1
EXHIBIT (h)(1)(d)
TRANSFER AGENCY AND SERVICE
AGREEMENT
between
THE ECLIPSE FUNDS, INC.
and
NYLIM SHAREHOLDER SERVICES LLC
2
TABLE OF CONTENTS
Page
ARTICLE 1 Terms of Appointment; Duties of NSS................................................... 1
ARTICLE 2 Fees and Expenses...................................................................... 4
ARTICLE 3 Representations and Warranties of NSS.................................................. 5
ARTICLE 4 Representations and Warranties of the Fund............................................. 5
ARTICLE 5 Indemnification........................................................................ 6
ARTICLE 6 Covenants of the Fund and NSS.......................................................... 7
ARTICLE 7 Insurance.............................................................................. 8
ARTICLE 8 Termination of Agreement............................................................... 9
ARTICLE 9 Additional Funds....................................................................... 9
ARTICLE 10 Assignment............................................................................. 9
ARTICLE 11 Amendment.............................................................................. 9
ARTICLE 12 Maryland Law to Apply................................................................. 10
ARTICLE 13 Merger of Agreement.................................................................... 10
3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the ____ day of December, 2000, by and between
THE ECLIPSE FUNDS, INC., a Massachusetts business trust, having its principal
office and place of business at _______________ (the "Trust"), and NYLIM
SHAREHOLDER SERVICES LLC, a Delaware limited liability company, having its
principal office and place of business at 000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx
Xxxxxx ("NSS").
WHEREAS, the Trust desires to appoint NSS as its named transfer
agent, dividend disbursing agent and agent in connection with certain other
activities, and NSS desires to accept such appointment effective December ___,
2000;
WHEREAS, the Trust is authorized to issue shares in separate series
and classes, with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust currently offers shares in 4 series, (such series,
together with all other series subsequently established by the Trust and made
subject to this Agreement in accordance with Article 9, being herein referred to
as the "Fund(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agrees as follows:
Article 1 Terms of Appointment: Duties of NSS
1.01 Subject to the terms and conditions set forth in this Agreement,
effective December ___, 2000, the Trust hereby employs and appoints NSS to act
as, and NSS agrees to act as, transfer agent for the Trust's authorized and
issued shares of beneficial interest ("Shares"), dividend disbursing agent and
agent in connection with any accumulation, letter of intent or similar purchase
plans provided to the shareholders of record of the Fund ("Shareholders") and
set out in the Prospectus (which term when used in this Agreement includes the
Statement of Additional Information) of the Trust, as now in effect or as
hereafter amended or supplemented from time to time without written objection by
NSS or as mutually agreed upon from time to time.
1.02 NSS agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Trust and NSS, NSS shall:
(i) receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation therefor to the custodian of the
applicable Series duly appointed by the Trustees of
the Trust (the "Custodian"); pursuant to orders for
the purchase of Shares, record the purchase of the
appropriate number of Shares in the Shareholder's
account and, if requested by the Shareholder, and if
the Trustees of the Trust have authorized the
issuance of stock certificates, issue a certificate
for the appropriate number of Shares;
4
(ii) pursuant to instructions provided by Shareholders,
reinvest income dividends and capital gains
distributions in additional shares of the Trust;
(iii) receive for acceptance, redemption and repurchase
requests and directions, and deliver the appropriate
documentation therefor to the Custodian;
(iv) at the appropriate time as and when it receives
monies paid to it by the Custodian with respect to
any redemption and repurchase, pay over or cause to
be paid over in the appropriate manner such monies as
instructed by the redeeming Shareholders;
(v) determine, upon receipt of a request for the
redemption or repurchase of Shares, for each
Shareholder the amount, if any, of such redemption or
repurchase which is subject to a contingent deferred
sales charge as described in the Prospectus as from
time to time in effect, withhold the amount of such
sales charge from the redemption or repurchase
proceeds, and remit the amount of such sales charge
to the principal underwriter of the Shares of the
Trust or such other person as the Trust shall
designate in writing;
(vi) effect transfers of Shares by the registered owners
thereof upon receipt of appropriate documentation
meeting the requirements set forth in the Trust's
current prospectus;
(vii) prepare and transmit payments for dividends and
distributions declared by the Trust other than such
dividends and distributions reinvested under
1.02(a)(ii);
(viii) maintain records of account for and advise the Trust
and its Shareholders as to the foregoing; and
(ix) effect exchanges of Shares of one series for shares
of the same class of another series at net asset
value upon receipt of appropriate authorization
meeting the requirements set forth in the Trust's
current prospectus.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), NSS shall: (i) perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, agent in connection
with accumulation, letter of intent, or similar purchase plans. The detailed
definition, frequency, limitations and associated costs (if any) set out in the
attached fee schedule, may include but are not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing proxy
statements and proxies, receiving and tabulating proxies, mailing Shareholder
reports and Prospectuses to current Shareholders, withholding taxes on U.S.
residents and nonresident alien accounts where applicable, preparing and filing
U.S. Treasury Department Forms 1099 and other appropriate forms required with
respect to dividends and distributions by federal authorities for all registered
Shareholders, preparing and mailing confirmations and statements of account to
Shareholders for all purchases, redemptions and repurchases of Shares and other
confirmable transactions in Shareholder accounts, preparing and mailing activity
statements for Shareholders, and providing Shareholder
5
account information and (ii) provide to the Trust daily and monthly a written
report which will enable the Trust to monitor the total number of Shares sold
and the aggregate public offering price thereof in each state by the Trust or
each of the Funds, added by sales in each state of the registered Shareholder or
dealer branch office, as requested by the Trust. If directed by the Trust, each
confirmation of the purchase which establishes a new account will be accompanied
by a Prospectus and any amendment or supplement thereto. A Prospectus and any
amendment or supplement will be mailed to a Shareholder when such prospectus,
amendment or supplement shall be effective. The Trust shall (i) identify to NSS
in writing those transactions and assets to be treated as exempt from the blue
sky reporting to the Trust for each state and (ii) approve those transactions to
be included for each state on the system prior to activation and thereafter
monitor the daily activity for each state. The responsibility of NSS for the
Trust's blue sky state registration status is limited to the reporting of
transactions as described above.
(c) Additionally, NSS shall:
(i) Utilize a system to identify all share transactions
which involve purchase, redemption, and repurchase
orders that are processed at a time other than the
time of the computation of net asset value ("NAV")
per share next computed after receipt of such orders,
and shall compute the net effect upon the Trust of
such transactions so identified on a daily and
cumulative basis.
(ii) If upon any day the cumulative net effect of such
transactions upon the Trust is negative (the Trust
determines there is a Trust loss resulting from NSS'
error) and the per share NAV error is less than 1/2
of 1% of the originally computed NAV, but greater
than one cent, NSS shall promptly make a payment to
the Trust in cash or through the use of a credit, in
the manner described in paragraph (iv) below, in such
amount as may be necessary to reimburse the Trust for
the net loss; and if the per share NAV error equals
or exceeds 1/2 of 1% of the originally computed per
share NAV, and is greater than one cent, NSS shall
make account adjustments or take such other action as
is necessary to compensate shareholders for
shareholder losses and reimburse the Trust for the
amount of Trust losses.
(iii) If on the last business day of any month the
cumulative net effect upon the Trust (adjusted by the
amount of all prior payments and credits by NSS and
the Trust) is negative, the Trust shall be entitled
to a reduction in the fee next payable under the
Agreement by an equivalent amount, except as provided
in paragraph (iv) below. If on the last business day
in any month the cumulative net effect upon the Trust
(adjusted by the amount of all prior payments and
credits by NSS and the Trust) is positive, NSS shall
be entitled to recover certain past payments and
reductions in fees, and to credit against all future
payments and fee reductions that may be required
under the Agreement as herein described in paragraph
(iv) below.
(iv) At the end of each month, any positive cumulative net
effect upon the Trust shall be deemed to be a credit
to NSS which shall first be applied to
6
permit NSS to recover any prior cash payments and fee
reductions made by it to the Trust under paragraphs
(ii) and (iii) above during the calendar year, by
increasing the amount of the monthly fee under the
Agreement next payable in an amount equal to prior
payments and fee reductions made by NSS during such
calendar year, but not exceeding the sum of that
month's credit and credits arising in prior months
during such calendar year to the extent such prior
credits have not previously been utilized as
contemplated by this paragraph. Any portion of a
credit to NSS not so used by it shall remain as a
credit to be used as payment against the amount of
any future negative cumulative net effects that would
otherwise require a cash payment or fee reduction to
be made to the Trust pursuant to paragraphs (ii) or
(iii) above (regardless of whether or not the credit
or any portion thereof arose in the same calendar
year as that in which the negative cumulative net
effects or any portion thereof arose).
(v) NSS shall supply to the Trust from time to time, as
mutually agreed upon, reports summarizing the
transactions identified pursuant to paragraph (i)
above, and the daily and cumulative net effects of
such transactions, and shall advise the Trust at the
end of each month of the net cumulative effect at
such time. NSS shall promptly advise the Trust if at
any time the cumulative net effect exceeds a dollar
amount equivalent to one cent per share.
(vi) In the event that this Agreement is terminated for
whatever cause, or this provision 1.02 (c) is
terminated pursuant to paragraph (vii) below, the
Trust shall promptly pay to NSS an amount in cash
equal to the amount by which the cumulative net
effect upon the Trust is positive or, if the
cumulative net effect upon the Trust is negative, NSS
shall promptly pay to the Trust an amount in cash
equal to the amount of such cumulative net effect.
(vii) This provision 1.02 (c) of the Agreement maybe
terminated by NSS at any time without cause,
effective as of the close of business on the date
written notice (which may be by facsimile) is
received by the Trust.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Trust and NSS.
Article 2. Fees and Expenses
2.01 For performance by NSS pursuant to this Agreement, the Trust
agrees to pay NSS an annual maintenance fee for each Shareholder account as set
out in the fee schedule attached hereto. Such fees and out-of-pocket expenses
and advances identified under Section 2.02 below may be changed from time to
time by mutual written agreement between the Trust and NSS.
2.02 In addition to the fee paid under Section 2.01 above, the Trust
agrees to reimburse NSS for reasonable out-of-pocket expenses or advances
incurred by NSS for the items set out in
7
the fee schedule attached hereto. In addition, any other expenses incurred by
NSS at the request or with the consent of the Trust, will be reimbursed by the
Trust.
2.03 The Trust agrees to pay all fees and reimbursable expenses
promptly; the terms, method and procedures for which are detailed on the
attached fee schedule.
Article 3. Representations and Warranties of NSS
NSS represents and warrants to the Trust that:
3.01 It is a limited liability company duly organized and existing and
in good standing under the laws of the State of Delaware.
3.02 It has the legal power and authority to carry on its business in
the State of New Jersey.
3.03 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It is duly registered as transfer agent under Section 17A of the
Securities Exchange Act of 1934, as amended (the "Act").
3.06 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4. Representations and Warranties of the Trust
The Trust represents and warrants to NSS that:
4.01 It is a business trust duly organized and existing under the laws
of Massachusetts.
4.02 It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement.
4.03 All proceedings required by said Declaration of Trust and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
4.04 It is an investment company registered under the Investment
Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933 has been
filed, and appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of the Trust being offered for
sale. The Trust shall notify NSS when such registration statement shall have
been amended to include additional series of the Trust and shall notify NSS if
such registration statement or any state securities registration or
qualification has been terminated or a stop order has been entered with respect
to the Shares.
8
Article 5. Indemnification
5.01 NSS shall not be responsible for, and the Trust shall indemnify
and hold NSS harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions of NSS or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct.
(b) The Trust's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Trust's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Trust hereunder.
(c) The reliance on or use by NSS or its agents or subcontractors of
information, records and documents which (i) are received by NSS or its agents
or subcontractors and furnished to it by or on behalf of the Trust, and (ii)
have been prepared and/or maintained by the Trust or any other person or firm
(except NSS or its agents ) on behalf of the Trust.
(d) The reliance on or the carrying out by NSS or its agents or
subcontractors of any written instructions or requests reasonably believed by
NSS in good faith to be given by an authorized person of the Trust.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations, or the securities laws or
regulations of any state that such Shares be registered in such state, or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state, unless such violation is the result of NSS' negligent or willful failure
to comply with the provisions of Section 1.02(b) of this Agreement unless the
Trust shall have provided three days written notice to NSS not to accept
purchases in any state.
5.02 NSS shall indemnify and hold the Trust harmless from any losses,
damages, costs or expenses that arise out of NSS' refusal or failure to comply
with the terms of this Agreement, or which arise out of NSS' negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of NSS hereunder or which arise out of such refusal or failure,
negligence or willful misconduct or breach by NSS' agents or subcontractors.
5.03 At any time NSS may apply to any officer of the Trust for
instructions, and may consult with legal counsel of the Trust with respect to
any matter arising in connection with the services to be performed by NSS under
this Agreement, and NSS and its agents or subcontractors shall not be liable and
shall be indemnified by the Trust for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. NSS, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Trust, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided NSS or its agents
or subcontractors by telephone, in person, machine readable input, telex, CRT
data entry or other similar means authorized by the Trust, and shall not be held
to have notice of any change of authority of any person, until receipt of
written notice thereof from
9
the Trust. NSS, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officer or officers of the
Trust, and the proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes. Notwithstanding the above, NSS shall not be excused from liability
in the event any telecommunications, power or equipment (of NSS, its agents or
subcontractors) failures could have been avoided or minimized by such parties
having maintained adequate industry standard backup systems and/or plan and a
disaster recovery plan.
5.05 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 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. 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.
Article 6. Covenants of the Trust and NSS
6.01 The Trust shall promptly furnish to NSS the following:
(a) A certified copy of the resolution of the Trustees of the Trust
authorizing the appointment of NSS and the execution and delivery of this
Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto.
6.02 NSS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any,
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 NSS shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Act and the Rules thereunder, NSS agrees that all
such records, and those records that the Trust and NSS agree from time to time
to be the records of the Trust, will be preserved, maintained at the expense of
the Trust and made available in accordance with such Section and Rules and this
Agreement, and will be surrendered promptly to the Trust at its request. Records
surrendered
10
hereunder shall be in machine readable form, except to the extent that NSS has
maintained such a record only in paper form.
6.04 NSS and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, NSS will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
instruction. NSS resells the right, however, to exhibit the Shareholder records
to any person whenever it is advised by counsel to the Trust that it may be held
liable for the failure to exhibit the Shareholder records to such person.
6.06 NSS agrees to maintain redundant facilities or a compatible
configuration and to backup the Trust's master and input files and to store such
files in a secure off premises location so that in the event of a power failure
or other interruption of whatever cause at its principal place of business, the
Trust's records are maintained intact, and transactions can be processed at
another location.
6.07 NSS acknowledges that the Trust, as a registered investment
company under the Act, is subject to the provisions of the Act and the rules and
regulations thereunder, and that the offer and sale of the Trust's Shares are
subject to the provisions of federal and state laws and regulations applicable
to the offer and sale of securities. The Trust acknowledges that NSS is not
responsible for the Trust's compliance with such laws and regulations. If the
Trust advises NSS that a procedure of NSS related to the discharge of its
obligations hereunder has or may have the effect of causing the Trust to violate
any of such laws or regulations, NSS shall use its best efforts to develop an
alternative procedure which does not have such effect.
Article 7. Insurance
7.01 NSS shall maintain insurance of the types and in the amounts
required by the State of New Jersey. To the extent that policies of insurance
may provide for coverage of claims for liability or indemnity 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, NSS or other insured party which would
otherwise be a covered claim in the absence of any provision of this Agreement.
7.02 NSS shall notify the Trust should its insurance coverage with
respect to professional liability or errors and omissions coverage be canceled
or reduced. Such notification shall include the date of change and the reasons
therefor. NSS shall notify the Trust of any material claims against it with
respect to services performed under this Agreement, whether or not they may be
covered by insurance, and shall notify the Trust from time to time as may be
appropriate of the total outstanding claims made by NSS under its insurance
coverage.
Article 8. Termination of Agreement
11
8.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
8.02 Should the Trust exercise its right to terminate other than for
cause, all out-of-pocket expenses associated with the movement of records and
material will be borne by the Trust. Additionally, NSS reserves the right to
charge for any other reasonable expenses associated with such termination and/or
a charge equivalent to the average of the most recent three (3) months' fees.
Article 9. Additional Funds
9.01 In the event that the Trust establishes one or more series or
classes of Shares in addition to the existing series or classes with respect to
which it desires to have NSS render services as transfer agent under the terms
hereof, it shall so notify NSS in writing, and unless NSS objects in writing to
providing such services, the term "Trust" hereunder, unless the context
otherwise requires, shall be deemed to include such series of Shares.
Article 10. Assignment
10.01 Except as provided in Section 10.03 below, neither this Agreement
nor any rights or obligations hereunder maybe assigned by either party without
the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
10.03 NSS, may, at its own expense and without further consent on the
part of the Trust, subcontract for the performance hereof with (i) Boston
Financial Data Services, Inc., a Massachusetts corporation ("BFDS") which is
duly registered as a transfer agent or (ii) any affiliate of NSS or BFDS
provided, however, that NSS shall be as fully responsible to the Trust for the
acts and omissions of any subcontractor as it is for its own acts and omissions.
Article 11. Amendment
11.01 This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 12. Maryland Law to Apply
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Maryland.
Article 13. Merger of Agreement
13.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
12
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers as of the day and year first above written.
ECLIPSE FUNDS, INC.
BY:______________________________
President
ATTEST:
_________________________________
Secretary
NYLIM SHAREHOLDER SERVICES LLC
BY:____________________________
President
ATTEST:
_________________________________
Secretary
13
TRANSFER AGENCY AND SERVICE AGREEMENT
Between
ECLIPSE FUNDS, INC. And
NYLIM SHAREHOLDER SERVICES LLC
FEE SCHEDULE
1) MAINTENANCE AND TRANSACTION CHARGES - BILLABLE MONTHLY
A) Per Account Annual Fee:
The following funds will be billed at a rate of 1/12 of the
annual fee for each fund account serviced during the month.
Accounts serviced is defined as all open accounts at month end
and accounts which close during the month.
Funds Account Rates
----- -------------
Ultra Short Term Income Fund
Balanced Fund
Mid Cap Value Fund
Small Cap Value Fund
B) Fund Minimum (Cusip/Class/Fund)
$1,000 per month per cusip
The fees and charges set forth shall increase annually over
the fees and charges during the prior 12 months in an amount
equal to the annual percentage of change in the Northeastern
Consumer Price Index as last reported by the U.S. Bureau of
Labor Statistics.
2) Out-Of-Pocket
A) Out-of-Pocket
Out-of-pocket expenses include but are not limited to:
Confirmation production, postage, forms, telephone, microfilm,
microfiche and expenses incurred at the specific direction of
the fund. Postage for mass mailings is due seven days in
advance of the mailing date.
14
IN WITNESS WHEREOF, Eclipse Funds, Inc. and NYLIM Shareholder Services LLC have
agreed upon this fee schedule and have caused this fee schedule to be executed
in their names and on their behalf through duly authorized officers.
ECLIPSE FUNDS, INC. NYLIM SHAREHOLDER SERVICES LLC
NAME: NAME:
----------------------- ---------------------------------
TITLE: President TITLE: President & CEO
----------------------- ---------------------------------
DATE: ,2000 DATE: ,2000
--------------- --------------
