TRANSFER AGENCY SERVICES AGREEMENT
The following is transfer agency agreement between Atlantic Shareholder
Services, LLC and ▇'▇▇▇▇▇▇ EQUUS
TABLE OF CONTENTS
SECTION 1. APPOINTMENT ..................................................... 1
SECTION 2. DUTIES OF ATLANTIC .............................................. 1
SECTION 3. STANDARD OF CARE ................................................ 3
SECTION 4. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY ................. 5
SECTION 5. COMPENSATION AND EXPENSES ....................................... 5
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION ......................... 6
SECTION 7. ACTIVITIES OF ATLANTIC .......................................... 7
SECTION 8. PROPRIETARY AND CONFIDENTIAL INFORMATION ........................ 7
SECTION 9. RECORDS ......................................................... 8
SECTION 10. LOST SHAREHOLDER DUE DILIGENCE SEARCHES AND SERVICING .......... 8
SECTION 11. IDENTITY THEFT PREVENTION PROGRAM .............................. 8
SECTION 12. REPRESENTATIONS AND WARRANTIES ................................. 9
SECTION 13. MISCELLANEOUS .................................................. 11
APPENDIX A: SERVICES ....................................................... 15
SCHEDULE A: FEE SCHEDULE ................................................... 21
TRANSFER AGENCY SERVICES AGREEMENT
BETWEEN
ATLANTIC SHAREHOLDER SERVICES, LLC
AND
▇'▇▇▇▇▇▇ EQUUS
AGREEMENT (this "AGREEMENT") made as of this 21st__day of May, 2014
(the "EFFECTIVE DATE"), between Atlantic Shareholder Services, LLC (the
"ATLANTIC"), a limited liability company organized under the laws of the State
of Delaware with its principal place of business at Three ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and ▇'▇▇▇▇▇▇ EQUUS (the "FUND"), a statutory trust
organized under the laws of the State of Delaware with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 ACT"), as an closed-end, management investment
company and may issue its shares of beneficial interest, no par value (the
"SHARES"), in separate series and classes; and WHEREAS, the Fund desires that
Atlantic perform transfer agency services for the Fund and Atlantic is willing
to provide such services on the terms and conditions set forth in this
Agreement.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Fund and Atlantic agree as follows:
SECTION 1. APPOINTMENT
The Fund hereby appoints Atlantic, subject to the supervision of the
Board of Trustees of the Fund (the "BOARD"), to act as transfer agent to the
Fund and, in such capacity, to provide the services set forth in APPENDIX A
hereto (the "SERVICES"). Atlantic accepts this employment and agrees to render
the Services for the compensation set forth herein. In connection therewith,
the Fund has delivered to Atlantic copies of (i) the Fund's Certificate of
Trust, Agreement and Declaration of Trust and By-laws ("ORGANIC DOCUMENTS"),
(ii) the Fund's "Registration Statement" and all amendments thereto filed with
the US Securities and Exchange Commission ("SEC") pursuant to the Investment
Company Act of 1940, as amended (the "1940 ACT") or the Securities Act of 1933,
as amended ("SECURITIES ACT"), (iii) the current Prospectus and Statement of
Additional Information of the Fund (collectively, as currently in effect and as
amended or supplemented, the "PROSPECTUS"), (iv) all policies and procedures
adopted by the Fund, and (v) any other documents, materials or information that
Atlantic shall reasonably request to enable it to perform its duties pursuant
to this Agreement. The Fund will further, from time to time, furnish Atlantic
with all amendments of or supplements to the foregoing. The Fund shall cause
all service providers to the Fund to furnish information to Atlantic and to
assist Atlantic as may be required and shall ensure that Atlantic has
reasonable access to all records and documents maintained by or on behalf of
the Fund or any service provider to the Fund.
SECTION 2. DUTIES OF ATLANTIC
(a) Subject to the direction and control of the Board and as detailed
in this Agreement, Atlantic shall manage, coordinate and report to the Board
regarding the (i) Services and (ii) such other matters related to the services
provided to the Fund by Atlantic as may be specifically set forth in this
Agreement.
(b) Subject to the terms and conditions of this Agreement, Atlantic
shall provide the Services set forth in APPENDIX A.
(c) In addition to the limitation of liability set forth in SECTION 3
of this Agreement, Atlantic shall not be liable to the Fund or any other
individual or entity ("PERSON") for any failure to provide any Service in the
following circumstances, but only for so long as such circumstances continue
(and for a reasonable period thereafter taking into account the impact that
such an occurrence has on Atlantic's ability to comply with its obligations
under this Agreement) and provided that such failure is not the result of
Atlantic's bad faith, willful misfeasance or negligence in its performance of
such Service:
(i) if any relevant condition precedent upon which performance of
the relevant Service depends ("DEPENDENCIES") are not met and the
failure to meet any such Dependencies was not a result of delay,
or failure to provide information or take action, by Atlantic
required to be provided or taken under this Agreement;
(ii) if the failure to perform the Services is at the request or with
the consent of the Fund;
(iii) if the failure to perform the Services results from incorrect or
corrupted information provided by (A) any Person that is not an
affiliate of Atlantic, that provides services to the Fund
including, without limitation, any investment adviser (each a
"PORTFOLIO MANAGER") for the Fund, underwriter for the Fund,
independent accountants, brokers or other intermediaries through
which the Fund's securities may be sold or distributed and any
other current or predecessor service providers to the Fund or (B)
valuation or market information providers, pricing services,
couriers, software houses, custodians clearing systems or
depositories, PROVIDED, that (1) if any such Person described in
clause (B) above is chosen by Atlantic, then the selection of
such Person must have been reasonable under the circumstances
(and the selection of such a Person shall be deemed reasonable
if, after notice explicitly identifying such selection and
providing an opportunity to object to such selection the Board
does not object to such selection); and (2) in any event, Persons
shall be deemed reasonable if they are selected or retained at
the direction of the Fund or with the consent of the Fund; and/or
(iv) if any Law to which Atlantic or any third party is subject
prevents or limits the performance of the duties and obligations
of Atlantic.
Notwithstanding the foregoing, Atlantic shall nevertheless use reasonable
efforts to provide the Services while any of the circumstances specified in
this SECTION 2(C) above subsist, PROVIDED that Atlantic shall not be required
to incur any additional costs in doing so (other than costs that it would have
had to incur in the ordinary course of providing the Services, assuming such
circumstances had not so occurred). If, despite the foregoing, Atlantic incurs
any such additional costs in endeavoring to supply the Services, Atlantic shall
promptly notify the Fund and the Fund shall reimburse those costs to Atlantic
to the extent that they have been reasonably incurred (and Atlantic used
reasonable efforts to mitigate such costs) or they have been agreed in advance
between the parties. For purposes of this Agreement, (i) the capitalized term
"LAW" means any statutes, rules and regulations of any Governmental Authority
and applicable judicial or regulatory interpretations thereof and (ii)
"GOVERNMENTAL AUTHORITY" means any court, government department, central bank,
commission, board, bureau, agency, securities or futures
- 2 -
industry associations or other regulatory, self-regulatory, administrative,
judicial, executive, legislative or governmental entity in any country or
jurisdiction.
(d) Nothing contained herein shall be construed to require Atlantic
to perform any service that could cause Atlantic to be deemed an investment
adviser for purposes of the 1940 Act, or that could cause the Fund to act in
contravention of the Prospectus, its Organic Documents or any Law. The Fund
acknowledges and agrees that (i) the summaries of the Services set out in
APPENDIX A are intended to define the scope of the services to be provided; and
(ii) the procedures, features, functionalities, systems and/or facilities that
support the provision of the Services by Atlantic or any affiliated
subcontractor shall be a matter for the sole discretion of Atlantic. Except as
otherwise specifically provided in APPENDIX A with respect to the Services, the
Fund assumes all responsibility for ensuring that the Fund complies in all
material respects with all applicable requirements of Law.
(e) Atlantic shall maintain policies and procedures relating to the
Services it provides to the Fund that are reasonably designed to prevent
violations of the Federal Securities Laws (as defined in the ▇▇▇▇ ▇▇▇) and
shall employ personnel to administer the policies and procedures who have the
requisite level of skill and competence required to discharge its
responsibilities effectively.
(f) Atlantic shall promptly, after obtaining knowledge thereof, use
its commercially reasonable efforts to correct any errors that have been made
in connection with its Services rendered hereunder, including errors of
judgment or mistakes of Law, in accordance with the Fund's applicable policies
and procedures (g) Atlantic shall (i) promptly notify the Fund's chief
compliance officer ("CCO") of any material violation of Law known to Atlantic
by the Fund or Atlantic affecting the Fund and (ii) at each meeting of the
Board and at such other times as determined appropriate by Atlantic, notify the
Board of any other violation of Law by the Fund or Atlantic or a Third Party
Service Provider affecting the Fund of which Atlantic becomes aware in
providing the Services, including as a result of information generated by
Atlantic, detected through Atlantic's internal or external audit procedures or
provided to Atlantic by other service providers to the Fund or any Atlantic
subcontractor.
(h) If Atlantic is in doubt as to any action it should or should not
take, Atlantic may request directions, advice or instructions from the Fund or,
as applicable, and with the consent of the Fund, the Fund's investment adviser,
custodian or other service providers. If Atlantic is in doubt as to any
question of law pertaining to any action it should or should not take, Atlantic
may, with the consent of the Fund, request advice from counsel for the Fund,
the Portfolio Manager or Atlantic, at the option of Atlantic. In the event of
a conflict between directions, advice or instructions Atlantic receives from
the Fund or any service provider and the advice Atlantic receives from counsel,
the Fund and Atlantic shall mutually agree upon the directions, advice or
instructions to follow. Upon request, Atlantic will provide the Fund with a
copy of the advice of counsel received that is not the subject of attorney
client or work product privilege. Nothing in this SECTION 2(I) shall excuse
Atlantic when an action or omission on the part of Atlantic constitutes willful
misfeasance, bad faith, negligence or reckless disregard by Atlantic of any
duties, obligations or responsibilities set forth in this Agreement.
SECTION 3. STANDARD OF CARE
(a) Atlantic shall be obligated to act in good faith and to exercise
commercially reasonable care and diligence in the performance of its duties
under this Agreement (the "STANDARD OF CARE").
- 3 -
(b) Atlantic shall not be liable to the Fund, any investor of the
Fund, any Portfolio Manager or any other Person for any action or inaction of
Atlantic relating hereto whatsoever including, without limitation, any error of
judgment or mistake of Law or any loss incurred by the Fund, in the absence of
bad faith, willful misfeasance or negligence in the performance of Atlantic's
duties or obligations under this Agreement or Atlantic's reckless disregard of
its duties and obligations under this Agreement. Without limiting the
foregoing, Atlantic shall not be responsible or liable for any failure or delay
in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties (other than those related to Atlantic's
employees), fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
(c) The Fund agrees to indemnify and hold harmless Atlantic, its
employees, agents, subcontractors, directors, officers and managers and any
Person who controls Atlantic within the meaning of section 15 of the Securities
Act or section 20 of the Securities Exchange Act of 1934, as amended,
("ATLANTIC INDEMNITEES") against and from any and all claims, demands, actions,
suits, judgments, liabilities, losses, damages, costs, charges, reasonable
counsel fees and other expenses of every nature and character arising out of or
in any way related to a claim from a third party and arising directly out of
(A) Atlantic's actions taken or failures to act with respect to a Fund or (B)
incident to the delivery of the Services, except those actions or failures to
act for which Atlantic Indemnitee would otherwise be liable under SECTION
3(A).
(d) Atlantic agrees to indemnify and hold harmless the Fund and its
employees, agents, trustees and officers against and from any and all claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses of every nature and
character arising out of or in any way related to a claim from a third party
and arising directly out of (A)Atlantic's actions taken or failures to act with
respect to the Fund or (B) incident to the delivery of the Services, in either
clause (A) or clause (B), for which Atlantic would be liable under SECTION
3(A).
(e) An Atlantic Indemnitee shall not be liable for any action taken
or failure to act in good faith reliance upon:
(i) the advice of the Fund or of counsel, who may be counsel to
the Fund, counsel to the Portfolio Manager or counsel to
Atlantic, and upon statements of accountants, brokers and
other Persons reasonably believed in good faith by Atlantic
to be expert in the matters upon which they are consulted;
(ii) any oral instruction that it receives and that it
reasonably believes in good faith was transmitted by the
Person or Persons authorized by the Fund to give such oral
instruction. Atlantic shall have no duty or obligation to
make any inquiry or effort of certification of such oral
instruction;
(iii) any written instruction or certified copy of any resolution
of the Board, and Atlantic may rely upon the genuineness of
any such document or copy thereof reasonably believed in
good faith by Atlantic to have been validly executed;
(iv) any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument,
report, notice, consent, order, or other document reasonably
believed in good faith by Atlantic to be genuine and
- 4 -
to have been signed or presented by the Fund or other proper
party or parties; or
(v) any electronic instructions from the Fund in conformity
with security procedures established by Atlantic from time
to time in order to (X) effect the transfer or movement of
cash or shares or (Y) transmit investor information or other
information.
(f) In order that the indemnification provisions contained in this
Section shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim or to defend against
said claim in its own name or in the name of the other party. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
(g) Atlantic's liability to the Fund and any other Person for any
losses or damages in contract, tort or otherwise, arising out of the subject
matter of this Agreement shall be limited to those actual and direct damages
that are reasonably incurred by the Fund and the Funds and shall not exceed the
fees paid by the Fund in respect of the Services during the twenty-four (24)
months immediately preceding the date of the event giving rise to the claim.
Notwithstanding any other provision of this Agreement to the contrary, neither
party to this Agreement shall be liable to the other party or any indemnitee
for any indirect, special or consequential damages in relation to the subject
matter of this Agreement or under any provision of this Agreement, even if
advised of the possibility of the same.
SECTION 4. LIMITATION OF INVESTOR AND TRUSTEE LIABILITY
Atlantic acknowledges and agrees that the members of the Board and
the investors of the Fund shall not be liable under this Agreement for any
obligations of the Fund, or any other series of the Fund, Atlantic agrees that,
in asserting any rights or claims under this Agreement, it shall look only to
the assets and property of the Fund to which Atlantic's rights or claims relate
in settlement of such rights or claims.
SECTION 5. COMPENSATION AND EXPENSES
(a) For the services provided by Atlantic pursuant to this Agreement,
the Fund shall pay Atlantic a fee at the annual rate stated for the Fund in
SCHEDULE A hereto (the "FEE SCHEDULE"). Such fees shall be accrued by the Fund
daily and billed monthly in arrears. Atlantic also shall be reimbursed for such
out-of-pocket expenses (E.G., telecommunication charges, postage and delivery
charges, and reproduction charges) as are reasonably incurred by Atlantic in
performing its duties hereunder.
If fees begin to accrue in the middle of a month or if this Agreement
terminates before the end of any month, all fees for the period from that date
to the end of that month or from the beginning of that month to the date of
termination, as the case may be, shall be prorated according to the proportion
that the period bears to the full month in which the effectiveness or
termination occurs. Upon the termination of this Agreement with respect to the
Fund, the Fund shall pay to Atlantic such compensation as shall be payable
prior to the effective date of termination.
- 5 -
The Fund shall pay all such 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 Fund shall notify
Atlantic in writing within thirty (30) calendar days following receipt of each
invoice if the Fund is disputing any amounts in good faith. The Fund shall pay
such disputed amounts within the foregoing thirty (30) calendar day period or,
if later, ten (10) calendar days of the day on which the parties agree to the
amount to be paid. Notwithstanding anything to the contrary, amounts owed by
the Fund to Atlantic shall only be paid out of the assets and property of the
particular Fund involved.
(b) Notwithstanding anything in this Agreement to the contrary,
Atlantic and its affiliated Persons may receive other compensation or
reimbursement from the Fund, which compensation or reimbursement and related
services shall be memorialized in a separate agreement, including with respect
to (i) the provision of services not covered by this Agreement or (ii) the
provision of investor support or other services not covered by this Agreement.
(c) In connection with the services provided by Atlantic pursuant to
this Agreement, the Fund agrees to reimburse Atlantic for the expenses set
forth in the Fee Schedule. In addition, the Fund shall reimburse Atlantic for
all expenses and employee time (at 150% of salary) attributable to any review,
outside of routine and normal periodic reviews or other reviews provided for
under this Agreement, of the Fund's accounts and records by the Fund's
independent accountants or any regulatory body of which the Fund is first
notified and that are not attributable to any negligent action or inaction of
Atlantic.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the Effective Date. This
Agreement shall continue in effect (i) until terminated in its entirety or
(ii), or with respect to any one or more of the Services covered by APPENDIX A,
as applicable, provided to the Fund, until terminated as a Service provided to
the Fund.
(b) This Agreement may be terminated without the payment of any
penalty:
(i) with or without cause, at any time, by either party on the
date specified in a written notice to the other party
provided not less than 120 days prior to the termination
date specified in the notice; and
(ii) for cause at any time by the non-breaching party on at
least sixty (60) days' written notice thereof to the other
party, if the other party has materially breached any of its
obligations hereunder including, with respect to Atlantic,
the failure by Atlantic to act consistently with the
Standard of Care set forth in SECTION 3(A); PROVIDED,
HOWEVER, that (i) the termination notice shall describe the
breach, and (ii) no such termination shall be effective if,
with respect to any breach that is capable of being cured
prior to the date set forth in the termination notice, the
breaching party has cured such breach to the reasonable
satisfaction of the non- breaching party.
(c) Upon notice of termination by either party of this Agreement, in
its entirety or with respect to the Fund or any Service provided to the Fund,
Atlantic shall promptly transfer to any successor service providers the original
or copies of all books and records maintained by Atlantic under this Agreement
including, in the case of records maintained on computer systems, copies of such
records in commercially reasonable, machine-readable form, and shall cooperate
with, and provide reasonable assistance to, the successor service provider(s) in
the establishment of the books and records necessary to carry out the successor
service providers' responsibilities.
- 6 -
Should the Fund or Atlantic exercise its right to terminate this Agreement, the
Fund shall reimburse Atlantic for Atlantic's reasonable costs and employee time
(at 150% of salary) associated with the copying and movement of records and
material to any successor person and providing assistance to any successor
person in the establishment of the accounts and records necessary to carry out
the successor's responsibilities and for any out-of-pocket fees or expenses
incurred by Atlantic in respect of the cancellation or termination of third
party services provided in support of the services rendered by Atlantic
pursuant to this Agreement ("TERMINATION COSTS"); PROVIDED, HOWEVER, that,
notwithstanding anything herein to the contrary, the Fund shall have no
obligation to reimburse Atlantic for its costs if the Fund terminates this
Agreement pursuant to clause (ii) of subsection (b) above or if Atlantic
terminates this Agreement pursuant to clause (i) of subsection (b) above.
(d) The provisions of SECTIONS 3, 4, 5, 6, 7, 8, 9 and 13 shall
survive any termination of this Agreement.
SECTION 7. ACTIVITIES OF ATLANTIC
Except to the extent necessary to perform its obligations under this
Agreement, nothing herein shall be deemed to limit or restrict Atlantic's
right, or the right of any of its officers, directors or employees to engage in
any other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, trust, firm, individual
or association.
SECTION 8. PROPRIETARY AND CONFIDENTIAL INFORMATION
(a) Atlantic agrees on behalf of itself and its directors, officers,
and employees to treat confidentially and as proprietary information of the
Fund, all records and other information relative to the Fund and prior,
present, or potential investors in the Fund (and clients of said investors),
and not to use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, except (i) after
prior notification to and approval in writing by the Fund, which approval shall
not be unreasonably withheld, conditioned or delayed and may not be withheld,
conditioned or delayed where Atlantic may be exposed to civil or criminal
contempt proceedings for failure to comply, provided, further however, that
Atlantic shall advise the Fund of such required disclosure promptly upon
learning thereof in order to afford the Fund a reasonable opportunity to
contest, limit and/or assist Atlantic in crafting such disclosure), (ii) when
requested to divulge such information by duly constituted authorities approved
by the Fund, or (iii) when so requested by the Fund. Records and other
information which have become known to the public through no wrongful act of
Atlantic or any of its employees, agents or representatives, and information
that was already in the possession of Atlantic prior to receipt thereof from
the Fund or its agent free of any disclosing restriction to the disclosing
party at the time it is obtained, shall not be subject to this paragraph.
(b) Further, Atlantic will adhere to the privacy policies adopted by
the Fund pursuant to Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, as may be modified
from time to time. In addition, Atlantic will comply with any other limitations
or restrictions on disclosure of portfolio holdings or other information of the
Fund set forth in the Fund's prospectus and statement of additional
information. Nonpublic personal financial information relating to consumers or
customers of the Fund provided by, or at the direction of the Fund to Atlantic,
or collected or retained by Atlantic in the course of performing its duties
hereunder, shall be considered confidential information. Atlantic shall not
give, sell or in any way transfer such information to any person or entity,
other than affiliates of Atlantic except at the direction of the Fund or as
required or permitted by law. In this regard, Atlantic shall have in place and
maintain physical, electronic and procedural safeguards reasonably designed to
protect the security, confidentiality and integrity of, and to
- 7 -
prevent unauthorized access to or use of, records and information relating to
the Fund and its investors.
SECTION 9. RECORDS
Atlantic 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 Fund, but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, section 31 of
the 1940 Act and the rules thereunder. Atlantic agrees that all such records
prepared or maintained by Atlantic relating to the services to be performed by
Atlantic hereunder are the property of the Fund and will be preserved,
maintained, and made available in accordance with such laws applicable to the
Fund, including without limitation, section 31 of the 1940 Act and will be
promptly surrendered to the Fund or its designee on and in accordance with its
request.
If requested, Atlantic agrees to provide periodic reports and
reasonable documentation to the Fund's Chief Compliance Officer in connection
with Rule 38a-1 under the 1940 Act with respect to services provided by
Atlantic and Atlantic's compliance with its operating policies and procedures.
SECTION 10. LOST INVESTOR DUE DILIGENCE SEARCHES AND SERVICING
The Fund hereby acknowledges that Atlantic has an arrangement with an
outside vendor to conduct lost investor searches required by Rule 17Ad-17 under
the Securities Exchange Act of 1934, as amended. If an investor remains lost
and the investor's account unresolved after completion of the mandatory Rule
17Ad-17 search, the Fund hereby authorizes Atlantic to enter (itself or through
the vendor), at its discretion, into fee sharing arrangements with the lost
investor (or such lost investor's representative or executor) to conduct a more
in-depth search in order to locate the lost investor before the investor's
assets escheat. The Fund hereby acknowledges that Atlantic is not a party to
these arrangements and does not receive any revenue sharing or other fees
relating to these arrangements. Furthermore, the Fund hereby acknowledges that
vendor may receive compensation from the lost investor's assets for its efforts
in locating the lost investor.
SECTION 11. IDENTITY THEFT PREVENTION PROGRAM
(a) The Fund hereby delegates to Atlantic, and Atlantic hereby
accepts, responsibility to perform certain services (the "IDENTITY THEFT
PREVENTION SERVICES") in connection with the Fund's Identity Theft Prevention
Program, (the "FUND IDENTITY THEFT PREVENTION PROGRAM"), as further set out in
the Fund Identity Theft Prevention Program. Atlantic agrees to cooperate with
the CCO in the performance of the Identity Theft Prevention Services as set
forth in the Fund Identity Theft Prevention Program.
(b) Atlantic represents and warrants that:
(i) Atlantic undertakes to perform all delegated
responsibilities under the Fund Identity Theft Prevention
Program; and
(ii) Atlantic has adopted and will maintain a written identity
theft prevention program ("ATLANTIC IDENTITY THEFT
PREVENTION PROGRAM") that includes
- 8 -
policies and procedures that enable it to perform its
responsibilities under this Agreement.
(c) The Fund represents and warrants that the Fund will promptly
provide Atlantic any amendment(s) to the Fund Identity Theft Prevention
Program, which will be subject to the terms of this Agreement.
(d) Atlantic agrees to furnish the Fund with the following:
(i) prompt written notification of any transaction or
combination of transactions that Atlantic believes, based on
the Identity Theft Prevention Procedures, evidence money
laundering or identity theft activities in connection with
the Fund or any investor in the Fund;
(ii) prompt written notification of any customer(s) that
Atlantic reasonably believes, based upon the Identity Theft
Prevention Procedures, to be engaged in money laundering or
identity theft activities, provided that the Fund shall not
communicate this information to the customer;
(iii) Any reports received by Atlantic from any government agency
or applicable industry self-regulatory organization
pertaining to Atlantic Identity Theft Prevention Program, or
the Fund Identity Theft Prevention Program;
(iv) prompt written notification of any action taken in response
to anti-money laundering violations or identity theft
activity as described in (i), (ii) or (iii); and
(v) certified annual and quarterly reports of its monitoring
and customer identification activities on behalf of the
Fund.
(e) The Fund hereby directs Atlantic to, and Atlantic acknowledges,
that it shall (i) permit federal regulators access to such information and
records maintained by Atlantic and relating to Atlantic's implementation of the
Identity Theft Prevention Procedures, on behalf of the Fund, as they may
request, and (ii) permit such federal regulators to inspect Atlantic's
implementation of the Identity Theft Prevention Procedures on behalf of the
Fund; any such provision of access or inspection shall be deemed outside of
routine and normal periodic reviews as contemplated under Section 5(c).
SECTION 12. REPRESENTATIONS AND WARRANTIES
(a) REPRESENTATIONS AND WARRANTIES OF ATLANTIC. Atlantic represents
and warrants to the Fund that:
(i) It is duly organized and existing as a limited liability
company and in good standing under the laws of the State of
Delaware.
(ii) It is empowered under applicable laws and by its limited
liability company agreement to enter into and perform this
Agreement.
(iii) All requisite limited liability company proceedings have
been taken to authorize it to enter into and perform this
Agreement.
- 9 -
(iv) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties
and obligations under this Agreement in accordance with
industry standards.
(v) (i) The execution, delivery and performance of this
Agreement by Atlantic does not breach, violate or cause a
default under any agreement, contract or instrument to which
Atlantic is a party or any judgment, order or decree to
which Atlantic is subject; (ii) the execution, delivery and
performance of this Agreement by Atlantic has been duly
authorized and pproved by all necessary limited liability
company action; and (iii) upon the execution and delivery of
this Agreement by Atlantic and Fund, this Agreement will be
a valid and binding obligation of Atlantic.
(vi) Each of Atlantic, its parent and its parent's other
subsidiaries has adopted and implemented written policies
and procedures reasonably designed to prevent violations of
the Federal Securities Laws (as defined under the ▇▇▇▇ ▇▇▇)
related to the services provided by Atlantic to the Fund. It
will review, no less frequently than annually, the adequacy
of the policies and procedures and the effectiveness of
their implementation. At least quarterly, Atlantic will
report to the Fund any material changes made to the policies
and procedures and provide the Fund with a report of each
compliance matter identified during the quarter with respect
to the Funds that may reasonably be deemed material (as
defined in the 1940 Act).
(vii) It will maintain insurance that covers such risks and is in
such amounts, with such deductibles and exclusions,
sufficient for compliance by Atlantic with all requirements
of Law and sufficient for Atlantic to perform its
obligations under this Agreement; and all such policies are
in full force and effect and are with financially sound and
reputable insurance companies, underwriters or other
insuring entities.
(viii) It is a registered transfer agent under Section 17A(c) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and will remain so for the term of this
Agreement.
(ix) It shall comply in all material respects with all laws,
rules and regulations, including all provisions of the
Exchange Act and the rules thereunder, an all state laws,
rules and regulations applicable to its transfer agency
business.
(x) It is duly qualified to carry on its business in each
jurisdiction in which it does business where its activities
would require such qualification.
(b) REPRESENTATIONS AND WARRANTIES OF THE FUND. The Fund represents
and warrants to Atlantic that:
- 10 -
(i) It is a statutory trust duly organized, validly existing
and in good standing under the laws of the State of Delaware
and is registered with the SEC as an closed-end investment
company under the 1940 Act.
(ii) It is empowered under applicable laws and by its Organic
Documents to enter into and perform this Agreement.
(iii) All requisite trust proceedings, including Board
authorization, have been taken to authorize it to enter into
and perform this Agreement.
(iv) The execution, delivery and performance of this Agreement
by the Fund does not breach, violate or cause a default
under any agreement, contract or instrument to which the
Fund is a party or any judgment, order or decree to which
the Fund is subject; (ii) the execution, delivery and
performance of this Agreement by the Fund has been duly
authorized and approved by all necessary action; and (iii)
upon the execution and delivery of this Agreement by
Atlantic and the Fund, this Agreement will be a valid and
binding obligation of the Fund.
(v) The Fund has undertaken all filings and other actions
necessary to permit the Fund to lawfully offer and sell
Shares in the Fund under the Securities Act and the
applicable securities laws of each state and territory in
which the Fund has or intends to offer and sell Shares.
SECTION 13. MISCELLANEOUS
(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto. Atlantic agrees to give notice to the Board of any amendments,
effective at any time subsequent to the Effective Date and prior to the
termination of this Agreement, to that certain Transfer Agency Services
Agreement, dated mm,dd,yy, between Atlantic and The Advisors' Inner Circle III
Fund, a business trust organized under the laws of the Commonwealth of
Massachusetts that are relevant to the services offered to a closed-end,
management investment company and further agrees, in good faith, to consider a
similar amendment to this Agreement if so requested by the Board.
(b) No amendment to this Agreement or the termination of this
Agreement with respect to a Fund shall affect this Agreement as it pertains to
any other Fund.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware without regard to its principles of conflicts of
law.
(d) This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement between those parties with
respect to the subject matter hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any
number of counterparts, and all of the counterparts taken together shall be
deemed to constitute one and the same instrument. If this Agreement or any Law
requires a record or signature (as such terms are defined in [section] 12A-102
of the Uniform Electronic Transactions Act of the State of Delaware) to be
- 11 -
written or in writing, an electronic record or electronic signature, as the
case may be, satisfies such requirement. Electronic delivery of this Agreement
shall be deemed to have been properly delivered.
(f) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion
or portions shall be considered severable and not be affected, and the rights
and obligations of the parties shall be construed and enforced as if this
Agreement did not contain the particular part, term or provision held to be
illegal or invalid.
(g) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(h) Notices, requests, instructions and communications received by
the parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(i) No affiliated Person, employee, agent, director, officer or
manager of Atlantic shall be liable at law or in equity for Atlantic's
obligations under this Agreement.
(j) Each of the undersigned warrants and represents that they have
full power and authority to sign this Agreement on behalf of the party
indicated and that their signature will bind the party indicated to the terms
hereof and each party hereto warrants and represents that this Agreement, when
executed and delivered, will constitute a legal, valid and binding obligation
of the party, enforceable against the party in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and secured
parties.
(k) Each Appendix to this Agreement is part of the Agreement. In the
event of any conflict between the Agreement and any Appendices, the Agreement
shall control.
(m) Except as otherwise provided in this Agreement, neither this
Agreement nor any rights or obligations under this Agreement may be assigned by
any party without the written consent of the other party. This Agreement shall
inure to the benefit of and be binding upon the parties and their respective
permitted successors and assigns. Subject to prior written notice to the Fund,
Atlantic may subcontract for the performance hereof with any affiliate of
Atlantic; PROVIDED HOWEVER, that Atlantic shall be as fully responsible to the
Fund for the acts and omissions of any assignee or subcontractor as Atlantic is
for its own acts and omissions under this Agreement and that no such assignment
or subcontract will increase the compensation payable by the Fund to Atlantic
under this Agreement for the Services. Notwithstanding the foregoing, Atlantic
shall not be liable for the acts or omissions of any Person to which any
performance hereunder is subcontracted at the direction of the Fund.
(n) This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party or parties
that drafted this Agreement or caused it to be drafted.
(o) Words denoting the singular number shall also include the plural
and VICE VERSA as the context demands. Words denoting any gender include all
genders and words denoting persons shall include companies, partnerships, firms
and corporations and VICE VERSA as the context demands. Unless otherwise
indicated herein, any reference in this Agreement to an article, section,
appendix, exhibit or schedule shall mean the applicable article, section,
appendix, exhibit or schedule of or to this Agreement. As used in this
Agreement, the terms (i) "include," "includes" or "including" means "including,
without limitation"; "herein," "hereof" and other
- 12 -
similar terms refer to this Agreement taken as a whole and not to a particular
Section; and (iii) "party" or "parties" means the applicable party or parties
to this Agreement (unless otherwise provided). The titles, captions and
headings of the articles and sections herein, are for convenience of reference
only and are not intended to be a part of or to affect or restrict the meaning
or interpretation of this Agreement. The appendices, exhibits and schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
- 13 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Fee Schedule to be duly executed all as of the day and year first above
written.
▇'▇▇▇▇▇▇ EQUUS
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President and Secretary
ATLANTIC SHAREHOLDER SERVICES, LLC
By:/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Senior Vice President
- 14 -
APPENDIX A: SERVICES
Atlantic shall:
1. GENERAL
(a) Set up and maintain investor account information, including, as applicable,
name, address, taxpayer identification number(s) and intermediary instructions.
(b) Track and report pending subscriptions and repurchases to all applicable
parties.
(c) Maintain all investor account information changes.
(d) Prepare investor mailing lists.
(e) Withhold taxes on U.S. resident and non-resident alien accounts, when
applicable.
(f) Prepare and file U.S. Treasury Department Forms 945, 1042, 1099 and 5498
with respect to distributions for investors.
(g) Prepare and mail confirmation statements as required by Rule 10b-10 of the
Securities Exchange Act of 1934, as amended, and statements of account to
investors for all purchases and repurchases of Shares and other confirmable
transactions in investor accounts.
(h) Provide investor account information.
(i) Provide data regarding broker commissions and providing related reports to
all applicable parties.
(j) Calculate any applicable fees under 12b-1 plans, if any, and providing
related reports to the Fund's distributor; and
(k) Transmitting to the Fund's fund accounting service provider appropriate
data to allow the service provider's reconciliations of cash, shares
outstanding and other data.
(l) Prepare and mail activity statements and other routine communications to
investors, when applicable.
2. PURCHASES, REPURCHASES AND TRANSFERS
(a) Receive for acceptance, orders for the purchase of Shares, and confirm
subscription activity with the investor.
(b) Maintain an escrow or other bank account to facilitate receipt of monies
prior to movement to custody account.
(c) Deliver accepted subscription payment and appropriate documentation to the
custodian and report the activity to Investment Manager as specified.
(d) Pursuant to purchase orders, issue the appropriate number of Shares and
hold such Shares in the appropriate investor account.
- 15 -
(e) Receive for acceptance, repurchase requests and deliver the appropriate
documentation to the custodian.
(f) Calculate and pro-rate request to repurchase Shares, as instructed from
Trust.
(g) Calculate and track any fees or holdbacks associated with repurchases.
(h) As and when it receives monies paid to it by the Custodian with respect to
any repurchase, pay the repurchase proceeds as required by the Fund's prospectus
pursuant to which the repurchased Shares were offered and as instructed by the
repurchasing investors.
(i) Process investor transfer requests, subject to obtaining appropriate
documentation and consents as required of the purchaser.
(j) Receive for acceptance letters of transmittal for the repurchase of Shares
pursuant to Fund repurchase offers and communicate with Administrator and
Investment Manager.
(k) Process investor pledge request subject to obtaining appropriate
documentation and consent as TA and Fund may require
3. NOTES AND CONDITIONS TO PURCHASE, REPURCHASES AND TRANSFER OF SHARES:
(a) Atlantic may require any or all of the following in connection with the
original issue of Shares: (i) instructions requesting the issuance, (ii)
evidence that the Board has authorized the issuance, (iii) any required funds
for the payment of any original issue tax applicable to such Shares, and (iv) an
opinion of the counsel to the Fund regarding the legality and validity of the
issuance.
(b) Shares shall be issued in accordance with the terms of the Fund's then
current prospectus after Atlantic receives either of the following, in each
case in good order and with such additional items or materials as may be
required by the Fund's policies and procedures, Atlantic's operational
procedures:
(i) (a) an instruction directing investment in the Fund, (b) a check
(other than a third party check) or a wire or other electronic payment
in the amount designated in the instruction, and (c) in the case of an
initial purchase, a completed subscription and other appropriate
documentation; or
(ii) the information required for purchases pursuant to a selected dealer
agreement, processing organization agreement, or a similar contract
with a financial intermediary.
(c) Investor payments shall be considered Federal Funds no later than on the
day indicated below unless other times are noted in the Fund's Prospectus:
(i) for a wire received, at the time of the receipt of the wire;
(ii) for a check drawn on a member bank of the Federal Reserve System, on
the next Fund business day following receipt of the check; and
- 16 -
(iii) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as Atlantic is credited with
Federal Funds with respect to that check.
(d) In registering transfers of Shares, Atlantic may rely upon the Uniform
Commercial Code as in effect in the State of Delaware or any other statutes
that, in the opinion of Atlantic's counsel, protect Atlantic and the Fund from
liability arising from (i) not requiring complete documentation, (ii)
registering a transfer without an adverse claim inquiry, (iii) delaying
registration for purposes of such inquiry or (iv) refusing registration
whenever an adverse claim requires such refusal. As Transfer Agent, Atlantic
will be responsible for delivery to the transferor and transferee of such
documentation as is required by the Uniform Commercial Code.
4. AML SERVICES
For investors purchasing shares of the fund outside of the UBS Wealth Management
sub-distribution channel, the Trust delegates to Atlantic the performance of the
anti-money laundering services set forth below (the "AML Services") with respect
to shareholder accounts maintained by Atlantic pursuant to this Agreement; and
subject to the terms and conditions of this Agreement, Atlantic accepts this
delegation and agrees to perform the AML Services in accordance with the Trust's
and Atlantic's AML program and reasonably to cooperate with the Trust's AML
compliance officer (the "AML Compliance Officer") in the performance of that
person's responsibilities. Notwithstanding this delegation, the Trust shall
maintain full responsibility for ensuring that its AML program is and continues
to be reasonably designed to ensure compliance with the applicable AML laws.
(e) Verify shareholder identity upon opening new customer accounts in
accordance with Section 326 of the USA PATRIOT Act (the "Patriot Act") and any
regulations thereunder, as required under Applicable Law;
(f) Monitor shareholder transactions and identify and report suspicious
activities that are required to be so identified and reported, in each case
consistent with the AML programs of the Trust and Atlantic;
(g) Review all new accounts and registration maintenance transactions against
the Office of Foreign Asset Control ("OFAC") database and other such lists or
databases of trade restricted individuals or entities as may be required from
time to time by applicable regulatory authorities, including review of such
shareholder information upon changes to such databases;
(h) Follow the Trust's policies with respect to the acceptance of cash
equivalents and third party checks; provided, however, that unless the parties
agree otherwise under no circumstance will Atlantic accept a corporate third
party check;
(i) Place holds on transactions in shareholder accounts or freeze shareholder
accounts, as provided in the AML programs of the Trust and Atlantic and in
accordance with the Patriot Act and OFAC;
(j) (i) Atlantic will reasonably cooperate with the Trust to accommodate
non-material changes and adjustments to agreed upon services, maintaining
reasonably adequate policies, procedures and internal controls that are
consistent with the Trust's AML
- 17 -
program as in effect from time-to-time, (ii) conduct (or have a third party
conduct) an independent review of its AML Program at least annually and provide
the report of such independent review to the Trust and the Trust's AML
Compliance Officer; and (iii) maintain a reasonable, ongoing training program
with respect to its own personnel relating to AML matters.
5. NOTES AND CONDITIONS TO AML SERVICES
(a) The Trust authorizes Atlantic to take such actions in the performance of
the AML Services as Atlantic deems appropriate and consistent with the Trust's
AML program and applicable AML Laws;
(b) Atlantic agrees to furnish the Trust its written program concerning
anti-money laundering services rendered by Atlantic to its various clients.
Atlantic agrees to notify the Trust of any changes to its anti-money laundering
program that individually or in the aggregate would materially impact the
Trust's AML program;
(c) Atlantic shall make its relevant personnel available to meet or speak with
the Board concerning the AML Services at such intervals as may be reasonably
necessary or appropriate.
(d) Atlantic represents and warrants to the Trust that (i) Atlantic has adopted
and will maintain a written program concerning the anti-money laundering
services it provides to its various clients, and (ii) Atlantic's policies and
procedures are reasonably adequate for it to provide the AML Services and
comply with its obligations under this Agreement.
6. PROCESSING DISTRIBUTIONS
Prepare and, subject to receipt of good funds therefore from the custodian,
transmit to investors (or credit the appropriate investor accounts) payments
for all distributions declared by the Fund.
7. IDENTITY THEFT SERVICES
(a) Provide the Fund with prompt written notification of (i) any transaction or
combination of transactions that Atlantic believes, based on the Fund Identity
Theft Prevention Program, evidence money laundering or identity theft activities
in connection with the Fund or any investor of the Fund and (ii) any customer(s)
that Atlantic reasonably believes, based upon the Fund Identity Theft Prevention
Program, to be engaged in money laundering or identity theft activities,
provided that the Fund agrees not to communicate this information to the
customer;
(b) Provide the Fund with any reports received by Atlantic from any government
agency or applicable industry self-regulatory organization pertaining to the
Atlantic Identity Theft Prevention Program or the Fund Identity Theft
Prevention Program.
(c) Provide the Fund with prompt written notification of any action taken in
response to identity theft activity as described in (a), (b) or (c).
- 18 -
(d) Permit United States federal regulators access to such information and
records maintained by Atlantic and relating to Atlantic's implementation of the
Fund Identity Theft Prevention Program, on behalf of the Fund, as they may
request, and permit such regulators to inspect Atlantic's implementation of the
Fund Identity Theft Prevention Program on behalf of the Fund.
8. PAYMENTS TO FINANCIAL INTERMEDIARIES, REPURCHASE FEES
(a) Track investor accounts by financial intermediary source and otherwise as
reasonably requested by the Fund.
(b) Calculate, report to the Fund and receive from investors or debit investor
accounts for sales commissions and service fees.
(c) Calculate, report to the Fund, subject to receipt of good funds, transmit
payments to underwriters for commissions, service fees and other payments due
from the Fund or any distributor.
(d) Calculate, report to the Fund and withhold repurchase fees and pay the
amount of any repurchase fees to the Fund.
9. ESCHEATMENT
(a) Calculate the total number of Shares of the Fund and, if applicable, class
thereof sold in each reporting jurisdiction authorized by the Fund.
(b) Monitor and prepare and make appropriate filings with respect to the
escheatment laws of the various states and territories of the United States.
Atlantic may, in its sole discretion, use the services of a third party to
perform some or all such services.
(c) Perform the services as are required to comply with Rule 17Ad-17 of the
Securities Exchange Act of 1934, as amended, including:
(i) documentation of search policies and procedures;
(ii) execution of required searches;
(iii) tracking of results and maintaining applicable data; and
(iv) preparing and submitting applicable data.
Atlantic may use the services of a third party to perform some or all such
services.
10. RECORDKEEPING AND REPORTING; FACILITIES
(a) Record the issuance of Shares of the Fund and maintain pursuant to Rule
17Ad-10(e) under the 1934 Act a record of the total number of Shares of the Fund
and, if applicable each Class thereof, that are authorized, based upon data
provided to it by the Fund, and are issued and
- 19 -
outstanding and provide the Fund on a monthly basis a report of the total
number of Shares that are registered with the SEC, authorized, issued and
outstanding.
(b) Maintain records of accounts and provide reports and statements to the Fund
and Investors.
(c) In addition to other references herein regarding records to be maintained,
maintain such records as (i) may be required by Laws applicable to Atlantic and
(ii) are prudently and customarily maintained by third-party transfer agents
for registered management investment companies.
- 20 -
SCHEDULE A: FEE SCHEDULE
NOTE: The following Fee Schedule relates to the Services Agreement by and
between Atlantic Shareholder Services, LLC and ▇'▇▇▇▇▇▇ EQUUS (the
"AGREEMENT"). Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Agreement.
Defined terms in this Fee Schedule have the meanings set forth in the
Agreement, as amended from time to time.
ANNUAL NET ASSET-BASED FEE
* 1/2 1.0 basis point (0.005%) on the total assets
ANNUAL ACCOUNT FEES
* $24 per open account
* Open account fees subject to an $24,000 minimum per fund (as defined on
the transfer agency system)
* $2.04 per closed account
OPTIONAL SERVICES
* Client/intermediary internet access: $1,200 annually
* Blue Sky administration: $65 annually for each permit or similar state
registration
* Customized development post implementation: $200 per hour
* Customized development pre implementation: $100 per hour
* Pledged account fee: TBD per account
OUT-OF-POCKET EXPENSES
Out of pocket expenses include, but are not limited to, banking fees; Blue
Sky state sales charges; CIP scanning; data storage; escheatment vendor;
FinCEN; imaging; literature fulfillment; mailing, postage and printing;
NSCC fees; OFAC; paper stock; proxy services; record retention; regulatory
enhancements; telecommunications; and SSAE 16 allocation.
- 21 -