TRANSFER AGENCY AGREEMENT
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THIS AGREEMENT made as of the 1st day of January, 1997, by and between
Wasatch Funds, Inc., a Utah corporation having its principal place of business
at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (the "Corporation"), and
SUNSTONE INVESTOR SERVICES, LLC, a Wisconsin limited liability company, having
its principal place of business at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxx 00000 (the "Sunstone"):
WHEREAS, the Corporation is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end management investment company
and is authorized to issue shares of common stock ("Shares") in separate
series with each such series representing the interests in a separate portfolio
of securities and other assets;
WHEREAS, the Corporation desires to retain Sunstone to render the transfer
agency and other services contemplated hereby with respect to each of the
investment portfolios of the Corporation as are listed on Schedule A hereto and
any additional investment portfolios the Corporation and Sunstone may agree upon
and include on Schedule A as such Schedule may be amended from time to time
(such investment portfolios and any additional investment portfolios are
individually referred to as a "Fund" and collectively the "Funds"), and
Sunstone is willing to render such services.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
ARTICLE I
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APPOINTMENT OF TRANSFER AGENT
A. APPOINTMENT. The Corporation hereby constitutes and appoints Sunstone as
transfer agent and dividend disbursing agent of all the Shares of the
Funds during the period of this Agreement, and Sunstone hereby accepts such
appointment as transfer agent and dividend disbursing agent and agrees to
perform the duties thereof as hereinafter set forth.
2. Sunstone shall perform the transfer agent and dividend disbursing
agent services described on Schedule B hereto. To the extent that a Fund
requests Sunstone to perform any additional services in a manner not consistent
with Sunstone's then current utilization of the System or Sunstone's usual
processing procedures, Sunstone and the Fund shall mutually agree as to the
services to be accomplished, the manner of accomplishment and the compensation
to which Sunstone shall be entitled with respect thereto.
3. Sunstone may, in its discretion, appoint in writing other parties
qualified to perform transfer agency and shareholder services reasonably
acceptable to the Funds (individually, a "Sub-transfer Agent") to carry out
some or all of its responsibilities under this Agreement with respect to a Fund;
provided, however, that unless the Fund shall enter into a written agreement
with such Sub-transfer Agent, the Sub-transfer Agent shall be the agent of
Sunstone and not the agent of the Corporation or such Fund and, in such event
Sunstone shall be fully responsible for the acts or omissions of such Sub-
transfer Agent and shall not be relieved of any of its responsibilities
hereunder by the appointment of such Sub-transfer Agent.
4. Sunstone shall have no duties or responsibilities whatsoever
hereunder except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against Sunstone.
B. DOCUMENTS/RECORDS.
1. In connection with such appointment, the Corporation shall deliver or
cause to be delivered the following documents to Sunstone:
a) A copy of the Articles of Incorporation and By-laws of the
Corporation and all amendments thereto certified by the Secretary of the
Corporation;
b) A copy of the resolutions of the Board of Directors of the
Corporation certified by the Secretary of the Corporation appointing Sunstone
and authorizing the execution of this Transfer Agency Agreement on behalf of the
Funds and designating certain persons to sign stock certificates, if any, and
give written or oral instructions and requests on behalf of the Funds;
c) A certificate signed by the Secretary of the Corporation
specifying: the number of authorized Shares and the number of such authorized
Shares issued and currently outstanding; the names and specimen signatures of
the officers of the Corporation authorized to sign written stock certificates
and the individuals authorized to provide oral instructions and to sign written
instructions and requests; and the name and address of the legal counsel for the
Corporation;
d) In the event the Corporation issues Share certificates, specimen
Share certificates for each Fund in the form approved by the Board of Directors
of the Corporation (and in a format compatible with Sunstone's operating
system), together with a Certificate signed by the Secretary of the Corporation
as to such approval;
e) Copies of the Corporation's Registration Statement, as amended to
date, and the most recently filed Post-Effective Amendment thereto, filed by the
Corporation with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "1933 Act"), and under the 1940 Act, as amended,
together with any applications filed in connection therewith; and
f) Opinion of counsel for the Corporation with respect to the
Corporation's organization and existence under the laws of its state of
organization, the validity of the authorized and outstanding Shares, whether
such Shares are fully paid and non-assessable and the status of such Shares
under the Securities Act of 1933, as amended, and any other applicable federal
law or regulation (i.e., if subject to registration, that they have been
registered and that the Registration Statement has become effective or, if
exempt, the specific grounds therefor.)
2. The Corporation agrees to deliver or to cause to be delivered to
Sunstone in Milwaukee, Wisconsin, at the Corporation's expense, all of its
shareholder account records relating to the Funds in a format acceptable to
Sunstone and all such other documents, records and information as Sunstone may
reasonably request in order for Sunstone to perform its services hereunder.
ARTICLE II
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COMPENSATION & EXPENSES
A. COMPENSATION. In consideration for its services hereunder as transfer
agent and dividend disbursing agent, each Fund will pay to Sunstone such
compensation as shall be set forth in a separate fee schedule to be agreed to by
each Fund and Sunstone from time to time. A copy of the initial fee schedule is
attached hereto as Schedule C.
B. EXPENSES. The Corporation on behalf of each Fund also agrees to promptly
reimburse Sunstone for all reasonable out-of-pocket expenses or disbursements
incurred by Sunstone in connection with the performance of services under this
Agreement including, but not limited to, expenses for postage, express delivery
services, freight charges, envelopes, checks, drafts, forms (continuous or
otherwise), specially requested reports and statements, bank account service
fees and charges, telephone calls, telegraphs, stationery supplies, counsel
fees, outside printing and mailing firms, magnetic tapes, reels or cartridges
(if sent to a Fund or to a third party at a Fund's request) and magnetic tape
handling charges, on-site and off-site record storage, media for storage of
records (e.g., microfilm, microfiche, optical platters, computer tapes and
disks), computer equipment installed at a Fund's request at a Fund's or a third
party's premises, telecommunications equipment, telephone/telecommunication
lines between a Fund and its agents, on one hand, and Sunstone on the other,
proxy soliciting, processing and/or tabulating costs, second site backup
computer facility, transmission of statement data for remote printing or
processing, and transaction fees to the extent any of the foregoing are paid by
Sunstone. Postage is payable in advance and is due at least seven days prior to
the anticipated mail date. Other out-of-pocket expenses are payable in advance
is so requested by Sunstone. In the event Sunstone requests advance payment,
Sunstone shall not be obligated to incur such expenses or perform the related
service(s) until payment is received. In addition to the foregoing, any other
expenses incurred by Sunstone at the request or with the consent of a Fund will
be promptly reimbursed by the respective Fund.
C. PAYMENT PROCEDURES.
1. Amounts due hereunder shall be due and paid by the respective Fund on
or before the thirtieth (30th) day after the date of the statement therefor (the
"Due Date"). Service fees are billed monthly, and out-of-pocket expenses are
billed as incurred (unless prepayment is requested by Sunstone). Sunstone may,
at its option, arrange to have various service providers submit invoices
directly to the Funds for payment of out-of-pocket expenses reimbursable
hereunder. The Corporation is aware that its failure to pay all amounts in a
timely fashion so that they will be received by Sunstone on or before the Due
Date will give rise to costs to Sunstone not contemplated by this Agreement,
including but not limited to carrying, processing and accounting charges.
Accordingly, in the event that any amounts due hereunder are not received by
Sunstone by the Due Date, a Fund shall pay a late charge equal to one and one-
half percent (1.5%) per month or the maximum amount permitted by law, whichever
is less. In addition, the Fund shall pay reasonable attorney's fees and court
costs of Sunstone if any amounts due Sunstone are collected by or through an
attorney. The parties hereby agree that such late charge represents a fair and
reasonable computation of the costs incurred by reason of late payment or
payment of amounts not properly due. Acceptance of such late charge shall in no
event constitute a waiver of the Fund's default or prevent the non-defaulting
party from exercising any other rights and remedies available to it.
2. In the event that any charges are disputed, the Fund shall, on or
before the Due Date, pay all undisputed amounts due hereunder and notify
Sunstone in writing of any disputed charges for out-of-pocket expenses which it
is disputing in good faith. Payment for such disputed charges shall be due on
or before the close of the fifth (5th) business day after the day on which
Sunstone provides to the Fund documentation which an objective observer would
agree reasonably supports the disputed charges (the "Revised Due Date"). Late
charges shall not begin to accrue as to charges disputed in good faith until the
first day after the Revised Due Date.
ARTICLE III
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PROCESSING AND PROCEDURES
A. ISSUANCE, REDEMPTION AND TRANSFER OF SHARES.
1. Sunstone acknowledges that it has received a copy of the Fund's
Prospectus (as hereinafter defined), which Prospectus describes how sales and
redemptions of shares of each Fund shall be made and Sunstone agrees to accept
purchase orders and redemption requests with respect to Fund shares on each Fund
Business Day in accordance with such Prospectus. "Fund Business Day" shall be
deemed to be each day on which the New York Stock Exchange is open for trading,
and "Prospectus" shall mean the last Fund prospectus actually received by
Sunstone from the Fund with respect to which the Fund has indicated a
registration statement under the 1933 Act has become effective, including the
Statement of Additional Information, incorporated by reference therein.
2. On each Fund Business Day Sunstone shall, as of the time at which the
net asset value of the Fund is computed, issue to and redeem from the accounts
specified in a purchase order or redemption request, which in accordance with
the Prospectus is effective on such day, the appropriate number of full and
fractional Shares based on the net asset value per Share of such Fund specified
in an advice received on such Fund Business Day from or on behalf of the Fund.
3. Upon the issuance of any Shares in accordance with this Agreement,
Sunstone shall not be responsible for the payment of any original issue or other
taxes required to be paid by the Fund in connection with such issuance of any
Shares.
4. Sunstone shall not be required to issue any Shares after it has
received from an Officer (as herein defined) of the Fund or from an appropriate
federal or state authority written notification that the sale of Shares has been
suspended or discontinued, and Sunstone shall be entitled to rely upon such
written notification. "Officer" shall be deemed to be the Corporation's
President, any Vice President, Secretary, Treasurer, Controller, any Assistant
Controller, any Assistant Treasurer and any Assistant Secretary of the
Corporation, and any other person duly authorized by the Board of Directors of
the Corporation to execute any certificate, instruction, notice or other
instrument or provide oral instructions on behalf of the Corporation, and
disclosed to Sunstone, as such individuals may be amended from time to time and
disclosed in writing to Sunstone, and any person reasonably believed by Sunstone
to be such a person.
5. Upon receipt of a proper redemption request and monies paid to it by
the Custodian in connection with a redemption of Shares, Sunstone shall cancel
the redeemed Shares and after making appropriate deduction for any withholding
of taxes required of it by applicable law, make payment in accordance with the
Fund's redemption and payment procedures described in the Prospectus.
6. Except as otherwise provided in sub-paragraph (b) of this paragraph,
Shares will be transferred or redeemed upon presentation to Sunstone of Share
certificates, if any, or instructions properly endorsed for transfer or
redemption, accompanied by such documents as Sunstone deems necessary to
evidence the authority of the person making such transfer or redemption, and
bearing satisfactory evidence of the payment of stock transfer taxes. Sunstone
reserves the right to refuse to transfer or redeem Shares until it is satisfied
that the endorsement on the stock certificate, if any, or instructions is valid
and genuine, and for that purpose it will require, unless otherwise instructed
by an authorized officer of the Fund or except as provided in sub-paragraph (b)
of this paragraph, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. Sunstone also
reserves the right to refuse to transfer or redeem Shares until it is satisfied
that the requested transfer or redemption is legally authorized, and it shall
incur no liability for the refusal, in good faith, to make transfers or
redemptions which Sunstone, in its judgment, deems improper or unauthorized, or
until it is satisfied that there is no basis to any claims adverse to such
transfer or redemption. Sunstone may, in effecting transfers and redemptions of
Shares, rely upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as the same may be
amended from time to time, applicable to the transfer of securities, and the
Corporation shall indemnify Sunstone for any act done or omitted by it in good
faith in reliance upon such laws.
(b) Notwithstanding the foregoing or any other provision contained in
this Agreement to the contrary, Sunstone shall be fully protected by each Fund
in not requiring any instruments, documents, assurances, endorsements or
guarantees, including, without limitation, any signature guarantees, in
connection with a redemption, or transfer, of Shares whenever Sunstone
reasonably believes that requiring the same would be inconsistent with the
transfer and redemption procedures as described in the Prospectus.
7. Notwithstanding any provision contained in this Agreement to the
contrary, Sunstone shall not be required or expected to require, as a condition
to any transfer or redemption of any Shares pursuant to a computer tape or
electronic data transmission, any documents to evidence the authority of the
person requesting the transfer or redemption and/or the payment of any stock
transfer taxes, and shall be fully protected in acting in accordance with the
applicable provisions of this Article.
8. In connection with each purchase and each redemption of Shares,
Sunstone shall send such statements as are prescribed by the Federal securities
laws applicable to transfer agents or as described in the Prospectus. If the
Prospectus indicates that certificates for Shares are available and if
specifically requested in writing by any shareholder, or if otherwise required
hereunder, Sunstone will countersign, issue and mail to such shareholder at the
address set forth in the records of Sunstone a Share certificate for any full
Share requested.
9. On each Fund Business Day Sunstone shall supply the Fund with a
statement specifying with respect to the immediately preceding Fund Business
Day: the total number of Shares of the Fund (including fractional Shares)
issued and outstanding at the opening of business on such day; the total number
of Shares of the Fund sold on such day; the total number of Shares of the Fund
and the dollar amount redeemed from Shareholders by Sunstone on such day; and
the total number of Shares of the Fund issued and outstanding.
10. Procedures for effecting purchase, redemption or transfer
transactions accepted from investors by telephone or other methods shall be
established by mutual agreement between the Funds and Sunstone consistent with
the terms of the Prospectus. Sunstone upon notice to a Fund may establish such
additional procedures, rules and regulations governing the transfer or
registration of Share certificates, if any, or the purchase, redemption or
transfer of Shares, as it may deem advisable and consistent with the Prospectus
and such rules and regulations generally adopted by mutual fund transfer agents.
Sunstone shall not be liable, and shall be held harmless by the Funds, for its
actions or omissions which are consistent with the foregoing procedures.
B. DIVIDENDS AND DISTRIBUTIONS.
1. The Corporation shall furnish to Sunstone a copy of a resolution of
its Board of Directors, certified by the Secretary or any Assistant Secretary,
either (i) setting forth the date of the declaration of a dividend or
distribution, the date of accrual or payment, as the case may be, thereof, the
record date as of which shareholders entitled to payment, or accrual, as the
case may be, shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount, if any, payable to Sunstone on
such payment date, or (ii) authorizing the declaration of dividends and
distributions on a daily or other periodic basis and authorizing Sunstone to
rely on a certificate of an Officer setting forth the information described in
subsection (i) of this paragraph.
2. In connection with a reinvestment of a dividend or distribution of
Shares of a Fund, Sunstone shall as of each Fund Business Day, as specified in a
certificate or resolution described in paragraph 1, issue Shares of the Fund
based on the net asset value per Share of such Fund specified in an advice
received from or on behalf of the Fund on such Fund Business Day.
3. Upon the mail date specified in such certificate or resolution, as
the case may be, the Fund shall, in the case of a cash dividend or distribution,
cause the Custodian to deposit in an account in the name of Sunstone on behalf
of the Fund, an amount of cash, if any, sufficient for Sunstone to make the
payment, as of the mail date, specified in such Certificate or resolution, as
the case may be, to the Shareholders who were of record on the record date.
Sunstone will, upon receipt of any such cash, make payment of such cash
dividends or distributions to the shareholders of record as of the record date.
Sunstone shall not be liable for any improper payments made in good faith and in
accordance with a certificate or resolution described in the preceding
paragraph. If Sunstone shall not receive from the Custodian sufficient cash to
make payments of any cash dividend or distribution to all shareholders of the
Fund as of the record date, Sunstone shall, upon notifying the Fund, withhold
payment to all shareholders of record as of the record date until sufficient
cash is provided to Sunstone.
4. It is understood that Sunstone in its capacity as transfer agent and
dividend disbursing agent shall in no way be responsible for the determination
of the rate or form of dividends or capital gain distributions due to the
shareholders pursuant to the terms of this Agreement. It is further understood
that Sunstone shall file such appropriate information returns concerning the
payment of dividend and capital gain distributions with the proper federal
authorities as are required by law to be filed by the Funds but shall in no way
be responsible for the collection or withholding of taxes due on such dividends
or distributions due to shareholders, except and only to the extent, required by
applicable law. Sunstone shall file applicable state reports concerning the
payment of dividend and capital gains distributions upon receipt from or on
behalf of the Funds of all information regarding the state filing requirements
in each applicable state (including without limitation the forms required, due
dates, filing procedures and reporting thresholds), and upon receipt of such
compensation as Sunstone and the Funds may mutually agree.
C. AUTHORIZATION AND ISSUANCE OF SHARES; RECAPITALIZATION OR CAPITAL
ADJUSTMENT.
1. Prior to the effective date of any increase or decrease in the total
number of Shares authorized to be issued, or the issuance of any additional
Shares of a Fund pursuant to stock dividends, stock splits or similar
transactions, the Corporation agrees to deliver to Sunstone such documents,
certificates, reports and legal opinions as Sunstone may reasonably request.
2. In the case of any negative stock split, recapitalization or other
capital adjustment requiring a change in the form of Share certificates,
Sunstone will issue Share certificates in the new form in exchange for, or upon
transfer of, outstanding Share certificates in the old form, upon receiving:
(a) A certificate of an Officer authorizing the issuance of the Share
certificates in the new form, a certified copy of any amendment to the Articles
of Incorporation with respect to the change, and such other documents and
information as Sunstone may reasonably request.
(b) In the event the Funds issue Share certificates, specimen Share
certificates for each Fund in the new form approved by the Board of Directors,
with a certificate signed by the Secretary of the Corporation as to such
approval.
3. In the event a Fund issues Share certificates, the Fund at its
expense shall furnish Sunstone with a sufficient supply of blank Share
certificates in the new form and from time to time will replenish such supply
upon the request of Sunstone. Such blank Share certificates shall be compatible
with Sunstone's system and shall be properly signed by facsimile or otherwise by
Officers of the Corporation authorized by law or by the By-Laws to sign Share
certificates and, if required shall bear the corporate Seal or facsimile
thereof. Each Fund agrees to indemnify and exonerate, save and hold Sunstone
harmless, from and against any and all claims or demands that may be asserted
against Sunstone with respect to the genuineness of any Share certificate
supplied to Sunstone.
4. In the event a Fund issues Share certificates, Sunstone may issue new
Share certificates in place of certificates represented to have been lost,
stolen, or destroyed upon receiving written instructions from the shareholder
accompanied by proof of an indemnity or surety bond issued by a recognized
insurance institution specified by the Fund or Sunstone. If Sunstone receives
written notification from the shareholder or broker dealer that the certificate
issued was never received, and such notification is made within 30 days of the
date of issuance, Sunstone may reissue the certificate without requiring a
surety bond. Sunstone may also reissue certificates which are represented as
lost, stolen, or destroyed without requiring a surety bond provided that the
notification is in writing and accompanied by an indemnification signed on
behalf of a member firm of the New York Stock Exchange and signed by an officer
of said firm with the signature guaranteed. Notwithstanding the foregoing,
Sunstone will reissue a certificate upon written authorization from an Officer
of the Fund.
D. RECORDS.
1. Sunstone shall keep such records as are specified in Schedule D
hereto in the form and manner, and for such period, as it may deem advisable but
not inconsistent with the rules and regulations of appropriate government
authorities, in particular Rules 31a-2 and 31a-3 under the 1940 Act. Sunstone
may deliver to the Funds from time to time at its discretion, for safekeeping or
disposition by a Fund in accordance with law, such records, papers and documents
accumulated in the execution of its duties as such transfer agent, as Sunstone
may deem expedient, other than those which Sunstone is itself required to
maintain pursuant to applicable laws and regulations. The Funds shall assume
all responsibility for any failure thereafter to produce any record, paper,
cancelled Share certificate, or other document so returned, if and when
required. To the extent required by Section 31 of the 1940 Act and the rules
and regulations thereunder, the records specified in Schedule D hereto
maintained by Sunstone, which have not been previously delivered to a Fund
pursuant to the foregoing provisions of this paragraph, shall be considered to
be the property of the Fund, shall be made available upon request for inspection
by the officers, employees, and auditors of the Fund, and shall be delivered to
the Fund promptly upon request and in any event upon the date of termination of
this Agreement, in the form and manner kept by Sunstone on such date of
termination or such earlier date as may be requested by the Fund.
2. Sunstone agrees to keep all records and other information relative
to the Funds and their shareholders confidential. In case of any requests or
demands for the inspection of the shareholder records of a Fund, Sunstone will
endeavor to notify the Fund promptly and to secure instructions from an Officer
as to such inspection. Sunstone reserves the right, however, to exhibit the
shareholder records to any person whenever it receives advice from its counsel
that there is a reasonable likelihood that Sunstone will be held liable for the
failure to exhibit the shareholder records to such person; provided, however,
that in connection with any such disclosure Sunstone shall promptly notify the
Fund that such disclosure has been made or is to be made. Notwithstanding the
foregoing, Sunstone may disclose information when requested by a shareholder
concerning an account as to which such shareholder claims a legal or beneficial
interest or when requested by the Funds, the shareholder or the dealer of record
as to such account.
3. Sunstone shall only be responsible for the safekeeping and
maintenance of transfer agency records, cancelled certificates, if any, and
correspondence of a Fund created or produced prior to the time of conversion
which are under its control and acknowledged in a writing to the Fund to be in
its possession. Any expenses or liabilities incurred by Sunstone as a result of
shareholder inquiries, regulatory compliance or audits related to such records
shall be the responsibility of the Funds.
ARTICLE IV
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CONCERNING THE CORPORATION
A. REPRESENTATIONS. The Corporation represents and warrants to Sunstone
that:
(a) It is a corporation duly organized and existing under the laws of
the State of Maryland, it is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement, and all
requisite corporate proceedings have been taken to authorize it to enter into
and perform this Agreement.
(b) It is an investment company registered under the 1940 Act.
(c) A registration statement under the 1933 Act with respect to the
Shares is effective. The Corporation shall notify Sunstone if such registration
statement or any state securities registrations have been terminated, lapse or a
stop order has been entered with respect to the Shares.
B. COVENANTS.
1. The Corporation will file with Sunstone copies of all material
amendments to its Articles of Incorporation and By-laws made after the date of
this Agreement. Each copy of the Articles of Incorporation of the Funds and
copies of all amendments thereto shall be certified by the Secretary of the
Corporation. Each copy of the By-Laws and copies of all amendments thereto, and
copies of resolutions of the Board of Directors, shall be certified by the
Secretary of the Corporation.
2. The Corporation shall promptly deliver to Sunstone written notice of
any change in the Officers authorized to sign Share certificates, if any,
notifications or requests, or provide oral instructions, together with a
specimen signature of each new Officer. In the event any Officer who shall have
signed manually or whose facsimile signature shall have been affixed to blank
Share certificates shall die, resign or be removed prior to issuance of such
Share certificates, Sunstone may issue such Share certificates of the Fund
notwithstanding such death, resignation or removal, and the Funds shall promptly
deliver to Sunstone such approval, adoption or ratification as may be required
by law.
3. The Corporation shall deliver to Sunstone the Fund's currently
effective Prospectus and, for purposes of this Agreement, Sunstone shall not be
deemed to have notice of any information contained in such Prospectus until a
reasonable time after it is actually received by Sunstone.
4. All requisite steps will be taken by the Corporation from time to
time when and as necessary to register the Funds' shares for sale in all states
in which Funds' shares shall at the time be offered for sale and require
registration. If at any time a Fund receives notice of any stop order or other
proceeding in any such state affecting such registration or the sale of Fund's
shares, or of any stop order or other proceeding under the federal securities
laws affecting the sale of the Fund's shares, the Fund will give prompt notice
thereof to Sunstone.
5. The Corporation will comply with all applicable requirements of the
1933 Act, the Securities Exchange Act of 1934, as amended, the 1940 Act, blue
sky laws, and any other applicable laws, rules and regulations.
6. The Corporation agrees that prior to effecting any change in the
Prospectus which would increase or alter the duties and obligations of Sunstone
hereunder, it shall advise Sunstone of such proposed change at least 30 days
prior to the intended date of the same, and shall proceed with such change only
if it shall have received the written consent of Sunstone thereto, which shall
not be unreasonably withheld.
ARTICLE V
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CONCERNING THE TRANSFER AGENT
A. REPRESENTATIONS. Sunstone represents and warrants to the Fund that:
(a) It is a limited liability company duly organized and existing under
the laws of the State of Wisconsin, is empowered under applicable law and by its
Operating Agreement to enter into and perform this Agreement, and all requisite
proceedings have been taken to authorize it to enter into and perform this
Agreement.
(b) It is duly registered as a transfer agent under Section 17A of the
Securities Exchange Act of 1934, as amended, to the extent required.
B. LIMITATION OF LIABILITY; INDEMNIFICATION.
1. Sunstone shall use its best efforts to ensure the accuracy of all
services performed under this Agreement, but shall not be liable for any loss or
damage, including counsel fees, resulting from its actions or omissions to act
or otherwise, in the absence of its bad faith, willful misfeasance, gross
negligence or reckless disregard of its duties under this agreement.
2. The Corporation, on behalf of the Funds, agrees to indemnify and hold
harmless Sunstone, its employees, agents, directors, officers and nominees from
and against any and all claims, demands, actions and suits, whether groundless
or otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Sunstone's actions taken or
nonactions with respect to the performance of services under this Agreement or
based, if applicable, upon reliance on information, records, instructions (oral
or written) or requests given or made to Sunstone by the Funds, its officers,
directors, agents or representatives; provided that this indemnification shall
not apply to actions or omissions of Sunstone in cases of its own willful
misfeasance or gross negligence, and further provided that prior to confessing
any claim against it which may be the subject of this indemnification, Sunstone
shall give the Funds written notice of and reasonable opportunity to defend
against said claim in its own name or in the name of Sunstone. The indemnity
and defense provisions provided hereunder shall indefinitely survive the
termination of this Agreement.
3. Sunstone assumes no responsibility hereunder, and shall not be liable,
for any damage, loss of data, errors, delay or any other loss whatsoever caused
by events beyond its reasonable control. Sunstone will, however, take all
reasonable steps to minimize service interruptions for any period that such
interruption continues beyond Sunstone's control.
4. Sunstone shall not be liable and shall be indemnified in acting upon any
writing or document reasonably believed by it to be genuine and to have been
signed or made by an Officer or verbal instructions which the individual
receiving the instructions on behalf of Sunstone reasonably believes in
good faith to have been given by an Officer, and Sunstone shall not be held to
have any notice of any change of authority of any person until receipt of
written notice thereof from a Fund or such person. Sunstone shall not be liable
to a Fund with respect to any redemption draft on which the signature of the
drawer is forged nor shall Sunstone be liable for any alteration or absence or
forgery of any endorsement, it being understood that Sunstone's sole
responsibility with respect to inspecting redemption drafts is to use reasonable
care to verify the drawer's signature against signatures on file. It shall also
be protected in processing Share certificates, if any, which bear the proper
countersignature of Sunstone and which it reasonably believes to bear the proper
manual or facsimile signature of the Officers.
5. In no event, and under no circumstances shall either party to this
Agreement be liable to anyone, including, without limitation to the other party,
for punitive damages for any act or failure to act under any provision of the
Agreement even if advised of the possibility thereof.
6. At any time Sunstone may request instructions and/or receive directions
from an Officer with respect to any matter arising in connection with Sunstone's
duties and obligations under this Agreement, and Sunstone shall not be liable
for any action taken or permitted by it in good faith in accordance with such
instructions or directions. Such request for instructions by Sunstone may set
forth any action proposed to be taken or omitted by Sunstone with respect to its
duties or obligations under this Agreement and the date on and/or which such
action shall be taken. Sunstone shall not be liable for any action taken or
omitted in accordance with a proposal included in any such request on or after
the date specified therein unless, prior to taking or omitting any such action,
Sunstone has received instructions in response to such application specifying
the action to be taken or omitted. Sunstone may consult counsel of the
Corporation, or upon notice to the Corporation, its own counsel, at the expense
of the Corporation and shall be fully protected with respect to anything done or
omitted by it in good faith in accordance with the advice or opinion of counsel
to the Corporation or its own counsel.
7. Notwithstanding any of the provisions of this Agreement, Sunstone shall
be under no duty or obligation under this Agreement to inquire into, and shall
not be liable for:
(a) The legality of the issue or sale of any Shares, the sufficiency of
the amount to be received therefor, or the authority of a Fund, as the case may
be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a redemption of any
Shares, the propriety of the amount to be paid therefor, or the authority of a
Fund, as the case may be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by a Fund, or the
legality of the issue of any Shares in payment of any stock dividend, or the
legality of any recapitalization or readjustment of Shares
ARTICLE V
----------
TERM
1. This Agreement shall be effective as of February 28, 1998, and remain in
full force and effect for a period of one year from such date and thereafter
shall automatically extend for additional, successive twelve (12) month terms
unless earlier terminated as provided below.
2. Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of receipt of such
notice. In the event such notice is given by a Fund, it shall be accompanied by
a copy of a resolution of the Board of Directors of the Corporation, certified
by the Secretary or any Assistant Secretary, electing to terminate this
Agreement and designating the successor transfer agent or transfer agents. In
the event such notice is given by Sunstone, the Fund shall on or before the
termination date, deliver to Sunstone a copy of a resolution of its Board of
Directors certified by the Secretary or any Assistant Secretary designating a
successor transfer agent or transfer agents. In the absence of such designation
by the Fund, the Fund shall upon the date specified in the notice of termination
of this Agreement and delivery of the records maintained hereunder, be deemed to
be its own transfer agent and Sunstone shall thereby be relieved of all duties
and responsibilities pursuant to this Agreement. Fees and out-of-pocket
expenses incurred by Sunstone, but unpaid by a Fund upon such termination, shall
be immediately due and payable upon and notwithstanding such termination.
3. In the event this Agreement is terminated as provided herein, Sunstone,
upon the written request of a Fund, shall deliver the records of the Fund to the
Fund or its successor transfer agent in the form maintained by Sunstone. The
Fund shall be responsible to Sunstone for all out-of-pocket expenses and for the
reasonable costs and expenses associated with the preparation and delivery of
such media, including: (a) any custom programming requested by a Fund in
connection with the preparation of such media; (b) transportation of forms and
other Fund materials used in connection with the processing of Fund transactions
by Sunstone; and (c) transportation of Fund records and files in the possession
of Sunstone. Sunstone shall not reduce the level of service provided to the
Fund following notice of termination by the Fund.
ARTICLE VI
----------
MISCELLANEOUS
A. NOTICES. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to a Fund or the Corporation shall be
sufficiently given if addressed to the Corporation and mailed and delivered to
the President at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, or at such
other place as a Fund or the Corporation may from time to time designate in
writing. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to Sunstone shall be sufficiently given if addressed
to Sunstone and mailed or delivered to the President at 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as Sunstone may
from time to time designate in writing.
B. AMENDMENTS/ASSIGNMENTS.
1. This Agreement may not be amended or modified in any manner except by
a written agreement executed by both parties with the formality of this
Agreement.
2. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns. This Agreement shall not
be assignable by either party without the written consent of the other party
except that Sunstone may assign this Agreement to an affiliate with
advance written notice to the Corporation.
C. WISCONSIN LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin. If any part, term or
provision of this Agreement is determined by the courts or any regulatory
authority having jurisdiction over the issue to be illegal, in conflict with any
law or otherwise invalid, the remaining portion or portions shall be considered
severable and not be affected, and the rights and obligations of the parties
shall be construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
D. COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
E. BACK-UP FACILITY. During the terms of this Agreement, Sunstone shall
provide a facility capable of safeguarding the transfer agency and dividend
disbursing records of the Fund in case of damage to the primary facility
providing those services (the "Back-Up Facility"). Transfer of the transfer
agency and dividend records of the Fund to the Back-Up Facility shall commence
as soon as practicable after damage to the primary facility results in an
inability to provide the transfer agency and dividend disbursing services.
After the primary facility has recovered, Sunstone shall again utilize it to
provide the transfer agency and dividend disbursing services to the Fund.
Sunstone shall use reasonable efforts to provide the services described in this
Agreement from the Back-Up Facility.
F. PRIOR TRANSFER AGENT(s). Sunstone will endeavor to assist in resolving
shareholder inquiries and errors relating to the period during which prior
transfer agents acted as such for the Fund. Any such inquiries or errors which
cannot be expediently resolved by Sunstone will be referred to the Fund.
G. NON-EXCLUSIVE; OTHER AGREEMENTS. The services of Sunstone hereunder are
not deemed exclusive and Sunstone shall be free to render similar services to
others. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights or
obligations of any other party hereunder.
H. CAPTIONS. The captions in the 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officer, thereunto duly authorized and
their respective corporate seals to be hereunto affixed, as the day and year
first above written.
SUNSTONE INVESTOR SERVICES, LLC WASATCH FUNDS, INC.
By: By:
------------------------------ -------------------------------
(Signature) (Signature)
------------------------------ -------------------------------
(Name) (Name)
------------------------------ -------------------------------
(Title) (Title)
------------------------------ -------------------------------
(Date Signed) (Date Signed)
SCHEDULE A
TO THE
TRANSFER AGENCY AGREEMENT
BY AND BETWEEN
WASATCH FUNDS, INC.
AND
SUNSTONE INVESTOR SERVICES, LLC
WASATCH AGGRESSIVE EQUITY FUND
WASATCH MICRO-CAP FUND
WASATCH GROWTH FUND
WASATCH MID-CAP FUND
WASATCH - XXXXXXXXXX U.S. TREASURY FUND
WASATCH WORLD WIDE FUND
SCHEDULE B
TO THE
TRANSFER AGENCY AGREEMENT
BY AND BETWEEN
WASATCH FUNDS, INC.
AND
SUNSTONE INVESTOR SERVICES, LLC
SERVICES
-- MAINTENANCE OF SHAREHOLDER ACCOUNTS
- Maintain records for each shareholder account;
- Scan account documents for electronic storage;
- Issue customer statements;
- Record changes to shareholder account information;
- Maintain account documentation files for each shareholder; and
- Establish and maintain XXX accounts.
-- SHAREHOLDER SERVICING AND SHAREHOLDER TRANSACTIONS
- Respond to written and telephone (recorded lines) inquiries from
shareholders for information about their accounts;
- Process shareholder purchase and redemption orders, including those of
automatic investment and systematic withdrawal plans;
- Set up account information, including address, dividend options, taxpayer
identification numbers and wire instructions;
- Issue transaction confirmations;
- Process transfers and exchanges; and
- Process dividend payments by check, wire or ACH or purchase new shares
through dividend reinvestment.
-- COMPLIANCE REPORTING AND PROXY PROCESSING
- Provide required reports to the Securities and Exchange Commission, the
National Association of Securities Dealers and the states in which each
fund is registered;
- Prepare and distribute required Internal Revenue Service forms relating
to earned income and capital gains to fund and shareholders;
- Issue tax withholding reports to the Internal Revenue Service; and
- Mail, process and tabulate proxies.
TELEPHONE SERVICE REPRESENTATIVES ON-LINE ACCESS
- Respond to shareholder or dealer inquiries related to:
- Account registration;
- Share balances;
- Account options;
- Dividend and capital gain distribution status;
- Withholding status;
- Transaction dates and types;
- Shares traded;
- Social security number/tax ID number;
- External account number;
- Address;
- Customer or account type;
- Dealer, branch and rep information;
- Dollars available/not available in the account;
- Shares purchased/redeemed today;
- Dividend accrual, current dividend period; and
- Market value of shares.
- Dedicated shareholder services representatives
-- STANDARD REPORTS
- Shareholder base analysis (monthly)
- New account listing (weekly)
- Purchases, redemptions, exchanges (monthly)
- Servicing summary (monthly)
- Commission and 12b-1 reports for load funds (monthly)
SCHEDULE C
TO THE
TRANSFER AGENCY AGREEMENT
BY AND BETWEEN
WASATCH FUNDS, INC.
AND
SUNSTONE INVESTOR SERVICES, LLC
FEE SCHEDULE
-- ANNUAL BASE FEES FOR FUNDS
Shareholder account fee for equity, fixed income and balanced funds:
$20.00 open accounts
2.50 closed accounts
Minimum annual fee:
Aggressive Equity Fund $22,000
Growth Fund 7,000
Wasatch-Xxxxxxxxxx
U.S. Treasury Fund 5,000
Mid-Cap Fund 7,000
Micro-Cap Fund 5,000
World Wide Fund 7,000*
The base fee assumes a single class of shares, no load or 12b-1 plan;
availability of automatic investment plans and systematic withdrawal plans;
quarterly or less frequent dividend distributions; annual capital gain
distributions; annual tax reporting; telephone privileges and all standard
reports.
-- ADDITIONAL FEES TO BE ADDED TO BASE FEE
TYPE OF SERVICE OR ANNUAL SHAREHOLDER MINIMUM ANNUAL
FUND FUNCTION ACCOUNT FEE FEE PER FUND
------------- ----------- ------------
Front-end load 1.50 2,000
CDSC, back-end load or
redemption fee 2.00 3,000
12b-1 plan 1.00 1,000
Monthly dividends on
non-money market funds 2.00 2,000
Check writing privilege 2.00 2,000
----------------------
* To be effective with respect to World Wide Fund upon commencement of
operations.
-- ONE-TIME SET-UP FEES
(per Fund Family)
New Fund Set-up (per fund) $2,000
Out-of-pocket expenses At cost
NSCC FundSERV set-up 2,500
NSCC networking 1,500
Asset allocation program 5,000
Remote access set-up (per location) 1,000
Northern Money Market Funds (per Northern Fund) 2,500
VRU 2,000
-- ACCOUNT MAINTENANCE AND PROCESSING FEES
(per occurrence)
Shareholder account set-up 5.00
AIP/SWP/Automatic Exchange account set-up 1.00
AIP/SWP/Automatic Exchange transaction processing .50
AIP/SWP/Automatic Exchange alternate date transaction processing 1.50
Check writing signature verification 0.50
Omnibus account transaction 2.50
Transaction processing - FundSERV 0.20
Certificate issuance 4.00
Locating lost shareholders 8.00
Taxpayer ID number solicitation 1.25
Telephone exchange fee 5.00
Asset allocation transactions
(purchases, redemptions, rebalancing) 1.00
XXX/SEP processing
Annual maintenance or custodial fee (per account) 12.50
Account termination (transfer or rollover) 15.00
Monthly remote access user charge
First user and password 250.00
Additional users and passwords (each) 100.00
VRU Transaction .25
-- DEDICATED SHAREHOLDER SERVICES REPRESENTATIVE(S)
Monthly charges per dedicated representative
Sunstone employee 5,000.00
Sunstone intern (10 hours per week) 750.00
(Monthly charges to increase annually by a percentage equal to the then
current consumer price index plus 3%)
Out-of-pocket expenses (e.g. travel, blue sky licenses)
Programming to sort shareholder data 125.00/hr
(quoted on a project basis)
-- OUT-OF-POCKET EXPENSES
Per check processing (dividend, capital gains, redemption) .25
Per statement and confirm processing .25
Per tax form processing .15
Per label printing for proxy or marketing purposes .05
Production of ad hoc reports 100.00/min.
Bulk mailings/insert handling charge
1 insert .25
2 - 3 inserts (per piece) .20
4 - 5 inserts (per piece) .15
Bank account service fees and any other bank charges At cost
Check stock At cost
Statement paper At cost
Envelopes At cost
Tax forms At cost
Postage and express delivery charges At cost
Telephone and long distance charges At cost
Fax charges At cost
P.O. box rental At cost
800-phone number At cost
Inventory and records storage At cost
FundSERV charges At cost
Travel expenses At cost
Outgoing wire fee At cost
Check writing transaction fees
Stop payments At cost
Non-sufficient funds At cost
Check copy 2.50
Account transcripts older than 2 years
(per year, per fund) 5.00
Non-sufficient funds At cost
-- MAINTENANCE OF NORTHERN MONEY MARKET FUNDS
An annual fee of $2,000 per Northern Money Market Fund used in connection
with your fund family is added to the base fee of each of your funds.
-- CUSTOM PROGRAMMING
Additional fees may apply for special programming to meet servicing
requirements or to create custom reports.
SCHEDULE D
TO THE
TRANSFER AGENCY AGREEMENT
BY AND BETWEEN
WASATCH FUNDS, INC.
AND
SUNSTONE INVESTOR SERVICES, LLC
RECORDS MAINTAINED BY SUNSTONE
Account applications
Cancelled certificates plus stock powers and supporting documents
Checks including check registers, reconciliation records, any adjustment
records and tax withholding documentation
Indemnity bonds for replacement of lost or missing stock certificates
and checks
Liquidation, redemption, withdrawal and transfer requests including stock
powers, signature guarantees and any supporting documentation
Shareholder correspondence
Shareholder transaction records
Share transaction history of the Funds
