TRANSFER AGENCY AND SERVICE AGREEMENT
Exhibit
(h)(7)
TRANSFER
AGENCY AND SERVICE AGREEMENT
Transfer
Agency and Services Agreement (the “Agreement”) made this 1st
day of
August, 2005, between CornerCap® Group of Funds, a Massachusetts Business Trust
(the “Fund”), CornerCap Investment Counsel, Inc., a Georgia corporation
(“CornerCap”) and ALPS Mutual Funds Services, Inc., a Colorado corporation (the
“Transfer Agent”).
WHEREAS,
the
Fund is an open-end management investment company registered under the
Investment Company Act of 1940, as amended, presently consisting of three
portfolios having one class of shares, listed in Appendix
A
attached
hereto; such investment portfolio and any additional investment portfolios
that
may be established by the Fund is referred to herein individually as a
“Portfolio” and collectively as the “Portfolios”; and
WHEREAS,
the
Transfer Agent provides certain transfer agency services to investment
companies; and
WHEREAS,
CornerCap and the Fund have entered into an administrative services agreement
(the “Services Agreement”) pursuant to which CornerCap provides day-to-day
administrative and other services to the Fund and certain of said services
are
commonly referred to as those performed by a transfer agent;
WHEREAS,
CornerCap and the Fund, desire to appoint the Transfer Agent as the Fund’s
transfer agent, dividend disbursing agent, and 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:
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1.
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Terms
of Appointment and Duties
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1.1
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Transfer
Agency Services.
Subject to the terms and conditions set forth in this Agreement,
CornerCap
and the Fund, on behalf of the Portfolio(s), hereby employ and appoint
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 beneficial
interest (“Shares”), dividend disbursing agent, and agent in connection
with any accumulation, open-account or similar plan provided to the
shareholders of each Portfolio of the Fund (“Shareholders”) and as 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
Portfolio, as applicable and the Transfer Agent agrees that it will
perform the following services:
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(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
by
the Fund (the “Custodian”);
(b)
Pursuant
to purchase orders, issue the appropriate number of Shares and hold such Shares
in the appropriate Shareholder account;
(c)
Receive
for acceptance redemption requests and redemption directions and deliver the
appropriate documentation thereof to the Custodian;
(d)
With
respect to the transactions enumerated in 1.1 (a), (b) and (c) above, the
Transfer Agent shall execute transactions directly with broker-dealers and
other
financial institutions authorized by the Fund, deemed to be acting as a limited
agent of the Fund. The Transfer Agent will execute transactions only from
broker-dealers and other financial institutions who have adopted and implemented
internal controls reasonably designed to ensure that order or redemption
requests received in proper form by the terms specified in the Prospectus
(currently, the close of regular trading on the New York Stock Exchange) will
be
processed on that day and order or redemption requests received in proper form
after the terms specified in the Prospectus (currently, the close of regular
trading on the New York Stock Exchange) will be processed on the next business
day;
(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)
Maintain
records of account for and advise the Fund and its Shareholders as to the
foregoing;
(i)
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;
and
(j)
Orders
or
redemption requests received in proper form by the terms specified in the
Prospectus (currently, the close of regular trading on the New York Stock
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Exchange)
will be processed by the Transfer Agent that day and orders or redemption
requests received in proper form after the terms specified in the Prospectus
(currently, the close of regular trading on the New York Stock Exchange) will
be
processed by the Transfer Agent on the next business day.
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1.2
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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:
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(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, withholding taxes on U.S.
resident and non-resident alien accounts and maintaining records with respect
to
such withholding, 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;
(b)
Control
Book.
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, providing a system which will enable the Fund
to monitor the total number of Shares sold in each State, and providing any
other information reasonably requested by the Fund to fulfill the Fund’s
obligation to monitor Blue Sky compliance;
(d)
National
Securities Clearing Corporation (the “NSCC”). The
Transfer Agent shall (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 the NSCC on behalf of broker-dealers and
banks which have been established
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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 the
Transfer Agent’s computer system (the “System”) in accordance with NSCC’s
Networking and Fund/SERV rules for those broker-dealers; and (iv) maintain
Shareholder accounts on the System through Networking; and
(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. Pursuant to such agreement 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.
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2.
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Fees
and Expenses
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2.1
Fee
Schedule. For
the
performance by the Transfer Agent pursuant to this Agreement, the Fund agree
to
pay the Transfer Agent fees as set forth in the attached fee schedule (“Schedule
B”). Such fees and out-of-pocket expenses and advances identified in Section
2.2
below may be changed from time to time subject to mutual written agreement
between the Fund and the Transfer Agent.
2.2
Out-of-Pocket
Expenses. In
addition to the fee paid under Section
2.1
above,
the Fund agrees to reimburse the Transfer Agent for reasonable out-of-pocket
expenses, including but not limited to statement and confirmation production,
postage, forms, NSCC interface fees, allocation of service auditor’s report,
telephone, records storage, or advances incurred by the Transfer Agent for
the
items set out in Schedule
B
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.
2.3
Postage.
Postage
for mailing of dividends, Fund reports and other mailings to all shareholder
accounts shall be advanced to the Transfer Agent by the Fund at least seven
(7)
days prior to the mailing date of such materials.
2.4
Invoices.
The
Fund
agree 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 that 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 are 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
ten (10) business days from the day on which the parties agree on the amount
to
be paid, or at such later date as may be agreed upon by the Transfer Agent,
by
payment of the agreed amount. If no
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agreement
is reached, then such disputed amounts shall be settled as may be required
by
law or legal process.
2.5
Cost
of Living Adjustment.
Following each Term, unless the parties shall otherwise agree and provided
that
the service mix and volumes remain consistent as previously provided in the
previous Term as defined below, 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 Schedule B) 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 Denver-Boulder-Greeley
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, applicable to both
parties.
2.6
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 Transfer Agent) 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
Colorado law.
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3.
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Representations
and Warranties of the Transfer
Agent
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The
Transfer Agent represents and warrants to the Fund
that:
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3.1
It
is a
Colorado corporation duly organized and existing and in good standing under
the
laws of the State of Colorado.
3.2
It
is
duly qualified to carry on its business in the State of Colorado.
3.3
It
is
empowered under applicable laws and by its Declaration of Trust and By-Laws
to
enter into and perform this Agreement.
3.4
All
requisite corporate proceedings have been taken to authorize it to enter into
and perform this Agreement.
3.5
It
has
and will continue to have access to the necessary facilities, equipment and
personnel to perform its duties and obligations under this
Agreement.
3.6
It
is,
and will continue to be, registered as a transfer agent under the Securities
Exchange Act of 1934, as amended.
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3.7
It
will
adopt and implement written policies and procedures reasonably designed to
prevent violations of the Federal Securities Laws (as defined under Rule 38a-1
of the Investment Company Act of 1940, as amended) by the Fund. It will review,
no less frequently than annually, the adequacy of the policies and procedures
and the effectiveness of their implementation and will report to the Fund any
material changes made to the policies and procedures since the date of the
last
report, and any material changes made to the policies and procedures recommended
as a result of the annual review. It will provide the Fund with an annual report
of each Material Compliance Matter (as defined under Rule 38a-1 of the
Investment Company Act of 1940, as amended) that occurred since the date of
the
last report.
3.8
It
will
impose and collect any redemption fees imposed by the Portfolios of the Fund
in
accordance with the terms set forth in the Prospectus.
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4.
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Representations
and Warranties of the Fund
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The
Fund
represents and warrants to the Transfer Agent that:
4.1
It
is a
business trust organized and existing and in good standing under the laws of
the
State of Massachusetts.
4.2
It
is
empowered under applicable laws and by its Declaration of Trust and Bylaws
to
enter into and perform this Agreement.
4.3
All
corporate proceedings required by said Declaration of Trust and Bylaws have
been
taken to authorize it to enter into and perform this Agreement.
4.4
It
is an
open-end management investment company registered under the Investment Company
Act of 1940, as amended.
4.5
A
registration statement under the Securities Act of 1933, as amended is
currently, or will be upon commencement of operations, 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.
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5.
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Wire
Transfer Operating Guidelines/Articles 4A of the Uniform Commercial
Code
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5.1
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”),
attached
hereto as Schedule C chosen
for Fund 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
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time.
All
payment orders and communications received after the customary deadline will
be
deemed to have been received the next business day.
5.2
Security
Procedure.
The
Fund acknowledges that the Security Procedure it has designated on the Fund
Selection Form, attached hereto as Schedule C, was selected by the Fund. The
Fund must notify the Transfer Agent immediately 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. The Transfer Agent is
authorized to make exceptions to the Security Procedures if instructed by the
Fund. For purposes of this section only, instructions received from
representatives of the Fund’s Investment Adviser, will be considered to be
instructions from the Fund.
5.3
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.
5.4
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 initiating such payment order would cause the Transfer
Agent, in the Transfer Agent’s sole judgment, 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.
5.5
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, in absence
of negligence, bad faith or willful misconduct by the Transfer Agent, the
Transfer Agent assumes no liability if the request for amendment or cancellation
cannot be satisfied.
5.6
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 and acts without negligence, bad faith or willful misconduct.
The Security Procedure is established for the purpose of authenticating payment
orders only and not for the detection of errors in payment orders.
5.7
Interest.
Absent
negligence, bad faith or willful misconduct, 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.
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5.8
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 Transfer
Agent 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.
5.9
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 information systems, or by facsimile or call-back. Fund
must report any objections to the execution of an order within thirty (30)
days.
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6.
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Indemnification
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6.1
The
Transfer Agent shall not be responsible for, and the Fund shall indemnify and
hold the Transfer Agent 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, 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
in
writing, 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, third-party administrator or previous transfer agent; (ii) any
instructions or requests of the Fund or any of its officers reasonably believed
by the Transfer Agent to be authorized by the Fund’s Board of Trustees; (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
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consultation
with such legal counsel; or (iv) any paper or document, reasonably believed
to
be genuine, authentic, and signed by the proper person or persons;
(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,
excluding checks not made payable to the order of the Fund, the Fund’s
management company, custodian, transfer agent or distributor or the retirement
account custodian or trustee for a plan account investing in Shares (such checks
are commonly known as “third party checks”) which checks are tendered to a bank
for the purchase of Shares; 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.
6.2 In
order
that the indemnification provisions contained in this Section
6
shall
apply, upon the assertion of a claim for which the Fund may be required to
indemnify the Transfer Agent, the Transfer Agent shall have acted without
negligence, bad faith or willful misconduct and 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.
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7.
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Standard
of Care
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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. According to mutually
agreed upon procedures, the Transfer Agent agrees to use reasonable efforts
with
regard to the processing of investments checks. 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
7
of this
Agreement.
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8.
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Confidentiality
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8.1
The
Transfer Agent, CornerCap 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
Shareholders’ or customers’ lists, trade secrets, cost figures and projections,
profit figures and projections, or any personal information of the Fund’s
shareholders or other secret or confidential information whatsoever, whether
of
the Transfer Agent or of the Fund, used or gained by the Transfer Agent,
CornerCap® or the Fund during performance under this Agreement. For purposes of
this Agreement, confidential information shall also include:
(a)
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 relationship, customer
profiles, Shareholder personal information, sales estimates, business plans,
and
internal performance results relating to the past, present or future business
activities of the Fund or the Transfer Agent, their respective affiliates and
customers, shareholders, clients and suppliers of any of them;
(b)
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 Fund or the Transfer Agent a competitive advantage
over its competitors;
(c)
All
confidential or proprietary concepts, documentation, reports, data
specifications, computer software, source code, object code, flow charts,
databases, inventions, know-how and trade secrets, whether or not patentable
or
copyrightable; and
(d)
Information
that the Fund is required to keep confidential pursuant to agreements with
third
party service providers.
Confidential
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 with the written permission of the other party for general
disclosure by a written release by the Transfer Agent or the Fund, as the case
may be; (iii) are already in the possession of the receiving party at the time
of receipt without obligation of confidentiality or breach of this Agreement;
(iv) are subsequently disclosed to a party hereto on a non-confidential basis
by
a third party that is not bound by an agreement of non disclosure or
confidentiality with another party hereto or its affiliates, which rightfully
acquired such information; or (v) are independently developed by a party
hereto.
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
-10-
successors
and assigns. The above prohibition of disclosure shall not apply to the extent
that the Transfer Agent must disclose such data to its sub-contractor or Fund
agent for purposes of providing services under this Agreement, provided such
parties are bound by the same obligations to maintain confidentiality as set
forth above.
8.2
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 use reasonable
efforts to notify the Fund to the extent legally permitted 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.
8.3
The
Fund
and the Transfer Agent shall each comply with all applicable laws, rules and
regulations relating to privacy, confidentiality, data security and the handling
of personal financial information applicable to it that may be established
from
time to time, including but not limited to the Xxxxx-Xxxxx-Xxxxxx Act and
Securities and Exchange Commission Regulation S-P (17 CFR Part 248) promulgated
thereunder.
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9.
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Covenants
of the Fund and the Transfer
Agent
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9.1
The
Fund
shall promptly furnish to the Transfer Agent the following:
(a)
A
certified copy of the resolution of the Board of Trustees of the Fund
authorizing the appointment of the Transfer Agent and the execution and delivery
of this Agreement; and
(b)
A
copy of
the Declaration of Trust and By-Laws of the Fund and all amendments
thereto.
9.2
The
Transfer Agent hereby agrees to establish and maintain facilities and procedures
reasonably acceptable to the Fund for safekeeping of check forms and facsimile
signature imprinting devices, if any; and for the preparation or use, and for
keeping account of, such certificates, forms and devices.
9.3
The
Transfer Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable as required by
applicable laws, rules and regulations. 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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9.4
The
Transfer Agent shall provide assistance to and cooperate with the Fund’ internal
or external auditors in connection with any Fund-directed audits. The Transfer
Agent shall provide such assistance in accordance with reasonable procedures
and
at reasonable frequencies, which shall not exceed twice each calendar year
unless otherwise agreed to by the parties, and the Fund shall provide reasonable
advance notice to the Transfer Agent of such audits. For purposes of such
audits, at the request of the Fund, the Transfer Agent will use reasonable
efforts to make available, during normal business hours, all required records,
data and operating processes for review by such auditors. On an annual basis,
the Transfer Agent will provide the Fund with copies of its SAS 70 report.
The
Fund understands and agrees that its auditors will be required by the Transfer
Agent to execute a confidentiality agreement prior to being given access to
such
records, data and operating processes.
|
10.
|
Termination
of Agreement
|
10.1
Term.
The
term of this Agreement shall be 3 years (“Initial Term”) from the date first
stated above unless terminated pursuant to the provisions of this Section
10.
After
the Initial Term, this Agreement will renew automatically from year to year
(each such renewal year and the Initial Term, each a “Term”). After the initial
term, this Agreement may be terminated by either party upon at least sixty
(60)
days’ written notice to the other party. No later than ninety (90) days before
the expiration of each Term the parties to this Agreement will agree upon a
Schedule B for the upcoming Term. Otherwise the fees shall be increased pursuant
to Section 2.5 of this Agreement. In the event of the termination of this
Agreement, the terms of this Agreement shall continue in effect until the date
that the Deconversion (defined below) of the Fund is completed.
10.2
Termination;
Deconversion.
In
the
event that this Agreement is terminated, the Transfer Agent agrees that, in
order to provide for uninterrupted service to the Fund, the Transfer Agent,
at
the Fund’ request, shall offer reasonable assistance to the Fund in converting
the records of the Fund from the Transfer Agent’s systems to whatever services
or systems are selected by the Fund (the “Deconversion”). As used herein
“reasonable assistance” and “transitional assistance” shall not include
requiring the Transfer Agent (i) to assist any new service or system provider
(the “new agent”) to modify, to alter, to enhance, or to improve the new agent’s
system, or to provide any new functionality to the new agent’s system, (ii) to
disclose any proprietary information of the Transfer Agent, or (iii) to develop
Deconversion software, to modify any Transfer Agent software, or to otherwise
alter the format of the data as maintained on any Transfer Agent’s systems.
Notwithstanding
anything contained in this Agreement to the contrary, should the Fund desire
to
carry out such Deconversion, the Transfer Agent shall use its best efforts
to
facilitate the conversion on such date; however, there can be no guarantee
or
assurance that the Transfer Agent will be able to complete a Deconversion by
such requested date.
-12-
10.3
Fees
and Expenses upon Termination. Should
the
Transfer Agent terminate with cause or the Fund or CornerCap terminate for
any
reason, all reasonable out-of-pocket expenses or costs associated with the
movement of records and material will be borne by CornerCap and the Fund.
Additionally, the Transfer Agent reserves the right to charge a reasonable
fee
for its Deconversion services. In
the
event of termination of this Agreement, CornerCap and the Fund agrees to pay
the
Transfer Agent promptly all amounts due the Transfer Agent hereunder
for
services performed and reasonable out-of-pocket expenditures incurred prior
to
such termination. If the Fund terminates this Agreement unilaterally without
cause prior to the end of the Initial Term, it will be in default hereunder,
causing substantial damages to ALPS. Because of the difficulty of estimating
the
damages that will result, the Fund agrees to pay to ALPS, as liquidated damages
for such default, an amount equal to twenty-five percent (25%) of the annual
fee
in effect at the time of termination (the “Default Payment”). The parties agree
that the Default Payment is a reasonable forecast of probable actual loss to
ALPS and that this sum is agreed to as liquidated damages and not as a
penalty.
10.4
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.
10.5
Termination
by the Fund.
The
Fund,
in
addition to any other rights and remedies, shall have the right to terminate
this Agreement upon the occurrence of (i) the bankruptcy of the Transfer Agent
or the appointment of a receiver therefore if such proceedings are not dismissed
within 21 days of being brought or (ii) the material failure by the Transfer
Agent to perform its duties and obligations under this Agreement or a material
breach of this Agreement by the Transfer Agent. With respect to (i), the
termination shall be effective at any time specified in a written notice from
the Fund to the Transfer Agent. With respect to (ii), the Fund shall provide
the
Transfer Agent with written notice identifying such failure or breach and
stating its intention to terminate the Agreement in sixty (60) days from the
date of such notice if such failure or breach has not been cured by the Transfer
Agent within thirty (30) days after receipt of such written notice from the
Fund, except that any failure by the Transfer Agent to maintain its registration
as a transfer agent must be cured immediately.
10.6
Termination
by the Transfer Agent.
The
Transfer Agent, in addition to any other rights and remedies, shall have the
right to terminate this Agreement upon the occurrence at any time of (i) the
bankruptcy of the Fund or the appointment of a receiver therefore if such
proceedings are not dismissed within 21 days of being brought, or (ii) the
material failure by the Fund to perform its duties and obligations under this
Agreement or a material breach of this Agreement by the Fund. With respect
to
(i), the termination shall be effective at any time specified in a written
notice from the Transfer Agent to the Fund. With respect to (ii), the Transfer
Agent shall provide the Fund with written notice identifying such failure or
breach and stating its intention to terminate the Agreement in sixty (60) days
from the date of such notice if such failure
-13-
or
breach
has not been cured by the Fund within thirty (30) days after receipt of such
written notice from the Transfer Agent.
|
11.
|
Assignment
and Third Party Beneficiaries
|
11.1
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.
11.2
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.
11.3
This
Agreement does not constitute an agreement for a partnership or joint venture
between the Transfer Agent and the Fund. Neither party shall make any
commitments with third parties that are binding on the other party without
the
other party’s prior written consent.
|
12.
|
Subcontractors
|
12.1
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,
and shall have acted without negligence, bad faith or willful
misconduct.
|
13.
|
Miscellaneous
|
13.1
Amendment.
This
Agreement may be amended or modified by a written agreement executed by both
parties and, if material, authorized or approved by a resolution of the Board
of
Trustees of the Fund.
13.2
Colorado
Law to Apply. This
Agreement shall be construed and the provisions thereof interpreted under and
in
accordance with the laws of the state of Colorado.
13.3
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, and such party has acted without negligence, bad faith or willful
-14-
misconduct,
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. In the
event of a disaster rendering the Transfer Agent’s systems or facilities
inoperable, the Transfer Agent will use all reasonable efforts to continue
to
provide services to the Fund in accordance with the Transfer Agent’s then
current Business Contingency plan, which includes such general back-up
facilities as the Transfer Agent reasonably determines to be
appropriate.
13.4
Notice.
A
copy of
the Declaration of Trust is on file with the Secretary of the State of
Massuchetts, and notice is hereby given that this instrument is executed on
behalf of the Board of Trustees of the Fund as Trustees and not individually
and
that the obligations of this instrument are not binding upon any of the Trustees
or shareholders individually but are binding only upon the assets and property
of the Fund.
13.5
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.
13.6
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.
13.7
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.
13.8
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.
13.9
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.
13.10
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.
13.11
Reproduction
of Documents. This
Agreement and all schedules, exhibits, attachments and amendments hereto may
be
reproduced by any electronic, photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process. The parties hereto each agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a
-15-
party
in
the regular course of business, and that any enlargement, facsimile or further
reproduction shall likewise be admissible in evidence.
13.12
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) |
ALPS
Mutual Fund Services, Inc.
|
0000
Xxxxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention:
General Counsel
Fax:
000.000.0000
|
(b)
|
The
CornerCap Funds, Inc.
|
The
Peachtree Street, N.E., Suite 1700
0000
Xxxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attention:
Fax:
|
(c)
|
CornerCap
Investment Counsel, Inc.
|
The
Peachtree Street, N.E., Suite 1700
0000
Xxxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attention:
Fax:
|
14.
|
Additional
Fund
|
In
the
event that the Fund establish one or more Portfolios, 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 Portfolio 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.
-16-
|
ALPS
MUTUAL FUNDS SERVICES, INC.
|
CORNERCAP
GROUP OF FUNDS
|
|
By:
__________________
|
By:
_________________________
|
|
Name:
__________________
|
Name:
Xxxxxx
X.
Xxxxx
|
|
Title:
_____________________
|
Title:
President
|
CORNERCAP
INVESTMENT COUNSEL, INC.
By:
____________________________
Name: Xxxxxx
X. Quinn________ ____
Title: Chief
Executive
Officer
-17-
SCHEDULE
A
Fund
List
CornerCap®
Balanced Fund
CornerCap®
Small-Cap Value Fund
CornerCap®
Contrarian Fund
-18-
SCHEDULE
B
Fee
Schedule
Base
Fee:
Fees
are
billable on a monthly basis at the rate of 1/12 of the annual fee. A charge
is
made for an account in the month that an account opens.
Annual
Base Fee of:
$15,000
annual base fee per Portfolio
$3,500
annual fee per each private-labeled Portfolio
Annual
Open Account Fee of:
$15
per
open account
Annual
Inactive Account Fee of:
$5
per
inactive account1.
Annual
Closed Account Fee of
$0.50
per
closed account2.
1
An
inactive account is an account with a zero balance that has had activity in
the
last eighteen months.
2
A
closed
account is an account with a zero balance that has not had activity in the
last
eighteen months.
Out-of-Pocket
Fees:
The
following list includes some, but not all, of the Out-of-Pocket Fees and
expenses that may be incurred by ALPS from outside vendors. All Out-of-Pocket
Fees and expenses, whether or not listed below, are passed directly through
at
cost to our clients as Out-of-Pocket Fees and expenses. The following fees
are
estimates and are subject to change:
|
·
|
Monthly
NSCC-interface fees
|
|
·
|
The
cost of printing and mailing shareholder confirmations and statements
|
|
·
|
The
cost of fund-specific statement paper and
envelopes
|
|
·
|
Postage
|
|
·
|
SAS
70 report (calculated on a pro-rata basis per
Fund)
|
-19-
|
·
|
Customized
programming
|
|
·
|
Other
miscellaneous expenses that may occur at the Trust’s
direction
|
|
ALPS
MUTUAL FUNDS SERVICES, INC.
|
CORNERCAP
GROUP OF FUNDS
|
|
By:
______________________
|
By:
_________________________
|
|
Name:
____________________
|
Name:
Xxxxxx
X.
Xxxxx
|
|
Title:
_____________________
|
Title:
President
|
CORNERCAP
INVESTMENT COUNSEL, INC.
By:__________________________
Name: Xxxxxx
X.
Xxxxx
Title: Chief
Executive
Officer
-20-
Schedule
C
SECURITY
PROCEDURES
Telephone
Verification Procedures:
The
Transfer Agent will require verification of all of the following by the
caller
□ Social
Security number or Tax ID number
□ Account
Registration / Legal Name of Account
□ Mailing
Address of Record
Fax
Verification Procedures:
The
Transfer Agent will require that the fax contain an authorized signature for
verification. In addition, for faxed applications, the Transfer Agent will
require the shareholder to mail the original in a timely manner.
|
Phone
|
Fax
|
Mail
|
||
|
NO
Signature
Guarantee
Required
|
Signature
Guarantee
Required(2)
|
|||
|
Redemptions
|
||||
|
Wire
to bank instructions on record
|
X
|
X
|
X
|
|
|
Wire
to new bank instructions
|
X
|
|||
|
Exchanges
between classes
|
X
|
X
|
X
|
|
|
Purchases
|
||||
|
Purchase
by wire
|
X
|
X
|
X
|
|
|
Transfers
|
||||
|
Transfer
assets to different account registration
|
X
|
X
|
||
|
Account
Maintenance
|
||||
|
Establish
new account
|
X
|
X
|
||
|
Change
address of record
|
X
|
X
|
X
|
|
|
Change
account registration
|
X
|
X
|
||
|
Add
bank wiring instructions
|
X
|
X
|
||
|
Remove
bank wiring instructions
|
X
|
X
|
X
|
|
|
Change
interested party (additional mailings)
|
X
|
X
|
||
|
Change
broker dealer of record
|
X
|
X
|
||
|
Change
dividend options
|
X
|
X
|
X
|
|
|
Addition
or removal of authorized signer or transactor
|
X
|
X
|
||
-21-
In
addition to the transaction discussed above, ALPS will follow the following
procedures with respect to corporate accounts:
|
§
|
The
Transfer Agent may require authorization from the Fund to accept
outdated
corporate resolutions.
|
|
§
|
The
Transfer Agent will require authorization from the Fund to accept
transactions or maintenance requests for accounts with corporate
resolutions missing authorized
signatories.
|
|
ALPS
MUTUAL FUNDS SERVICES, INC.
|
CORNERCAP
GROUP OF FUNDS
|
|
By:
__________________________
|
By:
_________________________
|
|
Name:
________________________
|
Name:
Xxxxxx
X.
Xxxxx
|
|
Title:
________________________
|
Title:
President
|
CORNERCAP
INVESTMENT COUNSEL, INC.
By:___________________________
Name: Xxxxxx
X.
Xxxxx
Title: Chief
Executive
Officer
-22-
