TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 25th day of November,
2002, by and between Brazos Mutual Funds, a Delaware business trust (the
"Trust"), and U.S. Bancorp Fund Services, LLC, a Wisconsin limited liability
company ("USBFS").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company, and
is authorized to issue shares of beneficial interest in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets;
WHEREAS, the Trust is authorized to issue separate classes of shares for
each such series;
WHEREAS, USBFS is, among other things, in the business of administering
transfer and dividend disbursing agent functions for the benefit of its
customers; and
WHEREAS, the Trust desires to retain USBFS to provide transfer and
dividend disbursing agent services to each series of the Trust listed on Exhibit
A hereto (as amended from time to time) (each a "Fund", collectively the
"Funds") and each class of shares of each Fund listed on Exhibit A hereto (as
amended from time to time) (each a "Class").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. APPOINTMENT OF USBFS AS TRANSFER AGENT
The Trust hereby appoints USBFS as transfer agent of the Trust on the
terms and conditions set forth in this Agreement, and USBFS hereby accepts
such appointment and agrees to perform the services and duties set forth
in this Agreement.
2. SERVICES AND DUTIES OF USBFS
USBFS shall perform all of the customary services of a transfer agent and
dividend disbursing agent for the Funds, and as relevant, agent in
connection with accumulation, open account or similar plans (including
without limitation any periodic investment plan or periodic withdrawal
program), including but not limited to:
A. Receive orders for the purchase of shares.
B. Process purchase orders with prompt delivery, where appropriate, of
payment and supporting documentation to the Trust's custodian, and
issue the appropriate number of uncertificated shares with such
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uncertificated shares being held in the appropriate shareholder
account.
C. Arrange for issuance of shares obtained through transfers of funds
from Fund shareholders' accounts at financial institutions and
arrange for the exchange of shares for shares of other eligible
investment companies, when permitted by the Fund's current prospectus
("Prospectus").
D. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Trust's custodian.
E. Pay monies upon receipt from the Trust's custodian, where relevant,
in accordance with the instructions of redeeming shareholders.
F. Process transfers of shares in accordance with the shareholder's
instructions.
G. Process exchanges between Funds and/or classes of shares of Funds
both within the same family of funds and with a First American Money
Market Fund, if applicable.
H. Prepare and transmit payments for dividends and distributions
declared by the Trust with respect to the Fund, after deducting any
amount required to be withheld by any applicable laws, rules and
regulations and in accordance with shareholder instructions.
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (e.g., systematic withdrawal, automatic
investment, dividend reinvestment).
J. Record the issuance of shares of the Fund and maintain, pursuant to
Rule 17Ad-10(e) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), a record of the total number
of shares of the Fund which are authorized, issued and outstanding.
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies.
L. Mail shareholder reports and Prospectuses to current shareholders.
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to dividends
and distributions for all shareholders.
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N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Trust.
O. Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate federal
authorities any taxes to be withheld on dividends and distributions
paid by the Trust, all as required by applicable federal tax laws and
regulations.
P. Provide a Blue Sky system that will enable the Trust to monitor the
total number of shares of the Fund sold in each state. In addition,
the Trust or its agent, including USBFS, shall identify to USBFS in
writing those transactions and assets to be treated as exempt from
the Blue Sky reporting for each state.
Q. Answer correspondence from shareholders, securities brokers and
others relating to USBFS's duties hereunder and such other
correspondence as may from time to time be mutually agreed upon
between USBFS and the Trust.
R. Reimburse each Fund each month for all material losses resulting from
"as of" processing errors for which USBFS is responsible in
accordance with the "as of" processing guidelines set forth on
Exhibit C hereto.
3. COMPENSATION
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit B
hereto (as amended from time to time). The Trust shall pay all fees and
reimbursable expenses within thirty (30) calendar days following receipt
of the billing notice, except for any fee or expense subject to a good
faith dispute. The Trust shall notify USBFS in writing within thirty (30)
calendar days following receipt of each invoice if the Trust is disputing
any amounts in good faith. The Trust shall settle such disputed amounts
within ten (10) calendar days of the day on which the parties agree to the
amount to be paid. With the exception of any fee or expense the Trust is
disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of one and one-half percent (1 1/2%) per month, after the
due date. Notwithstanding anything to the contrary, amounts owed by the
Trust to USBFS shall only be paid out of assets and property of the
particular Fund involved.
4. DISCLAIMER OF LIABILITY
This Agreement is executed on behalf of the Trust by its officers in their
capacities as officers and not individually. The obligations of the Trust
under this Agreement are not binding upon the Trust's trustees, officers,
or shareholders individually, but are binding only upon the assets and
property of the Trust to which the services performed pursuant to this
Agreement relate. USBFS agrees that if obligations or liability relates to
one or more Funds, the obligations or liability hereunder shall be limited
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to the respective assets of such Funds.
5. INDEMNIFICATION; LIMITATION OF LIABILITY
A. USBFS shall exercise reasonable care in the performance of its duties
under this Agreement. USBFS shall not be liable for any error of
judgment or mistake of law or for any loss resulting from mechanical
breakdowns or the failure of communication or power supplies beyond
USBFS's control, except a loss arising out of or relating to USBFS's
refusal or failure to comply with the terms of this Agreement or from
bad faith, negligence, or willful misconduct on its part in the
performance of its duties under this Agreement. The Trust shall
indemnify and hold harmless USBFS from and against any and all
claims, demands, losses, expenses, and liabilities of any and every
nature (including reasonable attorneys' fees) that USBFS may sustain
or incur or that may be asserted against USBFS by any person arising
out of any action taken or omitted to be taken by the Trust as a
result of the Trust's refusal or failure to comply with the terms of
this Agreement or from bad faith, negligence or from willful
misconduct on its part in performance of its duties under this
Agreement.
USBFS shall indemnify and hold the Trust harmless from and against
any and all claims, demands, losses, expenses, and liabilities of any
and every nature (including reasonable attorneys' fees) that the
Trust may sustain or incur or that may be asserted against the Trust
by any person arising out of any action taken or omitted to be taken
by USBFS as a result of USBFS's refusal or failure to comply with the
terms of this Agreement, its bad faith, negligence, or willful
misconduct.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, USBFS shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond USBFS's control. USBFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of USBFS. USBFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency
use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be
entitled to inspect USBFS's premises and operating capabilities at
any time during regular business hours of USBFS, upon reasonable
notice to USBFS.
Notwithstanding the above, USBFS reserves the right to reprocess and
correct administrative errors at its own expense and shall reimburse
each Fund, where applicable, in accordance with the "As Of Processing
Policy," a copy of which is attached as Exhibit C.
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B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee harmless,
the indemnitor shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further
understood that the indemnitee will use all reasonable care to notify
the indemnitor promptly concerning any situation that presents or
appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim that may be the subject of this
indemnification. In the event that the indemnitor so elects, it will
so notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall
in no case confess any claim or make any compromise in any case in
which the indemnitor will be asked to indemnify the indemnitee except
with the indemnitor's prior written consent.
6. PROPRIETARY AND CONFIDENTIAL INFORMATION
USBFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and prior,
present, or potential shareholders (and clients of said shareholders) and
not to use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where USBFS may
be exposed to civil or criminal contempt proceedings for failure to comply
after being requested to divulge such information by duly constituted
authorities, or when so requested by the Trust.
Further, USBFS will adhere to the privacy policies adopted by the Trust
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time (the "Act"). Notwithstanding the foregoing, USBFS will not
share any nonpublic personal information concerning any of the Trust's
shareholders with any third party unless specifically directed by the
Trust or allowed under one of the exceptions noted under the Act.
7. TERM OF AGREEMENT; AMENDMENT
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of three years. Subsequent to the
initial three-year term, this Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or
such shorter period as is mutually agreed upon by the parties. However,
this Agreement may be amended by mutual written consent of the parties.
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8. RECORDS
USBFS shall keep records relating to the services to be performed
hereunder in the form and manner, and for such period, as it may deem
advisable and is agreeable to the Trust, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. USBFS
agrees that all such records prepared or maintained by USBFS relating to
the services to be performed by USBFS hereunder are the property of the
Trust and will be preserved, maintained, and made available in accordance
with such applicable sections and rules of the 1940 Act and will be
promptly surrendered to the Trust on and in accordance with its request.
9. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Wisconsin, or any of the
provisions herein, conflict with the applicable provisions of the 1940
Act, the latter shall control, and nothing herein shall be construed in a
manner inconsistent with the 1940 Act or any rule or order of the
Securities and Exchange Commission thereunder.
10. REPRESENTATIONS AND WARRANTIES OF USBFS
USBFS represents and warrants to the Trust that:
(a) It is a limited liability company duly organized, existing and in
good standing under the laws of Wisconsin;
(b) It is a registered transfer agent under the Securities Exchange Act
of 1934, as amended;
(c) It is duly qualified to carry on its business in the state of
Wisconsin;
(d) It is empowered under applicable laws and by its charter and bylaws
to enter into and perform this Agreement;
(e) All requisite corporate proceedings have been taken to authorize it
to enter and perform this Agreement;
(f) It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
(g) It will comply with all applicable requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules, and
regulations of governmental authorities having jurisdiction.
11. REGISTRATION AS A TRANSFER AGENT
USBFS is a registered transfer agent under the Securities Exchange Act of
1934, as amended. USBFS agrees that it will promptly notify the Trust in
the event of any material change in its status as a registered transfer
agent. Should USBFS fail to be registered with the appropriate federal
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agency as a transfer agent at any time during this Agreement, and such
failure to register does not permit USFBS to lawfully conduct its
activities under this Agreement, the Trust may terminate this Agreement
upon five days written notice to USBFS.
12. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
USBFS' duties or responsibilities hereunder is designated by the Trust by
written notice to USBFS, USBFS will promptly, upon such termination and at
the expense of the Trust, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by USBFS
under this Agreement in a form reasonably acceptable to the Trust (if such
form differs from the form in which USBFS has maintained, the Trust shall
pay any expenses associated with transferring the data to such form), and
will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from USBFS' personnel in the
establishment of books, records, and other data by such successor.
13. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be USBFS, shall furnish to USBFS the
data necessary to perform the services described herein at such times and
in such form as mutually agreed upon. If USBFS is also acting in another
capacity for the Trust, nothing herein shall be deemed to relieve USBFS of
any of its obligations in such capacity.
14. ASSIGNMENT
This Agreement may not be assigned by either party without the prior
written consent of the other party.
15. INSURANCE
USBFS shall maintain insurance of the types and in the amounts deemed by
it to be appropriate. To the extent that policies of insurance may provide
for coverage of claims for liability by the parties set forth in this
Agreement, the contracts of insurance shall take precedence, and no
provision of this Agreement shall be construed to relieve an insurer of
any obligation to pay claims to the Trust, any Fund, USBFS or any insured
party which would otherwise be a covered claim in the absence of any
provision of this Agreement provided however, that this Section 15 does
not void, reduce or jeopardize the insurance coverage of the insured
party.
16. SECURITY
USBFS represents and warrants that, to the best of its knowledge, the
various procedures and systems which USBFS has implemented with regard to
the safeguarding from loss or damage attributable to fire, theft or any
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other cause (including provision for twenty-four hours a day restricted
access) of the Trust's blank checks, certificates, records and other data
hereunder are adequate, and that it will make such changes therein from
time to time as in its judgment are required for the secure performance of
its obligations hereunder. USBFS shall review such systems and procedures
on a periodic basis and the Trust shall have access to review these
systems and procedures.
17. ANTI-MONEY LAUNDERING
(a) Delegation. The Trust hereby delegates to USBFS, as agent for the
Trust, responsibility for the implementation and operation of the
following policies and procedures in connection with the Trust's
anti-money laundering program ("AML Program"): (i) know-your- customer
policies; (ii) due diligence policies for correspondent accounts for
foreign financial institutions and for private banking accounts for
non-U.S. persons; (iii) no cash policy; (iv) detecting and reporting
suspicious activity; (v) monitoring accounts and identifying high risk
accounts; and (vi) all related recordkeeping requirements, and USBFS
accepts such delegation. USBFS further agrees to cooperate with the
Trust's AML Compliance Officer in the performance of Transfer Agent's
responsibilities under the AML Program.
(b) The AML Program. USBFS hereby represents and warrants that USBFS has
received a copy of the Trust's AML Program and undertakes to perform all
responsibilities imposed on USBFS as a "Service Provider" thereunder. The
Trust hereby agrees to provide to USBFS any amendment(s) to the AML
Program promptly after adoption of any such amendment(s) by the Trust.
(c) Consent to Examination. USBFS hereby consents to: (a) provide to
federal examination authorities information and records relating to the
AML Program maintained by USBFS; and (b) the inspection of USBFS by
federal examination authorities for purposes of the AML Program.
(d) Anti-Money Laundering Program. USBFS hereby represents and warrants
that it has implemented and enforces an anti-money laundering program
("AMLP") that complies with laws, regulations and regulatory guidance
applicable to the Trust and USBFS, and includes, at a minimum:
(1) know-your-customer policies;
(2) due diligence policies for correspondent accounts for foreign
financial institutions and for private banking accounts fro
non-U.S. persons;
(3) reasonable internal procedures and controls to detect and report
suspicious activities;
(4) monitoring accounts and identifying high-risk accounts;
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(5) a compliance officer or committee with responsibility for the
anti-money laundering program;
(6) employee training, including that: (i) new employees receive AML
training upon the commencement of their employment; and (ii)
existing employees receive AML training at the time such
employees assume duties that bring them into contact with
possible money laundering activities;
(7) an independent audit function; and
(8) recordkeeping requirements.
(e) Delivery of Documents. USBFS agrees to furnish to the Trust the
following documents:
(1) a copy of USBFS' AMLP as in effect on the date hereof, and any
material amendment thereto promptly after the adoption of any
such amendment;
(2) a copy of any deficiency letter sent by federal examination
authorities concerning USBFS' AMLP; and
(3) no less frequently than annually, a report on USBFS' anti-money
laundering program that includes a certification to the Trust
concerning USBFS' implementation of, and ongoing compliance
with, its anti-money laundering program and a copy of any audit
report prepared with respect to USBFS' anti-money laundering
program.
(f) Reports. USBFS will provide periodic reports concerning USBFS'
compliance with it's AMLP and/or the Trust's AML Program at such
times as may be reasonably requested by to the Trust's Board of
Trustees or AML Compliance Officer.
18. NOTICES
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given on the date
delivered personally or by courier service, or three (3) days after sent
by registered or certified mail, postage prepaid, return receipt
requested, or on the date sent and confirmed received by facsimile
transmission to the other party's address set forth below: Notice to USBFS
shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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and notice to the Trust shall be sent to:
Brazos Mutual Funds
Xx. Xxx Xxxxxxxxxxxx
0000 Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
BRAZOS MUTUAL FUNDS U.S. BANCORP FUND SERVICES, LLC
By: /s/ Xxx Xxxxxxxxxxxx By: /s/ Xxx Xxxxxxx
----------------------------- ----------------------------
Title: President Title: President
-------------------------- -------------------------
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EXHIBIT A
TO THE
TRANSFER AGENT SERVICING AGREEMENT
FUND NAMES
SEPARATE SERIES OF BRAZOS MUTUAL FUNDS
Name of Series Date Added
-------------- ----------
Brazos Micro Cap Portfolio
Brazos Small Cap Portfolio
Brazos Mid Cap Portfolio
Brazos Real Estate Securities Portfolio
Brazos Multi Cap Portfolio
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EXHIBIT B
TO THE
TRANSFER AGENT SERVICING AGREEMENT
FEE SCHEDULE
-----------------------------------------------------------------------------------------------------
SERVICE CHARGES TO THE FUND SERVICE CHARGES TO INVESTORS
--------------------------- ----------------------------
Shareholder Account Fee (Subject to Minimum) Qualified Plan Fees (Billed to Investors)
No-Load - $15.00 /account $12.50/qualified plan acct (Cap at $25.00/SSN)
Load Fund - $16.00 /account $12.50/Xxxxxxxxx ESA acct (Cap at $25.00/SSN)
Daily Accrual Fund - $21.00 /account $25.00/transfer to successor trustee
Annual Minimum $25.00/participant distribution (Excluding SWPs)
$24,000 per no-load fund $25.00 /refund of excess contribution
$28,000 per load or daily accrual fund
$15,000 each additional class Additional Shareholder Fees (Billed to Investors)
Plus 1 basis point $15.00/outgoing wire transfer
$15.00/overnight delivery
Activity Charges $ 5.00/telephone exchange
Telephone Calls - $1.50 /call $25.00/return check or ACH
Draft Check Processing - $1.00 /draft $25.00/stop payment
Daily Valuation Trades - $6.75 /trade $ 5.00/research request (Cap at $25.00/request)
Lost Shareholder Search - $5.00 /search (For requested items of the second calendar
E-mail Services year [or previous] to the request)
$200/month administration ---------------------------------------------------
$3.00/e-mail received TECHNOLOGY CHARGES
ACH/EFT Shareholder Services: ------------------
$125.00/month/fund group 1. NSCC Service Interface - All NSCC Services
$ .50/ACH item, setup, change Setup - $1,500/fund group
$5.00/correction, reversal Annual - $1,400 /fund group/year
2. Voice Services
VRU Setup - $500/fund group
Plus out-of-pocket expenses, including VRU Maintenance - $100/mo/fund group
but not limited to: $.25/voice response call
Telephone - toll-free lines, call $.35/voice recognition call
transfers, etc. 3. Asset Allocation Services - $8.00/account
Mailing, sorting and postage group/year (4 reallocations)
Stationery, envelopes 4. 12b-1 Aging - $1.50/account/year
Programming, special reports 5. Fund Group Setup - $2,000/fund group
Insurance 6. Fund Setup - $1,500/fund
Record retention 7. Average Cost - $.35/account/year
Microfilm/fiche of records 8. Development/Programming - $150/hour
Proxies, proxy services 9. File Transmissions - subject to requirements
ACH fees 10. Selects - $300 per select, plus $50/Excel
NSCC charges 11. Extraordinary services - charged as
AML Service - $.25/open acct incurred
(non-network level 3); $.50/ Conversion of Records (if necessary) - $48,000
foreign acct TO BE BILLED AT $1,000/MONTH, 48 MOS.
All other out-of-pocket expenses Custom processing, re-processing
Fees are billed monthly. All other extraordinary services
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EXHIBIT C
TO THE
TRANSFER AGENT SERVICING AGREEMENT
AS OF PROCESSING POLICY
USBFS will reimburse each Fund for any net material loss that may exist on
the Fund's books and for which USBFS is responsible, at the end of each calendar
month. "Net Material Loss" shall be defined as any remaining loss, after netting
losses against any gains, which impacts a Fund's net asset value per share by
more than 1/2 cent. Gains and losses will be reflected on the Fund's daily share
sheet, and the Fund will be reimbursed for any net material loss on a monthly
basis. USBFS will reset the as of ledger each calendar month so that any losses
which do not exceed the materiality threshold of 1/2 cent will not be carried
forward to the next succeeding month. USBFS will notify the advisor to the Fund
on the daily share sheet of any losses for which the advisor may be held
accountable.
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