Exhibit (K)(1)
SECURITY SERVICES AGREEMENT
This agreement dated as of ______________, 2001, by and between XXXXXX
FUNSHARES, INC, ("Company") and THE FIFTH THIRD BANK, an Ohio banking
corporation ("Bank") for the purposes of performing the services indicated below
with respect to the Company's securities.
WITNESSETH:
WHEREAS, the Company desires that certain services be rendered by Bank with
respect to the issuance, transfer and/or registration of certificates for a
number of securities of the Company; and
WHEREAS, the Bank is engaged in the business of providing services for issuers
of securities and desires to provide Company's services.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, the parties hereby agree as follows:
1) SCOPE. The Company hereby agrees to employ and hire Bank and Bank hereby
agrees to provide Company the issuance, transfer and/or registration of
certificates and services indicated herein (referred to as the "Services"),
subject to the terms of this Agreement and the Bank's Regulations attached
hereto as Exhibit A which are incorporated herein and made a part hereof. In the
event of a conflict between the terms of this Agreement and the Regulations, the
terms of this Agreement shall control.
2) FEES. The Company shall pay the Bank fees for services rendered pursuant to
the fee schedule attached hereto as Exhibit B. Fees shall be determined
quarterly in arrears on the last day of such quarter and payable upon receipt.
The Company's failure to pay Bank's fees under this Agreement within thirty
(30) calendar days of billing date shall constitute good cause for termination
of Bank's services. In the event of non-payment of Bank's fees, the Company
shall be liable to Bank for all reasonable costs of collection, including but
not limited to, interest, court costs and attorney's fees.
3) EFFECTIVE DATE. Bank shall perform the Services indicated herein in the City
of Cincinnati, Ohio effective as of Sept. 17, 2001 with regard to certificates
for the securities described below, and now or hereafter authorized by the
Company's governing documents:
NUMBER OF SHARES NUMBER OF SECURITIES REPRESENTED
CLASS OF PAR NOW AUTHORIZED BY BY CERTIFICATES OUTSTANDING AT
SECURITIES VALUE GOVERNING DOCUMENTS TIME OF THIS APPOINTMENT
---------- ----- ------------------- --------------------------------
Common
Company hereby certifies that all outstanding securities as of the date hereof
covered by this Agreement have been duly authorized and are fully-paid,
non-assessable and in the hands of the respective holders thereof.
4) SERVICES. Bank shall perform the services indicated below by the Company:
INSTRUCTIONS. For each item, unless instructed to skip it, if there are
boxes then (except as otherwise noted) check ONE box; and fill in any blank
lines (other than blanks applicable to unchecked boxes).
A) TRANSFER AGENT SERVICES. The Bank: [X] shall [ ] shall not
provide transfer agent services which include the following:
i) Maintaining shareholder account records, including name,
address, taxpayer identification number, shares held and
certificate numbers.
ii) Processing of all transfers of certificates including the
review of those transfer items requiring supporting documents
commonly referred to as "legal transfers".
iii) Furnishing a list of shareholders as of each dividend record
date if requested by the Company.
iv) Furnishing a journal sheet reflecting the daily transfer
activity if requested by the Company.
v) Maintaining a record of all certificates against which a stop
transfer notice has been placed.
B) REGISTRAR SERVICES. The Bank: [X] shall [ ] shall not provide
registrar services which include:
i) Maintaining a record of the number of authorized and
outstanding shares.
ii) Registering upon original issue or transfer all certificates
for securities.
C) DIVIDEND DISBURSING AGENT SERVICES. THE Bank: [X] shall [ ] shall
not provide dividend disbursing agent services which include the following:
i) Preparing dividend checks for each shareholder of record as of
the record date established for such dividend or dividend
credit for those shareholders who participate in the dividend
reinvestment plan.
ii) Mailing dividend checks by First Class regular mail.
iii) Maintaining a checking account against which checks will be
paid with funds to be supplied by the Company.
iv) Preparing applicable Internal Revenue Service forms, mailing
copies of such forms to the shareholders annually and
furnishing a computer tape summary of such forms to the U.S.
Treasury Department.
v) Mailing quarterly financial reports of the Company.
vi) Obtaining U.S. Treasury Forms or other certificates with
respect to Taxpayer Identification Numbers as may be required
under U.S. Treasury regulations.
vii) Withholding of Federal Income Tax on such dividends and
processing the payment of that tax over to the U.S. Treasury
as may from time to time be required by the U.S. Treasury
regulations.
viii) Filing tax information returns on shares held and dividends
paid with the various states as requested by the Company.
D) DIVIDEND REINVESTMENT SERVICES. The Bank: [ ] shall [X] shall not
provide Dividend Reinvestment Agent Services which (if such services shall be
performed) SHALL include the services initialized (frequency of reports and
statements should be provided for those items initialized) and shall be subject
to a Company sponsored dividend reinvestment plan acceptable to the Bank.
1) _____ Collecting the dividends and/or voluntary cash deposits
from the holders.
ii) _____ Purchasing of stock at market price on a
(monthly/quarterly) basis.
iii) _____ Crediting full and fractional shares to the participant
accounts.
iv) _____ Updating and balancing participant records as
transactions occur.
v) _____ Generating (monthly/quarterly) reports for the Company.
vi) _____ Generating (monthly/quarterly) statements for the
participants.
vii) Issuing, as applicable, all Internal Revenue Service forms.
E) PROXY AGENT SERVICES. The Bank: [X] shall [ ] shall not provide
proxy agent services which include the following:
Mailing broker-search cards prior to the voting record date of annual and
special meetings of Shareholders, preparing one set of proxies for the general
annual or any special meeting of shareholders for each shareholder of record on
the record date established for such meeting. If requested by the Company
mailing those proxies along with the proxy statement and annual report;
tabulating those proxies voted and furnishing the Company with interim reports
and a summary of such vote; and providing the Company with a shareholder list as
of record date of the proxy, in alphabetical sequence for the annual meeting of
shareholders.
5) AUTHORIZATION OF BANK.
Bank is authorized to countersign for original issue and to deliver when
registered by it, certificates for shares in a number not to exceed the number
of unissued shares of said securities at such time authorized to be issued by
the Company and in such names as Bank may be directed in writing from time to
time by the officer or officers authorized to do so pursuant to resolution of
the Company delivered to Bank, including, unless otherwise specified,
certificates for such number of unissued shares of said stock reserved for
issuance upon exercise of options granted under plans or agreements disclosed
to Bank by Company in writing. Notwithstanding the death, resignation, or
removal of any officer of the Company authorized to sign certificates of stock,
the Bank may continue to issue or register such certificates and continue to
countersign certificates bearing the manual or facsimile signature of such
officer until otherwise directed in writing by the Company.
6) INDEMNIFICATION BY THE COMPANY.
The Company shall indemnify the Bank and hold it harmless from any losses,
damages, liabilities and expenses (including reasonable attorney's fees) which
the Bank may suffer or incur from claims made against the Bank related to the
Bank's performance of its duties or arising from this Agreement by reason of any
act or omission to act by the Company in the conduct of its business, provided
that no indemnification shall be provided by the Company pursuant to this
Section for damages, losses, liabilities or expenses resulting from the reckless
or wilful misconduct of the Bank its officers, directors or employees in
connection with carrying out its duties under this Agreement.
The Company shall further protect and hold Bank harmless from any losses,
damages, liabilities and expenses (including reasonable attorney's fees) which
the Bank may suffer or incur from claims made against the Bank by reason of the
Bank's performance of duties as a Transfer Agent, Registrar and Dividend
Disbursement Agent for the Company, including, without limitation all liability
and expense in acting upon any signature, certificate or other document believed
by the Bank to be genuine and to have been signed by the proper person, or
refusing in good faith to transfer a certificate if it is not satisfied as to
the propriety of the requested transfer.
Bank may perform any of its duties by or through attorneys or agents. Bank shall
be entitled to advice of counsel concerning all matters hereunder and may pay
reasonable compensation to all attorneys and agents as may reasonably be
employed and shall be entitled to reimbursement therefor from the Company. Bank
shall not be responsible for any loss or damage resulting from any action or
nonaction taken in good faith in reliance upon such opinion or advice and Bank
has provided notice to Company.
7) LIMITATION OF LIABILITY.
In no event shall the Bank be liable or responsible with respect to any loss,
liability, cost, damage or expense arising out of a claim by Company or by
any third party in connection with the Services provided and/or performed by
Bank under this Agreement, to the extent such services as to which any claim
arises are provided and/or performed in accordance with (i) the Company's
written requirements and/or instructions; or (ii) the Company's written
concurrence that such Services are provided or performed or to be provided or
performed comply with Company's previously communicated requirements and/or
instructions in such regard.
In no event shall Bank be liable for special, consequential or punitive damages
arising from the performance or non-performance of any of the Services under
this Agreement and the Banks liability hereunder to Company shall be limited,
for the initial and subsequently renewal terms of the Agreement, to the lessor
of the Company's annual fee charged by Bank or actual damages as may be
substantiated and documented.
8) REPRESENTATIONS OF COMPANY.
a) The Company is duly organized and validly existing and in good standing
under the laws of the state of its formation.
b)
b) The execution, delivery and performance by the Company of this Agreement
has been duly authorized by all necessary corporate action and properly executed
and constitutes the valid and binding obligation of the Company, subject to
applicable bankruptcy and insolvency laws and general principles of equity, and
will not violate any agreement or instrument by which the Company is bound.
c) The Company agrees to furnish the Bank with any and all information in
such forms as the Bank may require in order to comply with the reporting and
other requirements of the Securities and Exchange Commission or such other
regulatory body having jurisdiction over the services to be performed by the
Bank for the Company under this Agreement.
d) Company agrees to maintain records relating to the services performed
hereunder for a period of six months and keep such records in a place of ready
access for a period of at least six years thereafter and to return copies of
such records, canceled stock certificates, instruments or documents, or any of
the foregoing when requested to do so, to Bank.
e) Company shall immediately advise the Bank in writing of all original
issues and transfers of certificates for securities made or effected by the
Company.
9) REPRESENTATIONS OF THE BANK.
a) The Bank represents that this Agreement has been duly authorized by all
necessary action and constitutes a valid and binding obligation of the Bank,
subject to applicable bankruptcy and insolvency laws and general principles of
equity.
b) The Bank represents that it presently has and shall maintain during the
term of this Agreement adequate staff and facilities to perform the Services
agreed to by the Bank pursuant to this Agreement.
c) The Bank agrees to furnish the Company with all information and such
forms as the Company may require in order to comply with the reporting or other
requirements of the Securities and Exchange Commission or such other regulatory
body having jurisdiction over the Services to be performed by the Bank for the
Company under this Agreement.
10) TERM. This Agreement shall be a continuous contract between both parties
beginning at its effective date and may be cancelable to either party upon sixty
(60) days written notice by Registered Mail return receipt
requested. The Company shall provide Bank with the name of a successor
securities services provider within thirty (30) days of the date set for
termination of the Agreement and Bank shall forward records to such successor.
If the Company fails to provide the name of a successor within said thirty (30)
days, Bank shall forward records to the Company.
In the event that the Company cancels this Agreement before one full year of
Service from the effective date, then the Company shall pay a termination fee
equal to the greater of: (i) the minimum annual fee as currently in effect at
the time of termination or (ii) the fees paid hereunder attributable to the
six-month period preceding such termination. The termination fee payable in this
section is payable as consideration for the lack of a definite term during which
this Agreement shall be in effect and is not a penalty for such termination.
11) FORCE MAJEURE. Bank shall have no liability or responsibility hereunder with
respect to its failure to perform the Services or duties and obligations under
this Agreement arising out of or related to acts beyond its control including
those attributable to acts of God, war, conditions or events of nature, civil
disturbances, work stoppage, equipment failure, power failure, fire and or other
similar events beyond Banks control. If such failures shall extend beyond a
reasonable period of time then the Company at its discretion may immediately
terminate this Agreement without any charges or damages and Bank shall cooperate
and assist Company in such transfer.
12) NOTICES. Any notices required or permitted to be given shall be deemed
effective upon receipt when sent by Certified Mail, Return Receipt Requested to
the following address or to such other addresses which a party may later
designate:
BANK:
The Fifth Third Bank
Stock Transfer Department
Corporate Trust Department, MD #10AT60
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
COMPANY:
Xxxxxx Funshares
-------------------------
0000 X. 0xx Xxxxxx 0xx Xxxxx
----------------------------
Xxxxxxxxx, Xxxx 00000
-------------------------
Attention: Xxxxxx X. Xxxxxx
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13) EXPENSES. The Company further agrees to reimburse the Bank for all
reasonable out of pocket expenses, including but not limited to the following:
a) Courier charges plus insurance for any and all shipments.
b) Postage and insurance on mailing stock certificates, dividend checks and
other mailings.
c) Reimbursement for envelopes, printing of checks, other forms and other
cost of supplies directly related to the Company's shareholder requirements.
d) Reimbursement for costs incurred in distributing materials to the
beneficial owners of the Company's stock.
e) Fees of counsel or agents.
14) MISCELLANEOUS.
a) Except as herein before provided, the terms and conditions of this
Agreement shall not be amended, supplemented or otherwise changed except in
writing signed by both of the parties hereto.
b) The headnotes contained herein are considered only as a matter of
convenience and for reference and in no way define or limit the scope or
intent of this Agreement or in any way effect this Agreement.
c) This Agreement contains the entire Agreement of the parties and no
representations, inducements, promises or agreements or otherwise not embodied
herein shall be of any force or effect.
d) The representations and warranties contained herein shall survive the
terms of this Agreement but not beyond the applicable statute of limitations.
e) If any section, subsection, sentence, clause, portion of this Agreement
or underlying the Agreement is for any reason held invalid or unconstitutional
by any court, federal or state agency of competent jurisdiction, such portions
shall be deemed a separate, distinct and independent provision and such holdings
shall not effect the validity of the remaining portions hereof.
f) This Agreement shall be controlled by the laws of the State of Ohio.
IN WITNESS WHEREOF, each of the parties have executed this Agreement as of the
date first written above.
ATTEST: FIFTH THIRD BANK
_________________________ By: _____________________________
Its: _____________________________
ATTEST: Xxxxxx Funshares, Inc.
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By: /s/ Xxxxxx X. Xxxxxx
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Its: Chairman
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Xxxxxxxxx X. Xxxxxxxxxxx
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Exhibit A
REGULATIONS
FOR SECURITIES TRANSFER AND REGISTRATION
1) DOCUMENTS TO BE PILED WITH APPOINTMENT.
In connection with the appointment of Fifth Third Bank (hereinafter called
the "Bank") as Transfer Agent or as Registrar of securities, there shall be
filed with the Bank the documents listed on Appendix I hereto.
2) LIMIT OF AUTHORITY.
Unless expressly limited by the resolution of appointment or by subsequent
corporate action, the appointment of the Bank as Transfer Agent or as Registrar
shall include and cover the amount of securities of the class for which the bank
is appointed Agent pursuant to the Security Services Agreement between the Bank
and the Company, as the same shall at any time be constituted and authorized by
the governing documents of the Company. If there are any subsequent increases or
changes in such authorized securities the Company shall file with the Bank:
a) A certified copy of the amendment to the governing documents of the
Company authorizing the increase of securities or other changes as is
applicable.
b) A certified copy of such commission, governmental or other consent to
the issuance of the securities as may be required by law.
c) If the original appointment of the Bank was expressly limited, a
certified copy of a resolution of the Company's governing board
increasing the authority of the Bank.
d) Information that the securities have been registered under the
Securities Act of 1933, as amended, or opinion of counsel for the
Company that the securities are exempt from registration.
3) TEMPORARY CERTIFICATES.
If temporary certificates are issued in the first instance, the Bank will
issue or register definitive certificates when the same are ready in exchange
for, or in transfer of, such temporary certificates.
4) RECAPITALIZATION OR READJUSTMENT.
In case of any recapitalization, readjustment or other change in the
structure of the Company requiring a change in the form of the stock
certificates, the Bank will issue or register certificates in the new form in
exchange for, or in transfer of, the outstanding certificates in the old form,
upon receiving:
a) Written instructions from an officer of the Company.
b) A certified copy of the amendment to the governing documents of the
Company reflecting the change.
c) A certified copy of such commission, governmental or other consent to
the issuance of the securities in the new form as may be required by
law.
d) Information that the securities have been registered under the
Securities Act of 1933, as amended, or opinion of counsel for the
Company that the securities are exempt form registration.
5) SECURITIES CERTIFICATES.
The Company will furnish the Bank with a sufficient supply of blank stock
certificates and from time to time will renew such supply upon the request of
the Bank. Such blank stock certificates shall be signed by the officers of the
Company authorized by law or by the by-laws or code of regulations to sign stock
certificates, and shall bear the corporate seal.
6) AMENDMENTS OF GOVERNING DOCUMENTS.
The Company will file with the Bank certified copies of all amendments to
its governing documents (including, in the case of a corporation articles of
incorporation, certificate of incorporation, by-laws or code of regulations)
made after the date of creation of the agency.
7) INSTRUCTION FROM THE COMPANY AND OPINION FROM COUNSEL.
At any time the Bank may request to any officer of the Company for
instructions, and may seek advice with legal counsel for the Company or its own
legal counsel, in respect of any matter arising in connection with the agency,
and it shall not be liable for any action taken or suffered by it in good faith
in accordance with such instructions or with the opinion of such counsel.
8) PAPERS SUBJECT TO APPROVAL OF BANK COUNSEL.
The acceptance by the Bank of its appointment as Transfer Agent or as
Registrar, and all documents filed in connection with such appointment and
thereafter in connection with the agency, shall be subject to the approval of
legal counsel for the Bank.
9) CERTIFICATION OF DOCUMENTS.
The copy of the governing documents of the Company and copies of all
amendments thereto shall be certified by the Secretary of State of the state of
the Company's formation, and if such governing documents and amendments are
required by law to be also filed with a county, city or to the officer or
official body, a certificate of such fling shall appear on the certified copy
submitted to the Bank. Copies of commission, governmental or other consents to
the issuance of the securities shall be certified by the Secretary or Clerk or
the commission or other body granting the consent, or by the officer having
custody of the records. The copy of the governing documents and copies of all
amendments thereto, and copies of resolutions of the Company's governing body,
shall be certified by the Secretary or an Assistant Secretary of the Company
under the Company's seal.
10) SIGNATURES.
The Bank shall be protected in acting under any paper or document believed
by it to be genuine and to have been signed by the proper person or persons. It
shall also be protected in recognizing stock certificates for securities which
it reasonably believes to bear the genuine signatures of the officers of the
company and the genuine countersignature of the Transfer Agent or Registrar.
11) ORIGINAL ISSUE OF STOCK CERTIFICATES.
The Bank as Transfer Agent will make original issues of certificates of
securities upon the written requisition of any officer of the Company having
authority to make such request.
12) ORIGINAL ISSUE TAX.
Before making any original issue of certificates the Bank must be furnished
with a sufficient amount of money to pay any applicable federal or state tax on
the original issue of securities. If the securities have no par value the
Company will furnish to the Bank such evidence as may be required by the Bank
to show the actual value of the securities.
13) TRANSFER OF SECURITIES.
Shares of securities will be transferred and new certificates issued in
transfer upon the surrender of the old certificates properly endorsed for
transfer, accompanied by such documents as the Bank may deem necessary to
