Exhibit h(2)
1999 AMENDMENT
Dated: August 11, 1999
To Transfer Agency and Service Agreement
Between
CGM Trust
and
State Street Bank and Trust Company
1. General Background.
In accordance with the Amendment provision in Section 13 of the Transfer
Agency and Service Agreement between CGM Trust (the "Fund") and State
Street Bank and Trust Company (the "Bank") dated October 27, 1997 (the
"Agreement"), the parties desire to amend the Agreement to set forth the
terms and conditions under which State Street agrees to serve as Custodian
of the retirement accounts established using the retirement account
materials developed by the Fund.
1.1 The Bank pursuant to the Agreement is the transfer agent for the Fund.
1.2 The Fund has developed certain retirement account materials (hereinafter
collectively called the "Fund Prototypes") that may be used by an
individual ("Participant") who desires to establish a Traditional XXX,
Xxxx XXX, SEP XXX or 403(b)(7)-retirement account (collectively,
"Retirement Account(s)").
1.3 The Fund desires to appoint the Bank as Custodian of any Retirement
Account established using the Fund Prototypes and the Bank desires to
accept such appointment.
1.4 All defined terms and definitions and other terms and conditions in the
Agreement shall be the same in this amendment (the "1999 Amendment") and
shall continue in full force and effect, except as specifically revised by
the 1999 Amendment.
1.5 In consideration of the mutual covenants herein contained, the parties
agree as follows:
2. Terms of Appointment and Duties
2.1 As Custodian of the Retirement Accounts, the Bank will be designated as
the owner, on the records of the Fund.
2.2 Records of the Custodian's ownership of Shares of the Fund will be
maintained by the transfer agent for such Shares in the name of the Bank
as Custodian (or its nominee) and no physical Shares will be issued.
2.3 Under the terms of each Fund Prototype, the Bank as Custodian has no
investment responsibility for the selection of investments for a
Retirement Account and the Bank will have no liability for any investments
made for a Retirement Account other than to maintain custody of the
investments subject to the terms of this Amendment and the Agreement. The
Fund will not state or make any representations to the contrary hereof.
2.4 The Bank will not serve as trustee or plan administrator of any Retirement
Account, or in any other administrative or other capacity except as
Custodian thereof. The Bank will not keep records of Retirement Accounts
or maintain any other records except those that are necessary to serve as
Custodian or as transfer agent pursuant to the Agreement. The Fund will
not state or make any representations to the contrary hereof.
2.5 The Fund will upon reasonable advance notice make available access to its
facilities and access to or copies of such records to the Bank as the Bank
may request in order that the Bank may determine that the Fund is properly
performing its duties and obligations hereunder. The Bank's right of
access under this provision will include access to any service provider or
service bureau performing any of the Fund's duties and obligations under
this Agreement on behalf of the Fund.
3. Review and Maintenance of Fund Prototypes
3.1 The Fund agrees that the Fund Prototypes will comply with applicable
sections of the Internal Revenue Code of 1986 (the "Code") and Regulations
promulgated pursuant to the Code in effect at the time. The Fund will be
responsible for establishing, maintaining and updating the Fund Prototypes
in compliance with the Code and all other applicable Federal or state law
or regulations, when changes in the law require such updating.
3.2 The Fund agrees that the Fund Prototypes are the responsibility of the
Fund and further agrees that it will indemnify, defend and hold harmless
the Bank, its successors, representatives and assigns from and against any
and all losses, damages, costs, charges, expenses including reasonable
fees for counsel, taxes, penalties and liability (collectively, "Losses")
arising out of or attributable to the use of the Fund Prototypes by the
Fund, its agents, employees, representatives or any other person acting on
the Fund's behalf, except to the extent that such Losses arise out of or
are attributable to the negligence, bad faith or willful misconduct of the
Bank (or its agents, affiliates, successors or assigns), unless such
negligence is a result of complying with the Fund Prototypes. This
indemnification obligation will survive termination of this 1999 Amendment
or the Agreement. Procedures for notification of claims under Section 3.2
hereof shall be pursuant to the terms of the Agreement.
3.3 The Fund agrees that any modifications made by the Fund to the Fund
Prototypes without the Bank's written consent shall not increase the
liabilities or responsibilities of the Bank as Custodian or limit the
Bank's ability to resign as Custodian as provided under Section 4 below.
The Fund will furnish the Bank with a copy of the Fund Prototypes. The
Bank shall not be required to review, comment or advise on such Fund
Prototypes.
4. Resignation or Removal of Custodian
4.1 If either party chooses to terminate the Agreement pursuant to Section 10
of the Agreement the Bank may thereupon resign as Custodian in respect to
any or all of the Retirement Accounts upon thirty (30) days' prior written
notice to the Fund. In such an event, the Fund will promptly distribute
the notice of the Custodian's resignation to such persons and in such
manner as are called for under the applicable provisions of the Retirement
Account and in form and content satisfactory to and signed by the Bank.
The Fund shall be responsible to obtain a successor custodian for all
Retirement Accounts.
4.2 If the Fund chooses to discontinue performing any of its duties and
obligations described in or contemplated by this 1999 Amendment or the
Fund Prototypes, either of a general nature or in respect to any or all
Retirement Accounts, it will give the Bank at least one hundred twenty
(120) days' written notice prior to such discontinuance. The Bank may
thereupon resign as Custodian in respect to any or all Retirement Accounts
by providing (30) days' prior written notice to the Fund. In such an
event, the Fund shall be responsible to obtain a successor custodian for
the Retirement Accounts. Upon written acceptance by the successor
custodian, the Fund will promptly distribute the notice of the Custodian's
resignation to such persons and in such manner as are called for under the
applicable provisions of the Retirement Account and in form and content
satisfactory to and signed by the Bank.
4.3 If at any time the Fund chooses to terminate the services requested under
this 1999 Amendment, it will give the Bank at least one hundred and twenty
(120) days' written notice prior to such termination. Such notice, to be
effective, shall designate a successor custodian and shall be accompanied
by the successor custodian's written acceptance. The Fund shall be
responsible to obtain a successor custodian for all Retirement Accounts.
Upon written acceptance by the successor custodian, the Fund will promptly
distribute the notice of the Custodian's resignation to such persons and
in such manner as are called for under the applicable provisions of the
Retirement Account and in form and content satisfactory to and signed by
the Bank.
4.4 If at any time and for any reason the Bank chooses to resign as Custodian
of any or all Retirement Accounts, it will give the Fund at least thirty
(30) days' prior written notice. In connection with its resignation
hereunder or pursuant to Sections 4.1, 4.2 or 4.3, the Custodian may, but
is not required to, designate a successor custodian by written notice to
the Fund, and the Fund will be deemed to have consented to such successor
unless the Fund designates a different successor custodian and provides
written notice thereof together with such a different successor's written
acceptance by such date as the Custodian specifies in its original notice
to the Fund provided that the Fund will have a minimum of thirty (30) days
to designate a different successor. The Fund will promptly distribute the
notice of the Custodian's resignation to such persons and in such manner
as are called for under the applicable provisions of the Retirement
Account and in form and content satisfactory to and signed by the Bank.
4.5 If within thirty (30) days (or such longer time as the Custodian may agree
to in writing) after resignation by the Custodian pursuant to Sections
4.1, 4.2 or 4.4 or removal of the Custodian under Section 4.3, the Fund or
the Custodian has not appointed a successor custodian who has accepted
such appointment in writing, the Fund shall within a further period of
thirty (30) days apply to a court of competent jurisdiction for
appointment of a successor custodian, provided that if (i) the Fund shall
have failed to have made such application within such period or (ii) the
court shall have dismissed such application without having made such
appointment, and (iii) no successor custodian shall have then accepted
appointment , then (iv) termination of the Custodian's responsibilities
shall be effected by distributing all assets of the Retirement Account in
a single payment in cash or in kind to each Participant, subject to the
Custodian's right to reserve such funds as it may deem advisable for
payment of all its fees, compensation, costs and expenses or for payment
of any other liabilities constituting a charge on or against the assets of
Retirement Accounts or on or against the Custodian. Any amounts remaining
after payment of such costs shall be delivered to the successor custodian,
if any.
4.6 Upon appointment of and acceptance by a successor custodian under this
Section 4, the Custodian shall transfer all assets in book entry form
relating to the Retirement Accounts to the successor custodian.
5. Applications and Correspondence
The Bank will execute any instruments and documents in regard to the
Retirement Accounts (including correspondence with various persons such as
employers, Participants and beneficiaries) which the Fund submits to the
Bank for that purpose. In no event will the Fund sign the Bank's name on
any application or other document without the Bank's prior written
approval.
6. Fees and Expenses
In consideration for the Bank's services as Custodian hereunder, the Bank
will receive such compensation specified in Section 2 and Schedule C of
the Agreement which may be amended from time to time subject to mutual
written agreement among the parties.
CGM TRUST STATE STREET BANK AND TRUST COMPANY
BY Xxxxxx X. Xxxx BY: Xxxxxx X. Xxxxx
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