1
Exhibit 99.b.9.a
TRANSFER AGENCY AND SERVICE AGREEMENT
between
AMERICAN AADVANTAGE MILEAGE FUNDS
and
STATE STREET BANK AND TRUST COMPANY
1C-Domestic Trust/Series
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TABLE OF CONTENTS
Page
----
1. Terms of Appointment; Duties of the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Representations and Warranties of the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Representations and Warranties of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. Wire Transfer Operating Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Data Access and Proprietary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8. Registration as a Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9. Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
11. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12. Standard of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13. Covenants of the Fund and the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15. Additional Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
16. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
17. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
18. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
19. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
20. Consequential Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
21. Merger of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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TABLE OF CONTENTS
(CONTINUED)
Page
----
22. Limitations of Liability of the Trustees
or Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
23. Separate Liability of Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
24. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
25. Reproduction of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of January, 1998, by and between AMERICAN
AADVANTAGE MILEAGE FUNDS, a Massachusetts business trust, having its principal
office and place of business at 0000 Xxxx Xxxxxx Xxxxxxxxx, XX0000, Xxxx Xxxxx,
Xxxxx 00000 (the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company having its principal office and place of business
at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Bank").
WHEREAS, the Fund is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund currently offers shares in nine (9) series, such series shall
be named in the attached Schedule A which may be amended by the parties from
time to time (each such series, together with all other series subsequently
established by the Fund and made subject to this Agreement in accordance with
Article 11, being herein referred to as a "Portfolio", and collectively as the
"Portfolios");
WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Bank as
its transfer agent, dividend disbursing agent, custodian of certain retirement
plans (as may be applicable) and agent in connection with certain other
activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
l. Terms of Appointment; Duties of the Bank
1.1 APPOINTMENT. Subject to the terms and conditions set forth in this
Agreement, the Fund, on behalf of the Portfolios, hereby employs and
appoints the Bank to act as, and the Bank agrees to act as its
transfer agent for the Fund's authorized and issued shares of its
beneficial interest, ("Shares"), dividend disbursing agent, custodian
of certain retirement plans and agent in connection with any
accumulation, open-account or similar plans provided to the
shareholders of each of the respective Portfolios of the Fund
("Shareholders") and set out in the currently effective prospectus and
statement of additional information ("prospectus") of the Fund on
behalf of the applicable Portfolio, including without limitation any
periodic investment plan or periodic withdrawal program.
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1.2 TRANSFER AGENT SERVICES. The Bank agrees that it will perform the
following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund on behalf of each of the
Portfolios, as applicable and the Bank, the Bank shall:
(i) receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of the Fund
authorized pursuant to the Declaration of Trust of
the Fund (the "Custodian");
(ii) pursuant to purchase orders, record the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
(iii) receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) in respect to the transactions in items (i), (ii) and
(iii) above, the Bank shall execute transactions
directly with broker-dealers authorized by the Fund;
(v) at the appropriate time as and when it receives
monies paid to it by the Custodian with respect to
any redemption, pay over or cause to be paid over in
the appropriate manner such monies as instructed by
the redeeming Shareholders;
(vi) effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vii) prepare and transmit payments for dividends and
distributions declared by the Fund on behalf of the
applicable Portfolio;
(viii) maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(ix) record the issuance of shares of the Fund and
maintain pursuant to SEC Rule 17Ad-10(e) a record of
the total number of shares of the Fund and each
Portfolio which are authorized, based
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upon data provided to it by the Fund on behalf of
each Portfolio, and issued and outstanding. The Bank
shall also provide the Fund and each Portfolio on a
regular basis with the total number of shares which
are authorized and issued and outstanding and shall
have no obligation, when recording the issuance of
shares, to monitor the issuance of such shares or to
take cognizance of any laws relating to the issue or
sale of such Shares, which functions shall be the
sole responsibility of the Fund.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall:
(i) perform the customary services of a transfer agent,
dividend disbursing agent, custodian of certain retirement
plans (as may be applicable) 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:
maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing Shareholder proxies, Shareholder
reports and prospectuses to current Shareholders, withholding
taxes on U.S. resident and non-resident alien accounts,
preparing and filing U.S. Treasury Department Forms 1099 and
other appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders,
preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of
Shares and other confirmable transactions in Shareholder
accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information
and (ii) provide a system which will enable the Fund to
monitor the total number of Shares sold in each State and
report such data to the Fund or its designee.
(c) In addition, the Fund shall (i) identify to the Bank in
writing those Shareholder transactions and assets to be
treated as exempt from blue sky reporting for each State and
(ii) verify the establishment of transactions for each State
on the system prior to activation and thereafter monitor the
daily activity for each State. The responsibility of the Bank
for the Fund's blue sky State registration status is solely
limited to the initial establishment of transactions subject
to blue sky compliance by the
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Fund and the reporting of such transactions to the Fund as
provided in Section 1.2 (b) above.
(d) Procedures as to who shall provide certain of these services
in Section 1 may be established from time to time by agreement
between the Fund on behalf of each Portfolio and the Bank per
the attached service responsibility schedule. The Bank may at
times perform only a portion of these services and the Fund or
its agent may perform these services on the Fund's behalf.
(e) The Bank shall provide additional services on behalf of the
Fund (e.g., escheatment services) which may be agreed upon in
writing between the Fund and the Bank.
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1.3 MILEAGE REPORTING. American Airlines, Inc. ("AA") has authorized the
Fund to allow Shareholders who participate in the AAdvantage Program
as defined below to accumulate points or miles. For purposes of this
Agreement, the following terms shall have the following meanings:
(a) Definitions
o "AAdvantage Account" means the record, maintained by
AA, of a Member's AAdvantage Program activity,
including, without limitation, the accrual and
redemption of AAdvantage Miles by such Member.
o "AAdvantage Miles" means the points or "Miles"
(including bonus points or "Miles") accrued under the
AAdvantage Program Rules by Members for (i) travel on
AA or American Eagle, (ii) travel on, and/or the
purchase of goods or services from, AAdvantage
Participants, or (iii) any other reason permitted by
AA.
o "AAdvantage Participant" means any Person that,
pursuant to an agreement between AA and such Person
regarding such Person's participation in the
AAdvantage Program: (i) provides goods or services to
Members in exchange for the redemption of AAdvantage
Miles, or (ii) in connection with the sale of goods
or services by such Person to Member offers
AAdvantage Miles to such Member.
o "AAdvantage Program" means the travel awards program
or any surviving program under a different name
established and governed by AA, as such program may
be in effect from time to time, pursuant to which,
among other things, Members receive Aadvantage Miles
for travel on AA or for travel on, or for the use or
purchase of goods or services offered by, an
Aadvantage Participant, or for any reason permitted
by AA.
o "Person" shall mean any firm, corporation, group,
organization, affiliate, agent, consultant,
independent contractor or subcontractor, subsidiary,
joint venture, partnership, trust, association,
governmental authority, regulatory agency, natural
person or legal entity.
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o "Member" means, as of any date, any individual who is
a member in good standing of the AAdvantage Program.
(b) Mileage Accrual
In accordance with the formula set forth in the Fund's
prospectus, the Bank agrees to calculate the number of
AAdvantage Miles to be posted to a Shareholder's AAdvantage
Account on a monthly basis.
(c) Reports
(i) Bank will provide AA with cartridges or transmissions
listing AAdvantage Miles to be posted by Member name,
AAdvantage Account number, transaction code and other
items as specified in the Report. Bank will submit
these cartridges or transmissions, which will be
merged with the AAdvantage data base maintained by
AA, to AA once each month on the day of the month
specified in writing from the Funds to the Bank. The
cartridges or transmissions will include all
AAdvantage Miles posted through the reporting period.
(ii) To minimize posting errors, Bank will verify that the
Member's AAdvantage Account number is valid prior to
transmission to AA as per the Algorithm outlined in
the Report.
(iii) AA will provide Bank with the following reports:
A. Cartridge or transmission listing of all
AAdvantage Miles posted for Bank by Member
name, AAdvantage Account number, transaction
date, and AAdvantage Miles, issued monthly.
B. Hard copy summary of all AAdvantage Miles
earned through the Funds, issued monthly.
(iv) All data exchanged by the parties will be subject to
the procedures outlined in the Report and any
subsequent amendments of that document agreed upon by
the parties.
(v) AA will be under no obligation to provide additional
reports, but will consider any request by Bank for
such reports, and will
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determine, in its reasonable discretion, whether to
honor such requests.
(vi) This Section 1.3 shall survive for at least twelve
(12) months but not more than twenty-four (24) months
after termination or expiration of the Transfer
Agency Agreement in order to correct errors and to
report and account for all AAdvantage Miles earned
during the term of the Agreement, provided however
that the Fund provides all data required to comply
with Section 1.3 herein.
2. Fees and Expenses
2.1 For the performance by the Bank pursuant to this Agreement, the Fund
agrees on behalf of each of the Portfolios to pay the Bank the fees as
set out in the initial fee schedule attached hereto.
2.2 In addition to the fee paid under Section 2.1 above, the Fund agrees
on behalf of each of the Portfolios to reimburse the Bank for
out-of-pocket expenses, including but not limited to confirmation
production, postage, forms, telephone, microfilm, microfiche, mailing
and tabulating proxies, records storage, or advances incurred by the
Bank for the items set out in the fee schedule attached hereto. Such
fees and out-of-pocket expenses and advances identified may be changed
from time to time subject to mutual written agreement between the Fund
and the Bank. In addition, any other expenses incurred by the Bank at
the request or with the consent of the Fund, will be reimbursed by the
Fund on behalf of the applicable Portfolio.
2.3 The Fund agrees on behalf of each of the Portfolios to pay all fees
and reimbursable expenses within twenty days following the receipt of
the respective billing notice. Postage for mailing of dividends,
proxies, Fund reports and other mailings to all shareholder accounts
shall be advanced to the Bank by the Fund at least two (2) days prior
to the mailing date of such materials.
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.1 It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
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3.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
3.3 It is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
3.6 It will comply with all applicable laws and regulations in performing
its duties required hereunder.
4. Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.1 It is a business trust duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts.
4.2 It is empowered under applicable laws and by its Declaration of Trust
and By-Laws to enter into and perform this Agreement.
4.3 All corporate proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.4 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.5 A registration statement under the Securities Act of 1933, as amended
on behalf of each of the Portfolios is currently effective and will
remain effective, and appropriate state securities law filings have
been made and will continue to be made, with respect to all Shares of
the Fund being offered for sale.
5. Wire Transfer Operating Guidelines/Articles 4A of the Uniform
Commercial Code
5.1 The Bank is authorized to promptly debit the appropriate Fund
account(s) upon the receipt of a payment order in compliance with the
selected security procedure (the "Security Procedure") chosen for
funds transfer and in the amount of money that the Bank has been
instructed to
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transfer. The Bank shall execute payment orders in compliance with
the Security Procedure and with the Fund instructions on the execution
date provided that such payment order is received by the close of the
funds- transfer business day of the Bank, unless the payment order
specifies a later time. All payment orders and communications
received after the customary deadline will be deemed to have been
received the next business day.
5.2 The Fund acknowledges that the Security Procedure it has designated on
the Fund Selection Form was selected by the Fund from security
procedures offered by the Bank. The Fund shall restrict access to
confidential information relating to the Security Procedure to
authorized persons as communicated to the Bank in writing. Each party
must notify the other party immediately if it has reason to believe
unauthorized persons may have obtained access to such information or
of any change in that party's authorized personnel. The Bank shall
verify the authenticity of all Fund instructions according to the
Security Procedure.
5.3 The Bank shall process all payment orders on the basis of the account
number contained in the payment order. In the event of a discrepancy
between any name indicated on the payment order and the account
number, the account number shall take precedence and govern.
5.4 The Bank reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected
balance in the account to be charged at the time of the Bank's receipt
of such payment order; (b) would cause the Bank, in the Bank's
reasonable judgement, to exceed any volume, aggregate dollar, network,
time, credit or similar limits which are applicable to the Bank; or
(c) the Bank, upon reasonable belief after verifying the authenticity
of the payment order according to the Security Procedures is unable
to satisfy itself that the transaction has been properly authorized.
5.5 The Bank shall use reasonable efforts to act on all authorized
requests to cancel or amend payment orders received in compliance with
the Security Procedure provided that such requests are received in a
timely manner affording the Bank reasonable opportunity to act.
However, the Bank assumes no liability if after using reasonable
efforts the request for amendment or cancellation cannot be satisfied.
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5.6 The Bank shall assume no responsibility for failure to detect any
erroneous payment order provided that the Bank complies with the
payment order instructions as received and the Bank complies with the
Security Procedure. The Security Procedure is established for the
purpose of authenticating payment orders only and not for the
detection of errors in payment orders.
5.7 The Bank shall assume no responsibility for lost interest with respect
to the refundable amount of any unauthorized payment order, unless the
Bank is notified of the unauthorized payment order within thirty (30)
days of notification by the Bank of the acceptance of such payment
order. In no event (including failure to execute a payment order)
shall the Bank be liable for special, indirect or consequential
damages, even if advised of the possibility of such damages.
5.8 When the Fund initiates or receives Automated Clearing House credit
and debit entries pursuant to these guidelines and the rules of the
National Automated Clearing House Association and the New England
Clearing House Association, the Bank will act as an Originating
Depository Financial Institution and/or receiving depository Financial
Institution, as the case may be, with respect to such entries.
Credits given by the Bank with respect to an ACH credit entry are
provisional until the Bank receives final settlement for such entry
from the Federal Reserve Bank. If the Bank does not receive such
final settlement, the Fund agrees that the Bank shall receive a refund
of the amount credited to the Fund in connection with such entry, and
the party making payment to the Fund via such entry shall not be
deemed to have paid the amount of the entry.
5.9 Confirmation of Bank's execution of payment orders shall ordinarily be
provided within twenty-four (24) hours notice of which may be
delivered through the Bank's proprietary information systems, or by
facsimile or call-back. Fund must report any objections to the
execution of an order within thirty (30) days.
6. Data Access and Proprietary Information
6.1 The Fund acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Bank as part of the
Fund's ability to
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access certain Fund-related data ("Customer Data") maintained by the
Bank on data bases under the control and ownership of the Bank or
other third party ("Data Access Services") constitute copyrighted,
trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to the Bank or other
third party. In no event shall Proprietary Information be deemed
Customer Data. The Fund agrees to treat all Proprietary Information
as proprietary to the Bank and further agrees that it shall not
divulge any Proprietary Information to any person or organization
except as may be provided hereunder. Without limiting the foregoing,
the Fund agrees for itself and its employees and agents:
(a) to access Customer Data solely from locations as may
be designated in writing by the Bank and solely in
accordance with the Bank's applicable user
documentation;
(b) to refrain from copying or duplicating in any way the
Proprietary Information;
(c) to refrain from obtaining unauthorized access to any
portion of the Proprietary Information, and if such
access is inadvertently obtained, to inform in a
timely manner of such fact and dispose of such
information in accordance with the Bank's
instructions;
(d) excluding the Fund's principal office in Fort Worth,
Texas, to refrain from causing or allowing the data
acquired hereunder from being retransmitted to any
other computer facility or other location, except
with the prior written consent of the Bank;
(e) that the Fund shall have access only to those
authorized transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the
Bank to protect at the Bank's expense the rights of
the Bank in Proprietary Information at common law,
under federal copyright law and under other federal
or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 6. The obligations of this Section shall
survive any earlier termination of this Agreement.
6.2 (a) The Bank acknowledges that the data, computer programs, report
formats, manuals, records or
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other information concerning the AAdvantage Account furnished
to the Bank by the Fund or AA as part of the Bank's obligation
to calculate and report AAdvantage Miles, as well as any other
information identified in writing by the Fund as confidential
immediately prior to or immediately after disclosure by the
Fund to the Bank, constitutes the confidential information of
the Fund ("Fund Confidential Information")
(b) The Bank agrees (i) to hold and maintain in strictest
confidence and not to reveal or disclose the Fund Confidential
Information other than to the fund, AA and to Bank employees
who need to know such information in order to perform Bank's
duties under this Agreement; and (ii) that neither the Bank
nor its employees, agents and/or contractors will use the Fund
Confidential Information in any manner whatsoever, except for
the purpose of carrying out the Bank's duties under this
Agreement.
(c) Notwithstanding any provision to the contrary contained
herein, the Bank shall be allowed to release the Fund
Confidential Information if compelled to do so by a regulatory
authority or court of competent jurisdiction, or if the Bank
believes in good faith that it is obligated by law to provide
such Fund Confidential Information to a regulatory authority
or court of competent jurisdiction, subject to the conditions
that the Bank: (i) gives the Fund prompt notice of the legal
process and the opportunity to seek an appropriate protective
order or to pursue such other legal action necessary to
preserve the confidentiality of the Fund Confidential
Information; and (ii) provides reasonable assistance to and
cooperates with the Fund in its efforts to preserve the
confidentiality of the Fund Confidential Information.
6.3 If the Fund notifies the Bank that any of the Data Access Services do
not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely
manner to correct such failure. Organizations from which the Bank may
obtain certain data included in the Data Access Services are solely
responsible for the contents of such data and the Fund agrees to make
no claim against the Bank arising out of the contents of such
third-party data, including, but not limited to, the accuracy thereof.
DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS,
AS AVAILABLE BASIS. THE BANK EXPRESSLY
16
DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.4 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect
the transfer or movement of cash or Shares or (ii) transmit
Shareholder information or other information, then in such event the
Bank shall be entitled to rely on the validity and authenticity of
such instruction without undertaking any further inquiry as long as
such instruction is undertaken in conformity with security procedures
established by the Bank from time to time.
7. Indemnification
7.1 The Bank shall not be responsible for, and the Fund shall on behalf of
the applicable Portfolio indemnify and hold the Bank harmless from and
against, any and all losses, damages, costs, charges, reasonable
counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions of the Bank or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or
willful misconduct;
(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the material breach of any
representation or warranty of the Fund hereunder;
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services
which (i) are received by the Bank or its agents or
subcontractors, and (ii) have been prepared, maintained or
performed by the Fund or any other person or firm on behalf of
the Fund including but not limited to any previous transfer
agent or registrar;
(d) The reliance on, or the carrying out by the Bank or its agents
or subcontractors of any instructions or requests of the Fund
on behalf of the applicable Portfolio;
(e) The offer or sale of Shares in violation of federal or state
securities laws or regulations requiring
17
that such Shares be registered or in violation of any stop
order or other determination or ruling by any federal or any
state agency with respect to the offer or sale of such Shares;
(f) upon the Fund's request entering into any agreements required
by the National Securities Clearing Corporation (the "NSCC")
required by the NSCC for the transmission of Fund or
Shareholder data through the NSCC clearing systems.
7.2 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with Fund counsel with respect to any
matter arising in connection with the services to be performed by the
Bank under this Agreement, and the Bank and its agents or
subcontractors shall not be liable and shall be indemnified by the
Fund on behalf of the applicable Portfolio for any action taken or
omitted by it in reliance upon such instructions or upon the opinion
of such counsel. The Bank, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document,
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 the Bank or its agents or subcontractors
by machine readable input, telex, CRT data entry or other similar
means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice
thereof from the Fund.
7.3 The Bank shall indemnify and hold the Fund harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to any action or
failure or omission to act by the Bank as a result of the Bank's lack
of good faith, gross negligence or willful misconduct.
7.4 In order that the indemnification provisions contained in this Section
7 shall apply, upon the assertion of a claim for which the one party
(the "Indemnitor") may be required to indemnify the other party (the
"Indemnitee"), the Indemnitee shall promptly notify the Indemnitor of
such assertion, and shall keep the Indemnitor advised with respect to
all developments concerning such claim. The Indemnitor shall have the
option to participate with the Indemnitee in the defense of such claim
or to defend against said claim in its own name or in the name of the
Indemnitee. The Indemnitee shall in no case confess any claim or make
any compromise in any case in which the Indemnitor may be required to
indemnify the Indemnitee except with the Indemnitor's prior written
consent.
18
8. Registration as a Transfer Agent
Bank and its record keeping Transfer Agent NFDS are currently
registered with the appropriate federal agency for the registration of
transfer agents, or is otherwise permitted to lawfully conduct its
activities without such registration and that it will remain so
registered for the duration of this Agreement. Bank agrees that it
will promptly notify the Fund in the event of any material change in
its status as a registered transfer agent. Should Bank fail to be
registered with the appropriate federal agency as a transfer agent at
any time during this Agreement, and such failure to register does not
permit Bank to lawfully conduct its activities, the Fund may terminate
this Agreement upon five days written notice to Bank.
9. Year 2000
Notwithstanding anything in this Agreement to the contrary, the Bank's
only warranty with respect to year 2000 compliance is that the Bank's
processing systems and software (the "TA2000 System") will be year
2000 compliant during the term set forth in Section 14 of this
Agreement. As used in this Agreement "year 2000 compliant" shall mean
that the software will perform in accordance with the terms of this
Agreement regardless of the century with respect to which date data is
encountered by the software; provided, that (i) all date data received
by the Bank for use by the software is accurate and in formats
specified by the Bank from time to time, (ii) all date data generated
by the software is accepted by the Fund in formats provided by the
Bank from time to time, and (iii) the Bank shall not be obligated to
provide date data for interface functions such as screens, reports or
data transmission files in any format other than that specified by the
Bank from time to time. Notwithstanding the foregoing, the Bank makes
no representation or warranty as to the ability of any hardware,
firmware, software, products or services provided to the Bank
software, including the TA2000 System, in circumstances where data
received from any fund system or any other system is invalid,
incorrect or otherwise corrupt.
10. Insurance
Bank 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
19
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 Fund, Bank or other insured
party which would otherwise be a covered claim in the absence of any
provision of this Agreement provided however, that this Section 10
does not void, reduce or jeopardize the insurance coverage of the
insured party.
11. Security
Bank represents and warrants that, to the best of its knowledge, the
various procedures and systems which Bank has implemented with regard
to the safeguarding from loss or damage attributable to fire, theft or
any other cause (including provision for twenty-four hours a day
restricted access) of the Fund'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. Bank shall
review such systems and procedures on a periodic basis and the fund
shall have access to review these systems and procedures.
12. Standard of Care
The Bank shall at all times act in good faith and agrees to use its
best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless said
errors are caused by its negligence, bad faith, or willful misconduct
or that of its employees.
13. Covenants of the Fund and the Bank
13.1 The Fund shall on behalf of each of the Portfolios promptly furnish to
the Bank the following:
(a) A copy of the resolution of the Board of Trustees of the Fund
authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Fund and
all amendments thereto.
13.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of check
forms and facsimile signature imprinting devices, if any; and for the
20
preparation or use, and for keeping account of, such forms and devices.
13.3 The Bank 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 Investment Company Act of 1940,
as amended, and the Rules thereunder, the Bank agrees that all such
records prepared or maintained by the Bank relating to the services to
be performed by the Bank hereunder are the property of the Fund and
will be preserved, maintained and made available in accordance with
such Section and Rules, and will be surrendered promptly to the Fund
on and in accordance with its request.
13.4 The Bank and the Fund 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.
13.5 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the
Fund and to secure instructions from an authorized officer of the
Fund as to such inspection. The Bank reserves the right, however, to
exhibit the Shareholder records to any person whenever it is advised
by its counsel that it may be held liable for the failure to exhibit
the Shareholder records to such person.
14. Termination of Agreement
14.1 Unless otherwise provided in this Agreement, this Agreement may be
terminated by either party upon ninety (90) days written notice to the
other.
14.2 Should the Fund exercise its right to terminate, reasonable
out-of-pocket expenses associated with the movement of records and
material will be borne by the Fund on behalf of the applicable
Portfolio(s). Additionally, the Bank reserves the right to charge for
any other reasonable expenses associated with such termination.
15. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to the series named in the attached Schedule A with respect
to which it desires to have the Bank render services as transfer agent
under the terms
21
hereof, it shall so notify the Bank in writing, and if the Bank agrees
in writing to provide such services, such series of Shares shall
become a Portfolio hereunder.
16. Assignment
16.1 Except as provided in Section 16.3 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party
without the written consent of the other party.
16.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
16.3 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS") which is duly
registered as a transfer agent pursuant to Section 17A(c)(2) of the
Securities Exchange Act of 1934, as amended ("Section 17A(c)(2)"),
(ii) a BFDS subsidiary duly registered as a transfer agent pursuant to
Section 17A(c)(2) or (iii) a BFDS affiliate; provided, however, that
the Bank shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and
omissions.
17. Amendment
This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of
the Board of Trustees of the Fund.
18. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
19. Force Majeure
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.
22
20. Consequential Damages
Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act
hereunder.
21. Merger of Agreement
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
22. Limitations of Liability of the Trustees and Shareholders
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of
the Trust as Trustees and not individually and that the obligations of
this instrument are not binding upon any of the Trustees or
Shareholders individually but are binding only upon the assets and
property of the Fund.
23. Separate Liability of Portfolios
Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Portfolio of the Fund
are separate and distinct from the assets and liabilities of each
other Portfolio and that no Portfolio shall be liable or shall be
charged for any debt, obligation or liability of any other Portfolio,
whether arising under the Agreement or otherwise.
24. Counterparts
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
25. Reproduction of Documents
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The
parties hereto each agree that any such reproduction shall be
admissible in evidence as the original itself in
23
any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement,
facsimile or further reproduction shall likewise be admissible in
evidence.
26. Notices
All notices under this Agreement shall be made orally, in writing, or
by any other means mutually acceptable to the parties. If in writing,
a notice shall be sufficient if personally delivered, mailed, first
class postage prepaid, or sent via facsimile with return confirmation
to the party entitled to receive such notices at the following
addresses:
(a) if to the Fund, to:
[Fund Name]
0000 Xxxx Xxxxxx Xxxx.
XX 0000
Xxxx Xxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
24
(b) if to the Bank, to:
State Street Bank and Trust Company
C/O Boston Financial Data Services, Inc.
Attention: President
0 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address as either party shall have furnished to the
other in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
AMERICAN AADVANTAGE MILEAGE FUNDS
BY: /s/ XXXXXXX X. XXXXX
--------------------------------------
ATTEST:
/s/ XXXXX X. GREENEBRG
-------------------------
STATE STREET BANK AND TRUST COMPANY
BY: /s/ XXXXXX X. XXXXX
--------------------------------------
Executive Vice President
ATTEST:
/s/ X. XXXXX
-------------------------
00
XXXXX XXXXXX BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES*
Service Performed Responsibility
----------------- --------------
Bank Fund
---- ----
1. Receives orders for the purchase X
of Shares.
2. Issue Shares and hold Shares in X
Shareholders accounts.
3. Receive redemption requests. X
4. Effect transactions 1-3 above X
directly with broker-dealers.
5. Pay over monies to redeeming X
Shareholders.
6. Effect transfers of Shares. X
7. Prepare and transmit dividends X
and distributions.
8. Issue Replacement Certificates. N/A
9. Reporting of abandoned property. X
10. Maintain records of account. X
11. Maintain and keep a current and X
accurate control book for each
issue of securities.
12. Mail proxies. X
13. Mail Shareholder reports. X
14. Mail prospectuses to current X
Shareholders.
15. Withhold taxes on U.S. resident X
and non-resident alien accounts.
Shareholders.
26
Service Performed Responsibility
----------------- --------------
Bank Fund
---- ----
16. Prepare and file U.S. Treasury X
Department forms.
17. Prepare and mail account and X
confirmation statements for
18. Provide Shareholder account X
information.
19. Blue sky reporting. X
* Such services are more fully described in Section 1.2 (a), (b) and (c)
of the Agreement.
AMERICAN AADVANTAGE MILEAGE FUNDS
BY: /S/ XXXXXXX X. XXXXX
---------------------
ATTEST:
/s/ XXXXX X. XXXXXXXXX
------------------
STATE STREET BANK AND TRUST COMPANY
BY: /s/ XXXXX X. XXXXX
-------------------
Executive Vice President
ATTEST:
/s/ X. XXXXX
------------------
27
SCHEDULE A
Balanced Mileage Fund
Growth and Income Mileage Fund
Intermediate Bond Mileage Fund (effective 3/1/98)
International Equity Mileage Fund
Limited-Term Income Mileage Fund
Municipal Money Market Mileage Fund
U.S. Government Money Market Mileage Fund
S&P 500 Index Mileage Fund (effective 3/1/98)
Money Market Mileage Fund
28
ATTACHMENT 1
DATA FLOW REQUIREMENTS
