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TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
HOMESTEAD FUNDS, INC.
AND
NATIONAL FINANCIAL DATA SERVICES, INC.
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TABLE OF CONTENTS
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Page
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1. Terms of Appointment and Duties ............................. 1
2. Third Party Administrators for Defined Contribution Plans.... 3
3. Fees and Expenses ........................................... 4
4. Representations and Warranties of the Transfer Agent ........ 5
5. Representations and Warranties of the Fund .................. 6
6. Wire Transfer Operating Guidelines/Articles 4A of UCC ....... 6
7. Data Access and Proprietary Information ..................... 7
8. Indemnification ............................................. 9
9. Standard of Care ............................................ 10
10. Year 2000 ................................................... 10
11. Confidentiality ............................................. 11
12. Covenants of the Fund and the Transfer Agent ................ 11
13. Termination of Agreement .................................... 12
14. Assignment and Third Party Beneficiaries .................... 12
15. Subcontractors .............................................. 13
16. Miscellaneous ............................................... 13
17. Additional Funds ............................................ 15
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TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1ST day of September, 2000, by and between
HOMESTEAD FUNDS, INC., a Maryland corporation, having its principal office and
place of business at 0000 Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Fund"), and
NATIONAL FINANCIAL DATA SERVICES, INC., a Massachusetts corporation having its
principal office and place of business at The Xxxxxxxxxx Building, 000 Xxxx 00xx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 (the "Transfer Agent").
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;
WHEREAS, the Fund intends to initially offer shares in 6 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
Section 17, being herein referred to as a "Portfolio", and collectively as the
"Portfolios"); and
WHEREAS, the Fund, on behalf of the Portfolios, desires to appoint the Transfer
Agent as its transfer agent, dividend disbursing agent and shareholder servicing
agent in connection with certain other activities, and the Transfer Agent
desires to accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Terms of Appointment and Duties
1.1 Transfer Agency Services. Subject to the terms and conditions set forth
in this Agreement, the Fund, on behalf of the Portfolios, hereby
employs and appoints the Transfer Agent to act as, and the Transfer
Agent agrees to act as its transfer agent for the Fund's authorized and
issued shares of its common stock ("Shares"), dividend disbursing agent
and shareholder servicing agent in connection with any accumulation,
open-account or similar plan 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. 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 Transfer Agent, the Transfer
Agent agrees that it will perform the following services:
(a) 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 Articles of
Incorporation of the Fund (the "Custodian");
(b) Pursuant to purchase orders, issue the appropriate number of Shares
in certificate form, if requested by the shareholder and authorized by
the Fund and hold such Shares in the appropriate Shareholder account;
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(c) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation thereof to the
Custodian;
(d) in respect to the transactions in items (a), (b) and (c) above, the
Transfer Agent shall execute transactions directly with broker-dealers
authorized by the Fund;
(e) 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;
(f) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
(g) Prepare and transmit payments for dividends and distributions
declared by the Fund on behalf of the applicable Portfolio;
(h) Issue replacement certificates for those certificates alleged to
have been lost, stolen or destroyed upon receipt by the Transfer Agent
of indemnification satisfactory to the Transfer Agent and protecting
the Transfer Agent and the Fund, and the Transfer Agent at its option,
may issue replacement certificates in place of mutilated stock
certificates upon presentation thereof and without such indemnity;
(i) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(j) 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 which are authorized, based upon data provided to it by the Fund,
and issued and outstanding. The Transfer Agent shall also provide the
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 issue or sale
of such Shares, which functions shall be the sole responsibility of the
Fund.
1.2 Additional Services. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraph, the
Transfer Agent shall perform the following services:
(a) Other Customary Services. Perform the customary services of a
transfer agent, dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plan (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;
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(b) Control Book (also known as "Super Sheet"). Maintain a daily record
and produce a daily report for the Fund of all transactions and
receipts and disbursements of money and securities and deliver a copy
of such report for the Fund for each business day to the Fund no later
than 9:00 AM Eastern Time, or such earlier time as the Fund may
reasonably require, on the next business day;
(c) "Blue Sky" Reporting. The Fund shall (i) identify to the Transfer
Agent in writing those 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 Transfer Agent 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 Fund and providing a
system which will enable the Fund to monitor the total number of Shares
sold in each State;
(d) National Securities Clearing Corporation (the "NSCC"). (i) accept
and effectuate the registration and maintenance of accounts through
Networking and the purchase, redemption, transfer and exchange of
shares in such accounts through Fund/SERV (Networking and Fund/SERV
being programs operated by the NSCC on behalf of NSCC's participants,
including the Fund), in accordance with, instructions transmitted to
and received by the Transfer Agent by transmission from NSCC on behalf
of broker-dealers and banks which have been established by, or in
accordance with the instructions of authorized persons, as hereinafter
defined on the dealer file maintained by the Transfer Agent; (ii) issue
instructions to Fund's banks for the settlement of transactions between
the Fund and NSCC (acting on behalf of its broker-dealer and bank
participants); (iii) provide account and transaction information from
the affected Fund's records on DST Systems, Inc. computer system TA2000
("TA2000 System") in accordance with NSCC's Networking and Fund/SERV
rules for those broker-dealers; and (iv) maintain Shareholder accounts
on TA2000 System through Networking;
(e) New Procedures. New procedures as to who shall provide certain of
these services in Section 1 may be established in writing from time to
time by agreement between the Fund and the Transfer Agent. The Transfer
Agent 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; and
1.3 Retirement Accounts. With respect to certain retirement plans or
accounts (such as individual retirement accounts ("IRAs"), SIMPLE
IRAs, SEP IRAs, Xxxx IRAs, Education IRAs, and 403(b) Plans (such
accounts, "Retirement Accounts")), the Transfer Agent, at the request
of the Fund, shall arrange for the provision of appropriate prototype
plans as well as provide or arrange for the provision of various
services to such plans and/or accounts, which services may include
custodial services to be provided by State Street Bank and Trust (the
"Bank"), account set-up maintenance, and disbursements as well as such
other services as the parties hereto shall mutually agree upon.
2. Third Party Administrators for Defined Contribution Plans
2.1 The Fund may decide to make available to certain of its customers, a
qualified plan program (the "Program") pursuant to which the customers
("Employers") may adopt certain plans of deferred compensation ("Plan
or Plans") for the benefit of the individual
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Plan participant (the "Plan Participant"), such Plan(s) being qualified
under Section 401 (a) of the Internal Revenue Code of 1986, as amended
("Code") and administered by third party administrators which may be
plan administrators as defined in the Employee Retirement Income
Security Act of 1974, as amended (the "TPA(s)").
2.2 In accordance with the procedures established in the initial Schedule
2.1 entitled "Third Party Administrator Procedures", as may be amended
by the Transfer Agent and the Fund from time to time ("Schedule 2.1"),
the Transfer Agent shall:
(a) Treat Shareholder accounts established by the Plans in the name of
the Trustees, Plans or TPA's as the case may be as omnibus accounts;
(b) Maintain omnibus accounts on its records in the name of the TPA or
its designee as the Trustee for the benefit of the Plan; and
(c) Perform all services under Section I as transfer agent of the Funds
and not as a record-keeper for the Plans.
2.3 Transactions identified under Section 2 of this Agreement shall be
deemed exception services ("Exception Services") when such
transactions:
(a) Require the Transfer Agent to use methods and procedures other than
those usually employed by the Transfer Agent to perform services under
Section I of this Agreement;
(b) Involve the provision of information to the Transfer Agent after
the commencement of the nightly processing cycle of the TA2000 System;
or
(c) Require more manual intervention by the Transfer Agent, either in
the entry of data or in the modification or amendment of reports
generated by the TA2000 System than is usually required by
non-retirement plan and pre-nightly transactions.
3. Fees and Expenses
3.1 Fee Schedule. For the performance by the Transfer Agent pursuant to
this Agreement, the Fund agrees to pay the Transfer Agent an annual
maintenance fee for each Shareholder account as set forth in the
attached fee schedule ("Schedule 3.1"). Such fees and out-of-pocket
expenses and advances identified under Section 3.2 below may be changed
from time to time subject to mutual written agreement between the Fund
and the Transfer Agent.
3.2 Out-of-Pocket Expenses. In addition to the fee paid under Section 3.1
above, the Fund agrees to reimburse the Transfer Agent 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
Transfer Agent for the items set out in Schedule 3.1 attached hereto.
In addition, any other expenses incurred by the Transfer Agent at the
request or with the consent of the Fund, will be reimbursed by the
Fund.
3.3 Postage. Postage for mailing of dividends, proxies, Fund reports and
other mailings to all shareholder accounts shall be billed as incurred.
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3.4 Invoices. The Fund agrees to pay all fees and reimbursable expenses
within thirty (30) days following the receipt of the respective billing
notice, except for any fees or expenses which are subject to good faith
dispute. In the event of such a dispute, the Fund may only withhold
that portion of the fee or expense subject to the good faith dispute.
The Fund shall notify the Transfer Agent in writing within twenty-one
(21) calendar days following the receipt of each billing notice if the
Fund is disputing any amounts in good faith. If the Fund does not
provide such notice of dispute within the required time, the billing
notice will be deemed accepted by the Fund. The Fund shall settle such
disputed amounts within five (5) days of the day on which the parties
agree on the amount to be paid by payment of the agreed amount. If no
agreement is reached, then such disputed amounts shall be settled as
may be required by law or legal process.
3.5 Cost of Living Adjustment. Following the Initial Term, unless the
parties shall otherwise agree and provided that the service mix and
volumes remain consistent as previously provided in the Initial Term,
the total fee for all services shall equal the fee that would be
charged for the same services based on a fee rate (as reflected in a
fee rate schedule) increased by the percentage increase for the
twelve-month period of such previous calendar year of the Consumer
Price Index for Urban Wage Earners and Clerical Workers, for the Boston
area, as published bimonthly by the United States Department of Labor,
Bureau of Labor Statistics, or, in the event that publication of such
Index is terminated, any successor or substitute index, appropriately
adjusted, acceptable to both parties.
3.6 Late Payments. If any undisputed amount in an invoice of the Transfer
Agent (for fees or reimbursable expenses) is not paid when due, the
Fund shall pay the Transfer Agent interest thereon (from the due date
to the date of payment) at a per annum rate equal to one percent (1.0%)
plus the Prime Rate (that is, the base rate on corporate loans posted
by large domestic banks) published by The Wall Street Journal (or, in
the event such rate is not so published, a reasonably equivalent
published rate selected by the Fund) on the first day of publication
during the month when such amount was due. Notwithstanding any other
provision hereof, such interest rate shall be no greater than permitted
under applicable provisions of Massachusetts law.
4. Representations and Warranties of the Transfer Agent
The Transfer Agent represents and warrants to the Fund that:
4.1 It is a corporation duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
4.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
4.3 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
4.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
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5. Representations and Warranties of the Fund
The Fund represents and warrants to the Transfer Agent that:
5.1 It is a corporation duly organized and existing and in good standing
under the laws of the State of Maryland.
5.2 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
5.3 All corporate proceedings required by said Articles of Incorporation
and By-Laws have been taken to authorize it to enter into and perform
this Agreement.
5.4 It is open-end and diversified management investment company registered
under the Investment Company Act of 1940, as amended.
5.5 A registration statement under the Securities Act of 1933, as amended
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.
6. Wire Transfer Operating Guidelines/Articles 4A of the Uniform
Commercial Code
6.1 Obligation of Sender. The Transfer Agent 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 Transfer Agent has been instructed to transfer. The Transfer Agent
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 customary deadline for processing such
a request, unless the payment order specifies a later time. All payment
orders and communications received after this the customary deadline
will be deemed to have been received the next business day.
6.2 Security Procedure. 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 Transfer Agent. The Fund shall
restrict access to confidential information relating to the Security
Procedure to authorized persons as communicated to the Transfer Agent
in writing. The Fund must notify the Transfer Agent immediately if it
has reason to believe unauthorized persons may have obtained access to
such information or of any change in the Fund's authorized personnel.
The Transfer Agent shall verify the authenticity of all Fund
instructions, according to the Security Procedure.
6.3 Account Numbers. The Transfer Agent 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.
6.4 Rejection. The Transfer Agent 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
Transfer Agent's receipt of such payment order; (b) if
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initiating such payment order would cause the Transfer Agent, in the Transfer
Agent's sole judgement, to exceed any volume, aggregate dollar, network, time,
credit or similar limits which are applicable to the Transfer Agent; or (c) if
the Transfer Agent, in good faith, is unable to satisfy itself that the
transaction has been properly authorized.
6.5 Cancellation Amendment. The Transfer Agent shall use reasonable best
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 Transfer
Agent reasonable opportunity to act. However, the Transfer Agent
assumes no liability if the request for amendment or cancellation
cannot be satisfied.
6.6 Errors. The Transfer Agent shall assume no responsibility for failure
to detect any erroneous payment order provided that the Transfer Agent
complies with the payment order instructions as received and the
Transfer Agent 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.
6.7 Interest. The Transfer Agent shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized
payment order, unless the Transfer Agent is notified of the
unauthorized payment order within thirty (30) days of notification by
the Transfer Agent of the acceptance of such payment order.
6.8 ACH Credit Entries\Provisional Payments. 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 Transfer Agent with
respect to an ACH credit entry are provisional until the Transfer Agent
receives final settlement for such entry from the Federal Reserve Bank.
If the Transfer Agent does not receive such final settlement, the Fund
agrees that the Transfer Agent 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.
6.9 Confirmation. Confirmation of Transfer Agent's execution of payment
orders shall ordinarily be provided within twenty four (24) hours
notice of which may be delivered through the Transfer Agent'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.
7. Data Access and Proprietary Information
7.1 The Fund acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Transfer Agent as
part of the Fund's ability to access certain Fund-related data
("Customer Data") maintained by the Transfer Agent on databases under
the control and ownership of the Transfer Agent or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of
substantial value to the Transfer Agent or other third party. In no
event shall Proprietary Information be deemed Customer Data. The Fund
agrees to treat all
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Proprietary Information as proprietary to the Transfer Agent 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 to:
(a) Use such programs and databases (i) solely on the Fund's computers,
or (ii) solely from equipment at the location agreed to between the
Fund and the Transfer Agent and (iii) solely in accordance with the
Transfer Agent's applicable user documentation;
(b) Refrain from copying or duplicating in any way (other than in the
normal course of performing processing on the Fund's computers(s)), the
Proprietary Information;
(c) 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 Transfer Agent's instructions;
(d) Refrain from causing or allowing information transmitted from the
Transfer Agent's computer to the Fund's terminal to be retransmitted to
any other computer terminal or other device except as expressly
permitted by the Transfer Agent (such permission not to be unreasonably
withheld);
(e) Allow the Fund to have access only to those authorized transactions
as agreed to between the Fund and the Transfer Agent; and
(f) Honor all reasonable written requests made by the Transfer Agent to
protect at the Transfer Agent's expense the rights of the Transfer
Agent in Proprietary Information at common law, under federal copyright
law and under other federal or state law.
7.2 Proprietary Information shall not include all or any portion of any of
the foregoing items that: (i) are or become publicly available without
breach of this Agreement; (ii) are released for general disclosure by a
written release by the Transfer Agent; or (iii) are already in the
possession of the receiving party at the time of receipt without
obligation of confidentiality or breach of this Agreement.
7.3 The Fund acknowledges that its obligation to protect the Transfer
Agent's Proprietary Information is essential to the business interest
of the Transfer Agent and that the disclosure of such Proprietary
Information in breach of this Agreement would cause the Transfer Agent
immediate, substantial and irreparable harm, the value of which would
be extremely difficult to determine. Accordingly, the parties agree
that, in addition to any other remedies that may be available in law,
equity, or otherwise for the disclosure or use of the Proprietary
Information in breach of this Agreement, the Transfer Agent shall be
entitled to seek and obtain a temporary restraining order, injunctive
relief, or other equitable relief against the continuance of such
breach.
7.4 If the Fund notifies the Transfer Agent that any of the Data Access
Services do not operate in material compliance with the most recently
issued user documentation for such services, the Transfer Agent shall
endeavor in a timely manner to correct such failure. Organizations from
which the Transfer Agent may obtain certain data included in the Data
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Access Services are solely responsible for the contents of such data
and the Fund agrees to make no claim against the Transfer Agent 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 TRANSFER AGENT EXPRESSLY
DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
7.5 If the transactions available to the Fund include the ability to
originate electronic instructions to the Transfer Agent 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
Transfer Agent 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 Transfer Agent from time to
time.
7.6 Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this Section 7. The obligations of this
Section shall survive any earlier termination of this Agreement.
8. Indemnification
8.1 The Transfer Agent shall not be responsible for, and the Fund shall
indemnify and hold the Transfer Agent and the Bank, as to Section
8.1(e), harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of
or attributable to:
(a) All actions of the Transfer Agent or its agents or subcontractors
required to be taken pursuant to this Agreement (including the defense
of any law suit in which the Transfer Agent or affiliate is a named
party), 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;
(c) The reliance upon, and any subsequent use of or action taken or
omitted, by the Transfer Agent, or its agents or subcontractors on: (i)
any information, records, documents, data, stock certificates or
services, which are received by the Transfer Agent or its agents or
subcontractors by machine readable input, facsimile, CRT data entry,
electronic instructions or other similar means authorized by the Fund,
and which 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 broker-dealer, TPA or previous transfer agent; (ii) any
instructions or requests of the Fund or any of its officers; (iii) any
instructions or opinions of legal counsel with respect to any matter
arising in connection with the services to be performed by the Transfer
Agent under this Agreement which are provided to the Transfer Agent
after consultation with such legal counsel; or (iv) any paper or
document, reasonably believed to be genuine, authentic, or signed by
the proper person or persons;
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(d) The offer or sale of Shares in violation of federal or state
securities laws or regulations requiring 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;
(e) The negotiation and processing of any checks including without
limitation for deposit into the Fund's demand deposit account
maintained by the Transfer Agent; or
(f) Upon the Fund's request entering into any agreements required by
the NSCC for the transmission of Fund or Shareholder data through the
NSCC clearing systems.
8.2 In order that the indemnification provisions contained in this
Section 8 shall apply, upon the assertion of a claim for which the Fund
may be required to indemnify the Transfer Agent, the Transfer Agent
shall promptly notify the Fund of such assertion, and shall keep the
Fund advised with respect to all developments concerning such claim.
The Fund shall have the option to participate with the Transfer Agent
in the defense of such claim or to defend against said claim in its own
name or in the name of the Transfer Agent. The Transfer Agent shall in
no case confess any claim or make any compromise in any case in which
the Fund may be required to indemnify the Transfer Agent except with
the Fund's prior written consent.
9. Standard of Care
The Transfer Agent shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to ensure 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, including encoding and payment processing errors, unless said
errors are caused by its negligence, bad faith, or willful misconduct
or that of its employees or agents. The parties agree that any encoding
or payment processing errors shall be governed by this standard of care
and Section 4-209 of the Uniform Commercial Code is superseded by
Section 9 of this Agreement. This standard of care also shall apply to
Exception Services, as defined in Section 2.3 herein, but such
application shall take into consideration the manual processing
involved in, and time sensitive nature of, Exception Services.
10. Year 2000
The Transfer Agent will take reasonable steps to ensure that its
products (and those of its third-party suppliers) reflect the available
technology to offer products that are Year 2000 ready, including, but
not limited to, century recognition of dates, calculations that
correctly compute same century and multi century formulas and date
values, and interface values that reflect the date issues arising
between now and the next one-hundred years, and if any changes are
required, the Transfer Agent will make the changes to its products at a
price to be agreed upon by the parties and in a commercially reasonable
time frame and will require third-party suppliers to do likewise.
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11. Confidentiality
11.1 The Transfer Agent and the Fund agree that they will not, at any time
during the term of this Agreement or after its termination, reveal,
divulge, or make known to any person, firm, corporation or other
business organization, any customers' lists, trade secrets, cost
figures and projections, profit figures and projections, or any other
secret or confidential information whatsoever, whether of the Transfer
Agent or of the Fund, used or gained by the Transfer Agent or the Fund
during performance under this Agreement. The Fund and the Transfer
Agent further covenant and agree to retain all such knowledge and
information acquired during and after the term of this Agreement
respecting such lists, trade secrets, or any secret or confidential
information whatsoever in trust for the sole benefit of the Transfer
Agent or the Fund and their successors and assigns. In the event of
breach of the foregoing by either party, the remedies provided by
Section 7.3 shall be available to the party whose confidential
information is disclosed. The above prohibition of disclosure shall not
apply to the extent that the Transfer Agent must disclose such data to
its subcontractor or Fund agent for purposes of providing services
under this Agreement.
11.2 In the event that any requests or demands are made for the inspection
of the Shareholder records of the Fund, other than request for records
of Shareholders pursuant to standard subpoenas from state or federal
government authorities (i.e., divorce and criminal actions), the
Transfer Agent will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such
inspection. The Transfer Agent expressly reserves the right, however,
to exhibit the Shareholder records to any person whenever it is advised
by counsel that it may be held liable for the failure to exhibit the
Shareholder records to such person or if required by law or court
order.
12. Covenants of the Fund and the Transfer Agent
12.1 The Fund shall promptly furnish to the Transfer Agent the following:
(a) A certified copy of the resolution of the Board of Directors of the
Fund authorizing the appointment of the Transfer Agent and the
execution and delivery of this Agreement; and
(b) A copy of the Articles of Incorporation and By-Laws of the Fund and
all amendments thereto.
12.2 The Transfer Agent hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Fund for safekeeping of
stock certificates, check forms and facsimile signature imprinting
devices, if any; and for the preparation or use, and for keeping
account of, such certificates, forms and devices.
12.3 The Transfer Agent 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 Transfer Agent agrees
that all such records prepared or maintained by the Transfer Agent
relating to the services to be performed by the Transfer Agent
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.
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13. Termination of Agreement
13.1 Term. The initial term of this Agreement (the "Initial Term") is for a
period of six (6) months. This Agreement may be terminated by Fund at
the end of the initial term by notice in writing, delivered or mailed,
postage prepaid, to Transfer Agent and received not later than ninety
(90) days prior to the end of the initial term. After the initial term,
this Agreement shall continue from year to year until terminated by
Fund or Transfer Agent by notice in writing, delivered or mailed,
postage prepaid, to the other party and received not later than ninety
(90) days prior to the date specified in the notice as the date of
termination.
13.2 Expiration of Term. After the expiration of the Initial Term or Renewal
Term, whichever currently is in effect, should either party exercise
its right to terminate, all out-of-pocket expenses or costs associated
with the movement of records and material will be borne by the Fund.
Additionally, the Transfer Agent reserves the right to charge for any
other reasonable expenses associated with such termination.
13.3 Confidential Information. Upon termination of this Agreement, each
party shall return to the other party all copies of confidential or
proprietary materials or information received from such other party
hereunder, other than materials or information required to be retained
by such party under applicable laws or regulations.
13.4 Unpaid Invoices. The Transfer Agent may terminate this Agreement
immediately upon an unpaid invoice payable by the Fund to the Transfer
Agent being outstanding for more than ninety (90) days, except with
respect to any amount subject to a good faith dispute within the
meaning of Section 3.4 of this Agreement.
13.5 Bankruptcy. Either party hereto may terminate this Agreement by notice
to the other party, effective at any time specified therein, in the
event that (a) the other party ceases to carry on its business or (b)
an action is commenced by or against the other party under Title II of
the United States Code or a receiver, conservator or similar officer is
appointed for the other party and such suit, conservatorship or
receivership is not discharged within thirty (30) days.
14. Assignment and Third Party Beneficiaries
14.1 Except as provided in Section 15.1 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party
without the written consent of the other party. Any attempt to do so in
violation of this Section shall be void. Unless specifically stated to
the contrary in any written consent to an assignment, no assignment
will release or discharge the assignor from any duty or responsibility
under this Agreement.
14.2 Except as explicitly stated elsewhere in this Agreement, nothing under
this Agreement shall be construed to give any rights or benefits in
this Agreement to anyone other than the Transfer Agent and the Fund,
and the duties and responsibilities undertaken pursuant to this
Agreement shall be for the sole and exclusive benefit of the Transfer
Agent and the Fund. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and
assigns.
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14.3 This Agreement does not constitute an agreement for a partnership or
joint venture between the Transfer Agent and the Fund. Other than as
provided in Section 15., neither party shall make any commitments with
third parties that are binding on the other party without the other
party's prior written consent.
15. Subcontractors
15.1 The Transfer Agent may, without further consent on the part of the
Fund, subcontract for the performance hereof with a subsidiary or
affiliate duly registered as a transfer agent; provided, however that
the Transfer Agent shall be fully responsible to the Fund for the acts
and omissions of such subsidiary or affiliate as it is for its own acts
and omissions.
15.2 Nothing herein shall impose any duty upon the Transfer Agent in
connection with or make the Transfer Agent liable for the actions or
omissions to act of unaffiliated third parties such as by way of
example and not limitation, Airborne Services, Federal Express, United
Parcel Service, the U.S. Mails, the NSCC and telecommunication
companies, provided, if the Transfer Agent selected such company, the
Transfer Agent shall have exercised due care in selecting the same.
16. Miscellaneous
16.1 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 Directors of the Fund.
16.2 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.
16.3 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.
16.4 Consequential Damages. Neither party to this Agreement shall be liable
to the other party for special, indirect or consequential damages under
any provision of this Agreement or for any special, indirect or
consequential damages arising out of any act or failure to act
hereunder.
16.5 Survival. All provisions regarding indemnification, warranty,
liability, and limits thereon, and confidentiality and/or protections
of proprietary rights and trade secrets shall survive the termination
of this Agreement.
16.6 Severability. If any provision or provisions of this Agreement shall be
held invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
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16.7 Priorities Clause. In the event of any conflict, discrepancy or
ambiguity between the terms and conditions contained in this Agreement
and any Schedules or attachments hereto, the terms and conditions
contained in this Agreement shall take precedence.
16.8 Waiver. No waiver by either party or any breach or default of any of
the covenants or conditions herein contained and performed by the other
party shall be construed as a waiver of any succeeding breach of the
same or of any other covenant or condition.
16.9 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.
16.10 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.
16.11 Reproduction of Documents. This Agreement and all schedules, exhibits,
attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, microcard, 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
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.
16.12 Notices. All notices and other communications as required or permitted
hereunder shall be in writing and sent by first class mail, postage
prepaid, addressed as follows or to such other address or addresses of
which the respective party shall have notified the other.
(a) If to National Financial Data Services, Inc., to:
National Financial Data Services, Inc.
000 Xxxx 0xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
(b) If to the Fund, to:
NRECA
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Facsimile: 000-000-0000
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17. Additional Funds
In the event that the Fund establishes one or more series of Shares, in
addition to those listed on the attached Schedule A, with respect to which
it desires to have the Transfer Agent render services as transfer agent
under the terms hereof, it shall so notify the Transfer Agent in writing,
and if the Transfer Agent agrees in writing to provide such services, such
series of Shares shall become a Portfolio hereunder.
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.
HOMESTEAD FUNDS, INC.
By:/s/
__________________________________
ATTEST:
/s/
________________________
NATIONAL FINANCIAL DATA SERVICES, INC.
By:
__________________________________
ATTEST:
________________________
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