requirements,
limitations and capabilities of and similar information about the Licensed
System.
"EXHIBIT 1" means Exhibit 1 to this Schedule D.
"GENERAL UPGRADE" means (i) an Upgrade that BNYM in its sole and absolute
discretion incorporates into the Licensed System at no additional fees or
charges to Company, and (ii) an Upgrade that BNYM offers to incorporate into the
Licensed System without charge or at such additional fees and charges as the
parties shall agree in writing and that Company accepts for incorporation into
the Licensed System.
"HARMFUL CODE" means any computer code intentionally designed to (a) disable,
impair, delete, damage or corrupt a computer processing system, computer
network, computer service, a deliverable for any of the foregoing, interface,
data, files, software, storage media, or computer or electronic hardware or
equipment; (b) impair in any way the operation of any of the foregoing based on
the elapsing of a period of time, advancement of a particular date or other
numeral (sometimes referred to as "time bombs," "time locks," or "drop dead"
devices); or (c) permit a non-authorized party to access, transmit or utilize,
as appropriate, any computer processing system, computer network, computer
service, deliverable for any of the foregoing, interface, data, files, software,
storage media, or computer or electronic hardware or equipment without proper
consent, (sometimes referred to as "lockups," "traps," "access codes," or "trap
door" devices); or (d) any other similar harmful or hidden procedures, routines
or mechanisms.
"INTELLECTUAL PROPERTY RIGHTS" means the legal rights, interests and protections
afforded under applicable patent, copyright, trademark, trade secret and other
intellectual property laws.
"LICENSE EFFECTIVE DATE" means, with respect to each Component System of the
Licensed System that Company is given the right to access and use, the date as
of which the Company is first given such right to access and use.
"LICENSED SERVICES" means all functions performed by the Licensed System.
"LICENSED SYSTEM" means, collectively:
(a) as of its applicable License Effective Date, any one or more of the of the
following: (i) any Listed System to which the Company is given access to and use
of by BNYM in its entirety; and (ii) any "SUPPORT FUNCTION", which is hereby
defined to mean any system, subsystem, software, program, application,
interface, process, subprogram, series of commands or function, regardless of
the degree of separability from or integration with a Listed Program, that
Company is given access to and use of to support its utilization of a Listed
System - items within "Support Function" and this clause (ii) could be one or
more parts of a Listed System or could be items which exist apart from any
Listed System but which are provided to support utilization of a Listed System.
(b) Updates, General Upgrades and Company Modifications (as defined at Section
2.16) to the Listed Systems included within clause (a)(i) above and the systems,
subsystems, software, programs, applications, interfaces, processes,
subprograms, series of commands and functions included within clause (a)(ii)
above.
"LISTED SYSTEMS" means the computer systems listed on Exhibit 1, whether
mainframe systems, surround systems, subsystems or component systems, and in the
Page 39
case of the NSCC and CMS means as well the separate and distinct component
systems of NSCC and CMS that BNYM may give Company access to and use of at
Company's request in lieu of access to and use of the entire NSCC or CMS.
"MAIN AGREEMENT" means the part of this Agreement that commences on the first
page and ends with but includes Schedule A, excluding Section 3(d) (which
incorporates this Schedule D into the Agreement).
"MARKS" means trademarks, service marks and trade names as those terms are
generally understood under applicable intellectual property laws and any other
marks, names, words or expressions of a similar character.
"PERMITTED USER" means a person other than an employee of the Company who is
authorized by the Company pursuant to and in accordance with Section 2.1(a)(ii)
and all applicable Documentation to access and use one or more specific
Component Systems.
"PRODUCT ASSISTANCE" means assistance provided by BNYM personnel regarding the
Licensed System, including regarding its impact on other software,
functionality, usage and integration.
"PROPRIETARY ITEMS" means:
(a) (i) All contents of the Listed Systems, (ii) all systems, subsystems,
software, programs, applications, interfaces, processes, subprograms, series of
commands or functions, regardless of the degree of separability from or
integration with a Listed Program, and whether or not part of a Listed Program,
that BNYM may at any time provide any customer with access to and use of to
support the customer's s utilization of a Listed System, including the Support
Functions, (iii) all systems, subsystems, software, programs, applications,
interfaces, processes, subprograms, series of commands or functions which BNYM
utilizes in providing any of the services, or engaging in any of the activities,
contemplated by this Agreement, (iv) all systems, subsystems, software,
programs, applications, interfaces, processes, subprograms, series of commands
or functions owned, leased, licensed or sublicensed by BNYM which interface
with, provide data to or receive data from any of the foregoing, and (v) all
updates, upgrades, revisions, modifications, refinements, releases, versions,
instances, translations, enhancements and improvements to and of all or any part
of the foregoing, whether in existence on, or occurring prior to or subsequent
to, the Effective Date (collectively, the "BNYM SOFTWARE");
(b) all facilities, central processing units, nodes, equipment, storage devices,
peripherals and hardware utilized by BNYM in connection with the BNYM Software
(the "BNYM EQUIPMENT");
(c) all documentation materials relating to the BNYM Software, including
materials describing functions, capabilities, dependencies and responsibilities
for proper operation of the Licensed System, including the Documentation, and
all updates, upgrades, revisions, modifications, refinements, releases,
versions, translations, enhancements and improvements to or of all or any part
of foregoing (the "BNYM DOCUMENTATION", and together with the BNYM Software and
the BNYM Equipment, the "SYSTEM" or the "BNYM SYSTEM") and all versions of the
BNYM System as they may exist after the Effective Date or may have existed at
any time prior to the Effective Date;
(d) all methods, concepts, visual expressions, screen formats, file and report
formats, interactivity techniques, engine protocols, models and design features
used in the BNYM System;
(e) source code and object code for all of the foregoing, as applicable;
(f) all derivative works, inventions, discoveries, patents, copyrights,
patentable or copyrightable items and trade secrets prepared or furnished by or
for BNYM in connection with the performance of the services or in connection
with any activities of the parties related to this Agreement;
(g) all materials related to the testing, implementation, support and
maintenance of all of the foregoing;
(h) all other documentation, manuals, tutorials, guides, instructions, policy
and procedure documents and other materials in any recorded medium prepared or
furnished by or for BNYM in connection with the performance of the Licensed
Services or in connection with any activities of the parties related this
Agreement;
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(i) the contents of all databases and other data and information of whatsoever
nature in the BNYM System, other than Company Data, whether residing in the BNYM
System or existing outside the BNYM System in recorded form whether in hardcopy,
electronic or other format; and
(j) all copies of any of the foregoing in any form, format or medium.
"TERMS OF USE" means any privacy policy, terms of use or other terms and
conditions made applicable by BNYM in connection with the Company's or a
Permitted User's access to and use of a Component System or a BNYM Web
Application or other access site or access method.
"THIRD PARTY PRODUCTS" means the products or services of parties other than BNYM
that constitute part of the Licensed System.
"THIRD PARTY PROVIDER" means licensors, subcontractors and suppliers of BNYM
furnishing the Third Party Products.
"UNITED STATES" means the states and the District of Columbia of the United
States.
"UPDATE" means a modification to a Component System necessary to maintain the
operation of the Component System in compliance with the Documentation in effect
as of the Component System's applicable License Effective Date and includes
without limitation modifications correcting any design or operational errors in
the Component System and modifications enabling the Component System to be
operated in any revised operating environment issued by BNYM and excludes
Upgrades.
"UPGRADE" means an enhancement to a Component System as it exists on its
applicable License Effective Date, new features and new functionalities added to
the Component System as it exists on its applicable License Effective Date, and
all revisions, modifications, refinements, releases, enhancements and
improvements to a Component System as it exists on its applicable License
Effective Date which change the operation of Component System rather than just
bring it into compliance with the applicable Documentation.
SECTION 2. LICENSED RIGHTS AND COMPANY OBLIGATIONS
2.1 LICENSED RIGHTS.
(a) (i) BNYM hereby grants to Company a limited, nonexclusive, nontransferable
license to access and use the Licensed System in the United States through its
employees (other than as expressly permitted otherwise by Section 2.1(a)(ii)
below), solely in accordance with applicable Documentation, through the
interfaces and telecommunication lines designated by BNYM, strictly for the
internal business purposes of the Company, solely in support of the Core
Services and solely for so long as any applicable fees are paid by Company.
(ii) The license granted by Section 2.1(a)(i) includes, where such access
and use is expressly contemplated by the Documentation applicable to a
particular Component System to which the Company has been given access and use,
the right to authorize persons not employees of the Company to access and use in
the United States the specified Component System strictly in compliance with
applicable Documentation, through the interfaces and telecommunication lines
designated by BNYM, solely in support of the Core Services and solely for so
long as any applicable fees are paid by Company. Except with respect to Fund
shareholders seeking to access IAM, to exercise the right contained in this
Section 2.1(a)(ii) the Company must designate such persons to BNYM and approve
them in a writing that conforms to the requirements of applicable Documentation
and procedures of BNYM and furnish any information reasonably requested by BNYM.
Access to IAM for Fund shareholders shall occur in accordance with the
Documentation applicable to IAM. Upon the exercise by Company of the right
contained in this Section 2.1(a)(ii), the term Company shall be redefined for
all purposes of this Agreement to mean the Company and all Permitted Users,
individually and collectively, unless in an individual case the context clearly
requires that the definition be restricted solely to the Company. The Company
shall be responsible and liable for compliance by Permitted Users with all
applicable terms of the Agreement as if the Permitted Users were its own
employees.
(iii) Company may not, and shall not under any circumstances grant
sublicenses to any right granted by this Section 2.1 or subcontract or delegate
any right granted by this Section 2.1 or use the Licensed System to provide
services to third parties, other than shareholders of its Funds, or for any
other purpose other than that described in Sections 2.1(a)(i) and (ii).
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(b) The grant of rights in this Section 2.1 shall be construed narrowly. No
grant of license is made hereunder to Company or any other party, except the
license to Company expressly provided in this Section 2.1. The rights granted by
this Section 2.1 shall immediately terminate without further action required on
anyone's part, including without prior notification, upon the termination or
expiration of the Agreement. BNYM and its licensors reserve all rights in the
BNYM System not expressly granted to Company in this Section 2.1. Nothing in
this Section 2.1 shall be construed to give Company rights of any nature in
source code. The rights granted to Company by this Section 2.1 are sometimes
referred to herein as the "LICENSED RIGHTS".
(c) For clarification:
Company may be given access to and use of a Listed System which contains
integration points or links to one or more Support Functions that are part of a
Listed System to which the Company has not been given access and use ("LINKED
FUNCTIONS"). The Licensed Rights granted by this Section 2.1 to access and use a
particular Listed System containing integration points or links to Linked
Functions includes the right to access and use such Linked Functions, does not
include the right to use the entire Listed System containing the Linked
Functions or other subsystems, software, programs, applications, interfaces,
processes, subprograms, series of commands or functions in that Listed System.
To the extent exercise of Licensed Rights hereunder inadvertently or otherwise
results in access to or use of a Component System or other system, subsystem,
software, program, application, interface, process, subprogram, series of
commands or function which is not part of the its Licensed System, all terms of
this Agreement shall apply to such access and use.
2.2 DOCUMENTATION. Company shall use the Licensed System solely and strictly in
accordance and compliance with the Documentation provided or made available to
Company by BNYM from time to time and any specifications contained therein.
Company may use only the number of copies of the Documentation that are provided
to Company and may not make any additional copies of such Documentation, except
that Company may copy the Documentation to the extent reasonably necessary for
routine backup and disaster recovery purposes and upon request of an applicable
regulatory authority. Company shall pay BNYM such fees as it has established for
copies of the Documentation, if any, as listed in the Fee Agreement.
2.3 THIRD PARTY SOFTWARE AND SERVICES. Company acknowledges that Third Party
Products may constitute part of the Licensed System. Company's use of Third
Party Products shall be subject to the terms and conditions of this Agreement;
provided, however, access, use, maintenance and support of Third Party Products
made available to Company after an applicable License Effective Date may be
conditioned upon Company's execution of an agreement with the applicable Third
Party Provider ("THIRD PARTY AGREEMENT") which would provide for certain rights
and obligations between the Company and the Third Party Provider ("DIRECT THIRD
PARTY PRODUCT"), in which case the terms of the Third Party Agreement will also
apply to Company's use of the particular Third Party Product. Notwithstanding
the foregoing sentences of this Section 2.3, Company acknowledges that BNYM is
not responsible for, nor does BNYM warrant the performance or other features of,
nor can it fix errors or defects in, third party software and services and
BNYM's sole obligation with respect to third party software and services is to
inform the third party of any errors, defects, deficiencies or other matters
regarding the third party software and services of which BNYM is made aware by
Company.
2.4 COMPLIANCE WITH APPLICABLE LAW. Company shall comply with all laws,
regulations, rules and orders of whatsoever nature of governmental bodies and
authorities (whether legislative, executive, independent, self-regulatory or
otherwise) applicable to the business or activities in connection with which it
utilizes the Licensed System.
2.5 RESPONSIBILITY FOR USE.
(a) The Company alone will be responsible for furnishing, or arranging for a
third party to furnish, all data and information required by the Documentation
and the specifications therein for the Licensed System to function and perform
in accordance with the Documentation, other than the data and information
residing in the Licensed System in connection with BNYM's performance of the
Core Services. BNYM shall have no liability or responsibility for any Loss
caused in whole or in part by the Company's or a Permitted User's exercise of
the Licensed Rights or use of the Licensed System or by data or information of
any nature inputted into the Licensed System by or under the direction or
authorization of Company or a Permitted User; provided, however, this Section
2.5 shall not relieve BNYM of its obligation to act in accordance with the
Standard Of Care with respect to the services described in Section 3 of the Main
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Agreement. Company shall be responsible and solely liable for the cost or
expense of regenerating any output or other remedial action if the Company, a
Permitted User or an agent of either shall have failed to transmit properly and
in the correct format any data or information, shall have transmitted erroneous
or incorrect information or data, or shall have failed to timely verify or
reconcile any such data or information when it is generated by the System ("DATA
FAULTS").
(c) Company warrants that the data transmitted to the Licensed System by or
under the direction or authorization of Company or Permitted Users will not
disrupt, disable, harm, or otherwise impede in any manner the operation of the
Licensed System or any associated software, firmware, hardware, or BNYM computer
system or network.
2.6 INTERNAL CONTROL OBLIGATIONS.
(a) Company shall adopt and implement commercially reasonable internal control
procedures regarding the use of the Licensed System, which internal control
procedures shall be reasonably designed to ensure that any use of the Licensed
System complies with (i) Sections 2.1, 2.2, 2.6, 2.12, 2.17, 2.20 and 3.4 of
this Schedule D, and (ii) applicable Documentation.
(b) Company shall establish and adhere to security policies and procedures
intended to (i) safeguard the System from unauthorized or improper access and
use from equipment utilized by the Company, (ii) safeguard the integrity and
validity of any user identifications, access passwords, mnemonics and other
security data elements related to accessing the Licensed System or any Component
System ("SECURITY CODES"), and (iii) prevent unauthorized access to and protect
electronically stored, processed or transmitted information. Such policies and
procedures shall be at least equal to industry standards and any higher standard
agreed upon by the Parties.
(c) Unless Company obtains prior written permission from BNYM, Company shall
permit only Authorized Persons to use Security Codes assigned to or selected by
Company with respect to the Licensed System. The Security Codes shall constitute
Confidential Information of both Company and BNYM under the Agreement subject to
all obligations thereunder, and Company shall not permit access to Security
Codes to any person other than Authorized Persons. Company shall notify BNYM
immediately if Company has reason to believe that any person who is not an
Authorized Person has obtained access to a Security Code or accessed or used the
Licensed System, that an Authorized Person has accessed or used the Licensed
System using Security Codes not assigned to that Authorized Person, that any
other loss of confidentiality with respect to a Security Code has occurred or
the security of the Licensed System has otherwise been breached.
(d) Company shall verify and confirm all information entered on the Licensed
System and shall notify BNYM of any error in any information entered on the
Licensed System as soon as practicable following Company's knowledge of such
error.
(e) Company will not recirculate, redistribute or otherwise retransmit or
re-rout the Licensed System to any third party or authorize the use of any
information included on the Licensed System on any equipment or display not
authorized by BNYM without BNYM's prior express written approval.
2.7 COMPANY RESOURCES.
(a) Company will be solely responsible, at Company's expense, for procuring,
maintaining, and supporting all third-party software and all workstations,
personal computers, printers, controllers or other hardware or peripheral
equipment at Company's sites ("COMPANY SYSTEM") required for Company to operate
the Licensed System in accordance with the Documentation and specifications
provided by BNYM from time to time. BNYM will provide Company with
specifications for Company System, including any requirements relating to the
connection and operation of Company System with the Licensed System and Third
Party Products. Company shall conform its operating system environment to the
operating system requirements provided by BNYM for the Licensed System. Company
will support and maintain Company's System as necessary to ensure its operation
does not impact the Licensed System adversely or otherwise in a manner not
contemplated by the Documentation.
(b) Company shall, at its own expense, devote such of the Company System and
other equipment, facilities, personnel and resources reasonably necessary to (a)
implement the Licensed System, (b) be trained in the use of the Licensed System,
(c) perform timely any electrical work and cable installation necessary for
Company's use of the Licensed System, and (d) begin using the Licensed System on
a timely basis. BNYM shall not be responsible for any delays or fees and costs
associated with Company's failure to timely perform its obligations under this
Section 2.7.
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2.8 COMPANY TELECOMMUNICATIONS AND DATA TRANSMISSIONS. Company will be solely
responsible for complying at all times with telecommunications requirements
designated by BNYM for use of the Licensed System. Any data or information
electronically transmitted by or on behalf of Company to the Licensed System
will be so transmitted solely and exclusively in the format specified by BNYM.
2.9 NOTICES OF MATERIAL INCREASE IN USE. Company shall give advance written
notice to BNYM whenever Company intends to increase its scope of use of the
Licensed System in any material respect. Upon receipt of such notice, Company
and BNYM shall mutually agree in writing on any required changes to the
Company's scope of use for the Licensed System and, if applicable, the
corresponding fees with respect to such increased scope.
2.10 CERTIFICATIONS AND AUDITS. Company shall promptly complete and return to
BNYM any certifications which BNYM in its sole discretion may from time to time
send to Company, certifying that Company is using the Licensed System in strict
compliance with the terms and conditions set forth in this Agreement. BNYM may,
at its expense and after giving reasonable advance written notice to Company,
enter Company locations during normal business hours and audit Company's
utilization of the Licensed System, the number of copies of the Documentation in
Company's possession, and the scope of use and information pertaining to
Company's compliance with the provisions of this Agreement. The foregoing right
may be exercised directly by BNYM or by delegation to an independent auditor
acting on its behalf. If BNYM discovers that there is any unauthorized scope of
use or that Company is not in compliance with the aforementioned provisions,
Company shall reimburse BNYM for the full costs incurred in conducting the
audit.
2.11 TAXES. The amounts payable by Company to BNYM in consideration of the
performance of services by BNYM under the Agreement, including providing access
to and use of the Licensed System pursuant to this Schedule D, do not include,
and Company will timely pay, all federal, state and local taxes (including
sales, use, excise and property taxes), if any, assessed or imposed in
connection therewith, excluding any taxes imposed upon BNYM based upon BNYM's
net income.
2.12 USE RESTRICTIONS.
(a) Company will not do or attempt to do, and Company will not permit any other
person or entity to do or attempt to do, any of the following, directly or
indirectly:
(i) use any Proprietary Item for any purpose, at any location or in any
manner not specifically authorized by this Agreement;
(ii) make or retain any copy of any Proprietary Item except as specifically
authorized by this Agreement;
(iii) create, recreate or obtain the source code for any Proprietary Item;
(iv) refer to or otherwise use any Proprietary Item as part of any effort to
develop other software, programs, applications, interfaces or
functionalities or to compete with BNYM or a Third Party Provider;
(v) modify, adapt, translate or create derivative works based upon any
Proprietary Item, or combine or merge any Proprietary Item or part
thereof with or into any other product or service not provided for in
this Agreement and not authorized in writing by BNYM;
(vi) remove, erase or tamper with any copyright or other proprietary notice
printed or stamped on, affixed to, or encoded or recorded in any
Proprietary Item, or fail to preserve all copyright and other
proprietary notices in any copy of any Proprietary Item made by Company;
(vii) sell, transfer, assign or otherwise convey in any manner any ownership
interest or Intellectual Property Right of BNYM, or market, license,
sublicense, distribute or otherwise grant, or subcontract or delegate to
any other person, including outsourcers, vendors, consultants, joint
venturers and partners, any right to access or use any Proprietary Item,
whether on Company's behalf or otherwise;
(viii) subcontract for or delegate the performance of any act or function
involved in accessing or using any Proprietary Item, whether on
Company's behalf or otherwise;
(ix) reverse engineer, re-engineer, decrypt, disassemble, decompile,
decipher, reconstruct, re-orient or modify the circuit design,
algorithms, logic, source code, object code or program code or any other
properties, attributes, features or constituent parts of any Proprietary
Item;
(x) take any action that would challenge, contest, impair or
otherwise adversely effect an ownership interest or Intellectual
Property Right of BNYM;
Page 44
(xi) use any Proprietary Item to provide remote processing, network
processing, network communications, a service bureau or time sharing
operation, or services similar to any of the foregoing to any person or
entity, whether on a fee basis or otherwise; (xii) allow Harmful Code
into any Proprietary Item, as applicable, or into any interface or other
software or program provided by it to BNYM, through Company's systems
or personnel or Company's use of the Licensed Services or Company's
activities in connection with this Agreement.
(b) Company shall, promptly after becoming aware of such, notify BNYM of any
facts, circumstances or events regarding its or a Permitted User's use of the
Licensed System that are reasonably likely to constitute or result in a breach
of this Section 2.12, and take all reasonable steps requested by BNYM to
prevent, control, remediate or remedy any such facts, circumstances or events or
any future occurrence of such facts, circumstances or events.
2.13 RESTRICTED PARTY STATUS. Company warrants at all times that it is not a
"RESTRICTED PARTY", which shall be defined to mean any person or entity: (i)
located in or a national of Cuba, Iran, Libya, North Korea, Sudan, Syria, or any
other countries that may, from time to time, become subject to U.S. export
controls for anti-terrorism reasons or with which U.S. persons are generally
prohibited from engaging in financial transactions; (ii) on the U.S. Department
of Commerce Denied Person's List, Entity List, or Unverified List; U.S.
Department of the Treasury list of Specially Designated Nationals and Blocked
Persons; or U.S. Department of State List of Debarred Parties; (iii) engaged in
activities involving nuclear materials or weapons, missile or rocket
technologies, or proliferation of chemical or biological weapons; (iv)
affiliated with or a part of any non-U.S. military organization, or (v)
designated by the U.S. Government to have a status equivalent to any of the
foregoing. If Company becomes a Restricted Person during the term of this
Agreement, the Licensed Rights shall terminate immediately without notice and
Company shall have no further rights to use the Licensed System.
2.14 MITIGATION MEASURES. Company shall take commercially reasonable measures
(except measures causing it to incur out-of-pocket expenses which BNYM does not
agree in advance to reimburse) to mitigate losses or potential losses to BNYM,
including taking verification, validation and reconciliation measures that are
commercially reasonable or standard practice in the Company's business.
2.15 COMPANY DEPENDENCIES. To the extent an obligation of BNYM under this
Schedule D is dependent and contingent upon Company's or Permitted User's
performance of an action or refraining from performing an action that has been
specified or described in this Schedule D or the Documentation or that is part
of practices and procedures which are commercially reasonable or standard in the
user's industry ("COMPANY DEPENDENCY"), BNYM shall not be liable for Loss to the
extent caused by or resulting from, or that could have been avoided but for, a
failure to properly perform or a delay in properly performing a Company
Dependency and BNYM's obligation to perform an obligation contemplated by this
Agreement shall be waived or delayed to the extent the performance of the
related Company Dependency is not properly performed or is delayed .
2.16 SOFTWARE MODIFICATIONS. Company may request that BNYM, at Company's
expense, develop modifications to the software constituting a part of the
Licensed System that BNYM generally makes available to customers for
modification ("SOFTWARE") that are required to adapt the Software for Company's
unique business requirements. Such requests, containing the material features
and functionalities of all such modifications in reasonable detail, will be
submitted by Company in writing to BNYM in accordance with the applicable,
commercially reasonable procedures maintained by BNYM at the time of the
request. Company shall be solely responsible for preparing, reviewing and
verifying the accuracy and completeness of the business specifications and
requirements relied upon by BNYM to estimate, design and develop such
modifications to the Software. BNYM shall have no obligation to develop
modifications to the Licensed System requested by Company, but may in its
discretion agree to develop requested modifications which it, in its sole
discretion, reasonably determines it can accomplish with existing resources or
with readily obtainable resources without disruption of normal business
operations provided Company agrees at such time in writing to pay all costs and
expenses, including out-of-pocket expenses, associated with the customized
modification. BNYM shall be obligated to develop modifications under this
Section 2.16 only upon the execution of and in accordance with a writing
containing, to BNYM's reasonable satisfaction, all necessary business and
technical terms, specifications and requirements for the modification as
determined by BNYM in its sole judgment ("CUSTOMIZATION ORDER") and Company's
agreement to pay all costs and expenses, including out-of-pocket expenses,
associated with the customized modification ("CUSTOMIZATION FEE AGREEMENT"). All
modifications developed and incorporated into the Licensed System pursuant to a
Customization Order are referred to herein as "COMPANY MODIFICATIONS". BNYM may
make Company Modifications available to all users of the Licensed System,
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including BNYM, at any time after implementation of the particular Company
Modification and any entitlement of Company to reimbursement on account of such
action must be contained in the Customization Fee Agreement.
2.17 EXPORT OF SOFTWARE. The Company and Permitted Users are without exception
prohibited from (i) accessing or using the BNYM System outside the United
States, or (ii) exporting, transmitting, transferring or shipping any
Proprietary Item to a country or jurisdiction outside the United States. No
provision of the Agreement shall be interpreted to require BNYM to permit access
or use outside the United States or to export any Proprietary Item to a country
or jurisdiction outside the United States. The Company shall comply with all
applicable export and re-export restrictions and regulations of the U.S.
Department of Commerce or other U.S. agency or authority and the Company may not
transfer a Proprietary Item in violation of any such restrictions and
regulations.
2.18 PERMITTED USERS CONTEMPLATED BY DOCUMENTATION. Notwithstanding any other
provision of the Agreement, to the extent Documentation applicable to a
particular Component System contemplates that Company Data will be transmitted
or transferred to a Permitted User outside the BNYM System, that Company Data
will be made available within the BNYM System for retrieval by a Permitted User
for use outside the BNYM System, that the Company Data will be provided or made
available to Permitted Users within the BNYM System for use by the Permitted
User within the BNYM System or within a system of the Permitted User, or that
the Company may authorize Permitted Users to access and use Company Data
contained within the Licensed System in any other manner:
(i) The Company hereby grants to BNYM a worldwide, royalty-free,
non-exclusive right and license to display the Company Data through any
BNYM Web Application contemplated by the Documentation for the
applicable Component System and hereby authorizes and directs BNYM, as
appropriate, to transmit, transfer, make available and provide the
Company Data to Permitted Users, as contemplated by the Documentation
applicable to the particular Component System, including without
limitation through the Internet or other communication link or method
and a BNYM Web Application or other access site or method designated by
BNYM for use of the particular Component System;
(ii) The Company hereby authorizes and directs BNYM, (A) to permit Permitted
Users to view and use Company Data within the Licensed System as
contemplated by applicable Documentation, (B) to act on behalf of a
shareholder in any way contemplated by applicable Documentation and
authorized by the Company in accordance with applicable Documentation,
including to effect purchases, sales, redemptions, distributions,
exchanges, transfers and other activities and to change the status, data
or information involving a shareholder account or assets in a
shareholder account, and (C) to the extent contemplated by applicable
Documentation, to permit Permitted Users to download and store, copy in
on-line and off-line form, reformat, perform calculations with, and
distribute, publish, transmit, and display the Company Data in the
systems of the Permitted User and to and through any relevant BNYM Web
Application;
(iii) The Company shall have sole responsibility for imposing any desired use
restrictions on Permitted Users to the extent use restrictions are
contemplated by the applicable Documentation and BNYM shall cooperate in
a commercially reasonable manner in imposing such use restrictions to
the extent the applicable Documentation contemplates a role for BNYM in
imposing such use restrictions;
(iv) The Company acknowledges and agrees that it alone is responsible for
entering into agreements with Permitted Users governing the terms and
conditions, as between the Company and the Permitted User, of the
Permitted User's use of the Company Data; the Company releases BNYM from
any and all responsibility and duty for obtaining any such agreements,
including agreements relating to confidentiality and privacy of the data
and information, and for any monitoring, supervision or inspection of
Permitted Users of any nature; the Company releases BNYM from any Loss
the Company may incur, and will indemnify and defend BNYM for any Loss
it may incur, arising or resulting from or in connection with Company
Data after BNYM, as appropriate, transmits, transfers, makes available
or provides the Company Data to the Permitted User in accordance with
applicable Documentation, whether through a BNYM Web Application or
otherwise;
(v) The Company shall be responsible and liable to BNYM for the acts and
omissions of Permitted Users while accessing and using a Component
System pursuant to authorization from the Company and shall indemnify
and defend BNYM for all Loss arising from or related to acts or
omissions by a Permitted User that would constitute a breach of this
Agreement if committed by the Company, that constitute reckless or
intentional misconduct or that constitute a breach of a duty of the
Permitted User imposed by this Schedule D; and
Page 46
(vi) BNYM may immediately terminate access to and use of the Licensed System
by a Permitted User if BNYM reasonably believes conduct of the Permitted
User would constitute a breach of this Agreement if committed by the
Company, constitutes reckless or intentional misconduct, or constitutes
a breach of a duty of the Permitted User imposed by this Schedule D,
applicable Documentation or applicable Terms of Use.
2.19 COMMUNICATIONS WITH THIRD PARTIES REGARDING COMPONENT SYSTEM SERVICES. The
Company shall be solely responsible for communicating with third parties to the
extent such is reasonably required for services to be provided in accordance
with the Documentation for the particular Component System.
2.20 COMPLIANCE WITH TERMS OF USE. The Company's and, to the extent applicable
in connection with a particular Component System, each Permitted User's use of a
Component System, a BNYM Web Application and any other access site or access
method to a particular Component System shall be conducted in full compliance
with applicable Terms of Use. In addition, Permitted Users shall be required to
comply with requirements set forth in applicable Documentation, including
requirements relating to Security Codes, as a condition to use of particular
Component Systems.
2.21 THIRD PARTY PROVIDERS TO THE COMPANY. The Company shall have sole
responsibility to maintain through itself or its agents all agreements with
third party providers that may be appropriate for use of a Component System and
to pay as they come due all fees and charges associated with such agreements
either directly or as passed through on invoices of BNYM.
2.22 FEES. The Company shall be obligated to pay to BNYM such fees and charges
for access and use of any part of the Licensed System as may be set forth in the
Fee Agreement and such fees and charges shall be paid in accordance with any
applicable provisions set forth in the Main Agreement.
SECTION 3. PROVISIONS REGARDING BNYM
3.1 RIGHT TO MODIFY. BNYM may alter, modify or change the Licensed System or any
component, code, language, format, design, architecture or element of the
Licensed System and present such alterations, modifications and changes to
Company as Updates or Upgrades; provided, however, at no time shall this section
be interpreted in such a manner as to allow BNYM by such alterations,
modifications or changes to fail to comply with any term of this Schedule D.
3.2 TRAINING AND PRODUCT ASSISTANCE. BNYM agrees to use commercially reasonable
efforts to provide requested training and Product Assistance for Company's
personnel at BNYM's facilities or at Company's facilities in connection with
access to and use of the Licensed System and subsequent Updates, as reasonably
requested by Company, at BNYM 's then-current charges and rates for such
services. All reasonable travel and out-of-pocket expenses incurred by BNYM
personnel in connection with and during such training or Product Assistance
shall be borne by Company upon pre-approval in writing.
3.3 MONITORING. BNYM is not responsible for Company's or Permitted User's use of
the Licensed System but shall have the right to monitor such use on BNYM's
network solely to verify compliance with the terms and conditions set forth
herein and for operational purposes related to the delivery of services by the
Licensed System.
3.4 ADDITIONAL SECURITY MEASURES. BNYM shall have the right to institute and
require additional security measures in connection with Company's and Permitted
User's access to and use of the Licensed System that it in its sole discretion
determines to be appropriate under the circumstances upon reasonable advance
notice, and Company and Permitted Users shall be required to comply with any
additional security requirements adopted pursuant to this Section 3.4.
3.5 BNYM FAILURE TO RECEIVE DATA. BNYM shall not be liable for data or
information which the Company, a Permitted User or an agent of either transmits
or attempts to transmit to BNYM in connection with its use of a Component System
and which is not received by BNYM or for any failure of a Component System to
perform a function in connection with any such data or information. BNYM shall
not be obligated to ascertain the accuracy, actual receipt by it or successful
transmission to it of any data or information in connection with the Company's
or a Permitted User's use of a Component System or to confirm the performance of
any function by a Component System based on the transmission of instructions,
data or information to BNYM in connection with such use by the Company or a
Permitted User. Sole responsibility for the foregoing shall rest with the party
initiating the transmission.
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3.6 ACH ACTIVITY. To the extent contemplated by the Documentation, and to the
extent authorized by the Company and agreed to by BNYM in its sole discretion,
BNYM will accept bank account information over the Internet or other
communication channel from Permitted Users and take such other actions as may be
appropriate to facilitate movement of money to and from shareholder accounts
through the Automated Clearing House ("ACH"). The Company shall be solely
responsible for all market risk (gain/loss liability) associated with
transactions utilizing the ACH process.
SECTION 4. OWNERSHIP AND OTHER RIGHTS
4.1 BNYM OWNERSHIP.
(a) BNYM and its licensors, subcontractors and suppliers will continue to own
all of their respective right, title, and interest, including Intellectual
Property Rights, in and to the BNYM System and the Proprietary Items, regardless
of any participation, contributions, collaboration or other participation of the
Company in or to the foregoing, and including any part of the foregoing that may
be created by or on behalf of, at the direction of or pursuant to business
requirements and other specifications provided by the Company, such as, but not
limited to, Company Modifications. For purposes of clarification: the BNYM
System and any modifications to the BNYM System or a Proprietary Item, whether
or not ordered or paid for by the Company as a customization, are not intended
to be and are not a "works made for hire" under Section 101 of the Copyright Act
or under any other applicable law, remain proprietary to and the exclusive
property of BNYM and accordingly Company hereby transfers, conveys and assigns
any ownership interests or intellectual property rights it may have in and to
Proprietary Items to BNYM. To the extent requested by BNYM, Company shall
cooperate with BNYM, at BNYM's expense, to cause to vest in BNYM any ownership
interests or Intellectual Property Rights in any of the forgoing that do not
automatically vest in BNYM.
(b) In the event a Company Web Application contains a Proprietary Item or other
intellectual property of BNYM, including, but not limited to, rights in
copyrighted works, trademarks and trade dress, BNYM shall retain all rights in
such Proprietary Item or other intellectual property. To the extent a
Proprietary Item or other intellectual property of BNYM is duplicated within a
Company Web Application to replicate the "look and feel," "trade dress" or other
aspect of the appearance or functionality of a BNYM Web Application or other
component of the BNYM System, BNYM grants to the Company a limited,
non-exclusive, non-transferable license to such a Proprietary Item or other
intellectual property for the duration of its authorized use of the applicable
Component System. The license granted by the foregoing sentence is limited to
the intellectual property needed to replicate the appearance of the particular
BNYM Web Application or other component of the BNYM System and does not extend
to any other Proprietary Item or other intellectual property owned by BNYM.
Company shall immediately cease using such Proprietary Item or other
intellectual property immediately upon termination of the Licensed Rights
governing the relevant Component System.
(c) This Agreement is not an agreement of sale, and no title, patent, copyright,
trademark, service xxxx, trade secret, intellectual property or other ownership
rights to any Proprietary Items are transferred to Company by virtue of this
Agreement. Upon BNYM's request, the Company shall promptly inform BNYM in
writing of the quantity and location of any tangible Proprietary Item furnished
to Company in connection with this Agreement. Nothing contained in this
Agreement, no disclosure of BNYM Confidential Information and no use of
Proprietary Items hereunder shall be construed as granting to or conferring on
Company any rights, by license or otherwise, for any invention, discovery or
improvement made, conceived, or acquired by BNYM prior to or after the date
hereof. No patent application that may hereafter be made, and no claim to any
trade secret or other protection, shall be prejudiced by any disclosure of
Confidential Information or use of Proprietary Items hereunder. Any sale,
assignment or transfer of any nature or in any manner, or any attempt to do
such, by Company or any party through Company of any ownership interest or
Intellectual Property Right of BNYM in the Proprietary Items shall be void. Any
subcontracting or delegation of any right to access or use a Proprietary Item
and any subcontracting for or delegation of the performance of any activities or
functions involved in accessing or using a Proprietary Item shall be void and
unenforceable against BNYM.
4.2 COMPANY OWNERSHIP. Company will own its respective right, title, and
interest, including Intellectual Property Rights, in and to the Company Data.
Company hereby grants BNYM a limited, nonexclusive, nontransferable license to
access and use the Company Data, and consents to BNYM's permitting access to,
transferring and transmitting Company Data, all as appropriate to Company's use
of the Licensed Rights or as contemplated by the Documentation.
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4.3 MUTUAL RETENTION OF CERTAIN RIGHTS. Each party acknowledges and agrees that,
other than the Licensed Rights provided for by Section 2.1 of this Schedule D,
this Agreement does not give a party any right, title or interest in or to any
ownership or other rights of the other party to property. Any software,
interfaces or other programs a party provides to the other party hereunder (i)
shall be used solely by such receiving party and only during the term of the
Agreement and only for the purpose it was provided and in accordance with the
provisions of this Agreement, and (ii) shall not be used by such party or any
affiliate for any other purpose or to connect to or with any other person. To
the extent the Intellectual Property Rights of one party are cached to expedite
communication, such party grants to the other party a limited, non-exclusive,
non-transferable license to such Intellectual Property Rights for a period of
time no longer than that reasonably necessary for the communication and a party
shall immediately cease using such Intellectual Property Rights immediately upon
termination of the Licensed Rights governing the relevant Component System.
4.4 USE OF HYPERLINKS. To the extent use of hyperlinks is contemplated by the
Documentation for a particular Component System: The Company hereby grants to
BNYM a royalty-free, nonexclusive, nontransferable and revocable right and
license to use the Company's hyperlink in connection with the relevant Licensed
Services; BNYM hereby grants to the Company a royalty-free, nonexclusive,
nontransferable and revocable right and license to use BNYM 's hyperlink in
connection with providing the relevant Licensed Services; each party shall
reasonably cooperate with the other party concerning the placement, location and
destination of such hyperlinks; and a party shall immediately cease using
another party's hyperlink immediately upon termination of the Licensed Rights
governing the relevant Component System.
4.5 USE OF MARKS. To the extent one party's Marks must be utilized by the other
party in connection with the operation of a particular Component System or the
Licensed Services related to the particular Component System: the Company hereby
grants to BNYM a non-exclusive, limited license to use its Marks solely in
connection with the Licensed Services provided by the Component System; BNYM
hereby grants to the Company a non-exclusive, limited license to use its Marks
solely in connection with the Licensed Services provided by the Component
System; all use of Marks shall be in accordance with the granting party's
reasonable policies regarding the advertising and usage of its Marks as
established from time to time; the Company hereby grants BNYM the right and
license to display the Company's Mark's on applicable BNYM Web Applications and
in advertising and marketing materials related to the BNYM Web Application and
the Licensed Services provided by the relevant Component System; each party
shall retain all right, title and interest in and to its Marks worldwide,
including any goodwill associated therewith, subject to the limited license
granted in this Section 4.5; use of the Marks hereunder by the grantee pursuant
to this limited license shall inure to the benefit of the trademark owner and
grantees shall take no action that is inconsistent with the trademark owner's
ownership thereof; each party shall exercise reasonable efforts within
commercially reasonable limits, to maintain all on-screen disclaimers and
copyright, trademark and service xxxx notifications, if any, provided to it by
the other party in writing from time to time, and all "point and click" features
relating to Authorized Persons' acknowledgment and acceptance of such
disclaimers and notifications; and a party shall immediately cease using another
party's Marks immediately upon termination of the Licensed Rights governing the
relevant Component System.
SECTION 5. REPRESENTATIONS, WARRANTIES & COVENANTS; INDEMNIFICATION
5.1 MUTUAL REPRESENTATIONS, WARRANTIES AND COVENANT. Each party warrants,
represents and covenants to the other party that it will use commercially
reasonable efforts to avoid engaging in any act, omission or conduct which would
result in the introduction into the software or systems of the other party any
computer software routines, code or programming devices designed to permit
unauthorized persons to access or use the other party's software, systems or
Confidential Information or data resident in the other party's systems or to
disrupt, interfere, impair, reprogram, recode, disable, modify, destroy or
damage the other party's software or systems or the operation thereof, any data
resident in the other party's systems, or any party's lawful and valid access to
or use of the other party's software or systems, including without limitation
any "back door," "time bomb," "Trojan horse," "worm," "drop dead device,"
"virus", "preventative routine," "disabling code," or "cookie".
5.2 RIGHT TO GRANT LICENSED RIGHTS; NO INFRINGEMENT; BNYM INDEMNIFICATION.
(a) BNYM warrants to Company that BNYM has the full legal right to grant Company
the right to use the Licensed System, as and to the extent permitted under this
Agreement, and that the Licensed System when properly used for the purpose and
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in the manner specifically authorized by this Agreement, does not to BNYM's
knowledge infringe in any material respect upon any United States patent or
copyright or any trade secret or other proprietary right of any person. BNYM
shall defend and indemnify Company against any third party claim to the extent
attributable to a violation of the foregoing warranty. BNYM shall have no
liability or obligation under this Section 5.2 unless Company gives written
notice to BNYM within ten (10) days (provided that later notice shall relieve
BNYM of its liability and obligations under this Section 5.2 only to the extent
that BNYM is prejudiced by such later notice) after any applicable infringement
claim is initiated against Company and allows BNYM to have sole control of the
defense or settlement of the claim. The remedies provided in this Section 5.2
are the sole remedies for a breach of the warranty contained in this Section
5.2. If any applicable claim is initiated, or in BNYM's sole opinion is likely
to be initiated, then BNYM shall have the option, at its expense, to:
(i) modify or replace the Licensed System or the infringing part of the
Licensed System so that the Licensed System is no longer infringing; or
(ii) procure the right to continue using or providing the infringing part of
the Licensed System; or
(iii) if neither of the remedies provided for in clauses (i) and (ii) can be
accomplished in a commercially reasonable fashion, limit or terminate
the Licensed Rights with respect to the infringing part of the Licensed
System and refund any fees paid by the Company with respect to future
periods affected by such limitation or termination.
(b) Neither BNYM nor any Third Party Provider shall have any liability under any
provision of this Agreement with respect to any performance problem, warranty,
claim of infringement or other matter to the extent attributable to (i)
Company's use of a Proprietary Item in a negligent manner or any manner not
consistent with this Schedule D or Company's breach of this Schedule D; (ii) any
modification or alteration of a Proprietary Item made by anyone other than BNYM
or made by BNYM at the request or direction of the Company, (iii) BNYM's
compliance with the instructions or requests of Company relating to a
Proprietary Item; (iv) any combination of a Proprietary Item with any item,
service, process or data not provided by BNYM, (v) third parties gaining access
to a Proprietary Item due to acts or omissions of Company, (vi) third party
software not recommended by BNYM or the use of open source software, (vii)
Company's failure to license and maintain copies of any third-party software
required to operate the any BNYM Software, (viii) Company's failure to operate
the BNYM Software in accordance with the Documentation, or (ix) Data Faults.
(collectively, "EXCLUDED EVENTS"). Company will indemnify, and with respect to
third party claims will defend, and hold harmless BNYM and Third Party Providers
from and against any and all Loss and claims resulting or arising from any
Excluded Events.
5.3 BNYM WARRANTIES. BNYM warrants that:
(i) except for Direct Third Party Products, with respect to which no
warranty is made, and subject to the last sentence of Section 2.3, the
Licensed System, if used in accordance with applicable Documentation,
will operate in material conformity with applicable Documentation, and
in the event of a breach of this clause (i) BNYM shall take commercially
reasonable actions to restore performance of the Licensed System to the
requirements of the foregoing warranty;
(ii) BNYM owns, or has the right to use under valid and enforceable
agreements, all Intellectual Property Rights reasonably necessary for
and related to the provision of the Licensed Rights and to grant the
license granted under Section 2.1;
(iii) BNYM's business is in material compliance with applicable law and
regulations the failure to comply with which would have a material
adverse effect on BNYM's performance of its obligations under this
Schedule D; and
(iv) BNYM has all requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of BNYM.
5.4 WARRANTY DISCLAIMER. THE LICENSED SYSTEM AND ALL RELATED SERVICES ARE MADE
AVAILABLE TO COMPANY ON AN "AS IS", "AS AVAILABLE" BASIS. UNLESS A SPECIFIC
WARRANTY IS EXPRESSLY GIVEN IN THIS SCHEDULE D, NO WARRANTY OF ANY NATURE,
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EXPRESS OR IMPLIED, IS MADE IN THIS SCHEDULE D, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTY AS TO THE AVAILABILITY, CONDITION, MERCHANTABILITY,
NON-INFRINGEMENT, DESIGN, OPERATION OR FITNESS FOR OR SATISFACTION IN REGARDS TO
A PARTICULAR PURPOSE.
5.5 LIMITATION OF WARRANTIES. The warranties made by BNYM in this Schedule D,
and the obligations of BNYM under this Schedule D, run only to Company and not
to its affiliates, its customers or any other persons.
SECTION 6 OTHER PROVISIONS
6.1 SCOPE OF SERVICES. The scope of services to be provided by BNYM under this
Agreement shall not be increased as a result of new or revised regulatory or
other requirements that may become applicable with respect to the Company,
unless the parties hereto expressly agree in writing to any such increase. BNYM
shall not be obligated to develop or implement Upgrades, but to the extent it
elects to do so Section 3.1 shall apply.
6.2 ADDITIONAL PROVISION REGARDING GOVERNING LAW. This Agreement will not be
governed by the United Nations Convention on Contracts for the International
Sale of Goods. The Uniform Computer Information Transaction Act drafted by the
National Conference Of Commissioners On Uniform State Laws, or a version
thereof, or any law based on or similar to such Act ("UCITA"), if and as adopted
by the jurisdiction whose laws govern with respect to this Agreement in any
form, shall not apply to this Agreement or the activities contemplated hereby.
To the extent UCITA is applicable notwithstanding the foregoing, the parties
agree to opt out of the applicability of UCITA pursuant to the "opt out"
provisions contained therein.
6.3 THIRD PARTY PROVIDERS. Except for those terms and conditions that
specifically apply to Third Party Providers, under no circumstances shall any
other person be considered a third party beneficiary of this Agreement or
otherwise entitled to any rights or remedies under this Agreement. Except as may
be provided in Third Party Agreements, Company shall have no rights or remedies
against Third Party Providers, Third Party Providers shall have no liability of
any nature to the Company, and the aggregate cumulative liability of all Third
Party Providers to the Company shall be $1.
6.4 LIABILITY PROVISIONS.
(a) Notwithstanding any provision of the Main Agreement or this Schedule D, BNYM
shall not be liable under this Schedule D under any theory of tort, contract,
strict liability or other legal or equitable theory for lost profits, for
exemplary, punitive, special, incidental, indirect or consequential damages, or
for any other damages which are not direct damages regardless of whether such
damages were or should have been foreseeable and regardless of whether any
entity has been advised of the possibility of such damages, all and each of
which damages is hereby excluded by agreement of the parties.
(b) Notwithstanding any provision of the Main Agreement or this Schedule D,
BNYM's cumulative, aggregate liability to the Company for any and all Loss,
including Loss arising from Claims for indemnification pursuant to the Main
Agreement and this Schedule D, that arises or relates to a term of this Schedule
D, the recovery of which is not otherwise excluded or barred by another
provision of this Agreement, shall not exceed the fees paid by Company to BNYM
for use of the particular Component System with respect to which the claim of
Loss was made for the six (6) months immediately prior to the date the last
claim of Loss relating to the particular Component System arose.
(c) In the event of a material breach of this Schedule D by BNYM with respect to
the operation of a particular Component System, Company's sole and exclusive
termination remedy shall be to terminate the Licensed Rights granted by this
Schedule D to the particular Component System with respect to which the material
breach occurred by complying with the notice and cure period provisions in the
Main Agreement applicable to a material breach of the Agreement, but the Company
shall not be entitled to terminate any other provision of the Agreement or the
Licensed Rights with respect to any other Component System. For purposes of
clarification: The foregoing sentence is not intended to restrict, modify or
abrogate any remedy available to a Company under another provision of the
Agreement for a breach of Schedule D by BNYM other than the termination remedy.
6.5 ASSIGNMENT. Company may not, and shall not under any circumstances, assign,
sublicense or otherwise transfer any Licensed Rights or any part thereof or any
obligation under this Schedule D, and any such assignment or transfer or
attempted assignment or transfer shall be void.
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6.6 RETURN OF PROPRIETARY ITEMS. Upon a termination of this Agreement or a
termination of the license to use the Licensed System or a license to use a
particular Component System, or at the end of a Continuation Period (as defined
in Section 6.16), as applicable, Company shall immediately cease attempts to
access and use the relevant Component Systems and related Proprietary Items, and
Company shall promptly return to BNYM all copies of the relevant Documentation
and any other related Proprietary Items then in Company's possession. Company
shall remain liable for any payments due to BNYM with respect to the period
ending on the date of termination or any Continuation Period, as applicable, and
any charges arising due to the termination.
6.7 CONFLICTS. Applicable terms of the Main Agreement shall apply to this
Schedule D but any conflict between a term of the Main Agreement and this
Schedule D shall be resolved to the fullest extent possible in favor of the term
in this Schedule D.
6.8 EXCLUSIVITY. Company shall solely and exclusively use the Licensed System to
perform the computing functions and services made available to the Company by
the Licensed System. For clarification: this means the Company will not use any
system, subsystem, component or functionality of another service provider to
perform functions or services similar to those provided by the Licensed System.
6.9 TERM. The term of this Schedule D shall be the same as the term in effect
for the Main Agreement, including with respect to any renewal terms.
Additionally, with respect to each Component System to which the Company is
given access and use, the term applicable to BNYM's obligation to furnish the
Component System and the Company's obligation to pay the fees and charges
applicable to the Component System ("COMPONENT SYSTEM OBLIGATIONS") shall be the
same as the term applicable to the Core Services, including with respect to any
renewal term. For clarification: this Schedule D and the Component System
Obligations may be terminated only in connection with a termination of the Main
Agreement in accordance with the termination provisions set forth in the Main
Agreement, except where this Schedule specifically sets forth an additional
termination right.
6.10 CONFIDENTIALITY. Company agrees to maintain the confidentiality of and
protect the Proprietary Items and to prevent access and use not permitted
hereunder with at least the same degree of care that it utilizes with respect to
its own proprietary and nonpublic material, including without limitation
agreeing:
(i) not to disclose to or otherwise permit any person access to, in any
manner, the Proprietary Items, or any part thereof in any form
whatsoever, except that such disclosure or access shall be permitted to
an employee of Company in the course of his or her employment and who is
bound to maintain the confidentiality thereof;
(ii) not to use the Proprietary Items for any purpose other than in
connection with the Company's exercise of the Licensed Rights, without
the consent of BNYM; and
(iii) to promptly report to BNYM any facts, circumstances or events that are
reasonably likely to constitute or result in a breach of this Section
6.10 or a breach of Section 4 of the Main Agreement with respect to the
Proprietary Items, and take all reasonable steps requested by BNYM to
prevent, control, remediate or remedy any such facts, circumstances or
events or any future occurrence of such facts, circumstances or events.
6.11 USE OF INTERNET. Each party acknowledges that the Internet is an unsecured,
unstable, unregulated, unorganized and unreliable network, and that to the
extent the ability of the other party to provide or perform services or duties
hereunder is dependent upon the Internet and equipment, software, systems, data
and services provided by various telecommunications carriers, equipment
manufacturers, firewall providers, encryption system developers and other
vendors and third parties, each party agrees that the other shall not be liable
in any respect for the functions or malfunctions of the Internet.
6.12 PROVISIONS APPLICABLE SOLELY TO IAM. In connection with any permitted
access and use of IAM, the Company agrees, at its expense, to;
(a) Provide, or retain other persons to provide, all computers,
telecommunications equipment, encryption technology and other materials,
services, equipment and software reasonably necessary to develop and maintain a
Company Web Application as contemplated by IAM Documentation, including the
functionality necessary to maintain the hypertext links to IAM ("COMPANY IAM
SITE");
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(b) Promptly provide BNYM written notice of changes in Fund policies or
procedures requiring changes to the IAM settings or parameters or services
("PARAMETER CHANGES"); provided, however, this provision shall be interpreted to
require BNYM to modify only adjustable settings and parameters already provided
for in IAM in response to a Parameter Change and not to require BNYM to effect
any Upgrade;
(c) Work with BNYM to develop Internet marketing materials for Permitted Users
and forward a copy of appropriate marketing materials to BNYM;
(d) Promptly revise and update applicable prospectuses and other pertinent
materials, such as user agreements, to include the appropriate consents, notices
and disclosures, including disclaimers and information reasonably requested by
BNYM;
(e) With respect to the Company IAM Site, maintain all on-screen disclaimers and
copyright, trademark and service xxxx notifications, if any, provided by BNYM in
writing from time to time, and all "point and click" features relating to
acknowledgment and acceptance of such disclaimers and notifications; and
(f) Design and develop the Company IAM Site functionality necessary to
facilitate, implement and maintain the hypertext links to IAM and the various
inquiry and transaction web pages and otherwise make the Company IAM Site
available to Permitted Users.
6.13 TERMINATION AND SUSPENSION BY BNYM.
(a) In the event of a material breach of this Schedule D by Company, BNYM may
terminate the Licensed Rights in their entirety and all access to and use of the
Licensed System by complying with the notice and cure period provisions in the
Main Agreement applicable to a material breach of the Agreement.
(b) In the event BNYM reasonably believes in good faith that activity
constituting a material breach of a "USE PROVISION" (which is hereby defined to
mean each of the following Sections: 2.1, 2.2, 2.6, 2.12, 2.13, 2.15, 2.17,
2.18, 2.20, 3.4, 4.1, 4.3, 4.4, 4.5, 6.5, 6.6, 6.8, 6.10 and 6.16 (c) and 6.16
(d)) is occurring by Company or a Permitted User, BNYM may, upon prior written
notice to Company describing in reasonable detail such alleged activity, without
incurring any liability, temporarily suspend access to and use of the Licensed
System or a Component System solely for the amount of time necessary for the
investigation and resolution of the issues. In the event such advance notice is
not reasonably practicable, BNYM shall provide such notice as is reasonably
practicable under the circumstances. BNYM shall exercise this right with
diligence to minimize the impact of any such suspension. The parties agree to
promptly cooperate in good faith to address such issues. The Company shall
indemnify BNYM for any Loss, and to the extent applicable defend BNYM against
Loss, resulting from or arising out of or in connection with a breach of a Use
Provision.
6.14 EQUITABLE RELIEF. Company agrees that BNYM would not have an adequate
remedy at law in the event of a breach or threatened breach of a Use Provision
by the Company and that BNYM would suffer irreparable injury and damage as a
result of any such breach. Accordingly, in the event Company breaches or
threatens to breach a Use Provision, in addition to and not in lieu of any legal
or other remedies BNYM may pursue hereunder or under applicable law, Company
hereby consents to the granting of equitable relief (including the issuance of a
temporary restraining order, preliminary injunction or permanent injunction)
against it by a court of competent jurisdiction, without the necessity of
proving actual damages or posting any bond or other security therefore,
prohibiting any such breach or threatened breach. In any proceeding upon a
motion for such equitable relief, BNYM's ability to answer in damages shall not
be interposed as a defense to the granting of such equitable relief.
6.15 SURVIVAL. Sections 2.1(b), 2.3, 2.5, 2.11, 2.12, 2.14, 2.18(iv), 2.18(v),
3.5, 4.1, 4.3, the last clause of Sections 4.4 and 4.5, 4, 5, 6.2, 6.3, 6.4,
6.6, 6.7, 6.10, 6.13(b), 6.14, 6.15, 6.16(i) through (m), 6.16(p) and 6.16(q)
shall survive any termination of the Agreement and any termination of Licensed
Rights.
6.16 PROVISIONS APPLICABLE SOLELY TO THE 22C-2 SYSTEM. In connection with any
permitted access and use of the 22c-2 System, the Company agrees as follows:
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(a) Definitions. The following terms have the following meanings solely for
purposes of this Section 6.16:
"COMMERCIALLY REASONABLE EFFORTS" means taking all such steps and performing in
such a manner as a well managed company in the securities processing industry
would undertake where such company was acting in a prudent and reasonable manner
under the same or similar circumstances.
"COMPANY 22C-2 DATA" means, collectively, the Fund Data, the Shareholder Data
and the Supplemental Data.
"COMPANY DATABASE" means the database maintained within the 22c-2 System by and
for Company containing the Fund Data, the Shareholder Data and Supplemental
Data.
"FINANCIAL INTERMEDIARY" means a financial intermediary as that term is defined
in Rule 22c-2.
"FRONT END DATA" means the transaction data relating to the Funds and the
accounts of Shareholders of the Funds (i) specified by applicable Documentation
for use within the 22c-2 System to yield reports intended to assist the Company
in determining the Financial Intermediaries from which additional transactional
details could be requested for purposes of compliance with SEC Rule 22c-2, and
(ii) which has been selected by the Company and transmitted to the Company
Database.
"FUND DATA" means, collectively, the Front End Data and the Fund Settings.
"FUND SETTINGS" means the Fund preferences, parameters, rules and settings
inputted into the Company Database and 22c-2 System by Company to administer a
Fund's Rule 22c-2 policies.
"RULE 22C-2" means Rule 22c-2 of the SEC promulgated under the 1940 Act.
"SHAREHOLDER" means a shareholder, as that term is defined in Rule 22c-2, of any
of the Funds.
"SHAREHOLDER DATA" means the transaction data with respect to Shareholders in a
Fund requested by Company that a Financial Intermediary, for access and use by
Company in the 22c-2 System, (i) delivers to BNYM by a Designated Method, or
(ii) delivers to Company and is inputted into the Company Database by Company.
"SOFTWARE," whether capitalized or not, means computer software in human
readable form that is not suitable for machine execution without intervening
interpretation or compilation.
"SRO" means any self-regulatory organization, including national securities
exchanges and national securities associations.
"SUPPLEMENTAL DATA" means any data or information, other than the Shareholder
Data and Fund Data, inputted into the Company Database by Company, or provided
to BNYM and inputted into the Company Database by BNYM as an additional service,
that Company has reasonably determined is necessary in the operation of the
22c-2 System for purposes of compliance with Rule 22c-2.
(b) Availability. BNYM shall make the 22c-2 System available to Company from
8:00 a.m. to 6:00 p.m., Eastern Time, during days the New York Stock Exchange is
open for trading, except for periods therein in which BNYM suspends access for
maintenance, backup, updates, upgrades, modifications required due to changes in
Applicable Law, or other commercially reasonable purposes as reasonably
determined by BNYM. BNYM will use Commercially Reasonable Efforts to limit any
periods of nonavailability due to the foregoing activities.
(c) Third Party Provisions. Company's use of the 22c-2 System shall be subject
to the terms and conditions contained in BNYM's agreements with Third Party
Providers that BNYM is required by such agreements to apply to users of the
software or services of the particular Third Party Provider to the extent
notified of such terms and conditions by BNYM.
(d) BNYM Modifications. Company hereby accepts all such modifications, revisions
and updates, including changes in programming languages, rules of operation and
screen or report format, as and when they are implemented by BNYM, and agrees to
take no action intended to have or having the effect of canceling, reversing,
nullifying or modifying in any fashion the operation or results of such
modifications, revisions and updates. BNYM will make Commercially Reasonable
Efforts to give Company advance written notice before any such modifications,
revisions or updates to the 22c-2 System go into effect.
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(e) Shareholder Data.
(1) Company acknowledges that Financial Intermediaries, not BNYM, provide
the Shareholder Data, that Company's access to the Shareholder Data through use
of the 22c-2 System is dependent upon delivery of the Shareholder Data by the
Financial Intermediaries, and that BNYM is not responsible or liable in any
manner for any act or omission by a Financial Intermediary with respect to the
delivery of Shareholder Data. Company also acknowledges that Financial
Intermediaries may deliver Shareholder Data which modifies Shareholder Data
previously delivered or may refuse to provide Shareholder Data and that BNYM is
not responsible or liable in any manner for any such modification of Shareholder
Data or any such refusal to deliver Shareholder Data.
(2) Company has sole responsibility for authorizing and directing a
Financial Intermediary to deliver Shareholder Data that Company may require for
purposes of Rule 22c-2. BNYM shall be obligated to receive and input into the
Company Database only that Shareholder Data which has been delivered by a
Financial Intermediary through the facilities maintained for such purpose by the
NSCC or through the internal communications links provided in the 22c-2 System
("DESIGNATED METHODS"). Company shall be solely responsible for inputting into
the Company Database and the 22c-2 System any Shareholder Data delivered by a
method other than a Designated Method.
(f) Company 22c-2 Data. As between Company and BNYM, Company alone shall be
responsible for obtaining all Fund Data, Shareholder Data and Supplemental Data
that Company determines is required in connection with its use of the 22c-2
System. Company is exclusively responsible for (i) the accuracy and adequacy of
all Company 22c-2 Data; (ii) the review of and the accuracy and adequacy of all
output of the 22c-2 System before reliance or use (provided the 22c-2 System is
operating in accordance with the Documentation); and (iii) the establishment and
maintenance of appropriate control procedures and back up procedures to reduce
any loss of information, interruption or delay in processing Company 22c-2 Data.
Company shall comply with all Applicable Laws and obtain all necessary consents
from any person, including Financial Intermediaries, regarding the collection,
use and distribution to BNYM of Company 22c-2 Data as contemplated herein and of
any other information or data regarding Company and the Funds that Company
provides or causes to be provided for the purposes set forth herein.
(g) Communications Configuration. Company shall be responsible, at its expense,
for procuring and maintaining the communications equipment, lines and related
hardware and software reasonably specified by BNYM to comprise the
communications configuration required for Company to use the 22c-2 System and
any Updates and General Upgrades to the communications configuration.
(h) Front End Data. As between Company and BNYM, Company shall be solely
responsible for selecting Front End Data, identifying it to BNYM and directing
BNYM to transmit the identified Front End Data from the BNYM transfer agent
system to the Company 22c-2 Database in the 22c-2 System. Company hereby
authorizes BNYM to transmit Front End Data to the 22c-2 System without further
action on anyone's part upon receiving a communication from Company identifying
Front End Data for transmission to the 22c-2 System.
(i) Restricted Use of Company 22c-2 Data. The Company 22c-2 Data constitutes
"Confidential Data" for all purposes of Section 4 and other applicable
provisions of the Main Agreement. As between the Company and BNYM, title to all
Company 22c-2 Data and all related intellectual property and other ownership
rights shall remain exclusively with Company. Company authorizes BNYM to
maintain and use Company 22c-2 Data solely in the manner contemplated by
applicable Documentation and this Agreement and to aggregate Company 22c-2 Data
in the Company Database with data of other users of the 22c-2 System to analyze
and enhance the effectiveness of the 22c-2 System and to create broad-based
statistical analyses and reports for users and potential users of the 22c-2
System and industry forums.
(j) Application of Results. Except to the extent that the results are inaccurate
due to BNYM's gross negligence, willful misconduct or bad faith, neither BNYM
nor any Third Party Provider shall have liability for any loss or damage
resulting from any application of the results, or from any unintended or
unforeseen results, obtained from the use of the 22c-2 System or any related
service provided by BNYM.
(k) Exclusion for Unauthorized Actions. Neither BNYM nor any Third Party
Provider shall have any liability with respect to any performance problem,
warranty, claim of infringement or other matter to the extent attributable to
Page 55
any unauthorized or improper use, alteration, addition or modification of the
22c-2 System by Company, any combination of the 22c-2 System with software not
specified by applicable Documentation and any other use of the 22c-2 System in a
manner inconsistent with this Agreement or applicable Documentation.
(l) Disclaimer. BNYM DOES NOT WARRANT THAT USE OF THE 22C-2 SYSTEM BY COMPANY
GUARANTEES COMPLIANCE WITH RULE 22C-2 OR ANY OTHER FEDERAL, STATE, LOCAL OR SRO
LAW OR REGULATION. BNYM DOES NOT ASSUME ANY RESPONSIBILITY FOR ANY ASPECT OF
LEGAL AND REGULATORY COMPLIANCE BY OR ON BEHALF OF COMPANY, NOR SHALL COMPANY
REPRESENT OTHERWISE TO ANY PERSON. COMPANY'S USE OF THE 22C-2 SYSTEM AND ANY
OTHER SERVICES PROVIDED UNDER THIS AGREEMENT SHALL NOT BE DEEMED LEGAL ADVICE.
(m) Hardware Disclaimer. Under no circumstance shall BNYM or a Third Party
Provider be liable to Company or any other Person for any loss of profits, loss
of use, or for any damage suffered or costs and expenses incurred by Company or
any Person, of any nature or from any cause whatsoever, whether direct, special,
incidental or consequential, arising out of or related to computer hardware.
(n) Termination by BNYM. BNYM may immediately terminate Company's license to use
and Company's access to and use of the 22c-2 System upon the occurrence of any
of the following events:
(a) Company engages in conduct which infringes or exceeds the scope of the
license granted to Company by Section 2.1 of this Schedule D and does not cure
the breach within ten (10) business days after receiving written notice from
BNYM; or
(b) A Third Party Provider terminates any relevant agreement the Third
Party Provider has with BNYM that is necessary in order for BNYM to be able to
license (or continue to license) the 22c-2 System to Company. BNYM agrees to
provide Company with as much notice of such termination as BNYM receives from
the Third Party Provider.
(o) Continuation Period. In the event the Agreement is terminated and in
connection with such a termination the parties agree that Company will continue
to have access to and use of the 22c-2 System, then the terms of this Agreement
shall apply during any such continuation period. The term of any such
continuation period shall be day to day and the continuation period may be
terminated immediately by either party at any time by written notice
notwithstanding the contents of any notice or other communication the parties
may exchange, unless both parties agree in writing to such contents. A
continuation period as described in this subsection (o) is referred to herein as
a "CONTINUATION PERIOD".
(p) Effect of Termination. Following a termination of the Agreement or at the
end of a Continuation Period, as applicable, BNYM will (i) dispose of all
Company 22c-2 Data in accordance with its applicable backup and data destruction
policies, and (ii) use good faith efforts to make electronic copies of Company
22c-2 Data in existing report formats of the 22c-2 System to the extent
reasonably requested by Company no less than thirty (30) days in advance of the
termination of the Agreement.
(q) This Agreement shall benefit and be enforceable by Third Party Providers of
the 22c-2 System.
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EXHIBIT 1 TO SCHEDULE D
AdvisorCentral A portal for trusts, financial advisors, broker/dealers and other
financial intermediaries to view mutual fund and client account
data on the transfer agent mainframe via the Internet if permitted
access by the Company and for Company back offices to view the
same data.
ACE (Automated Control Environment)- Windows database and reporting
capability which automates accounting functions for mutual fund
settlement, gain/loss tracking, dividend/capital gains settlement and
tax withholding tracking.
AOS (Advanced Output Solutions)- performs print mail and tax form production
and fulfillment services.
CMS* (Customer Management Suite) - the combination of functionalities,
systems and subsystems which together provide the following
capabilities: workflow management, electronic document processing,
integrated Web-based front-end processing, customer relationship
management and automated servicing of brokers and investors.
COLD (Computer Output to Laser Disk) - document management system that
provides for the laser disc storage in a PC/server environment of
certain data and documents generated on a mainframe and quick retrieval.
DAZL (Data Access Zip Link)- application which extracts broker/dealer data at
the representative level, branch level and broker/dealer level and third
party administrator data from the transfer agent mainframe and transmits
it to Company designated end users for viewing.
DRAS (Data Repository and Analytics Suite) - a relational data base for
management reporting which consists of the management company's entire
customer information base as copied nightly from the transfer agent
mainframe and includes an integrated reporting tool.
FSR (Full Service Retail) - principal transfer agent mainframe system which
performs comprehensive processing and shareholder recordkeeping
functions, including: transaction processing (purchases, redemptions,
exchanges, transfers, adjustments, and cancellations), distribution
processing (dividends and capital gains), commission processing and
shareholder event processing (automatic investment plans, systematic
withdrawal plans, systematic exchanges); creating and transmitting
standard and custom data feeds to support printed output (statements,
confirmations, checks), sales and tax reporting. FSR interfaces and
exchanges data with various surround systems and subsystems and includes
a functionality providing for direct online access.
FPT (Fund Pricing Transmission)- application automating price and rate
uploads and downloads used to perform daily fund and rate pricing from
fund accounting.
IAM (Internet Account Management) - application permitting account owners
via the Internet to view account information and effect certain
transactions and account maintenance changes.
NSCC * (National Securities Clearing Corporation) - application allowing
web-based utility at user's desktop to support processing linked to NSCC
activity, including networking, Fund/SERV, DCC&S, Commission/SERV,
mutual fund profile, and transfer of retirement assets, and includes
NEWS (NSCC Exception Workflow Processing) which provides for the
inputting of reject and exception information to the NSCC system.
RECON (Reconciliation) - application automating bank DDA (Demand Deposit
Account) reconciliation.
TRS (Tax Reporting Service)- functionality performing all applicable federal
and state tax reporting (tax form processing and corrections),
tax-related information reporting, and compliance mailings (including
X-0, X-0, XXX, B-Notice, and C-Notice).
22c-2 System The data warehousing, analytic and administrative applications
together with the related software, interfaces,
functionalities, databases and other components provided by
BNYM to assist fund sponsors and their principal underwriters
in satisfying requirements imposed by Rule 22c-2.
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* For clarification: The Company or a Permitted User may be given access
to and use of one or more separable components of this system (for
example, with respect to the CMS system, "Correspondence", "Image",
"Customer Relationship Manager" and "Operational Desktop") rather than
the entire system and a license granted by this Schedule D to use
separable components is limited to the functionalities of the separable
components even if certain of functionalities of the separable
components may include integration points with functionalities of the
non-licensed components.
[End to Exhibit 1 to Schedule D] [End to Schedule D]
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