EX.99B9(a)
TRANSFER AGENCY AND SERVICES AGREEMENT
(With Facilities Management Arrangement)
THIS AGREEMENT, dated as of this first day of June, 1995 between NATIONS
FUND, INC., a Maryland corporation, NATIONS FUND TRUST, a Massachusetts business
trust, THE CAPITOL MUTUAL FUNDS, a Massachusetts business trust, NATIONS FUND
PORTFOLIOS, INC., a Maryland corporation, and each other investment company
which may become a party hereto pursuant to the terms of this Agreement
(individually a "Fund", and collectively, the "Funds"), each with its principal
place of business at 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 and
additional offices at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
and THE SHAREHOLDER SERVICES GROUP, INC. (the "Transfer Agent"), a Massachusetts
corporation with principal offices at Xxx Xxxxxxxx Xxxxx, 00 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000.
WITNESSETH
WHEREAS, each Fund desires to appoint the Transfer Agent as its transfer
agent, dividend disbursing agent and agent in connection with certain other
activities and the Transfer Agent desires to accept such appointment;
WHEREAS, each Fund may authorize the issuance of Shares in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets ("Portfolio");
WHEREAS, each Fund and each Portfolio of a Fund subject to this Agreement,
including any investment company or Portfolio as may be added to this Agreement
pursuant to Section 17, shall be identified in the attached Schedule F; and
WHEREAS, the Transfer Agent and NationsBank, N.A. (Carolinas)
("NationsBank") have entered into a Facilities Management Agreement ("Facilities
Agreement") dated June 1, 1995 pursuant to which the Transfer Agent has
established a servicing and processing center to provide transfer agent services
on behalf of the Funds in Charlotte, North Carolina (the "Charlotte Facility").
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Funds and the Transfer Agent agree as follows:
Article 1 Definitions
1.1. Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of a Fund as the same may be amended from
time to time.
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(b) "Authorized Person" of a Fund shall be deemed to include (i) any
authorized officer of the Fund; (ii) the members of the Joint Operations
Board (as hereinafter defined); or (iii) any person, whether or not such
person is an officer or employee of the Fund, duly authorized to give Oral
Instructions or Written Instructions on behalf of the Fund as indicated in
writing to the Transfer Agent from time to time.
(c) "Board of Directors" of a Fund shall mean the Board of Directors
or Board of Trustees of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange Commission.
(e) "Custodian" of a Fund refers to any custodian or subcustodian of
securities and other property which the Fund may from time to time
deposit, or cause to be deposited or held under the name or account of
such a custodian pursuant to a Custodian Agreement.
(f) "Joint Operations Board" shall mean the joint board comprised of
one senior representative from the Transfer Agent, one individual
designated by the Funds jointly to represent their respective interests
and the most senior Transfer Agent manager of the Charlotte Facility.
(g) "1940 Act" shall mean the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, all as amended from time to
time.
(h) "Oral Instructions" shall mean instructions, other than Written
Instructions, actually received by the Transfer Agent from a person
reasonably believed by the Transfer Agent to be an Authorized Person;
(i) "Prospectus" of a Fund shall mean collectively the most recently
dated Fund Prospectuses and Statements of Additional Information,
including any supplements thereto, if any, with respect to each Portfolio
of the Fund which have become effective under the Securities Act of 1933
and the 1940 Act.
(j) "Shares" of a Fund refers collectively to such shares of capital
stock or beneficial interest, as the case may be, or class thereof, of the
Fund as may be issued from time to time.
(k) "Shareholder" shall mean a record owner of Shares.
(l) "Written Instructions" shall mean a written communication signed
by a person reasonably believed by the Transfer Agent to be an Authorized
Person and actually received by the Transfer Agent. Written Instructions
shall include manually executed originals and authorized electronic
transmissions, including telefacsimile of a manually executed original or
other process.
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Article 2 Appointment of the Transfer Agent
2.1. Each Fund hereby appoints and constitutes the Transfer Agent as
transfer agent and dividend disbursing agent for Shares of the Fund and the
Transfer Agent hereby accepts such appointments and agrees to perform the duties
hereinafter set forth.
Article 3 Duties of the Transfer Agent
3.1. The Transfer Agent shall be responsible for:
(a) Administering and performing the customary services of a transfer
agent; agent in connection with dividend and distribution functions; and
agent in connection with shareholder account and administrative functions
in connection with the issuance, transfer and redemption or repurchase
(including coordination with the Custodian) of Shares, as more fully
described in the written schedule of Duties of the Transfer Agent annexed
hereto as Schedule A and incorporated herein, and in accordance with the
terms of each Fund's Prospectus, applicable law and the procedures
established from time to time between the Transfer Agent and the Funds.
(b) Recording the issuance of Shares and maintaining pursuant to
Commission Rule 17Ad-10(e) a record of the total number of Shares which
are authorized, based upon data provided to it by each Fund, and issued
and outstanding. The Transfer Agent shall provide each Fund 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 legality or validity of the issue or sale of such
Shares, which functions shall be the sole responsibility of the Fund.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for: (i) the legality of the
issuance or sale of any Shares or the sufficiency of the amount to be
received therefor; (ii) the legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor; (iii) the legality of the
declaration of any dividend by the Board of Directors, or the legality of
the issuance of any Shares in payment of any dividend; or (iv) the
legality of any recapitalization or readjustment of the Shares.
3.2. In addition, each Fund shall verify the establishment of shares or
share transactions for each State prior to activation on the Transfer Agent's
system and thereafter monitor the daily activity of shares for each State based
upon daily transactions recorded by the Transfer Agent and transmitted to the
Fund or its designated agent. The responsibility of the Transfer Agent for a
Fund's blue sky State registration status is solely limited to the initial
establishment of shares or share transactions subject to blue sky compliance by
the Fund and the reporting of such transactions to the Fund as provided above.
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3.3. In addition to the duties set forth herein, the Transfer Agent shall
perform such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing between the Funds
and the Transfer Agent.
Article 4 Duties of the Joint Operations Board
4.1. The Joint Operations Board will be responsible for the following with
respect to the services to be performed by the Transfer Agent under this
Agreement (the "Services"):
(a) General oversight of the provision of Services by the Transfer
Agent, including, but not limited to, the creation and quarterly review of
quality standards governing the Services pursuant to Article 5 hereof, the
establishment of strategic and/or operational goals with respect to the
Services to be provided at the Charlotte Facility, and addressing such
issues and concerns that may arise from time to time amongst the Funds and
the Transfer Agent under this Agreement.
(b) Review and approval of, from a technical feasibility standpoint,
imaging and other new technologies proposed to be used by the Transfer
Agent in performing the Services at the Charlotte facility.
(c) Review and approval of the Charlotte Facility budget and expense
statements, including those costs for which compensation is sought by the
Transfer Agent pursuant to Article 8 hereof.
(d) Review of those costs incurred by the Transfer Agent, other than
in connection with the Charlotte Facility, for which compensation is
sought by the Transfer Agent pursuant to Article 8 hereof.
4.2. With respect to matters described in Section 4.1 above, the decision
of the Funds' representative on the Joint Operations Board shall control.
4.3. On a monthly basis, the Transfer Agent shall provide to the Joint
Operations Board a statement of the internal and external costs incurred by the
Transfer Agent in connection with the provision of Services for which the
Transfer Agent will seek reimbursement under Article 8 hereof.
Article 5 Quality Standards
5.1. The quality of service provided by the Transfer Agent hereunder shall
be maintained at or above the levels set forth in Schedule B hereto. Such
quality standards shall govern the Services provided by the Transfer Agent until
a new set of quality standards is established pursuant to Section 5.2 hereof.
5.2. As soon as practicable after the first ninety (90) days of operation
of the Charlotte Facility, the Joint Operations Board shall establish a new set
of quality standards reasonably acceptable to the Funds and the Transfer Agent.
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5.3. The Joint Operations Board shall review and update, if necessary, the
quality standards on a semi-annual basis.
5.4. If, at any time during the term of this Agreement, 20% or more of the
then-current quality standards (e.g., 2 or more out of 10 standards) are not met
by the Transfer Agent during any month (as evidenced by monthly reports), the
Funds shall promptly notify the Transfer Agent in writing of such failure and
the details relating to such failure. If, any of the failed quality standards
are not met by the Transfer Agent during the three month period commencing
thirty (30) days after the Transfer Agent receives such notice, the Funds shall
have the right to terminate this Agreement on thirty (30) days notice.
5.5. Notwithstanding the foregoing, the Funds shall not have the right to
terminate this Agreement based on the failure by the Transfer Agent to have
satisfied a quality standard if such failure was caused directly by the negative
vote of the Funds' representative on the Joint Operations Board with respect to
a commercially reasonable funding request of the Transfer Agent for the
Charlotte Facility.
Article 6 Recordkeeping and Other Information
6.1. The Transfer Agent shall create and maintain all records required of
it pursuant to its duties hereunder and as set forth in Schedule A in accordance
with all applicable laws, rules and regulations, including records required by
Section 31(a) of the 1940 Act. All records shall be available during regular
business hours for inspection and use by the Funds. Where applicable, such
records shall be maintained by the Transfer Agent for the periods and in the
places required by Rule 31a-2 under the 1940 Act.
6.2. To the extent required by Section 31 of the 1940 Act, the Transfer
Agent agrees that all such records prepared or maintained by the Transfer Agent
relating to the Services are the property of the relevant Fund and will be
preserved, maintained and made available in accordance with such section, and
will be surrendered promptly to such Fund on and in accordance with the Fund's
request.
6.3. In case of any requests or demands for the inspection of Shareholder
records of a Fund, the Transfer Agent will endeavor to notify the Fund of such
request and secure Written Instructions as to the handling of such request. The
Transfer Agent reserves the right, upon prior notice to the Fund, 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 comply with such request.
6.4. Upon reasonable notice by a Fund, the Transfer Agent shall make
available during regular business hours such of its facilities and premises
employed in connection with the performance of its duties under this Agreement
for reasonable visitation by the Fund, or any person retained by the Fund as may
be necessary for the Fund to evaluate the quality of the Services performed by
the Transfer Agent pursuant hereto.
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Article 7 Fund Instructions
7.1. The Transfer Agent will have no liability when acting for a Fund in
accordance with Written or Oral Instructions believed to have been executed or
orally communicated by an Authorized Person of the Fund and will not be held to
have any notice of any change of authority of any person until receipt of a
Written Instruction thereof from the Fund. The Transfer Agent will also have no
liability when processing Share certificates for a Fund which it reasonably
believes to bear the proper manual or facsimile signatures of the officers of
the Fund and the proper countersignature of the Transfer Agent.
7.2. The Transfer Agent may request Written Instructions from a Fund and
may seek advice from legal counsel for the Fund with prior notice to the Fund,
or its own legal counsel, with respect to any matter arising in connection with
this Agreement, and it shall not be liable for any action taken or not taken or
suffered by it in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Fund or for the Transfer Agent.
Written Instructions requested by the Transfer Agent will be provided by the
Fund within a reasonable period of time.
7.3. The Transfer Agent, its officers, agents or employees, shall accept
Oral Instructions or Written Instructions given to them with respect to a Fund
by any person representing or acting on behalf of the Fund only if said
representative is an Authorized Person of the Fund. The Funds agree that all
Oral Instructions shall be followed within one business day by confirming
Written Instructions, and that the Funds' failure to so confirm shall not impair
in any respect the Transfer Agent's right to rely on Oral Instructions.
Article 8 Compensation
8.1. The Funds shall reimburse the Transfer Agent for all the Transfer
Agent's "Costs" incurred in connection with the provision of Services as set
forth in the written Schedule of Costs annexed hereto as Schedule C and
incorporated herein and in addition the Funds shall compensate the Transfer
Agent for the following amounts (the "Margin");
(a) During the first 36 months of the Initial Term (as defined
below), and amount equal to 15% of such Costs during each month.
(b) During the last 24 months of the Initial Term and during each
Renewal Term (as defined below), an amount equal to 12.5% of such Costs
during each month.
8.2. Notwithstanding the foregoing, the charges incurred by the Transfer
Agent under the Facilities Agreement with NationsBank and such other expenses
set forth in the written schedule of Non-Margin Expenses annexed hereto as
Schedule D shall not be included as Costs in connection with the calculation of
the Margin amounts set forth in Subsections 8.1(a) and (b).
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8.3. In addition to the Costs and Margin described above, the Fund shall
reimburse the Transfer Agent, and will be billed separately for, those
out-of-pocket expenses incurred by the Transfer Agent in the performance of its
duties hereunder as specified in the written schedule of out-of-pocket expenses
annexed hereto as Schedule E and incorporated herein.
8.4. The Funds agree to pay all fees and out-of-pocket expenses within
thirty (30) days following the receipt of the respective invoice. The Funds
shall not be obligated to pay amounts that are reasonably in dispute until such
dispute is resolved.
Article 9 Documents
9.1. In connection with the appointment of the Transfer Agent, each Fund
shall, on or before the date this Agreement goes into effect, but in any case
within a reasonable period of time for the Transfer Agent to prepare to perform
its duties hereunder, deliver or cause to be delivered to the Transfer Agent the
documents set forth in the written schedule of Fund Documents annexed hereto as
Schedule F.
Article 10 Transfer Agent System
10.1. The Transfer Agent shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights utilized by the Transfer Agent in connection with
the services provided by the Transfer Agent to the Fund herein (the "Transfer
Agent System").
10.2. The Transfer Agent hereby grants to each Fund a limited license to
the Transfer Agent System for the sole and limited purpose of having the
Transfer Agent provide the services contemplated hereunder and nothing contained
in this Agreement shall be construed or interpreted otherwise and such license
shall immediately terminate upon the termination of this Agreement.
10.3. The Transfer Agent agrees to provide the Funds with full access to
the Transfer Agent System and all enhancements thereto to the same extent that
such is made available to other Transfer Agent clients.
10.4. In the event the Funds desire the Transfer Agent to develop any
enhancements for the Transfer Agent System, the parties shall agree on the
staffing requirements which will be subject to the approval of the Joint
Operations Board.
10.5. In the event the Funds request an enhancement to the Transfer Agent
System which is estimated to require 5,000 programming hours or more
("Enhancement Project") and the Funds agree to assume the cost of such
Enhancement Project, the Funds and the Transfer Agent shall agree in writing on
any restrictions imposed on the Transfer Agent with respect to the use of such
enhancement prior to commencement of the Enhancement Project.
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10.6. Each Fund reserves the right to review and examine "imaging" and
significant other technological developments to be implemented with the Transfer
Agent System from a technical feasibility standpoint.
Article 11 Representations and Warranties of the Transfer Agent
11.1. The Transfer Agent represents and warrants to each Fund that:
(a) It is a corporation duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts;
(b) It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(c) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement;
(d) It is duly registered with the appropriate regulatory agencies as
a transfer agent and such registration will remain in effect for the
duration of this Agreement;
(e) 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 12 Representations and Warranties of the Funds
12.1. Each Fund represents and warrants to the Transfer Agent that:
(a) It is duly organized and existing and in good standing under the
laws of the jurisdiction in which it is organized;
(b) It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into this Agreement;
(c) All corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken to authorize it
to enter into this Agreement;
(d) A registration statement under the Securities Act of 1933, as
amended, is currently effective and will remain effective, and all
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;
(e) All outstanding Shares are validly issued, fully paid and
non-assessable and that, when Shares are hereafter issued in accordance
with the terms of the Fund's Articles of Incorporation and its Prospectus,
such Shares shall be validly issued, fully paid and non-assessable.
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Article 13 Indemnification
13.1. The Transfer Agent shall not be responsible for and each Fund shall
indemnify and hold the Transfer Agent harmless from and against any and all
claims, costs, expenses (including reasonable attorneys' fees), losses, damages,
charges, payments and liabilities of any sort or kind which may be asserted
against the Transfer Agent or for which the Transfer Agent may be held to be
liable (a "Claim") arising out of or attributable to any of the following:
(a) Any actions of the Transfer Agent required to be taken pursuant
to this Agreement for the Fund unless such Claim resulted from a negligent
act or failure to act or bad faith by the Transfer Agent in the
performance of its duties hereunder.
(b) The Transfer Agent's reasonable reliance on, or reasonable use of
information, data, records and documents (including but not limited to
magnetic tapes, computer printouts, hard copies and microfilm copies)
received by the Transfer Agent from the Fund, or any authorized third
party acting on behalf of the Fund, including but not limited to the prior
transfer agent for the Fund, in the performance of the Transfer Agent's
duties and obligations hereunder.
(c) The reliance on, or the implementation of, any Written or Oral
Instructions or any other instructions or requests of the Fund which are
deemed to be provided by an Authorized Person of the Fund.
(d) The offer or sales of Shares by the Fund in violation of any
requirement under 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 state with respect to the offer or
sale of such Shares in such state.
(e) The Fund's refusal or failure to comply with the terms of this
Agreement, or any Claim which arises out of the Fund's negligence or
misconduct or the breach of any representation or warranty of the Fund
made herein.
13.2. In any case in which a Fund may be asked to indemnify or hold the
Transfer Agent harmless, the Transfer Agent will notify the Fund promptly after
identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Fund although the failure to do
so shall not prevent recovery by the Transfer Agent, unless the Fund is actually
prejudiced thereby, and the Transfer Agent shall keep the Fund advised with
respect to all developments concerning such situation. The Fund shall have the
option to defend the Transfer Agent against any Claim which may be the subject
of this indemnification, and, in the event that the Fund so elects, such defense
shall be conducted by counsel chosen by the Fund and satisfactory to the
Transfer Agent, and thereupon the Fund shall take over complete defense of the
Claim and the Transfer Agent shall sustain no further legal or other expenses in
respect of such Claim. The Transfer Agent will not confess any Claim or make any
compromise in any case in which the Fund will be asked to provide
indemnification, except with the Fund's prior written consent. The obligations
of the parties hereto under this Article shall survive the termination of this
Agreement, so long as the Transfer Agent and the Fund act in good faith and are
not negligent in their actions.
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Article 14 Standard of Care
14.1. The Transfer Agent shall at all times act in good faith and agrees
to use its best efforts within commercially reasonable limits to ensure the
accuracy of all services performed under this Agreement, but assumes no
responsibility for loss or damage to the Funds unless said errors are caused by
the Transfer Agent's own negligence, bad faith or willful misconduct or that of
its employees.
Article 15 Consequential Damages
15.1. In no event and under no circumstances shall either a Fund or the
Transfer Agent be liable to another party for consequential or indirect loss of
profits, reputation or business or any other special damages under any provision
of this Agreement or for any act or failure to act hereunder.
Article 16 Term and Termination
16.1. This Agreement shall be effective on the date first written above
and shall continue for a period of sixty (60) months (the "Initial Term"),
unless earlier terminated pursuant to the terms of this Agreement. Thereafter,
this Agreement shall automatically be renewed for successive terms of
twenty-four (24) months ("Renewal Terms") each, unless terminated pursuant to
this Agreement.
16.2. The Funds or the Transfer Agent may terminate this Agreement at the
end of the Initial Term or at the end of any subsequent Renewal Term upon not
less than nine (9) months prior written notice to the other parties.
16.3. Upon a minimum of nine (9) months prior written notice from the
Boards of Directors of the Funds, the Funds may terminate this Agreement at the
end of the thirty-sixth (36th) or forty-eighth (48th) month of the Initial Term.
16.4. The Funds shall have the right to terminate this Agreement
immediately upon the insolvency or bankruptcy of the Transfer Agent or the
appointment of a receiver for the Transfer Agent, or with respect to any of its
assets, or any change in the financial condition of the Transfer Agent which
impedes the ability of the Transfer Agent to perform any of its obligations
hereunder which is not cured by the Transfer Agent within thirty (30) days of
such occurrence. The Funds shall have the right to seek to renegotiate this
Agreement and, if such negotiations are not successful within a reasonable
period of time, not to exceed ninety (90) days, to terminate this Agreement upon
the transfer of ownership of a controlling interest in the Transfer Agent by or
to any person other than a person who was an affiliate of the Transfer Agent or
its parent company immediately before the transfer.
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16.5. In the event that the total number of combined Shareholder accounts
for the Funds and any other open-end investment companies affiliated with the
Funds by reason of having a common investment adviser exceeds three times the
1994 Shareholder account base of 130,000 due to merger or acquisition activity
involving the investment adviser or any affiliates of the adviser, the Funds
shall have the right to terminate this Agreement upon (9) months prior written
notice to the Transfer Agent. As used in this Article 16, "affiliates of the
adviser" shall mean (i) a direct or indirect owner of 50% or more of the
outstanding common stock of the adviser (a "parent") or (ii) any company or
association whose outstanding common stock is at least 50% owned, directly or
indirectly, by the adviser or by a parent.
16.6. In the event this Agreement is terminated by the Funds pursuant to
Section 5.4, all expenses associated with the movement of records and materials
to a successor transfer agent will be borne by the Transfer Agent. In the event
of a termination pursuant to any other sections, all expenses associated with
conversion will be borne by the Funds. The Transfer Agent shall cooperate with
any such conversion to a successor transfer agent and shall use its best efforts
to mitigate the costs associated with such transfer.
16.7. If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. If the Transfer Agent is the Non-Defaulting Party, its
termination of this Agreement shall not constitute a waiver of any other rights
or remedies of the Transfer Agent with respect to services performed prior to
such termination or rights of the Transfer Agent to be reimbursed for
out-of-pocket expenses incurred prior to such termination. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against the Defaulting Party. The Defaulting Party shall not be
released from any liability with respect to such services performed prior to
such termination.
16.8. In the event of termination of this Agreement by the Funds pursuant
to Sections 16.3 or 16.5:
(a) Prior to the effective date of the termination, the Funds shall
reimburse the Transfer Agent for all unamortized costs incurred by the
Transfer Agent in establishing the Charlotte Facility.
(b) Prior to the effective date of the termination, the Funds shall
assume any and all obligations that the Transfer Agent may have to third
parties arising out of or in connection with the Transfer Agent's
operations at the Charlotte Facility and that the Transfer Agent is not
able to terminate prior to the effective date of the termination of this
Agreement.
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(c) Prior to the effective date of the termination, the Funds shall
pay the Transfer Agent an amount equal to 80% of the cumulative Margin (as
defined in Section 8.1) paid by the Funds to the Transfer Agent for the
twelve months preceding the notice of termination, unless the Funds'
investment adviser or any affiliate of the adviser has acquired an entity
providing comparable transfer agency services to those provided under this
Agreement.
(d) The Funds shall reimburse the Transfer Agent for all reasonable
expenses (other than accrued vacation, sick or other leave) incurred by
the Transfer Agent in connection with the termination of the Transfer
Agent's employees located at the Charlotte Facility, or, at the option of
the Funds, the transfer of such employees to another entity providing
services to the Funds. The Transfer Agent shall be obligated to seek to
minimize any such expenses to the extent commercially practicable.
(e) The Transfer Agent shall transfer to the Funds all physical
assets located at the Charlotte Facility.
Article 17 Additional Portfolios and Funds
17.1. In the event that a Fund establishes one or more Portfolios in
addition to those identified initially on Schedule A, with respect to which the
Fund desires to have the Transfer Agent render services as transfer agent under
the terms hereof, the Fund shall so notify the Transfer Agent in writing, and if
the Transfer Agent agrees in writing to provide such services (such agreement
not to be withheld unreasonably), Schedule A shall be amended to include such
additional Portfolios.
17.2. Subsequent to the effective date of this Agreement, one or more
registered investment companies (a "New Fund") for which NationsBank or any of
its affiliates acts as investment adviser may become a party to this Agreement
upon execution of a written adoption agreement by such New Fund pursuant to
which such New Fund agrees to be bound by the terms of this Agreement (an
"Adoption Agreement"). Following the execution of an Adoption Agreement by a New
Fund, such New Fund shall be deemed a Fund for all purposes of this Agreement
and shall have all the rights, obligations and duties of a Fund under this
Agreement.
Article 18 Confidentiality
18.1. In connection with the services provided by the Transfer Agent
hereunder, certain confidential and proprietary information regarding the
Transfer Agent and the Fund may be disclosed to the other. In connection
therewith, the parties agree as follows:
(a) "Confidential Information" shall mean:
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(i) any data or information that is competitively sensitive
material, and not generally known to the public, including, but
not limited to, information about product plans, marketing
strategies, finance, operations, customer relationships, customer
profiles, sales estimates, business plans, and internal
performance results relating to the past, present or future
business activities of the Transfer Agent or the Fund, their
respective parent corporation, their respective subsidiaries and
affiliated companies and the customers, clients and suppliers of
any of the foregoing;
(ii) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable
and secret in the sense that its confidentiality affords the
Transfer Agent or the Fund a competitive advantage over its
competitors; and
(iii) all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code,
object code, flow charts, databases, inventions, know-how,
show-how and trade secrets, whether or not patentable or
copyrightable.
(b) Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment,
prototypes and models, and any other tangible manifestation of the
foregoing which now exist or come into the control or possession of the
party.
18.2. Except as expressly authorized by prior written consent of the
disclosing party ("Discloser"), the party receiving Confidential Information
("Recipient") shall:
(a) limit access to Discloser's Confidential Information to
Recipient's employees and agents who have a need-to-know in connection
with the subject matter thereof;
(b) advise those employees and agents who have access to the
Confidential Information of the proprietary nature thereof and of the
obligations set forth in this Confidentiality Agreement;
(c) take appropriate action by instruction or agreement with the
employees and agents having access to Discloser's Confidential Information
to fulfill Recipient's obligations under this Confidentiality Agreement;
(d) safeguard all of Discloser's Confidential Information by using a
reasonable degree of care, but not less than that degree of care used by
Recipient in safeguarding its own similar confidential information or
material;
(e) use all of Discloser's Confidential Information solely for
purposes for which the Confidential Information was conveyed; and
(f) not disclose any of Discloser's Confidential Information, or
information derived therefrom, to third parties.
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18.3. Upon Discloser's request, Recipient shall surrender to Discloser all
memoranda, notes, records, drawings, manuals, and other documents or materials
(and all copies of same) relating to or containing Discloser's Confidential
Information. When Recipient returns the materials, Recipient shall certify in
writing that it has returned all materials containing or relating to the
Confidential Information.
18.4. The obligations of confidentiality and restriction on use in this
Article 18 shall not apply to any Confidential Information that Recipient
proves:
(a) Was in the public domain prior to the date of this Agreement or
subsequently came into the public domain through no fault of Recipient; or
(b) Was received by Recipient from a third party without Recipient's
knowledge that the third party was not legally entitled to disclose such
information; or
(c) Was already in Recipient's possession prior to receipt from
Discloser; or
(d) Is required to be disclosed in a judicial or administrative
proceeding after reasonable legal remedies for maintaining such
information in confidence have been exhausted including, but not limited
to, giving Discloser as much advance notice as practical of the
possibility of disclosure to allow Discloser to take appropriate legal
action to seek to prevent such disclosure; or
(e) Is subsequently and independently developed by Recipient's
employees, consultants or agents without reference to Confidential
Information.
18.5. The Funds and the Transfer Agent agree that money damages would not
be a sufficient remedy to an injured party for breach of this Article 18.
Accordingly, in addition to all other remedies that a party may have, a party
shall be entitled to specific performance and injunctive or other equitable
relief against another party as a remedy for any breach of the obligations set
forth in this Article 18. The parties agree to waive any requirement for a bond
in connection with any such injunctive or other equitable relief.
18.6. The rights and obligations established by this Article 18 shall
survive the termination of this Agreement.
Article 19 Force Majeure
19.1. In the event a party is unable to perform its obligations under the
terms of this Agreement because of acts of God or by reason of circumstances
beyond its control, including war, national emergencies, strikes, labor
difficulties, insurrection, riots or the failure or unavailability of
transportation or communication services or power supplies, such party shall not
be liable for damages incurred by any other party resulting from such failure to
perform. The above in no way relieves the Transfer Agent or the Funds of
responsibility for exercising all backup and contingency plans available and in
effect at such time and does not affect any other remedies that a party may have
under this Agreement.
14
Article 20 Amendments
20.1. This Agreement may only be amended or modified by a written
instrument executed by all parties except that Schedule A may be amended in the
manner set forth in Section 17.1.
Article 21 Subcontracting
21.1. Each Fund agrees that the Transfer Agent, in its discretion, may
after notification to the Funds, subcontract for certain of the services to be
provided by the Transfer Agent under this Agreement or the Schedules hereto;
provided that the appointment of any such subcontractor shall not relieve the
Transfer Agent of its responsibilities hereunder.
Article 22 Arbitration
22.1. Any claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in Charlotte, North Carolina in accordance with
its applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply.
22.2. The parties hereby agree that judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
22.3. The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Article 22.
Article 23 Notice
23.1. Any notice or other instrument authorized or required by this
Agreement to be given in writing to a party, shall be sufficiently given if
addressed to that party and received by it at its office set forth below or at
such other place as such party may from time to time designate in writing.
To either of the Funds:
[Name of Applicable Fund]
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
15
To the Transfer Agent:
The Shareholder Services Group
Xxx Xxxxxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to:
General Counsel (same address)
Article 24 Successors
24.1. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns, provided, however, that
this Agreement shall not be assigned to any person other than a person
controlling, controlled by or under common control with the assignor without the
written consent of the other party, which consent shall not be unreasonably
withheld.
Article 25 Governing Law
25.1. This Agreement shall be governed exclusively by the laws of the
Commonwealth of Massachusetts without reference to the choice of law provisions
thereof. Subject to Article 22 hereof, each party hereto hereby (i) consents to
the personal jurisdiction of the Commonwealth of Massachusetts courts over the
parties hereto, hereby waiving any defense of lack of personal jurisdiction; and
(ii) appoints the person to whom notices hereunder are to be sent as agent for
service of process.
Article 26 Counterparts
26.1. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
Article 27 Captions
27.1. The captions of this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
Article 28 Use of Transfer Agent/Fund Name
28.1. The Funds shall not use the name of the Transfer Agent in any
Prospectus, Statement of Additional Information, Shareholders' report, sales
literature or other material relating to the Fund in a manner not approved prior
thereto in writing by the Transfer Agent; provided, that the Transfer Agent need
only receive notice of all reasonable uses of its name which merely refer in
accurate terms to its appointment hereunder or which are required by any
government agency or applicable law or rule.
16
28.2. The Transfer Agent shall not use the name of a Fund or material
relating to a Fund on any documents or forms for other than internal use in a
manner not approved prior thereto in writing by such Fund; provided, that the
Fund need only receive notice of all reasonable uses of its name which merely
refer in accurate terms to the appointment of the Transfer Agent as transfer
agent for the Fund or which are required by any government agency or applicable
law or rule.
Article 29 Relationship of Parties
29.1. The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
29.2. The parties hereby acknowledge and agree that each Fund has entered
into this Agreement independently on behalf of itself and its Portfolios which
are now or may hereafter be identified on Schedule F. Notwithstanding anything
to the contrary contained in this Agreement, (i) each Fund individually shall
have the rights and obligations of a Fund as set forth in this Agreement, (ii)
any action by a Fund in violation of this Agreement shall not affect the rights
and obligations of any other Fund under this Agreement, and (iii) the Transfer
agent, in seeking to enforce any provisions of this Agreement with respect to a
Portfolio, shall look solely to the assets and revenues of such Portfolio and
that in no event shall the Transfer Agent in seeking to enforce such obligation
have recourse to the independent assets or revenues of any other Portfolio.
Article 30 Entire Agreement; Severability
30.1. This Agreement and the Schedules attached hereto constitute the
entire agreement of the parties hereto relating to the matters covered hereby
and supersede any previous agreements. If any provision is held to be illegal,
unenforceable or invalid for any reason, the remaining provisions shall not be
affected or impaired thereby.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
NATIONS FUND, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Title: Secretary
------------------------
NATIONS FUND TRUST
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Title: Secretary
------------------------
THE CAPITOL MUTUAL FUNDS
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Title: Secretary
------------------------
NATIONS FUND PORTFOLIOS, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Title: Secretary
------------------------
THE SHAREHOLDER SERVICES GROUP, INC.
By: _______________________
Title:_______________________
18
Schedule A
DUTIES OF THE TRANSFER AGENT
1. Shareholder Information. The Transfer Agent shall maintain a record of
the number of Shares held by each Shareholder of record which shall include full
registration information, including, but not limited to, name, address and
taxpayer identification number and which shall indicate whether such Shares are
held in certificated or uncertificated form.
2. Shareholder Services. The Transfer Agent shall respond as appropriate
to all inquiries and communications from Shareholders relating to Shareholder
accounts with respect to its duties hereunder and as may be from time to time
mutually agreed upon between the Transfer Agent and the Funds.
3. Share Certificates.
(a) At the expense of the appropriate Fund, each Fund shall supply the
Transfer Agent with an adequate supply of blank share certificates to meet the
Transfer Agent's requirements therefor. Such Share certificates shall be
properly signed by facsimile. Each Fund agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent or its agent may continue to countersign
certificates which bear such signatures until otherwise directed by Written
Instructions.
(b) The Transfer Agent shall issue replacement Share certificates in
lieu of certificates which have been lost, stolen or destroyed, upon receipt by
the Transfer Agent of properly executed affidavits and lost certificate bonds,
in form satisfactory to the Transfer Agent, with the appropriate Fund and the
Transfer Agent as obligees under the bond.
(c) The Transfer Agent shall also maintain a record of each certificate
issued, the number of Shares represented thereby and the Shareholder of record.
With respect to Shares held in open accounts or in uncertificated form (i.e., no
certificate being issued with respect thereto) the Transfer Agent shall maintain
comparable records of the Shareholders thereof, including their names, addresses
and taxpayer identification number. The Transfer Agent shall further maintain a
stop transfer record on lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. The Transfer
Agent will address and mail to Shareholders of the Funds, all reports to
Shareholders, dividend and distribution notices and proxy material for the
Funds' meetings of Shareholders. In connection with meetings of Shareholders,
the Transfer Agent will prepare Shareholder lists, mail and certify as to the
mailing of proxy materials, process and tabulate returned proxy cards, report on
proxies voted prior to meetings, act as inspector of election at meetings and
certify Shares voted at meetings.
1
5. Sales of Shares
(a) The Transfer Agent shall not be required to issue any Shares of a
Fund where it has received a Written Instruction from the Fund or official
notice from any appropriate authority that the sale of the Shares of the Fund
has been suspended or discontinued. The existence of such Written Instructions
or such official notice shall be conclusive evidence of the right of the
Transfer Agent to reply on such Written Instructions or official notice.
(b) In the event that any check or other order for the payment of money
is returned unpaid for any reason, the Transfer Agent will endeavor to: (i) give
prompt notice of such return to the Fund or its designee; (ii) place a stop
transfer order against all Shares issued as a result of such check or order; and
(iii) take such actions as the Transfer Agent may from time to time deem
appropriate.
6. Transfer and Repurchase
(a) The Transfer Agent shall process all requests to transfer or redeem
Shares in accordance with the transfer or repurchase procedures set forth in the
Funds' Prospectus.
(b) The Transfer Agent will transfer or repurchase Shares upon receipt
of Oral or Written Instructions or otherwise pursuant to the Prospectus and
Share certificates, if any, properly endorsed for transfer or redemption,
accompanied by such documents as the Transfer Agent reasonably may deem
necessary.
(c) The Transfer Agent reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the endorsement on the instructions
is valid and genuine. The Transfer Agent also reserves the right to refuse to
transfer or repurchase Shares until it is satisfied that the requested transfer
or repurchase is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or repurchases which the Transfer
Agent, in its good judgment, deems improper or unauthorized, or until it is
reasonably satisfied that there is no basis to any claims adverse to such
transfer or repurchase.
(d) When Shares are redeemed, the Transfer Agent shall, upon receipt of
the instructions and documents in proper form, deliver to the Custodian and the
appropriate Fund or its designee a notification setting forth the number of
Shares to be redeemed. Such redeemed Shares shall be reflected on appropriate
accounts maintained by the Transfer Agent reflecting outstanding Shares of the
Fund and Shares attributed to individual accounts.
(e) The Transfer Agent, upon receipt of the monies paid to it by the
Custodian for the redemption of Shares, pay such monies as are received from the
Custodian, all in accordance with the procedures described in the Written
Instructions received by the Transfer Agent from the Funds.
2
(f) The Transfer Agent shall not process or effect any repurchase with
respect to Shares of the Fund after receipt by the Transfer Agent or its agent
of notification of the suspension of the determination of the net asset value of
the Fund.
7. Dividends
(a) Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of a Fund with respect to Shares of the
Fund, the Fund shall furnish or cause to be furnished to the Transfer Agent
Written Instructions setting forth the date of the declaration of such dividend
or distribution, the ex-dividend date, the date of payment thereof, the record
date as of which Shareholders entitled to payment shall be determined, the
amount payable per Share to the Shareholders of record as of that date, the
total amount payable to the Transfer Agent on the payment date and whether such
dividend or distribution is to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution of the
Board of Directors, the Fund will pay to the Transfer Agent sufficient cash to
make payment on such payment date to the Shareholders of record on the record
date.
(c) If, prior to the payment date, the Transfer Agent does not receive
sufficient cash from the Fund to make total dividend and/or distribution
payments to all Shareholders of the Fund as of the record date, the Transfer
Agent will, upon notifying the Fund, withhold payment to all Shareholders of
record as of the record date until sufficient cash is provided to the Transfer
Agent.
8. In addition to and neither in lieu nor in contravention of the services
set forth above, the Transfer Agent shall: (i) perform all the customary
services of a transfer agent, registrar, dividend disbursing agent and agent of
the dividend reinvestment and cash purchase plan as described herein consistent
with those requirements in effect as at the date of this Agreement. The detailed
definition, frequency, limitations and associated costs (if any) set out in the
attached fee schedule, include but are not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing proxies,
tabulating proxies, mailing Shareholder reports to current Shareholders,
withholding taxes on U.S. resident and non-resident 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 Shareholders.
3
Schedule B
[List of Initial Quality Standards based on
1994 quarterly senior management reports]
Nations Fund
------------
Financial Transactions
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials
Maintenance 98%
Transfers 98%
New Accounts 98%
% = minimum acceptable level
Closed End Funds
----------------
Financials 98%
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials
Certificate
Processing 98%
Maintenances 98%
Transfers 98%
New Accounts 98%
% = minimum acceptable levels
Capitol Funds
-------------
Financials
Subscriptions 98%
Redemptions 98%
Exchanges 98%
1
Non-Financials
Maintenance 98%
Transfers 98%
New Accounts 98%
% = minimum acceptable levels
2
Schedule C
Schedule of Costs
1. For purposes of this Agreement, "Costs" shall mean all internal and
external costs incurred by the Transfer Agent in connection with and properly
allocated to the Services provided under the Agreement, including, but not
limited to, the costs involved with the operation of the Charlotte Facility,
those costs reasonably incurred by the Transfer Agent to achieve the quality
standards imposed on it under the terms of this Agreement and the Transfer
Agent's overhead, depreciation and amortization costs, excepting out-of-pocket
expenses and such other costs agreed to in writing by the Transfer Agent and the
Funds.
2. The Funds shall have the right to audit, at their own expense, the
books and records of the Transfer Agent with respect to the Costs for which the
Transfer Agent seeks reimbursement under Article 8 on an annual basis, or more
frequently if the Funds have a reasonable basis to dispute any cost for which
the Transfer Agent seeks reimbursement.
3. The Transfer Agent shall use its best efforts to minimize the costs
incurred by it in connection with the provisions of services under this
Agreement to the extent such action is commercially reasonable and consistent
with the quality standards imposed under this Agreement.
Schedule D
Non-Margin Expenses
-------------------
- Facilities related expenses as incurred by the Transfer Agent under the
Facilities Management Agreement between the Transfer Agent and NationsBank
- Out-of-Pocket expenses
- Sub-Transfer Agent Fees and Expenses
- Any other expenses agreed to in writing by the Transfer Agent and the Funds
Schedule E
OUT-OF-POCKET EXPENSES
----------------------
The Funds shall reimburse the Transfer Agent monthly for reasonable
out-of-pocket expenses incurred in connection with the provision of Services
under this Agreement, including, but not limited to the following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes, checks and stationery -
Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct pass through
to the Funds
- Due diligence mailings
- Telephone and telecommunication costs, including all lease, maintenance and
line costs (excluding such telephone and telecommunications costs provided by
NationsBank pursuant to the Facilities Agreement)
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings (including all periodic statements)
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and any expenses
incurred in connection with such terminals and lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Overtime, as approved by the Funds
- Temporary staff, as approved by the Funds
- Travel and entertainment, as approved by the Funds
- Record retention, retrieval and destruction costs, including, but not limited
to exit fees charged by third party record keeping vendors
- Third party audit reviews
- All conversion costs: including System start up costs
- Insurance
- Such other miscellaneous expenses reasonably incurred by the Transfer Agent
in performing its duties and responsibilities under this Agreement
- Systems Programming utilizing non-dedicated systems resources at $100 per
hour
The Funds agree that postage and mailing expenses will be paid on the day
of or prior to mailing as agreed with the Transfer Agent. In addition, the Funds
will promptly reimburse the Transfer Agent for any other unscheduled expenses
incurred by the Transfer Agent whenever the Funds and the Transfer Agent
mutually agree that such expenses are not otherwise properly borne by the
Transfer Agent as part of its duties and obligations under the Agreement.
Schedule F
Fund Documents
- Certified copy of the Articles of Incorporation of the Fund, as amended
- Certified copy of the By-laws of the Fund, as amended,
- Copy of the resolution of the Board of Directors authorizing the execution
and delivery of this Agreement
- Specimens of the certificates for Shares of the Fund, if applicable, in the
form approved by the Board of Directors of the Fund, with a certificate of
the Secretary of the Fund as to such approval
- All account application forms and other documents relating to Shareholder
accounts or to any plan, program or service offered by the Fund
- Certified list of Shareholders of the Fund with the name, address and
taxpayer identification number of each Shareholder, and the number of Shares
of the Fund held by each, certificate numbers and denominations (if any
certificates have been issued), lists of any accounts against which stop
transfer orders have been placed, together with the reasons therefore, and
the number of Shares redeemed by the Fund
- All notices issued by the Fund with respect to the Shares in accordance with
and pursuant to the Articles of Incorporation or By-laws of the Fund or as
required by law and shall perform such other specific duties as are set forth
in the Articles of Incorporation including the giving of notice of any
special or annual meetings of shareholders and any other notices required
thereby.
