EXECUTION COPY
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
EACH OF THE ENTITIES, INDIVIDUALLY AND NOT JOINTLY,
AS LISTED ON SCHEDULE A
AND
BOSTON FINANCIAL DATA SERVICES, INC.
TABLE OF CONTENTS
PAGE
1. Terms of Appointment and Duties .........................................1
2. Third Party Administrators for Defined Contribution Plans ...............6
3. Fees and Expenses .......................................................7
4. Representations and Warranties of the Transfer Agent ....................9
5. Representations and Warranties of the Fund ..............................9
6. Wire Transfer Operating Guidelines .....................................10
7. Data Access and Proprietary Information ................................11
8. Indemnification ........................................................13
9. Standard of Care .......................................................15
10. Confidentiality ........................................................16
11. Covenants of the Fund and the Transfer Agent ...........................17
12. Termination of Agreement ...............................................19
13. Assignment and Third Party Beneficiaries ...............................22
14. Subcontractors .........................................................22
15. Changes and Modifications ..............................................23
16. Miscellaneous ..........................................................23
17. Additional Funds/Portfolios ............................................25
Schedule A Funds and Portfolios
Schedule 1.2(f) AML and CIP Delegation
Schedule 1.2(h) Omnibus Transparency Services
Schedule 2.1 Third Party Administrator(s) Procedures
Schedule 3.1 Fees and Expenses
TRANSFER AGENCY AND SERVICE AGREEMENT
THIS AGREEMENT made as of the 28th day of September 2007, by and between EACH OF
THE ENTITIES, INDIVIDUALLY AND NOT JOINTLY, as listed on Schedule A, having
their principal office and place of business at ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (collectively, the "Funds" and individually, the
"Fund") and BOSTON FINANCIAL DATA SERVICES, INC., a Massachusetts corporation
having its principal office and place of business at ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Transfer Agent"). The effective date of this
agreement will be October 1, 2007 or such other date as is mutually agreed by
the Fund and the Distributor.
WHEREAS, certain Funds may be authorized to issue shares in a separate series,
such series shall be named under the respective Fund in the attached Schedule A,
which may be amended by the parties from time to time, (each such series,
together with all other series subsequently established by a Fund and made
subject to this Agreement in accordance with SECTION 17, being herein referred
to as a "Portfolio", and collectively as the "Portfolios");
WHEREAS, each Fund is either a statutory or business trust or a corporation
organized under the laws of a state (as set forth on the Schedule A) and
registered with the Securities and Exchange Commission as an investment company
pursuant to the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, it is contemplated that additional Funds and Portfolios may become
parties to this Agreement by written consent of the parties hereto and in
accordance with SECTION 17; and
WHEREAS, each Fund, on behalf of itself and, where applicable, its Portfolios,
desires to appoint the Transfer Agent as its transfer agent, dividend disbursing
agent and agent in connection with certain other activities, and the Transfer
Agent desires to accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. TERMS OF APPOINTMENT AND DUTIES
1.1 TRANSFER AGENCY SERVICES. Subject to the terms and conditions set
forth in this Agreement, each Fund, on behalf of itself and, where
applicable, its Portfolios, hereby employs and appoints the Transfer
Agent to act as, and the Transfer Agent agrees to act as, its
transfer agent for each Fund's authorized and issued shares or
beneficial interest, as the case may be, ("Shares"), dividend
disbursing agent and agent in connection with any accumulation,
open-account or similar plan provided to the shareholders of each
Fund and of any Portfolios of a Fund ("Shareholders") and set out in
the currently effective prospectus and statement of additional
information ("Prospectus") of the Fund on behalf of the applicable
Portfolio, including without limitation any periodic investment plan
or periodic withdrawal program. In accordance with the Prospectus
and the procedures established from time to time by agreement
between the Transfer Agent and each of the Funds and their
respective Portfolios, (the "Procedures") with such changes or
deviations there from as have been (or may from time to time be)
agreed
upon in writing by the parties, the Transfer Agent agrees
that it will perform the following services:
(a) Establish each Shareholder's account in the Fund on the
Transfer Agent's recordkeeping system and maintain such
account for the benefit of such Shareholder in accordance with
the Procedures;
(b) Receive for acceptance and process orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of the Fund authorized
pursuant to the organizational documents of the Fund (the
"Custodian");
(c) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account;
(d) Receive for acceptance and process redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(e) In respect to items (a) through (d) above, the Transfer Agent
may execute transactions directly with broker-dealers
authorized by the Fund;
(f) At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over
or cause to be paid over in the appropriate manner such monies
as instructed by the redeeming Shareholders;
(g) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(h) Prepare and transmit payments for dividends and distributions
declared by the Fund or any Portfolio thereof, as the case may
be;
(i) Issue replacement checks and place stop orders on original
checks based on Shareholder's representation that a check was
not received or was lost. Such stop orders and replacements
will be deemed to have been made at the request of the Fund,
and, as between the Fund and the Transfer Agent, the Fund
shall be responsible for all losses or claims resulting from
such replacement;
(j) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing;
(k) Record the issuance of Shares of the Fund and maintain
pursuant to SEC Rule 17Ad-10(e) a record of the total number
of Shares of the Fund which are authorized, based upon data
provided to it by the Fund, and issued and outstanding. The
Transfer Agent shall also provide the Fund on a regular basis
with the total number of Shares which are authorized and
issued and outstanding but shall have no obligation, when
recording the issuance of Shares, to monitor the issuance of
such Shares or to take cognizance of any laws relating to the
issue or sale of such Shares, which functions shall be the
sole responsibility of the Fund;
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(l) Accept any information, records, documents, data,
certificates, transaction requests by machine readable input,
facsimile, CRT data entry and electronic instructions,
including e-mail communications, which have been prepared,
maintained or provided by the Fund or any other person or firm
on behalf of the Fund or from broker-dealers of record or
third-party administrators ("TPAs") on behalf of individual
Shareholders. With respect to transaction requests received in
the foregoing manner, the Transfer Agent shall not be
responsible for determining that the original source
documentation is in good order, which includes compliance with
Rule 22c-1 under the 1940 Act, and it will be the
responsibility of the Fund to require its broker-dealers or
TPAs to retain such documentation. E-mail exchanges on routine
matters may be made directly with the Fund's contact at the
Transfer Agent. The Transfer Agent will not act on any e-mail
communications coming to it directly from Shareholders
requesting transactions, including, but not limited to,
monetary transactions, change of ownership, or beneficiary
changes;
(m) Maintain and manage, as agent for the Fund, such bank accounts
as the Transfer Agent shall deem necessary for the performance
of its duties under this Agreement, including but not limited
to, the processing of share purchases and redemptions and the
payment of Fund dividends and distributions. The Transfer
Agent may maintain such accounts at the bank or banks deemed
appropriate by the Transfer Agent. In connection with the
recordkeeping and other services provided to the Fund
hereunder, the Transfer Agent may receive compensation for the
management of such accounts from the bank or banks used by the
Transfer Agent and such compensation may be calculated based
upon the average balances of such accounts;
(n) Receive correspondence pertaining to any former, existing or
new Shareholder account, process such correspondence for
proper recordkeeping and respond to Shareholder
correspondence;
(o) Process any request from a Shareholder to change account
registration, beneficiary, beneficiary information, transfer
and rollovers in accordance with the Procedures; and
(p) In connection with redemptions or exchanges of Shares, apply
redemption fees as applicable.
1.2 ADDITIONAL SERVICES. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraphs,
the Transfer Agent shall perform the following services:
(a) OTHER CUSTOMARY SERVICES. In accordance with instructions from
the Fund, perform the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plan
(including without limitation any periodic investment plan or
periodic withdrawal program), including but not limited to:
maintaining all Shareholder accounts, preparing lists of
Shareholders as of dates specified by the Fund, upon request
of the Fund, providing such list file to the vendor or vendors
designated by the Fund for mailings or proxy solicitations,
Shareholder reports and prospectuses to current Shareholders,
withholding taxes on U.S.
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resident and non-resident alien accounts, preparing and filing
U.S. Treasury Department Forms 1099 and other appropriate
forms required with respect to dividends and distributions by
federal authorities for all Shareholders, preparing and
mailing to shareholders written statements required by federal
law or regulation disclosing the source(s) (e.g., capital
gains, return of capital) of dividend and distribution
payments, preparing and mailing confirmation forms and
statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity
statements for Shareholders, and providing Shareholder account
information, and coordinating with the designated print/mail
vendor;
(b) CONTROL BOOK (ALSO KNOWN AS "SUPER SHEET"). Maintain a daily
record and produce a daily report for the Fund of all
transactions and receipts and disbursements of money and
securities and deliver a copy of such report for the Fund for
each business day to the Fund no later than 9:00 AM Eastern
Time, or such earlier time as the Fund may reasonably require,
on the next business day;
(c) "BLUE SKY" REPORTING. The Fund or its administrator shall
identify to the Transfer Agent in writing the states and
countries where the Shares of the Fund are registered or
exempt, and the number of shares registered for sale with
respect to each state or country, as applicable. The Transfer
Agent shall establish the foregoing parameters on the system
for the designated Blue Sky vendor. The Fund or its
administrator shall verify that such parameters have been
correctly established for each state or country on the system
prior to activation and thereafter shall be responsible for
monitoring the daily activity for each state or country. The
responsibility of the Transfer Agent for the Fund's blue sky
registration status is solely limited to the initial
establishment of the parameters provided by the Fund or the
administrator for the vendor's system and the daily
transmission of a file to such vendor in order that the vendor
may provide reports to the Fund or the administrator for
monitoring;
(d) NATIONAL SECURITIES CLEARING CORPORATION (THE "NSCC"). (i)
accept and effectuate the registration and maintenance of
accounts through Networking and the purchase, redemption,
transfer and exchange of shares in such accounts through
Fund/SERV (Networking and Fund/SERV being programs operated by
the NSCC on behalf of NSCC's participants, including the
Fund), in accordance with, instructions transmitted to and
received by the Transfer Agent by transmission from NSCC on
behalf of authorized broker-dealers on the Fund dealer file
maintained by the Transfer Agent; (ii) issue instructions to
Fund's banks for the settlement of transactions between the
Fund and NSCC (acting on behalf of its broker-dealer and bank
participants); (iii) provide account and transaction
information from the affected Fund's records on DST Systems,
Inc.'s computer system TA2000 ("TA2000 System") in accordance
with NSCC's Networking and Fund/SERV rules for those
broker-dealers; and (iv) maintain Shareholder accounts on
TA2000 System through Networking;
(e) NEW PROCEDURES. New procedures as to who shall provide certain
of these services in SECTION 1 may be established in writing
from time to time by agreement between the Fund and the
Transfer Agent. The Transfer Agent may at times perform only a
portion of these services and the Fund or its agent may
perform these services on the Fund's behalf;
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(f) ANTI-MONEY LAUNDERING ("AML") DELEGATION. The Fund has elected
to delegate to the Transfer Agent certain AML duties under
this Agreement. The parties will agree to such duties and
terms as stated in the attached schedule ("Schedule 1.2(f)
entitled "AML Delegation") which may be changed from time to
time subject to mutual written agreement between the parties.
In consideration of the performance of the duties by the
Transfer Agent pursuant to this Section 1.2(f), the Fund
agrees to pay the Transfer Agent for the reasonable
administrative expense that may be associated with such
additional duties;
(g) CALL CENTER SERVICES. Answer telephone inquiries from 8:30
a.m. to 6:30 p.m., Eastern Time, each day on which the New
York Stock Exchange is open for trading. The Transfer Agent
shall answer and respond to inquiries from existing
Shareholders, prospective Shareholders of the Fund and
broker-dealers on behalf of such Shareholders in accordance
with the telephone scripts provided by the Fund to the
Transfer Agent, such inquiries may include requests for
information on account set-up and maintenance, general
questions regarding the operation of the Fund, general account
information including dates of purchases, redemptions,
exchanges and account balances, requests for account access
instructions and literature requests. In consideration of the
performance of the duties by the Transfer Agent pursuant to
this Section, the Fund agrees to pay the Transfer Agent the
fee and the reasonable out-of-pocket expenses set forth on
Schedule 3.1 attached;
(h) SHORT TERM TRADER; EXCESSIVE TRADER. The Transfer Agent will
provide the Fund with periodic reports on trading activity in
the Fund based on parameters provided to the Transfer Agent by
the Fund, as amended from time to time, to assist in the
Fund's review of market timing and late trading. The services
to be performed by the Transfer Agent for the Fund hereunder
will be ministerial only and the Transfer Agent shall have no
responsibility for the monitoring or for making determinations
with respect to late trading or market-timing activities. In
consideration of the performance of the services by the
Transfer Agent pursuant to this Section 1.2(h), the Fund
agrees to pay the Transfer Agent for such fees and out-of
pocket expenses associated with such additional services as
set forth on Schedule 3.1;
(i) OMNIBUS TRANSPARENCY SERVICES. The Transfer Agent shall carry
out certain information requests, analyses and reporting
services in support of the Fund's obligations under Rule
22c-2(a)(2) and (3). The parties will agree to such services
and terms as stated in the attached schedule ("Schedule
1.2(i)" entitled "Omnibus Transparency Services") that may be
changed from time to time subject to mutual written agreement
between the parties. In consideration of the performance of
the services by the Transfer Agent pursuant to this Section
1.2(i), the Fund agrees to pay the Transfer Agent for such
fees and out-of pocket expenses associated with such
additional services as set forth on Schedule 3.1;
(j) ESCHEATMENT, ORDERS, ETC. If requested by the Fund (and as
mutually agreed upon by the parties as to any reasonable
reimbursable expenses), provide any additional related
services (i.e., pertaining to escheatments, abandoned
property, garnishment orders, bankruptcy and divorce
proceedings, Internal Revenue Service or state tax authority
tax levies and summonses and all matters relating to the
foregoing;
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1.3 FIDUCIARY ACCOUNTS. With respect to certain retirement plans or
accounts (such as individual retirement accounts ("IRAs"), SIMPLE
IRAs, SEP IRAs, ▇▇▇▇ IRAs, ▇▇▇▇▇▇▇▇▇ Education Savings Accounts, and
403(b) arrangements (such accounts, "Fiduciary Accounts"), the
Transfer Agent, at the request of the Fund, shall arrange for the
provision of appropriate prototype plans as well as provide or
arrange for the provision of various services to such plans and/or
accounts, which services may include custodial services to be
provided by State Street Bank and Trust Company ("State Street"),
account set-up maintenance, and disbursements as well as such other
services as the parties hereto shall mutually agree upon.
1.4 SITE VISITS AND INSPECTIONS; REGULATORY EXAMINATIONS. During the
term of this Agreement, authorized representatives of the Fund may
conduct periodic site visits of the Transfer Agent's facilities and
inspect the Transfer Agent's records and procedures solely as they
pertain to the Transfer Agent's services for the Fund under or
pursuant to this Agreement. Such inspections shall be conducted at
the Fund's expense (which shall include costs related to providing
materials, copying, faxing, retrieving stored materials, and similar
expenses) and shall occur during the Transfer Agent's regular
business hours and, except as otherwise agreed to by the parties, no
more frequently than twice a year; provided that the foregoing
limitation shall not apply to periodic visits by the Fund's Chief
Compliance Officer or any other Fund officers in the ordinary course
of business, during the Transfer Agent's normal business hours upon
reasonable notice. In connection with such site visit and/or
inspection, the Fund shall not attempt to access, nor will it
review, the records of any other clients of the Transfer Agent and
the Fund shall conduct the visit/inspection in a manner that will
not interfere with the Transfer Agent's normal and customary conduct
of its business activities, including the provision of services to
the Fund and to other clients. The Transfer Agent shall have the
right to immediately require the removal of any Fund representatives
from its premises in the event that their actions, in the reasonable
opinion of the Transfer Agent, jeopardize the information security
of its systems and/or other client data or otherwise are disruptive
to the business of the Transfer Agent. The Transfer Agent may
require any persons seeking access to its facilities to provide
reasonable evidence of their authority. The Transfer Agent may also
reasonably require any of the Fund's representatives to execute a
confidentiality agreement before granting such individuals access to
its facilities. The Transfer Agent will also provide reasonable
access to the Fund's officers and governmental regulators, at the
Fund's expense, solely to (i) the Fund's records held by the
Transfer Agent and (ii) the procedures of the Transfer Agent
directly related to its provision of services to the Fund under the
Agreement.
2. THIRD PARTY ADMINISTRATORS FOR DEFINED CONTRIBUTION PLANS
2.1 The Fund may decide to make available to certain of its customers, a
qualified plan program (the "Program") pursuant to which the
customers ("Employers") may adopt certain plans of deferred
compensation ("Plan or Plans") for the benefit of the individual
Plan participant (the "Plan Participant"), such Plan(s) being
qualified under Section 401(a) of the Internal Revenue Code of 1986,
as amended ("Code") and administered by TPAs which may be plan
administrators as defined in the Employee Retirement Income Security
Act of 1974, as amended.
6
2.2 In accordance with the procedures established in the initial
Schedule 2.1 entitled "Third Party Administrator Procedures", as may
be amended by the Transfer Agent and the Fund from time to time
("Schedule 2.1"), the Transfer Agent shall:
(a) Treat Shareholder accounts established by the Plans in the
name of the Trustees, Plans or TPAs as the case may be as
omnibus accounts;
(b) Maintain omnibus accounts on its records in the name of the
TPA or its designee as the Trustee for the benefit of the
Plan; and
(c) Perform all services under SECTION 1 as transfer agent of the
Fund and not as a record-keeper for the Plans.
2.3 Transactions identified under SECTIONS 1 AND 2 of this Agreement
shall be deemed exception services ("Exception Services") when such
transactions:
(a) Require the Transfer Agent to use methods and procedures other
than those usually employed by the Transfer Agent to perform
transfer agency and recordkeeping services;
(b) Involve the provision of information to the Transfer Agent
after the commencement of the nightly processing cycle of the
TA2000 System; or
(c) Require more manual intervention by the Transfer Agent, either
in the entry of data or in the modification or amendment of
reports generated by the TA2000 System than is normally
required.
3. FEES AND EXPENSES
3.1 FEE SCHEDULE. For the performance by the Transfer Agent pursuant to
this Agreement, the Fund agrees to pay the Transfer Agent the fee
and expenses as set forth in the attached fee schedule ("Schedule
3.1"). Such fees and reimbursable expenses and advances identified
under SECTION 3.2 below may be changed from time to time subject to
mutual written agreement between the Fund and the Transfer Agent.
Fees for any new funds, whether newly created or acquired by merger
or acquisitions shall be determined by mutual agreement of the
parties.
3.2 REIMBURSABLE EXPENSES. In addition to the fees paid under SECTION
3.1 above, the Fund agrees to reimburse the Transfer Agent for
reimbursable expenses, as listed in schedule 3.1 and, in addition,
any other expenses incurred by the Transfer Agent at the request or
with the consent of the Fund, will be reimbursed by the Fund.
Transfer Agent will otherwise consult with the Fund before incurring
other expenses.
3.3 INCREASES. The fees and charges set forth on Schedule 3.1 shall
increase or may be increased (i) in accordance with SECTION 3.6
below; (ii) upon at least ninety (90) days prior written notice, if
changes in laws applicable to its transfer agency business or laws
applicable to the Fund, which the Transfer Agent has agreed to abide
by and implement increases the Transfer Agent's ongoing system
utilization costs to provide the affected function by five percent
(5%) or more; or (iii) in connection with new or additional
functions or features or new services or modes of operation of the
TA2000 system. If the
7
Transfer Agent notifies the Fund of an increase in fees or charges
pursuant to subparagraph (ii) of this SECTION 3.3, the parties shall
confer, diligently and in good faith and agree upon a new fee or
charges to cover the amount necessary, but not more than such
amount, to reimburse the Transfer Agent for the increased costs of
operation or new fund features. If the Transfer Agent notified the
Fund of an increase in fees under subparagraph (iii) of this SECTION
3.3, the parties shall confer, diligently and in good faith and
agree upon a new fee to cover such new fund feature.
3.4 POSTAGE. Postage for mailing of dividends, proxies, Fund reports and
other mailings to all shareholder accounts shall be advanced to the
Transfer Agent by the Fund at least seven (7) days prior to the
mailing date of such materials.
3.5 INVOICES. The Fund agrees to pay all fees and reimbursable expenses
within thirty (30) days following the receipt of the respective
invoice, except for any fees or expenses that are subject to good
faith dispute. In the event of such a dispute, the Fund may only
withhold that portion of the fee or expense subject to the good
faith dispute. The Fund shall notify the Transfer Agent in writing
within twenty-one (21) calendar days following the receipt of each
invoice if the Fund is disputing any amounts in good faith. If the
Fund does not provide such notice of dispute within the required
time, the invoice will be deemed accepted by the Fund. The Fund
shall settle such disputed amounts within five (5) days of the day
on which the parties agree on the amount to be paid by payment of
the agreed amount. If no agreement is reached, then such disputed
amounts shall be settled as may be required by law or legal process.
3.6 COST OF LIVING ADJUSTMENT. After the Initial Term, unless the
parties agree otherwise, the total fee for all services for each
succeeding year shall equal the fee that would be charged for the
same services based on a fee rate (as reflected in a fee rate
schedule) increased by the percentage increase for the twelve-month
period of such previous calendar year of the CPI-W (defined below),
or, in the event that publication of such Index is terminated, any
successor or substitute index, appropriately adjusted, acceptable to
both parties. As used herein, "CPI-W" shall mean the Consumer Price
Index for Urban Wage Earners and Clerical Workers for
Boston-Brockton-Nashua, MA-NH-ME-CT, (Base Period: 1982-84 = 100),
as published by the United States Department of Labor, Bureau of
Labor Statistics.
3.7 LATE PAYMENTS. If any undisputed amount in an invoice of the
Transfer Agent (for fees or reimbursable expenses) is not paid when
due, then the Transfer Agent may charge the Fund interest thereon
(from the due date to the date of payment) at a per annum rate equal
to one percent (1.0%) plus the Prime Rate (that is, the base rate on
corporate loans posted by large domestic banks) published by THE
WALL STREET JOURNAL (or, in the event such rate is not so published,
a reasonably equivalent published rate selected by the Transfer
Agent) on the first day of publication during the month when such
amount was due. Notwithstanding any other provision hereof, such
interest rate shall be no greater than permitted under applicable
provisions of Massachusetts law.
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4. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Fund that:
4.1 It is a corporation duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
4.2 It is duly registered as a transfer agent under Section 17A(c)(2) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and it will remain so registered for the duration of this Agreement.
It will promptly notify the Fund in the event of any material change
in its status as a registered transfer agent.
4.3 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
4.4 It is empowered under applicable laws and by its Articles of
Organization and By-Laws to enter into and perform the services
contemplated in this Agreement.
4.5 All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
4.6 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
4.7 It is responsible for establishing and maintaining adequate
procedures and controls over the performance of its services under
this Agreement and such procedures and controls are reasonably
designed to prevent violation of the Federal Securities Laws, (as
defined in rules under the Investment Company Act of 1940) by the
Transfer Agent, it officers, employees and agents.
5. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Transfer Agent that:
5.1 It is a trust or corporation duly organized and existing and in good
standing under the laws of the state of its organization as set
forth on Schedule A.
5.2 It is empowered under applicable laws and by its organizational
documents to enter into and perform this Agreement.
5.3 All corporate proceedings have been taken to authorize it to enter
into and perform this Agreement.
5.4 The Fund is an open-end and diversified management investment
company registered under the ▇▇▇▇ ▇▇▇.
5.5 A registration statement under the Securities Act of 1933, as
amended is currently effective and will remain effective, and
appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares being offered for
sale by the Fund.
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6. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM COMMERCIAL
CODE
6.1 OBLIGATION OF SENDER. The Transfer Agent is authorized to promptly
debit the appropriate Fund account(s) upon the receipt of a payment
order in compliance with the selected security procedure (the
"Security Procedure") chosen for funds transfer and in the amount of
money that the Transfer Agent has been instructed to transfer. The
Transfer Agent shall execute payment orders in compliance with the
Security Procedure and with the Fund instructions on the execution
date provided that such payment order is received by the customary
deadline for processing such a request, unless the payment order
specifies a later time. All payment orders and communications
received after the customary deadline will be deemed to have been
received the next business day.
6.2 SECURITY PROCEDURE. The Fund acknowledges that the Security
Procedure it has designated on the Selection Form was selected by
the Fund from security procedures offered by the Transfer Agent. The
Fund shall restrict access to confidential information relating to
the Security Procedure to authorized persons as communicated to the
Transfer Agent in writing. The Fund must notify the Transfer Agent
immediately if it has reason to believe unauthorized persons may
have obtained access to such information or of any change in the
Fund's authorized personnel. The Transfer Agent shall verify the
authenticity of all Fund instructions according to the Security
Procedure.
6.3 ACCOUNT NUMBERS. The Transfer Agent shall process all payment orders
on the basis of the account number contained in the payment order.
In the event of a discrepancy between any name indicated on the
payment order and the account number, the account number shall take
precedence and govern.
6.4 REJECTION. The Transfer Agent reserves the right to decline to
process or delay the processing of a payment order which (a) is in
excess of the collected balance in the account to be charged at the
time of the Transfer Agent's receipt of such payment order; (b) if
initiating such payment order would cause the Transfer Agent, in the
Transfer Agent's sole judgment, to exceed any volume, aggregate
dollar, network, time, credit or similar limits which are applicable
to the Transfer Agent; or (c) if the Transfer Agent, in good faith,
is unable to satisfy itself that the transaction has been properly
authorized.
6.5 CANCELLATION AMENDMENT. The Transfer Agent shall use reasonable
efforts to act on all authorized requests to cancel or amend payment
orders received in compliance with the Security Procedure provided
that such requests are received in a timely manner affording the
Transfer Agent reasonable opportunity to act. However, the Transfer
Agent assumes no liability if the request for amendment or
cancellation cannot be satisfied.
6.6 ERRORS. The Transfer Agent shall assume no responsibility for
failure to detect any erroneous payment order provided that the
Transfer Agent complies with the payment order instructions as
received and the Transfer Agent complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of
errors in payment orders.
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6.7 INTEREST. The Transfer Agent shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized
payment order, unless the Transfer Agent is notified of the
unauthorized payment order within thirty (30) days of notification
by the Transfer Agent of the acceptance of such payment order.
6.8 ACH CREDIT ENTRIES/PROVISIONAL PAYMENTS. When the Fund initiates or
receives Automated Clearing House credit and debit entries pursuant
to these Section 6 guidelines and the rules of the National
Automated Clearing House Association and the New England Clearing
House Association, State Street will act as an Originating
Depository Financial Institution and/or Receiving Depository
Financial Institution, as the case may be, with respect to such
entries. Credits given by the Transfer Agent with respect to an ACH
credit entry are provisional until the Transfer Agent receives final
settlement for such entry from the Federal Reserve Bank. If the
Transfer Agent does not receive such final settlement, the Fund
agrees that the Transfer Agent shall receive a refund of the amount
credited to the Fund in connection with such entry, and the party
making payment to the Fund via such entry shall not be deemed to
have paid the amount of the entry.
6.9 CONFIRMATION. Confirmation of Transfer Agent's execution of payment
orders shall ordinarily be provided within twenty four (24) hours
notice of which may be delivered through the Transfer Agent's
proprietary information systems, or by facsimile or call-back. Fund
must report any objections to the execution of an order within
thirty (30) days.
7. DATA ACCESS AND PROPRIETARY INFORMATION
7.1 The Fund acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Transfer Agent as
part of the Fund's ability to access certain Fund-related data
maintained by the Transfer Agent on databases under the control and
ownership of the Transfer Agent or other third party ("Data Access
Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of
substantial value to the Transfer Agent or other third party. In no
event shall Proprietary Information be deemed Customer Information
(as defined in SECTION 10.2 below) or the confidential information
of the Fund. The Fund agrees to treat all Proprietary Information as
proprietary to the Transfer Agent and further agrees that it shall
not divulge any Proprietary Information to any person or
organization except as may be provided hereunder. Without limiting
the foregoing, the Fund agrees for itself and its employees and
agents to:
(a) Use such programs and databases (i) solely on the Fund's
computers, (ii) solely from equipment at the location agreed
to between the Fund and the Transfer Agent and (iii) solely in
accordance with the Transfer Agent's applicable user
documentation;
(b) Refrain from copying or duplicating in any way (other than in
the normal course of performing processing on the Fund's
computer(s)), the Proprietary Information;
11
(c) Refrain from obtaining unauthorized access to any portion of
the Proprietary Information, and if such access is
inadvertently obtained, to inform the Transfer Agent in a
timely manner of such fact and dispose of such information in
accordance with the Transfer Agent's instructions;
(d) Refrain from causing or allowing information transmitted from
the Transfer Agent's computer to the Fund's computer to be
retransmitted to any other computer or other device except as
expressly permitted by the Transfer Agent (such permission not
to be unreasonably withheld);
(e) Allow the Fund to have access only to those authorized
transactions as agreed to between the Fund and the Transfer
Agent; and
(f) Honor all reasonable written requests made by the Transfer
Agent to protect at the Transfer Agent's expense the rights of
the Transfer Agent in Proprietary Information at common law,
under federal copyright law and under other federal or state
law.
7.2 Proprietary Information shall not include all or any portion of any
of the foregoing items that: (i) are or become publicly available
without breach of this Agreement; (ii) are released for general
disclosure by a written release by the Transfer Agent; or (iii) are
already in the possession of the receiving party at the time of
receipt without obligation of confidentiality or breach of this
Agreement.
7.3 The Fund acknowledges that its obligation to protect the Transfer
Agent's Proprietary Information is essential to the business
interest of the Transfer Agent and that the disclosure of such
Proprietary Information in breach of this Agreement would cause the
Transfer Agent immediate, substantial and irreparable harm, the
value of which would be extremely difficult to determine.
Accordingly, the parties agree that, in addition to any other
remedies that may be available in law, equity, or otherwise for the
disclosure or use of the Proprietary Information in breach of this
Agreement, the Transfer Agent shall be entitled to seek and obtain a
temporary restraining order, injunctive relief, or other equitable
relief against the continuance of such breach.
7.4 If the Fund notifies the Transfer Agent that any of the Data Access
Services do not operate in material compliance with the most
recently issued user documentation for such services, the Transfer
Agent shall endeavor in a timely manner to correct such failure.
Organizations from which the Transfer Agent may obtain certain data
included in the Data Access Services are solely responsible for the
contents of such data and the Fund agrees to make no claim against
the Transfer Agent arising out of the contents of such third-party
data, including, but not limited to, the accuracy thereof. DATA
ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS
IS, AS AVAILABLE BASIS. EXCEPT THOSE EXPRESSLY STATED HEREIN THE
TRANSFER AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE.
12
7.5 If the transactions available to the Fund include the ability to
originate electronic instructions to the Transfer Agent in order to
(i) effect the transfer or movement of cash or Shares or (ii)
transmit Shareholder information or other information, then in such
event the Transfer Agent shall be entitled to rely on the validity
and authenticity of such instruction without undertaking any further
inquiry as long as such instruction is undertaken in conformity with
security procedures established by the Transfer Agent from time to
time and provided to the Fund.
7.6 Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this SECTION 7. The obligations of
this Section shall survive any earlier termination of this
Agreement.
8. INDEMNIFICATION
8.1 The Transfer Agent shall not be responsible for, and the Fund shall
indemnify and hold the Transfer Agent, its Board of Directors,
officers, employees and agents, and with respect to SECTION 1.3 and
SECTION 8.1(F) herein, also State Street, harmless, from and
against, any and all losses, damages, costs, charges, reasonable
counsel fees (including the defense of any lawsuit in which the
Transfer Agent or affiliate is a named party), payments, expenses
and liability arising out of or attributable to:
(a) All actions of the Transfer Agent or its agents or
subcontractors required to be taken pursuant to this
Agreement, provided that such actions are taken in good faith
and without negligence or willful misconduct;
(b) The Fund's lack of good faith, negligence or willful
misconduct or the breach of any of the Fund's representations
or warranties set forth in Section 5 hereof;
(c) The reliance upon, and any subsequent use of or action taken
or omitted, by the Transfer Agent, or its agents or
subcontractors on: (i) any information, records, documents,
data, stock certificates or services, which are received by
the Transfer Agent or its agents or subcontractors by machine
readable input, facsimile, CRT data entry, electronic
instructions, or other similar means authorized by the Fund,
and which have been prepared, maintained or performed by the
Fund or any other person or firm on behalf of the Fund
including but not limited to any broker-dealer, TPA or
previous transfer agent; (ii) any instructions or requests of
the Fund or any of its officers; (iii) any instructions or
opinions of legal counsel with respect to any matter arising
in connection with the services to be performed by the
Transfer Agent under this Agreement which are provided to the
Transfer Agent by counsel to the Fund after consultation with
such legal counsel and upon which instructions or opinion the
Transfer Agent is expressly permitted to rely or opinions of
legal counsel that are obtained by the Transfer Agent; or (iv)
any paper or document, reasonably believed to be genuine,
authentic, or signed by the proper person or persons;
(d) The offer or sale of Shares in violation of federal or state
securities laws or regulations requiring that such Shares be
registered, or in violation of any stop order or other
determination or ruling by any federal or any state agency
with respect to the offer or sale of such Shares;
13
(e) The acceptance of facsimile transaction requests on behalf of
individual Shareholders received from broker-dealers, TPAs or
the Fund, and the reliance by the Transfer Agent on the
broker-dealer, TPA or the Fund ensuring that the original
source documentation is in good order and properly retained;
(f) The negotiation and processing of any checks, wires and ACH
transmissions including without limitation for deposit into,
or credit to, the Fund's demand deposit accounts maintained by
the Transfer Agent; or
(g) Upon the Fund's request entering into any agreements required
by the NSCC for the transmission of Fund or Shareholder data
through the NSCC clearing systems.
8.2 To the extent that the Transfer Agent is not entitled to
indemnification pursuant to SECTION 8.1 above and only to the extent
of such right, the Fund, its Board of Directors, officer, employees
and agents, shall not be responsible for, and the Transfer Agent
shall indemnify and hold the Fund, its Board of Directors, officers,
and employees, harmless from and against any losses, damages, costs,
charges, reasonable counsel fees, payments, expenses and liability
arising directly out of or attributable to any action or failure of
the Transfer Agent to act as a result of the Transfer's Agent's lack
of good faith, negligence or willful misconduct in the performance
of its services hereunder or for the breach of any of the Transfer
Agent's representations or warranties set forth in Section 4 hereof.
For those activities or actions delineated in the Procedures, the
Transfer Agent shall be presumed to have used reasonable care, acted
without negligence, and acted in good faith if it has acted in
accordance with the Procedures.
8.3 In order that the indemnification provisions contained in this
SECTION 8 shall apply, upon the assertion of a claim for which one
party may be required to indemnify the other party, the indemnified
party shall promptly notify the indemnifying party of such
assertion, and shall keep the indemnifying party advised with
respect to all developments concerning such claim. The indemnifying
party shall have the option to participate with the indemnified
party in the defense of such claim or to defend against said claim
in its own name or in the name of the indemnified party. The
indemnified party shall in no case confess any claim or make any
compromise in any case in which the indemnifying party may be
required to indemnify the indemnified party except with the
indemnifying party's prior written consent, which consent shall not
be unreasonably withheld.
8.4 AS-OF ADJUSTMENTS.
(a) Notwithstanding anything herein to the contrary, with respect
to "as of" adjustments, the Transfer Agent will not assume one
hundred percent (100%) responsibility for losses resulting
from "as ofs" due to clerical errors or misinterpretations of
shareholder instructions, but the Transfer Agent will discuss
with the Fund the Transfer Agent's accepting liability for an
"as of" on a case-by-case basis and, subject to the limitation
set forth in SECTION 9, will accept financial responsibility
for a particular situation resulting in a financial loss to
the Fund where such loss is "material", as hereinafter
defined, and, under the particular facts at issue, the
Transfer Agent's conduct was culpable and the Transfer Agent's
conduct is the sole cause of the loss. A loss is "material"
for purposes
14
of this SECTION 8.4 when it results in a pricing error on a
particular transaction which equals or exceeds one ($.01) full
cent per share times the number of shares outstanding or such
other amounts as may be adopted by applicable accounting or
regulatory authorities from time to time.
(b) If the net effect of the "as of" transactions that are
determined to be caused solely by the Transfer Agent is
negative and exceeds the above limit, then the Transfer Agent
shall promptly contact the Fund accountants. The Transfer
Agent will work with the Fund accountants to determine what,
if any, impact the threshold break has on the Fund's Net Asset
Value and what, if any, further action is required. These
further actions may include but are not limited to, the Fund
re-pricing the affected day(s), the Transfer Agent
re-processing, at its expense, all affected transactions in
the Fund that took place during the period or a payment to the
Fund. The Fund agrees to work in good faith with the Transfer
Agent and wherever possible, absent a regulatory prohibition
or other mutually agreed upon reason, the Fund agrees to
re-price the affected day(s) and to allow the Transfer Agent
to re-process the affected transactions. When such re-pricing
and re-processing is not possible, and when the Transfer Agent
must contribute to the settlement of a loss, the Transfer
Agent's responsibility will commence with that portion of the
loss over $0.01 per share calculated on the basis of the total
value of all shares owned by the affected portfolio (i.e., on
the basis of the value of the shares of the total portfolio,
including all classes of that portfolio, not just those of the
affected class) and the Transfer Agent will make such account
adjustments and take such other action as is necessary to
compensate shareholders for shareholder losses and reimburse
the Fund for the amount of Fund losses in accordance with the
foregoing standards. If the Transfer Agent contributes to the
settlement of a loss, the amount paid by the Transfer Agent
shall be deducted from the amount of any accumulated losses
calculated in the fiscal year monitoring process described
below.
(c) The Transfer Agent will monitor all portfolios across share
classes to determine the accumulated gain or loss effect of
"as-of trades" caused solely by the transfer agent. At the
fiscal year end of each portfolio, if the portfolio has an
accumulated loss across share classes that is attributed to
the Transfer Agent, then the Transfer Agent shall pay to the
Fund the amount of such loss in excess of $.01 per share
calculated on the basis of the total value of all shares owned
by the affected portfolio (i.e., on the basis of the value of
the shares of the total portfolio, including all classes of
that portfolio, not just those of the affected class). If at
the end of the fiscal year, a portfolio has accumulated a gain
across share classes, that gain will remain with the Fund.
9. STANDARD OF CARE
The Transfer Agent shall at all times act in good faith and agrees to use
its best efforts within reasonable limits to ensure the accuracy of all
services performed under this Agreement, but assumes no responsibility and
shall not be liable for loss or damage due to errors, including encoding
and payment processing errors, unless said errors are caused by its
negligence, bad faith, or willful misconduct or that of its employees or
agents. The parties agree that any encoding or payment processing errors
shall be governed by this standard of care and that Section 4-209 of the
Uniform Commercial Code is superseded by SECTION 9 of this Agreement. This
standard of care also shall apply to Exception Services, as defined in
SECTION 2.3 herein, but shall take into
15
consideration and make allowances for the manual processing and
non-standard work involved in Exception Services. Notwithstanding the
foregoing, the Transfer Agent's aggregate liability during any term of this
Agreement with respect to, arising from or arising in connection with this
Agreement, or from all services provided or omitted to be provided by the
Transfer Agent under this Agreement for all of the Funds subject this
Agreement, whether in contract, or in tort, or otherwise, is limited to,
and shall not exceed the aggregate of the amounts actually received
hereunder by the Transfer Agent as fees and charges, but not including
reimbursable expenses, for all of the Funds covered by this Agreement for
an eighteen (18) calendar month period. The foregoing limitation on
liability shall not apply to any (i) loss, expense or damage arising from
any actions or omissions related to responsibilities under this Agreement
of the Transfer Agent, its officers, employees or agents in connection with
their willful misfeasance, fraud or intentional malevolent acts; (ii)
settlement order or finally adjudicated or damages, fines and penalties,
including attorneys fees awarded against Transfer Agent by a court or
regulator in connection with a material violation of statute or regulation
directly applicable to duties under this agreement; and (iii) settlement
order or finally adjudicated damages due to breach of the terms of this
Agreement regarding customer confidentiality. For purposes of this SECTION
9, "intentional malevolent acts" shall mean those acts undertaken
purposefully under the circumstances in which the person knows or has
reason to believe that such acts violates this Agreement and are likely to
cause damage or harm.
In the event that a claim giving rise to liability by the Transfer Agent
occurs prior to the completion of the first eighteen (18) months of the
Agreement, the Liability Limitation Amount shall be calculated by adding:
(1) the amounts actually paid hereunder for such period by the Funds to
the Transfer Agent as fees and charges, but not including reimbursable
expenses; and (2) an amount equal to (x) an average monthly fee
(determined based on the actual fees received and number of months that
have passed as of the calculation date) multiplied by (y) the number of
months remaining to reach eighteen (18) months. In the event that a claim
arises in the first month of the Agreement, then the average monthly fee
that shall be used for the foregoing calculation shall be $30,000.00.
10. CONFIDENTIALITY
10.1 The Transfer Agent and the Fund agree that they will not, at any
time during the term of this Agreement or after its termination,
reveal, divulge, or make known to any person, firm, corporation or
other business organization, any customers' lists, trade secrets,
cost figures and projections, profit figures and projections, or any
other secret or confidential information whatsoever, whether of the
Transfer Agent or of the Fund, used or gained by the Transfer Agent
or the Fund during performance under this Agreement (such party's
"Confidential Information," which shall include Customer Information
as defined below). The Fund and the Transfer Agent further covenant
and agree to retain all such Confidential Information in trust for
the sole benefit of the Transfer Agent or the Fund and their
successors and assigns. Confidential Information that is provided by
one party to the other will be used by the recipient only for the
purpose for which it was provided, and access to that information
will be restricted to only such other party's employees, agents,
affiliates, or other representatives who require the information (or
access to the information) to further that purpose (the
"Representatives"). In the event
16
of breach of the foregoing by either party or its Representatives,
the remedies provided by SECTION 7.3 shall be available to the party
whose confidential information is disclosed.
10.2 As between the Fund and Transfer Agent, Customer Information (as
defined below) is and will remain the sole and exclusive property of
the Fund. "Customer Information" means all the customer identifying
data however collected or received, including without limitation,
through "cookies" or non-electronic means pertaining to or
identifiable to the Fund's customer(s) or prospective customer(s)
and plan administrators (collectively, "Fund Customers"), including
without limitation, (i) name, address, email address, passwords,
account numbers, personal financial information, personal
preferences, demographic data, marketing data, data about securities
transactions, credit data or any other identification data; (ii) any
information that reflects the use of or interactions with a Fund
service, including the Fund's web site; or (iii) any data otherwise
submitted in the process of registering for a Fund service. For the
avoidance of doubt, Customer Information shall include all
"nonpublic personal information," as defined under the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 (Public Law 106-102, 113 Stat. 1138)
("GLB Act"). This Agreement shall not be construed as granting any
ownership rights in Transfer Agent to Customer Information.
10.3 The Transfer Agent represents, covenants, and warrants that Transfer
Agent will use Customer Information only in compliance with (i) the
provisions of this Agreement, (ii) its own Privacy and Information
Sharing Policy, as amended and updated from time to time and (iii)
privacy laws applicable to its business, including the GLB Act as
such is applicable to its transfer agency business; and (iv) as
directed by authorized persons of the Fund in writing.
10.4 In the event that any requests or demands are made for the
inspection of the Shareholder records of the Fund, other than
request for records of Shareholders pursuant to standard subpoenas
from state or federal government authorities (i.e., divorce and
criminal actions), the Transfer Agent will use reasonable efforts to
notify the Fund (except where prohibited by law) and to secure
instructions from an authorized officer of the Fund as to such
inspection. The Transfer Agent expressly reserves the right,
however, to exhibit the Shareholder records to any person whenever
it is advised by counsel that it may be held liable for the failure
to exhibit the Shareholder records to such person or if required by
law or court order.
11. COVENANTS OF THE FUND AND THE TRANSFER AGENT
11.1 The Fund shall promptly furnish to the Transfer Agent the following:
(a) A certified copy of the resolution of the Board of Directors
of the Fund authorizing the appointment of the Transfer Agent
and the execution and delivery of this Agreement; and
(b) A copy of the organizational documents of the Fund and all
amendments thereto.
17
11.2 The Transfer Agent hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for
safekeeping of stock certificates, check forms and facsimile
signature imprinting devices, if any; and for the preparation or
use, and for keeping account of, such certificates, forms and
devices.
11.3 RECORDS. The Transfer Agent shall keep records relating to the
services to be performed hereunder, in the form, manner and for such
periods, as it may deem advisable and as may be required by the laws
and regulations applicable to its business as a Transfer Agent,
including those set forth in 17 CFR 240.17Ad-6 and 17 CFR
240.17Ad-7, as such regulations may be amended from time to time.
The Transfer Agent shall also maintain customary records in
connection with its agency for the Fund; particularly those records
required to be maintained pursuant to subparagraph (2)(iv) of
paragraph (b) of Rule 31a-1 under the Investment Company Act of
1940. Records maintained by the Transfer Agent on behalf of the Fund
shall be made available for reasonable examinations by the SEC upon
reasonable request and shall be maintained by the Transfer Agent for
such period as required by applicable law or until such earlier time
as the Transfer Agent has delivered such records into the Fund's
possession or destroyed them at the Fund's request.
11.4 SERVICE LOCATIONS. The Transfer Agent may provide the services
hereunder from service locations within or outside of the United
States. The Transfer Agent will provide the Fund with reasonable
prior notice of any proposed change in service location, including a
general description of the services that will be provided at any new
service location and such other information as the Fund may
reasonably request.
11.5 COMPLIANCE PROGRAM. The Transfer Agent maintains and will contain to
maintain a comprehensive compliance program reasonably designed to
prevent violations of the federal securities laws pursuant to Rule
38a-1 under the 1940 Act. Pursuant to its compliance program, the
Transfer Agent will provide periodic measurement reports to the
Fund. The Transfer Agent will provide to the Fund in connection with
any periodic annual or semi-annual shareholder report filed by the
Fund or, in the absence of the filing of such reports, on quarterly
basis, a sub-certification pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002 with respect to the Transfer Agent's performance of the
services set forth in this Agreement and its internal controls
related thereto. In addition, on a quarterly basis, the Transfer
Agent will provide to the Fund a certification in connection with
Rule 38a-1 under the 1940 Act. The Transfer Agent reserves the right
to amend and update its compliance program and the measurement tools
and certifications provided thereunder from time to time in order to
address changing regulatory and industry developments.
11.6 SAS70 REPORTS. The Transfer Agent will furnish to the Fund, on a
semi-annual basis, a report in accordance with Statements on
Auditing Standards No. 70 (the "SAS70 Report") as well as such other
reports and information relating to the Transfer Agent's policies
and procedures and its compliance with such policies and procedures
and with the laws applicable to its business and its services, as
the Fund may reasonable request.
18
11.7 INFORMATION SECURITY. The Transfer Agent maintains and will continue
to maintain at each service location physical and information
security safeguards against the destruction, loss, theft or
alteration of the Fund's Confidential Information, including
Customer Information, in the possession of the Transfer Agent that
will be no less rigorous than those in place at the effective date
of this Agreement, and from time to time enhanced in accordance with
changes in regulatory requirements. The Transfer Agent will, at a
minimum, update its policies to remain compliant with regulatory
requirements. The Transfer Agent will meet with the Fund, at its
request, on an annual basis to discuss information security
safeguards. If the Transfer Agent or its agents discover or are
notified of that someone has violated security relating to the
Fund's Confidential Information, including Customer Information, the
Transfer Agent will promptly (a) notify the Fund of such violation,
and (b) if the applicable Confidential Information was in the
possession or under the control of the Transfer Agent or its agents
at the time of such violation, the Transfer Agent will promptly (i)
investigate, contain and address the violation, and (ii) provide the
Fund with assurance reasonably satisfactory to the Fund that such
violation will not recur.
11.8 BUSINESS CONTINUITY. The Transfer Agent will maintain a
comprehensive business continuity plan and will provide an executive
summary of such plan upon reasonable request of the Fund. The
Transfer Agent will test the adequacy of its business continuity
plan at least annually and upon request, the Fund may participate in
such test. Upon request by the Fund, the Transfer Agent will provide
the Fund with a letter assessing the most recent business continuity
test results. In the event of a business disruption that materially
impacts the Transfer Agent's provision of services under this
Agreement, the Transfer Agent will promptly notify the Fund of the
disruption and the steps being implemented under the business
continuity plan.
11.9 INSURANCE. The Transfer Agent has obtained and maintains at its own
expense, a level of insurance coverage that its Board of Directors
has determined is necessary and appropriate to the operation of its
business. The Transfer Agent, upon the Fund's request, shall furnish
to the Fund certificates of insurance or other appropriate
documentation (including evidence of renewal of insurance)
evidencing its insurance coverage.
The Transfer Agent shall continue in effect at least the minimum
insurance coverage described in Exhibit 11.9 hereto, provided that
such coverage is available at a reasonable cost to the insured
party. The Transfer Agent shall provide Client with written notice
of any modification which decreases coverage or termination of such
coverage. Such notice must be given within seven (7) days of The
Transfer Agent's receipt of notice of such modification or
termination.
12. TERMINATION OF AGREEMENT
12.1 TERM. The initial term of this Agreement (the "Initial Term") shall
be three (3) years from the date first stated above unless
terminated pursuant to the provisions of this SECTION 12. The term
may be renewed for successive periods of one year each ("Renewal
Term") in accordance with the provisions of this Section. Either the
Transfer Agent or the Fund shall give written notice to the other
party ninety (90) days
19
before the expiration of the Initial Term or of a Renewal Term if
such party desires not to renew the term for an additional one year
period and in the absence of such notice the Agreement shall renew
automatically for such one year term. In the event a Fund wishes to
terminate this Agreement as to the Fund prior to the expiration of
the Initial Term or a Renewal Term, the Fund shall give ninety (90)
days prior written notice to the Transfer Agent and shall be subject
to the terms of this Section, including the payments applicable
under SECTION 12.3. Ninety (90) days before the expiration of the
Initial Term or a Renewal Term, the Transfer Agent and the Fund will
agree upon a Fee Schedule for the upcoming Renewal Term. In the
event the parties fail to agree upon a new Fee Schedule as of such
date, the Fee Schedule set forth as Schedule 3.1 hereto shall remain
in effect subject to increase under SECTION 3.6. Notwithstanding the
termination or non-renewal of this Agreement, the terms and
conditions of this Agreement shall continue to apply until the
completion of Deconversion (defined below).
12.2 DECONVERSION. In the event that this Agreement is terminated or not
renewed for any reason by the Fund, the Transfer Agent agrees that,
in order to provide for uninterrupted service to the Fund, the
Transfer Agent, at Fund's request, shall offer reasonable assistance
to the Fund in converting the Fund's records from the Transfer
Agent's systems to whatever services or systems are designated by
Fund (the "Deconversion"). Such Deconversion is subject to the
recompense of the Transfer Agent for such assistance at its standard
rates and fees in effect at the time and to a reasonable time frame
for performance as agreed to by the parties. As used herein
"reasonable assistance" and "transitional assistance" shall not
include requiring the Transfer Agent (i) to assist any new service
or system provider to modify, to alter, to enhance, or to improve
such provider's system, or to provide any new functionality to such
provider's system, (ii) to disclose any protected information of the
Transfer Agent, including the Proprietary Information as defined in
SECTION 7.1, or (iii) to develop Deconversion software, to modify
any of the Transfer Agent's software, or to otherwise alter the
format of the data as maintained on any provider's systems.
12.3 TERMINATION OR NON RENEWAL.
(a) OUTSTANDING FEES AND CHARGES. In the event of termination or
non-renewal of this Agreement by the Fund, the Fund will
promptly pay the Transfer Agent all fees and charges for the
services provided under this Agreement (i) which have been
accrued and remain unpaid as of the date of such notice of
termination or non-renewal and (ii) which thereafter accrue
for the period through and including the date of Fund's
Deconversion.
(b) DECONVERSION COSTS AND POST-DECONVERSION SUPPORT FEES. In the
event of termination or non-renewal of this Agreement by the
Fund, the Fund shall pay the Transfer Agent for the
Deconversion costs as noted in SECTION 12.2 and all reasonable
fees and expenses for providing any support services that the
Fund requests the Transfer Agent to provide post Deconversion,
including but not limited to tax reporting and open issue
resolution.
(c) EARLY TERMINATION FOR CONVENIENCE. In addition to the
foregoing, in the event that the Fund terminates this
Agreement prior to the end of the Initial Term or any Renewal
Term other than due to the Transfer Agent's bankruptcy under
SECTION 12.6 or for cause under SECTION 12.7, the Fund shall
pay the Transfer Agent an amount equal to the
20
average monthly fee paid by the Fund to the Transfer Agent
under the Agreement multiplied by the number of months
remaining in the Initial or Renewal Term and calculated as set
forth on the then current Fee Schedule, on the date notice of
termination was given to the Transfer Agent (the "Early
Termination Fee").
12.4 CONFIDENTIAL INFORMATION. Upon termination of this Agreement, each
party shall return to the other party all copies of confidential or
proprietary materials or information received from such other party
hereunder, other than materials or information required to be
retained by such party under applicable laws or regulations. The
Transfer Agent agrees to dispose of any Confidential Information in
accordance with the requirements of the Transfer Agent's Privacy and
Information Sharing Policy.
12.5 UNPAID INVOICES. The Transfer Agent may terminate this Agreement
immediately upon an unpaid invoice payable by the Fund to the
Transfer Agent being outstanding for more than ninety (90) days
after receipt by the Fund, except with respect to any amount subject
to a good faith dispute within the meaning of SECTION 3.5 of this
Agreement. The Transfer Agent shall provide the Fund with ten (10)
business days written notice of its intention to terminate in
accordance with this Section.
12.6 BANKRUPTCY. Either party hereto may terminate this Agreement by
notice to the other party, effective at any time specified therein,
in the event that (a) the other party ceases to carry on its
business or (b) an action is commenced by or against the other party
under Title 11 of the United States Code or a receiver, conservator
or similar officer is appointed for the other party and such suit,
conservatorship or receivership is not discharged within thirty (30)
days.
12.7 CAUSE. If either of the parties hereto becomes in default in the
performance of its duties or obligations hereunder and such default
has a material adverse effect on the other party, then the
non-defaulting party may give notice to the defaulting party
specifying the nature of the default in sufficient detail to permit
the defaulting party to identify and cure such default. If the
defaulting party fails to cure such default within thirty (30) days
of receipt of such notice, or within such other period of time as
the parties may agree is necessary for such cure, then the
non-defaulting party may terminate this Agreement upon notice of not
less than five (5) days to the defaulting party.
12.8 In the event that the Fund terminates this Agreement prior to the
end of the Initial Term or any Renewal Term, other than by reason of
the Transfer Agent's bankruptcy under SECTION 12.6 or for cause
under SECTION 12.7, then effective as of the first day of any month
in which the Transfer Agent receives notice of such termination, any
discounts of fees and charges or fee concessions provided under this
Agreement and any related agreements shall cease and the Fund shall
thereafter pay full, undiscounted fees and charges for the services.
12.9 The parties agree that the effective date of any Deconversion as a
result of termination hereof shall not occur during the period from
December 15th through March 1st of any year to avoid adversely
impacting a year-end.
21
12.10 Within thirty (30) days after completion of a Deconversion, the Fund
will give notice to the Transfer Agent containing reasonable
instructions regarding the disposition of tapes, data files,
records, original source documentation or other property belonging
to the Fund and then in the Transfer Agent's possession and shall
make payment for the Transfer Agent's reasonable costs to comply
with such notice. If the Fund fails to give that notice within
thirty (30) days after termination of this Agreement, then the
Transfer Agent may dispose of such property as it sees fit. The
reasonable costs of any such disposition or of the continued storage
of such tapes, data files, records, original source documentation or
other properties shall be billed to, and within thirty (30) days of
receipt of such invoice paid by, the Fund. Failure to pay such sums
when due shall incur a late charge in accordance with SECTION 3.7 of
this Agreement. In no event shall the Transfer Agent be required to
keep archived versions of Fund records beyond the requirements of
law applicable to its transfer agency business and the terms of this
SECTION 12.10. In the event the Fund terminates this Agreement and
later re-engages the Transfer Agent for performance of transfer
agency services, the Fund agrees to pay the reasonable
administrative costs for recovery of any records that are still in
the Transfer Agent's possession.
13. ASSIGNMENT AND THIRD PARTY BENEFICIARIES
13.1 Except as provided in SECTION 14.1 below neither this Agreement nor
any rights or obligations hereunder may be assigned by either party
without the written consent of the other party. Any attempt to do so
in violation of this Section shall be void. Unless specifically
stated to the contrary in any written consent to an assignment, no
assignment will release or discharge the assignor from any duty or
responsibility under this Agreement.
13.2 Except as explicitly stated elsewhere in this Agreement, nothing
under this Agreement shall be construed to give any rights or
benefits in this Agreement to anyone other than the Transfer Agent
and the Fund, and the duties and responsibilities undertaken
pursuant to this Agreement shall be for the sole and exclusive
benefit of the Transfer Agent and the Fund. This Agreement shall
inure to the benefit of and be binding upon the parties and their
respective permitted successors and assigns.
13.3 This Agreement does not constitute an agreement for a partnership or
joint venture between the Transfer Agent and the Trust. Other than
as provided in SECTION 14.1 and Schedule 1.2(f), neither party shall
make any commitments with third parties that are binding on the
other party without the other party's prior written consent.
14. SUBCONTRACTORS
14.1 The Transfer Agent may, without further consent on the part of the
Fund, subcontract for the performance hereof with an affiliate of
the Transfer Agent which is duly registered as a transfer agent
pursuant to Section 17A(c)(2) of the 1934 Act or, with regard to
print/mail services, to DST Output, Inc., an affiliate of the
Transfer Agent; provided, however, that the Transfer Agent shall be
fully responsible to the Fund for the acts and omissions of its
affiliate as it is for its own acts and omissions. The foregoing
shall not be deemed to apply to any direct contracts between the
Fund and any affiliate of the Transfer Agent as to which the
Transfer Agent is not a party.
22
14.2 For purposes of this Agreement, unaffiliated third parties such as
by way of example and not limitation, Airborne Services, Federal
Express, United Parcel Service, the U.S. Mails, the NSCC and
telecommunication companies, shall not be deemed to be
subcontractors of the Transfer Agent, provided that if the Transfer
Agent selected such company, the Transfer Agent shall have exercised
reasonable care in selecting the same.
15. CHANGES AND MODIFICATIONS
15.1 During the term of this Agreement the Transfer Agent will use on
behalf of the Fund, without additional cost, all modifications,
enhancements, or changes which its affiliate DST Systems, Inc. may
make to the TA2000 System in the normal course of its business and
which are applicable to functions and features offered by the Fund,
unless substantially all clients of the Transfer Agent are charged
separately for such modifications, enhancements or changes,
including, without limitation, substantial system revisions or
modifications necessitated by changes in existing laws, rules or
regulations. The Fund agrees to pay the Transfer Agent promptly for
modifications and improvements which are charged for separately at
the rate provided for in the Transfer Agent's standard pricing
schedule which shall be identical for substantially all clients, if
a standard pricing schedule shall exist. If there is no standard
pricing schedule, the parties shall mutually agree upon the rates to
be charged.
15.2 The Transfer Agent shall have the right, at any time and from time
to time, to alter and modify any systems, programs, procedures or
facilities used or employed in performing its duties and obligations
hereunder; provided that the Fund will be notified as promptly as
possible prior to implementation of such alterations and
modifications and that no such alteration or modification or
deletion shall materially adversely change or affect the operations
and procedures of the Fund in using or employing the TA2000 System
or the Transfer Agent's facilities hereunder or the reports to be
generated by such system and facilities hereunder, unless the Fund
is given thirty (30) days prior notice to allow the Fund to change
its procedures and unless the Transfer Agent provides the Fund with
revised operating procedures and controls.
15.3 All enhancements, improvements, changes, modifications or new
features added to the TA2000 System however developed or paid for
shall be, and shall remain, the confidential and exclusive property
of, and proprietary to, DST Systems, Inc., an affiliate of the
Transfer Agent.
16. MISCELLANEOUS
16.1 AMENDMENT. This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a
resolution of the Board of Directors of the Fund.
16.2 MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed and
the provisions thereof interpreted under and in accordance with the
laws of The Commonwealth of Massachusetts.
23
16.3 FORCE MAJEURE. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of
God, acts of war or terrorism, strikes, equipment or transmission
failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to
perform or otherwise from such causes; provided that such party has
maintained and implemented reasonable disaster recovery plans.
16.4 CONSEQUENTIAL DAMAGES. Neither party to this Agreement shall be
liable to the other party for special, indirect or consequential
damages under any provision of this Agreement or for any special,
indirect or consequential damages arising out of any act or failure
to act hereunder.
16.5 SURVIVAL. All provisions regarding indemnification, warranty,
liability, and limits thereon, and confidentiality and/or
protections of proprietary rights and trade secrets shall survive
the termination of this Agreement.
16.6 SEVERABILITY. If any provision or provisions of this Agreement shall
be held invalid, unlawful, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way
be affected or impaired.
16.7 PRIORITIES CLAUSE. In the event of any conflict, discrepancy or
ambiguity between the terms and conditions contained in this
Agreement and any Schedules or attachments hereto, the terms and
conditions contained in this Agreement shall take precedence.
16.8 WAIVER. No waiver by either party or any breach or default of any of
the covenants or conditions herein contained and performed by the
other party shall be construed as a waiver of any succeeding breach
of the same or of any other covenant or condition.
16.9 MERGER OF AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written.
16.10 COUNTERPARTS. This Agreement may be executed by the parties hereto
on any number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
16.11 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules,
exhibits, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties hereto each agree
that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business,
and that any enlargement, facsimile or further reproduction shall
likewise be admissible in evidence.
24
16.12 NOTICES. All notices and other communications as required or
permitted hereunder shall be in writing and sent by first class
mail, postage prepaid, addressed as follows or to such other address
or addresses of which the respective party shall have notified the
other.
(a) If to the Transfer Agent, to:
Boston Financial Data Services, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Fund, to:
The Japan Fund, Inc.
C/o ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
17. ADDITIONAL PORTFOLIOS/ FUNDS
17.1 ADDITIONAL PORTFOLIOS. In the event that a Fund establishes one or
more series of Shares, in addition to those listed on the attached
Schedule A, with respect to which it desires to have the Transfer
Agent render services as transfer agent under the terms hereof, it
shall so notify the Transfer Agent in writing, and if the Transfer
Agent agrees in writing to provide such services, such series of
Shares shall become a Portfolio hereunder by the parties amending
the Schedule A to include the additional series.
17.2 ADDITIONAL FUNDS. In the event that an entity affiliated with the
Funds, in addition to those listed on the Schedule A, desires to
have the Transfer Agent render services as transfer agent under the
terms hereof and the Transfer Agent agrees to provide such services,
upon completion of an amended Schedule A signed by all parties to
the Agreement, such entity shall become a Fund hereunder and any
series thereof shall become a Portfolio hereunder.
17.3 CONDITIONS RE: ADDITIONAL FUNDS/PORTFOLIOS. In the event that the
Transfer Agent is to become the transfer agent for new funds or
portfolios, the Transfer Agent shall add them to the TA2000 System
upon at least thirty (30) days' prior written notice to the Transfer
Agent provided that the requirements of such funds or portfolios are
generally consistent with services then being provided by the
Transfer Agent under this Agreement, in which case the fees and
expenses for such additional funds or portfolios shall be as set
forth on Schedule 3.1 for the remainder of the then-current term. To
the extent such funds or portfolios use functions, features or
services not set forth in SECTION 1.1, SECTION 1.2 or Schedule 3.1,
the rates and charges applicable to such new functions, features or
characteristics may be established or increased in accordance with
SECTION 3.3.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
EACH OF THE ENTITIES, INDIVIDUALLY
AND NOT JOINTLY, AS LISTED ON
SCHEDULE A
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: CHIEF EXECUTIVE OFFICER
-----------------------------
As an Authorized Officer on behalf
of each of the Funds indicated on
Schedule A
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
BOSTON FINANCIAL DATA SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
-----------------------------
Title: SENIOR VICE PRESIDENT
-----------------------------
ATTEST:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
SCHEDULE A
Dated: September 28, 2007
FUND TYPE OF ENTITY JURISDICTION
---- -------------- ------------
The Japan Fund, Inc. Corporation Maryland
Schedule A-1
SCHEDULE 1.2(F)
AML DELEGATION
Dated: September 28, 2007
1. DELEGATION.
1.1 Subject to the terms and conditions set forth in this Agreement, the
Fund hereby delegates to the Transfer Agent those aspects of the
Fund's Program that are set forth in Section 4 below (the "Delegated
Duties"). The Delegated Duties set forth in Section 4 may be
amended, from time to time, by mutual agreement of the Fund and the
Transfer Agent upon the execution by such parties of a revised
Schedule 1.2(g) bearing a later date than the date hereof.
1.2 The Transfer Agent agrees to perform such Delegated Duties, with
respect to the ownership of shares in the Fund for which the
Transfer Agent maintains the applicable shareholder information,
subject to and in accordance with the terms and conditions of this
Agreement.
2. CONSENT TO EXAMINATION. In connection with the performance by the Transfer
Agent of the Delegated Duties, the Transfer Agent understands and
acknowledges that the Fund remains responsible for assuring compliance
with the USA PATRIOT Act and that the records the Transfer Agent maintains
for the Fund relating to the AML Program may be subject, from time to
time, to examination and/or inspection by federal regulators in order that
the regulators may evaluate such compliance. The Transfer Agent hereby
consents to such examination and/or inspection and agrees to cooperate
with such federal examiners in connection with their review. For purposes
of such examination and/or inspection, the Transfer Agent will use its
best efforts to make available, during normal business hours and on
reasonable notice all required records and information for review by such
examiners.
3. LIMITATION ON DELEGATION. The Fund acknowledges and agrees that in
accepting the delegation hereunder, the Transfer Agent is agreeing to
perform only the Delegated Duties, as may be amended from time to time,
and is not undertaking and shall not be responsible for any other aspect
of the AML Program or for the overall compliance by the Fund with the USA
PATRIOT Act or for any other matters that have not been delegated
hereunder. Additionally, the parties acknowledge and agree that the
Transfer Agent shall only be responsible for performing the Delegated
Duties with respect to the ownership of, and transactions in, shares in
the Fund for which the Transfer Agent maintains the applicable shareholder
information.
4. DELEGATED DUTIES
4.1 Consistent with the services provided by the Transfer Agent and with
respect to the ownership of shares in the Fund for which the
Transfer Agent maintains the applicable shareholder information, the
Transfer Agent shall:
Schedule 1.2(f) - 1
(a) Submit all new account and registration maintenance
transactions through the Office of Foreign Assets Control
("OFAC") database and such other lists or databases as may be
required from time to time by applicable regulatory
authorities;
(b) Submit special payee checks through OFAC database;
(c) Review redemption transactions that occur within thirty (30)
days of account establishment or maintenance;
(d) Review wires sent pursuant to banking instructions other than
those on file with the Transfer Agent;
(e) Review accounts with small balances followed by large
purchases;
(f) Review accounts with frequent activity within a specified date
range followed by a large redemption;
(g) On a daily basis, review purchase and redemption activity per
tax identification number ("TIN") within the Fund to determine
if activity for that TIN exceeded the $100,000 threshold on
any given day;
(h) Monitor and track cash equivalents under $10,000 for a rolling
twelve-month period and file IRS Form 8300 and issue the
Shareholder notices required by the IRS;
(i) Determine when a suspicious activity report ("SAR") should be
filed as required by regulations applicable to mutual funds;
prepare and file the SAR. Provide the Fund with a copy of the
SAR within a reasonable time after filing; notify the Fund if
any further communication is received from U.S. Department of
the Treasury or other law enforcement agencies regarding the
SAR;
(j) Compare account information to any FinCEN request received by
the Fund and provided to the Transfer Agent pursuant to USA
PATRIOT Act Sec. 314(a). Provide the Fund with
documents/information necessary to respond to requests under
USA PATRIOT Act Sec. 314(a) within required time frames;
(k) (i) Verify the identity of any person seeking to open an
account with the Fund, (ii) Maintain records of the
information used to verify the person's identity and (iii)
Determine whether the person appears on any lists of known or
suspected terrorists or terrorists organizations provided to
the Fund by any government agency; and
(l) Conduct due diligence for new correspondent accounts for
foreign financial institutions (as defined in 31 C.F.R.
103.175). Denote foreign correspondent accounts with a
distinct social code at account set-up when account set-up is
performed by the Transfer Agent or, if account set-up is
performed by a party other than the Transfer Agent, at such
other time as required documentary evidence for a foreign
correspondent account is presented in good order to the
Transfer Agent. Following the opening of an
Schedule 1.2(f) - 2
account for a foreign financial institution or setting up a
dealer relationship with a foreign financial institution, the
Transfer Agent will perform an assessment of the money
laundering risk presented by the account based on a
consideration of relevant factors in accordance with
applicable law and information provided by the foreign
financial institution in a financial institution
questionnaire. After assessing the money laundering risk and
determining a risk-ranking for the account, the Transfer Agent
will notify the Fund's AML Officer of any account with a
medium or above risk-ranking to obtain further instruction
from the Fund. In the situation where due diligence cannot be
completed with respect to an account, the Transfer Agent will
contact the Fund's AML Officer for further instruction. For
any accounts opened for foreign financial institutions, a
periodic review of the account activity will be performed by
the Transfer Agent in order to determine consistency with
information obtained about the type, purpose, and anticipated
activity of the account as detailed in the financial
institution questionnaire. Upon request by the Fund, generate
periodic reports of foreign correspondent accounts for review
by the Fund for purposes of compliance with USA PATRIOT Act,
Section 312. In accordance with instructions from the Fund,
conduct due diligence for existing accounts selected by the
Fund for further review in accordance with the procedures set
forth above.
4.2 In the event that the Transfer Agent detects activity as a
result of the foregoing procedures, which necessitates the
filing by the Transfer Agent of a SAR, a Form 8300 or other
similar report or notice to OFAC, then the Transfer Agent
shall also immediately notify the Fund, unless prohibited by
applicable law.
Schedule 1.2(f) - 3
SCHEDULE 1.2(I)
OMNIBUS TRANSPARANCY SERVICES
Dated: September 28, 2007
A. The Fund shall provide the following information to the Transfer Agent:
1. The name and contact information for the Financial Intermediary,
with which the Fund have a "shareholder information agreement"
(under which the Financial Intermediary agrees to provide, at the
Fund's request, identity and transaction information about
shareholders who hold their shares through an account with the
Financial Intermediary (an "accountlet")), that is to receive an
information request;
2. The Fund to be included, along with each Fund's frequency trading
policy, under surveillance for the Financial Intermediary;
3. The frequency of supplemental data requests from the Transfer Agent;
4. The duration of supplemental data requests (e.g. 60 days, 90 days);
and
5. The expected turnaround time for a response from the Financial
Intermediary to an information request (including requests for
supplemental data)
B. Upon receipt of the foregoing information, the Fund hereby authorizes and
instructs the Transfer Agent to perform the following Services:
1. FINANCIAL INTERMEDIARY SURVEILLANCE SCHEDULES.
(a) Create a system profile and infrastructure to establish and
maintain Financial Intermediary surveillance schedules and
communication protocol/links.
(b) Initiate information requests to the Financial Intermediaries.
2. DATA MANAGEMENT MONITORING
(a) Monitor status of information requests until all supplemental
data is received.
(b) If a Financial Intermediary does not respond to a second
request from the Transfer Agent, the Transfer Agent shall
notify the Fund for the Fund to follow-up with the Financial
Intermediary.
3. CUSTOMIZED REPORTING FOR MARKET TIMING ANALYSIS
(a) Run information received from the Financial Intermediaries
through TA2000 System functionalities (utilizing PowerSelect
tables, Short Term Trader and Excessive Trader).
(b) Generate exception reports using parameters provided by the
Fund.
4. DAILY EXCEPTION ANALYSIS OF MARKET TIMING POLICIES FOR SUPPLEMENTAL
DATA PROVIDED
(a) Review daily short-term trader exceptions, daily excessive
trader exceptions, and daily supplemental data reconciliation
exceptions.
(b) Analyze Financial Intermediary supplemental data (items),
which are identified as "Potential Violations" based on
parameters established by the Fund.
(c) Confirm exception trades and if necessary, request additional
information regarding Potential Violations.
SCHEDULE 1.2(H) (CONT'D)
OMNIBUS TRANSPARANCY SERVICES
5. COMMUNICATION AND RESOLUTION OF MARKET TIMING EXCEPTIONS
(a) Communicate results of analysis to the Fund or upon request of
the Fund directly to the Financial Intermediary.
(b) Unless otherwise requested by the Fund and as applicable,
instruct the Financial Intermediary to (i) restrict trading on
the accountlet, (ii) cancel a trade, or (iii) prohibit future
purchases or exchanges.
(c) Update AWD Work Object with comments detailing resolution.
6. MANAGEMENT REPORTING
(a) Provide periodic reports, in accordance with agreed upon
frequency and content parameters, to the Fund. As reasonable
requested by the Fund, the Transfer Agent shall furnish ad hoc
reports to the Fund.
7. SUPPORT DUE DILIGENCE PROGRAMS
(a) Update system watch list with pertinent information on trade
violators.
SCHEDULE 2.1
THIRD PARTY ADMINISTRATOR(S) PROCEDURES
Dated: September 28, 2007
1. On each day on which both the New York Stock Exchange and the Fund are
open for business (a "Business Day"), the TPA(s) shall receive, on behalf
of and as agent of the Fund, Instructions (as hereinafter defined) from
the Plan. Instructions shall mean as to each Fund (i) orders by the Plan
for the purchases of Shares, and (ii) requests by the Plan for the
redemption of Shares; in each case based on the Plan's receipt of purchase
orders and redemption requests by Participants in proper form by the time
required by the term of the Plan, but not later than the time of day at
which the net asset value of a Fund is calculated, as described from time
to time in that Fund's prospectus. Each Business Day on which the TPA
receives Instructions shall be a "Trade Date".
2. The TPA(s) shall communicate the TPA(s)'s acceptance of such Instructions,
to the applicable Plan.
3. On the next succeeding Business Day following the Trade Date on which it
accepted Instructions for the purchase and redemption of Shares, (TD+1),
the TPA(s) shall notify the Transfer Agent of the net amount of such
purchases or redemptions, as the case may be, for each of the Plans. In
the case of net purchases by any Plan, the TPA(s) shall instruct the
Trustees of such Plan to transmit the aggregate purchase price for Shares
by wire transfer to the Transfer Agent on (TD+1). In the case of net
redemptions by any Plan, the TPA(s) shall instruct the Fund's custodian to
transmit the aggregate redemption proceeds for Shares by wire transfer to
the Trustees of such Plan on (TD+1). The times at which such notification
and transmission shall occur on (TD+1) shall be as mutually agreed upon by
each Fund, the TPA(s), and the Transfer Agent.
4. The TPA(s) shall maintain separate records for each Plan, which record
shall reflect Shares purchased and redeemed, including the date and price
for all transactions, and Share balances. The TPA(s) shall maintain on
behalf of each of the Plans a single master account with the Transfer
Agent and such account shall be in the name of that Plan, the TPA(s), or
the nominee of either thereof as the record owner of Shares owned by such
Plan.
5. The TPA(s) shall maintain records of all proceeds of redemptions of Shares
and all other distributions not reinvested in Shares.
6. The TPA(s) shall prepare, and transmit to each of the Plans, periodic
account statements showing the total number of Shares owned by that Plan
as of the statement closing date, purchases and redemptions of Shares by
the Plan during the period covered by the statement, and the dividends and
other distributions paid to the Plan on Shares during the statement period
(whether paid in cash or reinvested in Shares).
7. The TPA(s) shall, at the request and expense of each Fund, transmit to the
Plans prospectuses, proxy materials, reports, and other information
provided by each Fund for delivery to its shareholders.
8. The TPA(s) shall, at the request of each Fund, prepare and transmit to
each Fund or any agent designated by it such periodic reports covering
Shares of each Plan as each Fund shall reasonably conclude are necessary
to enable the Fund to comply with state Blue Sky requirements.
9. The TPA(s) shall transmit to the Plans confirmation of purchase orders and
redemption requests placed by the Plans; and
10. The TPA(s) shall, with respect to Shares, maintain account balance
information for the Plan(s) and daily and monthly purchase summaries
expressed in Shares and dollar amounts.
11. Plan sponsors may request, or the law may require, that prospectuses,
proxy materials, periodic reports and other materials relating to each
Fund be furnished to Participants in which event the Transfer Agent or
each Fund shall mail or cause to be mailed such materials to Participants.
With respect to any such mailing, the TPA(s) shall, at the request of the
Transfer Agent or each Fund, provide at the TPA(s)'s expense a complete
and accurate set of mailing labels with the name and address of each
Participant having an interest through the Plans in Shares.
EXHIBIT 11.9
BOSTON FINANCIAL DATA SERVICES, INC.
INSURANCE COVERAGE
________________________________________________________________________________
For and during the term of this Master Agreement and for as long as BFDS is
performing its obligations hereunder, BFDS shall secure and maintain at its own
expense insurance of the following types and amounts:
A. Commercial General Liability Insurance in an amount of not less than
$1,000,000 per occurrence, subject to a $2,000,000 aggregate
covering, bodily injury (including death), personal injury, and
property damage. This policy shall include products/completed
operations coverage.
B. Workers' Compensation in accordance with all federal and state
statutory requirements and Employer's Liability Insurance in an
amount of not less than $500,000 per accident for bodily injury and
$500,000 per employee/aggregate for disease.
C. Commercial Automobile Liability Insurance in an amount of not less
than $1,000,000 combined single limit covering bodily injury
(including death) and property damage for all owned, hired, and
non-owned vehicles used by BFDS.
D. Umbrella Liability Insurance with respect to subsections A, B, and C
in an amount of not less than $10,000,000 combined single limit.
E. Blanket Fidelity Bond of not less than $10,000,000 covering the
dishonest acts of all BFDS employees performing under this
Agreement.
F. Claims Made Annual Aggregate Errors and Omissions in an amount of
not less than $1,000,000.