EXHIBIT 10.70
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FRANKLIN XXXXXXXXX INVESTOR SERVICES, LLC
TRANSFER AGENT AND SHAREHOLDER SERVICES AGREEMENT
Investment Company: [NAME OF TRUST OR CORPORATION]
Date:
The parties to this Agreement are the Investment Company named above
("Investment Company"), an open-end investment company registered as such under
the Investment Company Act of 1940 ("1940 Act"), on behalf of each class of
shares of each series of the Investment Company which now exists or may
hereafter be created (individually, a "Fund" and collectively, the "Funds") and
FRANKLIN XXXXXXXXX INVESTOR SERVICES, LLC ("FTIS"), a registered transfer agent
formerly known as Franklin Administrative Services, Inc. This Agreement
supersedes prior Shareholder Services Agreements between the parties, as stated
below in section 16(d).
WITNESSETH:
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That, for and in consideration of the mutual promises hereinafter set
forth, the Investment Company and FTIS agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
(a) "Articles" shall mean the Articles of Incorporation, Declaration
of Trust or Agreement of Limited Partnership, as appropriate, of the
Investment Company as the same may be amended from time to time;
(b) "Authorized Person" shall be deemed to include any person, whether
or not such person is an officer or employee of the Investment Company,
duly authorized to give Oral Instructions or Written Instructions on behalf
of the Investment Company, as indicated in a resolution of the Investment
Company's Board which was valid at the time of this Agreement, or as
indicated in a certificate furnished to FTIS pursuant to Section 4(c)
hereof;
(c) "Board" shall mean the Investment Company's Board of Directors,
Board of Trustees or Managing General Partners, as appropriate;
(d) "Custodian" shall mean a custodian and any sub-custodian of
securities and other property which the Investment Company may from time to
time deposit, or cause to be deposited or held under the name or account of
such custodian pursuant to the Custody Agreement;
(e) "Oral Instructions" shall mean instructions (including without
limitation instructions received by telephone, facsimile, electronic mail
or other
electronic mail), other than written instructions, actually received by
FTIS from a person reasonably believed by FTIS to be an Authorized Person;
(f) "Shares" shall mean shares of each class of capital stock,
beneficial interest or limited partnership interest, as appropriate, of
each series of the Investment Company; and
(g) "Written Instructions" shall mean a written communication signed
by a person reasonably believed by FTIS to be an Authorized Person and
actually received by FTIS.
2. APPOINTMENT OF FTIS. The Investment Company hereby appoints FTIS as
transfer agent for Shares of the Investment Company, as service agent in
connection with dividend and distribution functions, and as shareholder
servicing agent for the Investment Company, and FTIS accepts such appointment
and agrees to perform the following duties.
3. COMPENSATION.
(a) PAYMENT TO FTIS:
(i) Compensation for Servicing: The Investment Company will
compensate FTIS for the performance of its obligations hereunder in
accordance with the fees set forth in the written schedule of fees
annexed hereto as Schedule A and incorporated herein. FTIS will xxxx
the Investment Company as soon as practicable after the end of each
calendar month, in accordance with Schedule A. The Investment Company
will promptly pay to FTIS the amount of such billing.
(ii) Reimbursement for Out-of-Pocket Expenses: The Investment
Company will reimburse FTIS for out-of-pocket disbursements paid to
third parties by FTIS in the performance of its obligations hereunder
including, but not limited to, the items specified in the written
schedule of out-of-pocket expenses paid to third parties annexed
hereto as Schedule B and incorporated herein. Unspecified
out-of-pocket expenses shall be limited to those out-of-pocket
expenses reasonably incurred by FTIS in the performance of its
obligations hereunder, subject to approval by the Board. Reimbursement
by the Investment Company for out-of-pocket disbursements paid by FTIS
in any month shall be made as soon as practicable after the receipt of
an itemized xxxx from FTIS.
(b) BENEFICIAL OWNER SERVICING FEES TO THIRD PARTIES: Subject to the
limitation set forth in paragraph (d) below, the Investment Company will
reimburse FTIS for servicing fee payments ("Beneficial Owner Servicing
Fees") made by FTIS on the Investment Company's behalf to institutions
that:
(i) maintain a master account with a Fund in the institution's
name ("Omnibus Account") on behalf of numerous beneficial owners of
Omnibus Account assets; or
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(ii) maintain a master account with a Fund in the institution's
name on behalf of an employer sponsored retirement plan (a "Plan
Account") and provide, directly or indirectly under separate contract
with the retirement plan, participant level accounting for each plan
participant with a beneficial ownership in Plan Account assets.
Each beneficial owner with an interest in Fund shares held in an
Omnibus Account and each plan participant with an interest in Fund
shares held in a Plan Account is referred to in this Agreement as a
"Beneficial Owner".
(c) NETWORKED ACCOUNT SERVICING FEES TO THIRD PARTIES: Subject to the
limitation set forth in paragraph (d) below, the Investment Company will
reimburse FTIS for servicing fee payments ("Networked Account Servicing
Fees") made by FTIS on the Investment Company's behalf to an institution
for each Fund account (a "Networked Account") maintained by FTIS in which
servicing is shared with that institution by the exchange of account data
through the National Securities Clearing Corporation (NSCC) networking
system.
(d) MAXIMUM REIMBURSEMENT AMOUNT FOR BENEFICIAL OWNER SERVICING FEES
AND NETWORKED ACCOUNT SERVICING FEES. The Investment Company authorizes
FTIS to negotiate Beneficial Owner Servicing Fees and Networked Account
Servicing Fees on the Investment Company's behalf and shall reimburse FTIS
for those fees negotiated and paid up to the "Maximum Reimbursement
Amount". The Maximum Reimbursement Amount for each fiscal year of the
Investment Company, calculated on the basis of all Omnibus Accounts and all
Networking Accounts open during that fiscal year, shall equal the total
amount (including out-of-pocket expenses) that would otherwise have been
payable by the Investment Company to FTIS under the terms of this Agreement
if (i) all Beneficial Owners for which Beneficial Owner Servicing fees were
paid had been Fund shareholders of record; and (ii) all Networked Accounts
for which Networked Account Servicing Fees were paid had been Full Service
Accounts (as defined in Schedule A).
(e) COMPENSATION ADJUSTMENTS. Any compensation agreed to hereunder may
be adjusted from time to time by mutual agreement by attaching revised
Schedules A or B to this Agreement.
4. DOCUMENTS. In connection with the appointment of FTIS, the Investment
Company shall, within a reasonable period of time for FTIS to prepare to perform
its duties hereunder, deliver to FTIS the following documents:
(a) If applicable, specimens of the certificates for the Shares;
(b) All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service offered by the
Investment Company;
(c) A certificate identifying the Authorized Persons and specimen
signatures of Authorized Persons who will sign Written Instructions; and
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(d) All documents and papers necessary under the laws of the
Investment Company's state of domicile, under the Investment Company's
Articles, and as may be required for the due performance of FTIS's duties
under this Agreement or for the due performance of additional duties as may
from time to time be agreed upon between the Investment Company and FTIS.
5. DUTIES OF THE TRANSFER AGENT. FTIS shall be responsible for
administering and/or performing transfer agent functions; for acting as service
agent in connection with dividend and distribution functions; and for performing
shareholder account and administrative agent functions in connection with the
issuance, transfer, exchange, redemption or repurchase (including coordination
with the Custodian) of Shares. FTIS shall be bound to follow its usual and
customary operating standards and procedures, as they may be amended from time
to time, and each current prospectus and Statement of Additional Information
(hereafter, collectively, the "prospectus") of the Investment Company. Without
limiting the generality of the foregoing, FTIS agrees to perform the specific
duties listed on Schedule C.
The duties to be performed by FTIS shall not include the engagement,
supervision or compensation of any service providers, or any registrations or
fees of any kind, which are required by the laws of any foreign country in which
the Fund may choose to invest portfolio assets or sell Shares.
6. (a) DISTRIBUTIONS PAYABLE IN SHARES. In the event that the Board of
the Investment Company shall declare a distribution payable in Shares, the
Investment Company shall deliver to FTIS written notice of such declaration
signed on behalf of the Investment Company by an officer thereof, upon
which FTIS shall be entitled to rely for all purposes, certifying (i) the
number of Shares involved, and (ii) that all appropriate action has been
taken to effect such distribution.
(b) DISTRIBUTIONS PAYABLE IN CASH; REDEMPTION PAYMENTS. In the event
that the Board of the Investment Company shall declare a distribution
payable in cash, the Investment Company shall deliver to FTIS written
notice of such declaration signed on behalf of the Investment Company by an
officer thereof, upon which FTIS shall be entitled to rely for all
purposes, certifying (i) the amount per share to be distributed, (ii) the
record and payment dates for the distribution, and (iii) that all
appropriate action has been taken to effect such distribution. Once the
amount and validity of any dividend or redemption payments to shareholders
have been determined, the Investment Company shall transfer the payment
amounts from the Investment Company's accounts to an account or accounts
held in the name of FTIS, as paying agent for the shareholders, in
accordance with any applicable laws or regulations, and FTIS shall promptly
cause payments to be made to the shareholders.
7. RECORDKEEPING AND OTHER INFORMATION. FTIS shall create, maintain and
preserve all necessary records in accordance with all applicable laws, rules and
regulations. Such records are the property of the Investment Company, and FTIS
will promptly surrender them to the Investment Company upon request or upon
termination of this Agreement. In the event of such a request or termination,
FTIS shall be entitled to make and retain copies of all records
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surrendered, and to be reimbursed by the Investment Company for reasonable
expenses actually incurred in making such copies. FTIS will take reasonable
actions to maintain the confidentiality of the Investment Company's records,
which may nevertheless be disclosed to the extent required by law or by this
Agreement, or to the extent permitted by the Investment Company.
8. OTHER DUTIES. In addition, FTIS shall perform such other duties and
functions, and shall be paid such amounts therefor, as may from time to time be
agreed upon in writing between the Investment Company and FTIS. Such other
duties and functions shall be reflected in a written amendment to Schedule C,
and the compensation for such other duties and functions shall be reflected in a
written amendment to Schedule A.
9. RELIANCE BY TRANSFER AGENT; INSTRUCTIONS.
(a) FTIS will be protected in acting upon Written or Oral Instructions
reasonably believed to have been executed or orally communicated by an
Authorized Person and will not be held to have any notice of any change of
authority of any person until receipt of a Written Instruction thereof from
an officer of the Investment Company. FTIS will also be protected in
processing Share certificates which it reasonably believes to bear the
proper manual or facsimile signatures of the officers of the Investment
Company and the proper countersignature of FTIS.
(b) At any time FTIS may apply to any Authorized Person of the
Investment Company for Written Instructions, or may seek advice at the
Investment Company's expense from legal counsel for the Investment Company,
with respect to any matter arising in connection with this Agreement. FTIS
shall not be liable for any action taken or not taken or suffered by it in
good faith in accordance with such Written Instructions or in accordance
with the opinion of counsel for the Investment Company. Written
Instructions requested by FTIS will be provided by the Investment Company
within a reasonable period of time.
10. ACTS OF GOD, ETC. FTIS will not be liable or responsible for delays or
errors by reason of circumstances beyond its control, including acts of civil or
military authority, national emergencies, labor difficulties, fire, mechanical
breakdown beyond its control, earthquake, flood or catastrophe, acts of God,
insurrection, war, riots or failure beyond its control of transportation,
communication or power supply.
11. DUTY OF CARE AND INDEMNIFICATION. FTIS will indemnify the Investment
Company against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action or suit resulting from willful
misfeasance, bad faith or gross negligence on the part of FTIS, and arising out
of, or in connection with, its duties hereunder. However, FTIS shall have no
liability for or obligation to indemnify the Investment Company against any
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) incurred by the Investment Company as a result of: (i) any
action taken in accordance with Written or Oral Instructions; (ii) any action
taken in accordance with written or oral advice reasonably believed
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by FTIS to have been given by counsel for the Investment Company; (iii) any
action taken as a result of any error or omission in any record (including but
not limited to magnetic tapes, computer printouts, hard copies and microfilm
copies) delivered, or caused to be delivered, by the Investment Company to FTIS
in connection with this Agreement; or (iv) any action taken in accordance with
shareholder instructions which meet the standards described in the Investment
Company's current prospectus, including without limitation oral instructions
which meet the standards described in the section of the prospectus dealing with
telephone transactions, so long as FTIS believes such instructions to be
genuine. The obligations of the parties hereto under this Section shall survive
the termination of this Agreement.
12. TERM AND TERMINATION.
(a) This Agreement shall be effective as of the date first written
above, shall continue through December 31, 2003, and thereafter shall
continue automatically for successive annual periods ending on December 31
of each year, provided such continuance is specifically approved at least
annually by the Investment Company's Board.
(b) Either party hereto may terminate this Agreement by giving to the
other party a notice in writing specifying the date of such termination,
which shall be not less than 60 days after the date of receipt of such
notice. Upon such termination, FTIS will (i) deliver to such successor a
certified list of shareholders of the Investment Company (with names and
addresses) and an historical record of the account of each Shareholder and
the status thereof; (ii) surrender all other relevant records in accordance
with section 7 of this Agreement, above, and (iii) cooperate in the
transfer of such duties and responsibilities, including provisions for
assistance from FTIS's personnel in the establishment of books, records and
other data by such successor or successors. FTIS shall be entitled to
charge the Investment Company a reasonable fee for services rendered and
expenses actually incurred in performing its duties under this paragraph.
13. AMENDMENT. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties.
14. SUBCONTRACTING. The Investment Company agrees that FTIS may, in its
discretion, subcontract for all or any portion of the services described under
this Agreement or the Schedules hereto; provided that the appointment of any
such agent shall not relieve FTIS of its responsibilities hereunder.
15. DATA PROCESSING SYSTEM, PROGRAM AND INFORMATION
(a) The Investment Company shall not, solely by virtue of this
Agreement, obtain any rights, title and interest in and to the computer
systems and programs, including all related documentation, employed by FTIS
in connection with rendering services hereunder; provided however, that the
records prepared, maintained and preserved by FTIS pursuant to this
Agreement shall be the property of the Investment Company.
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(b) Any modifications, changes and improvements in the automatic data
processing system (the "System") or in the manner in which the services are
rendered shall be made or provided as follows, and provided further that
modifications for which the Investment Company will be required to bear any
expenses shall be made only as set forth herein.
(i) FTIS shall, at no expense to the Investment Company, make any
revisions in the System necessary to (1) perform the services which it
has contracted to perform and (2) create and maintain the records
which it has contracted to create and maintain hereunder or (3)
enhance or update the System to the extent and in the manner necessary
to maintain said System. However, if specific reprogramming, coding or
other changes are necessary in the records of the Investment Company
or in its shareholder accounts in order to complete a system revision,
the costs for completing work specific to the Investment Company shall
be subject to a subsequent agreement between the parties. The System
is at all times to be competitive with that which is generally
available to the mutual fund industry from transfer agents.
(ii) To the extent that the System is modified to comply with
changes in the accounting or record-keeping rules applicable to mutual
funds, the Investment Company agrees to pay a reasonable pro rata
portion of the costs of the design, revision and programming of the
System; provided, however, that if the Investment Company's pro rata
portion exceeds $1,000 per 12 month period, the Investment Company's
obligation to pay a reasonable pro rata portion shall be conditioned
upon FTIS's having obtained prior Written Instructions from the
Investment Company for any charge. The determination that such
modifications or revisions are necessary, and that the System as so
modified produces records which comply with the record-keeping
requirements, as amended, shall be by mutual agreement; provided,
however, that upon written request by the Investment Company, FTIS
will provide the Investment Company with a written opinion of counsel
to FTIS to the effect that the modifications were required by changes
in the applicable laws or regulations and that the System, as
modified, complies with the laws or regulations as amended. Upon
completion of the changes FTIS shall render a statement to the
Investment Company, in reasonably detailed form, identifying the
nature of the revisions, the services, expenses and costs, and the
basis for determining the Investment Company's reasonable pro rata
portion. Any determination by FTIS of the Investment Company's pro
rata portion based upon the ratio of the number of shareholder
accounts of the Investment Company to the total number of shareholder
accounts of all clients for which FTIS provides comparable services
shall conclusively be presumed to be reasonable unless the nature of
the change to the System relates to certain types of shareholder
accounts, in which case the pro rata portion will be determined on a
mutually agreeable basis.
(iii) If system improvements are requested by the Investment
Company and are not otherwise required under this subsection 15(b),
FTIS shall be entitled to request a reasonable fee before agreeing to
make the improvements and shall be entitled to refuse to make any
requested improvements which FTIS reasonably believes to be
incompatible with its systems providing services to other funds.
16. MISCELLANEOUS.
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(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Investment Company or FTIS shall be
sufficiently given if addressed to that party and received by it at its
office at the place described in the Investment Company's most recent
registration statement or at such other place as it may from time to time
designate in writing.
(b) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by either party
without the written consent of the other party.
(c) This Agreement shall be construed in accordance with the laws of
the State of California applicable to contracts between California
residents which are to be performed primarily within California.
(d) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument. This Agreement supersedes all
prior Shareholder Services Agreements between the parties, and supersedes
all prior agreements between the parties relating to the subject matters of
this Agreement to the extent they are inconsistent with this Agreement.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
(f) It is understood and expressly stipulated that neither the holders
of Shares of the Investment Company nor any member of the Board, officer,
agent or employee of the Investment Company shall be personally liable
hereunder, nor shall any resort be had to other private property for the
satisfaction of any claim or obligation hereunder, but the Investment
Company only shall be liable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized as of
the day and year first above written.
[NAME OF TRUST OR CORP] FRANKLIN XXXXXXXXX INVESTOR
SERVICES, LLC
BY: _________________________ _________________________
NAME: Xxxxxx X. Xxxxxxx Xxxxx X. Xxx
TITLE: Secretary President
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