EXHIBIT H-2
TRANSFER AGENCY SERVICES AGREEMENT
THIS TRANSFER AGENCY SERVICES AGREEMENT is made on ___________________, 2013,
by and between ____________________________ a ______________________________
organized under the laws of ____________________________, (the "CLIENT") and
Northeast Retirement Service, Inc., a _____ corporation with its primary place
of business at 00 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "SERVICE
PROVIDER" and, with the Client, the "PARTIES").
1. DEFINITIONS
Schedu1e 1 contains capitalized terms that have the meanings set forth
therein. Other capitalized terms used but not defined in Schedule 1 will
have the meanings set forth herein.
2. SERVICES AND RELATED TERMS AND CONDITIONS
(A) SERVICES. The Services are described in Schedule 2 (the "SERVICES
SCHEDULE"). The Service Provider will perform the Services in accordance
with and subject to the terms of this Agreement starting on the Effective
Date and ending on the final day of the Term. The Services will be provided
only on Business Days, and any functions or duties normally scheduled to be
performed on any day that is not a Business Day will be performed on, and
as of, the next Business Day.
(B) SERVICE CHANGES. The Service Provider will be obliged to perform only
those Services set forth in the Services Schedule. The Service Provider
will not be obliged to change the Services unless it has agreed to do so
pursuant to an amendment to the Services Schedule. The Service Provider
will reasonably accommodate written requests to change the Services that
the Service Provider determines in good faith to be non-material taking
into account the effort and costs required to effect the requested change;
the Client recognizes that isolated requests for changes or adjustments,
when combined with other such requests, may in the aggregate have a
material effect. Any change to the Services agreed by the Service Provider
(a "SERVICE CHANGE") will be set forth in an amendment to the Services
Schedule signed by both Parties; each such amendment will specify (i) the
timeline and dependencies, and the parties' respective obligations, for
implementing the Service Change and (ii) any implementation or additional
ongoing fees and expenses that may be required to effect such Service
Change. The foregoing process is the "CHANGE CONTROL PROCESS."
(C) PROVISION OF INFORMATION; COOPERATION. In order to permit the Service
Provider to provide the Services, the Client agrees to provide, and to
cause each other agent or current or immediately preceding service provider
to the Client to provide, to the Service Provider the information (and in
such reasonable medium) that the Service Provider may reasonably request in
connection with the Services and this Agreement, including, without
limitation, any Organic Documents, Offering Documents and Policies and
Procedures of the Client and any amendments thereto. Client requests to
make a material change to the Services necessitated by a change to the
Client's Organic Documents, Offering Documents or such Policies and
Procedures or a change in applicable Law will be effective only upon
execution by the parties of an amendment to the Services Schedule, as
contemplated by the Change Control Process.
(D) DEPENDENCIES. Without prejudice to Section 6(B), the Service Provider will
not be liable to the Client or any other Person for any failure to provide
any Service in the following circumstances: (i) if any Dependency set forth
in Schedule 3 is not met through no fault of the Service Provider; (ii) if
the failure is at the written request or with the written consent of an
Authorized Person; (iii) if any Law to which the Service Provider is
subject prohibits or limits the performance of the Services; and/or (iv) if
the failure results from a Force Majeure Event.
Notwithstanding the foregoing, the Service Provider will nevertheless use
reasonable efforts to provide the Services while any of the circumstances
specified in this Section 2(D) subsist, provided that the Client will
reimburse the Service Provider for any extraordinary costs (relative to the
costs that it would have incurred in the ordinary course of providing the
Services, assuming such failure or inability had not so occurred) to the
extent that they have been reasonably incurred or agreed in advance between
the Parties. For purposes
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hereof, "FORCE MAJEURE EVENT" means any event due to any cause beyond the
reasonable control of the Service Provider or, as applicable, any
Administrative Support Provider, such as unavailability of communications
systems or pricing information, sabotage, fire, flood, explosion, acts of
God, civil commotion, strikes or industrial action of any kind, riots,
insurrection, war or acts of government, or suspension or disruption of any
relevant stock exchange or securities clearance system or market. The
Service Provider will use reasonable efforts to minimize the adverse
effects to the Client of any Force Majeure Event.
(E) INFORMATION AND DATA SOURCES; LIABILITY FOR THIRD PARTIES. For purposes of
this Agreement:
(i) as between the Client and the Service Provider, the Client is
responsible for the accuracy and completeness of (A) the information
contained in the Organic Documents, Offering Documents and any
Policies and Procedures submitted to the Service Provider pursuant to
Section 2(C) above and (B) any data submitted to the Service Provider
for processing by the Client or its employees, agents and
subcontractors (other than the Service Provider) and predecessor
service providers, including information and data submitted by (1) any
investment adviser providing services or acting for the benefit of the
Client ("INVESTMENT ADVISERS") or (2) any intermediaries or
distributors, or their agents, acting for the benefit of the Client or
its Customers ("INTERMEDIARIES"). The Service Provider may charge the
Client for additional work required to re-process any such incorrect
data at its standard hourly rates or as set forth in the Fee Schedule;
(ii) Subject to Sections 2(D) and 6, the Service Provider is responsible
for the accuracy and completeness of any data prepared and/or produced
by the Service Provider or its employees, agents or subcontractors
(other than Non-Discretionary Subcontractors);
(iii) the Service Provider will not be responsible for the errors or
failures to act of, or the inaccuracy of any data supplied by, (A)
securities pricing services, (B) clearance or settlement systems, (C)
custodians that hold the assets of the Client or its Customers
("CUSTODIANS"), (D) any Persons specified in Section (E)(i) above, (E)
any Persons who possess information about Client or its Customers
reasonably necessary for the Service Provider to provide the Services
and with whom the Service Provider is required to interact in order to
receive such information, including, without limitation, agents of
Investment Advisers, Intermediaries, Custodians or other Client
service providers; and (F) third parties engaged by the Service
Provider at the request of the Client to provide services to or for
the benefit of the Client or its Customers ("NON-DISCRETIONARY
SUBCONTRACTORS"), and such Persons will not be considered agents or
subcontractors of the Service Provider for purposes of this Agreement;
and
(iv) the Service Provider is permitted to appoint agents and
subcontractors to perform any of the duties of the Service Provider
under this Agreement ("ADMINISTRATIVE SUPPORT PROVIDERS"). The Service
Provider will use reasonable care in the selection and continued
appointment of Administrative Support Providers.
(F) OTHER SERVICES AND ACTIVITIES. The Client acknowledges that Service
Provider and its Affiliates may provide services, including other financial
services, to other Persons. Because the Service Provider may be prohibited
under applicable Law or contractually from disclosing to the Client any
fact or thing that may come to the knowledge of the Service Provider or
such Affiliates in the course of providing such services, neither the
Service Provider nor such Affiliates will be required or expected under
this Agreement to do so. Subject to compliance with its confidentiality
obligations hereunder, the Service Provider may acquire, hold or deal with,
for its own account or for the account of other Persons, any shares or
securities in which the Client is authorized to invest (for itself or its
Customers), and the Service Provider will not be required to account to the
Client for any profit arising therefrom.
3. INSTRUCTIONS
(A) MEDIUM OF TRANSMISSION. Instructions may be transmitted manually or
through any electronic medium, as agreed by the Parties or, absent such
agreement, consistent with the standards and practices of professionals
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for hire providing services similar to the Services in the jurisdiction in
which the Service Provider performs services under this Agreement.
(B) SECURITY PROCEDURES. The Client will comply with reasonable security
procedures designed by the Service Provider to verify the origination of
Instructions (the "SECURITY PROCEDURES"). The Service Provider's sole
obligation will be to comply with what is contained in the Security
Procedures to establish the identity or authority of any Authorized Person
to send any Instruction. The Service Provider is not responsible for errors
or omissions made by the Client or resulting from fraud or the duplication
of any Instruction by the Client. The Service Provider may act on an
Instruction if it reasonably believes it contains sufficient information.
(C) REQUESTS FOR INSTRUCTIONS. The Service Provider may request Instructions
from an Authorized Person and may refuse to act if such refusal is
permitted by this Agreement or otherwise reasonable under the
circumstances, including when the Service Provider reasonably doubts the
contents, authorization, origination or compliance with any Security
Procedures or applicable Law of an Instruction, and will promptly notify
the Client of its decision.
(D) RELIANCE. The Service Provider may rely on the authority of each
Authorized Person until the Service Provider has received notice acceptable
to it of any change from the Client or any other Authorized Person and the
Service Provider has had a reasonable time to act (after which time it may
rely on the change). The Service Provider may assume that any Instruction
does not conflict with any Law or the Organic Documents or Offering
Documents applicable to the Client.
(E) CUT OFF TIMES. The Service Provider is only obligated to act on
Instructions received prior to applicable cut- off times on a Business Day.
Instructions are to be given in the English language unless the Service
Provider otherwise agrees in writing.
(F) DEEMED DELIVERY Unless shown to have been received earlier, such notice,
instruction or other instrument shall be deemed to have been delivered, in
the case of personal delivery, at the time it is left at the premises of
the party, in the case of a registered letter at the expiration of five (5)
business days after posting and, in the case of fax or electronic means,
immediately on dispatch; provided that, if any document is sent by fax or
electronic means outside normal business hours, it shall be deemed to have
been received at the next time after delivery when normal business hours
commence. Evidence that the notice, instruction, or other instrument was
properly addressed, stamped, and put into the post shall be conclusive
evidence of posting. In proving the service of notice sent by fax or
electronic means it shall be sufficient to prove that the fax or electronic
communication was properly transmitted.
4. COMPLIANCE WITH LAWS; ADVICE
(A) COMPLIANCE. The Service Provider will comply in all material respects with
all Laws that it is subject to. The Client will comply in all material
respects with all Laws applicable to the subject matter of the Services and
the Client's receipt of the Services. Nothing in this Agreement will oblige
either Party to take any action that will breach any Law applicable to such
Party, or to omit to take an action if such omission will breach any such
Law.
(B) NO FIDUCIARY ETC. The Service Provider is not, under this Agreement, (i)
acting as, and is not required to take any action that would require
licensing or registration as, a fiduciary, an investment adviser, a
certified public accountant, or a broker or dealer; or (ii) providing
investment, legal or tax advice to the Client or any other Person or acting
as a Fund's independent accountants or auditors.
(C) LAWS APPLICABLE TO THE CLIENT. Except as specifically set forth in the
Services Schedule, the Service Provider assumes no responsibility for
compliance by the Client with any Laws applicable to the Client; and,
notwithstanding any other provision of this Agreement to the contrary, the
Service Provider assumes no responsibility for compliance by the Client or
the Service Provider with the Laws of any jurisdiction other than those
governing this Agreement.
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(D) ADVICE OF EXPERTS. About any matter related to the Services, the Service
Provider may seek advice from counsel or independent accountants of its own
choosing (who may provide such services to either Party). Any costs related
to such advice from external counsel or independent accountants will be
borne by the Client. The Service Provider will not be liable if it relies
on advice of reputable counsel or independent accountants.
5. COMMUNICATIONS; RECORDS AND ACCESS; CONFIDENTIALITY; PUBLICITY
(A) COMMUNICATIONS AND STATEMENTS. Communications, notices and invoices from
the Service Provider may be sent or made available by electronic form and
not in hard copy. The Client will notify the Service Provider promptly in
writing of anything incorrect in an invoice or periodic accounting or other
report (a "REPORT") and, in any case, within sixty (60) days from the date
on which the Report is sent or made available to the Client. Reports to
which the Client has not objected within this time period will be deemed
accepted by the Client.
(B) RECORDS AND ACCESS. Subject to applicable Law, the Service Provider will
allow the Client and its independent public accountants, agents or
regulators reasonable access to those records of the Client maintained by
the Service Provider and relating to the Services ("CLIENT RECORDS") as are
reasonably requested by the Client in connection with an examination of the
books and records pertaining to the affairs of the Client, and will seek to
obtain such access from each agent or subcontractor of the Service Provider
that maintains Client Records. Upon termination of this Agreement, the
Service Provider may retain archival copies of Client Records.
(C) CONFIDENTIALITY. The Service Provider will maintain reasonable controls
consistent with, and shall treat, all Confidential Information related to
the Client as confidential. The Client, on behalf of itself and on behalf
of its employees, agents, subcontractors and Customers, authorizes the
transfer or disclosure of any Confidential Information relating to the
Client to and between Affiliates and Administrative Support Providers of
the Service Provider and third parties selected by any of them, wherever
situated, for confidential use in connection with the provision of the
Services (including for data processing, statistical and risk analysis
purposes), and further acknowledges that the Service provider and any such
Affiliate, Administrative Support Provider or third party may transfer or
disclose any such information (i) to the applicable Customer and the
Customer's accountants, (ii) to the Client's Investment Advisers,
Intermediaries, Custodians and other Client service providers, (iii) to the
Client's tax authorities and applicable regulators incident to the delivery
of any tax filing or reporting services provided under this Agreement, and
(iv) as required by any Governmental Authority or pursuant to applicable
Law.
(D) PROPRIETARY INFORMATION.
(i) The Client acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals maintained by the Service Provider and/or its
Affiliates or Administrative Support Provider constitute copyrighted,
trade secret, or other proprietary information (collectively,
"PROPRIETARY INFORMATION") of substantial value to the Service
Provider or each such third party. The Client agrees to treat all
Proprietary Information as proprietary to the Service Provider or such
third parties and further agrees that it will not divulge any
Proprietary Information or Confidential Information related to the
Service Provider or its Affiliates to any Person or organization or
use such information for any purpose, except to receive the Services
or as may be specifically permitted under this Agreement or as
required under applicable Law. Subject to applicable Law, the Client
will treat the terms of this Agreement, including any Fee Schedule, as
Confidential Information.
(ii) Without limitation of the obligations of the Service Provider under
Section 5(C), the Service Provider acknowledges that any Customer list
and all information related to Customers furnished to or maintained by
the Service Provider in connection with this Agreement (collectively,
"CUSTOMER DATA") constitute proprietary information of substantial
value to the Client. The Service Provider agrees to treat, and to
require its employees and Administrative Support Providers to treat,
all
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Customer Data, Investment Methods and Portfolio Data as proprietary to
the Client and further agrees that it will not divulge any Customer
Data, Investment Methods or Portfolio Data to any Person or
organization without the Client's written consent, except as may be
specifically permitted under this Agreement.
(E) USE OF NAME. Without the written consent of the Client, the Service
Provider may use the name of the Client only (A) to sign any necessary
letters or other documents for and on behalf of the Client incident to the
delivery of the Services and (B) in client lists used for marketing
purposes. Subject to the foregoing, neither Party will publicly display the
name, trade xxxx or service xxxx of the other without the prior written
approval of the other, nor will the Client display that of any Service
Provider Affiliate without prior written approval from the Service Provider
or the Affiliate concerned or as required under applicable Law.
(F) COMMUNICATIONS TO CUSTOMERS. Without the written approval of the Service
Provider, the Client will not use the name of the Service Provider or
describe the Services or the terms or conditions of this Agreement in any
communication or document intended for distribution to any Customer in
connection with the offering or sale by the Client of securities, products
or services (an "OFFERING DOCUMENT"); nor will the Client amend any such
references to the Service Provider or the terms or conditions of this
Agreement in any Offering Document that has been previously approved by the
Service Provider without the Service Provider's written approval. The
Service Provider will not unreasonably withhold, condition or delay any of
the foregoing requested approvals. If the Services include the distribution
by the Service Provider of notices or statements to Customers, the Service
Provider may, upon advance notice to the Client, include reasonable notices
describing those terms of this Agreement relating to the Service Provider
and its liability and the limitations thereon; if Customer notices are not
sent by the Service Provider but rather by the Client or some other Person,
the Client will reasonably cooperate with any request by Service Provider
to include such notices.
6. SCOPE OF RESPONSIBILITY.
(A) STANDARD OF CARE. The Service Provider will perform its obligations with
reasonable care as determined in accordance with the standards and
practices of professionals for hire providing services similar to the
Services in the jurisdiction(s) in which the Service Provider performs
services under this Agreement (the " STANDARD OF CARE"). The Service
Provider will cause each Administrative Support Provider to perform with
reasonable care as determined in accordance with such standards.
(B) RESPONSIBILITY FOR LOSSES. Notwithstanding any other provision of this
Agreement to the contrary (including Section 6(A)), (i) the Service
Provider will not be liable to the Client for any damages or losses save
for those resulting from the willful default, fraud or gross negligence of
the Service Provider or any Administrative Support Provider, and (ii) the
Service Provider's liability will be subject to the limitations set forth
below.
(C) LIMITATIONS ON LIABILITY.
(i) The Service Provider is responsible for the performance of only those
duties as are expressly set forth herein and in the Services Schedule.
The Service Provider will have no implied duties or obligations. Each
Party shall mitigate damages for which the other Party may become
responsible hereunder.
(ii) The Client understands and agrees that (i) the obligations and duties
of the Service Provider will be performed only by the Service Provider
and are not obligations or duties of any Service Provider Affiliate
and (ii) the rights of the Client with respect to the Service Provider
extend only to the Service Provider and, except as provided by
applicable Law, do not extend to any Service Provider Affiliate.
(iii) Except as provided in this Agreement with regard to Administrative
Support Providers, the Service Provider is not responsible for the
acts, omissions, defaults or insolvency of any third party including,
but not limited to, any Investment Advisers, Custodians,
Intermediaries, Non-Discretionary Subcontractors or any other Person
described in Section 2(E)(iii).
(iv) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, SERVICE PROVIDER
HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR
IMPLIED, MADE
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TO THE CLIENT OR ANY OTHER PERSON, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTIES REGARDING QUALITY, SUITABILITY OR OTHERWISE (IRRESPECTIVE
OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE), OF ANY SERVICES
OR ANY GOODS PROVIDED INCIDENTAL TO SERVICES PROVIDED UNDER THIS
AGREEMENT. SERVICE PROVIDER DISCLAIMS ANY WARRANTY OF TITLE OR
NON-INFRINGEMENT EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT.
(v) Notwithstanding anything in this Agreement to the contrary, the
cumulative liability of Service Provider to the Client for all losses,
claims, suits, controversies, breaches or damages for any cause
whatsoever (including but not limited to those arising out of or
related to this Agreement), and regardless of the form of action or
legal theory, shall not exceed the total amount of compensation paid
to Service Provider under this Agreement during the twelve (12) months
immediately before the date on which the alleged damages were claimed
to have been incurred.
(D) MUTUAL EXCLUSION OF CONSEQUENTIAL DAMAGES. EXCEPT FOR ANY LIQUIDATED
DAMAGES AGREED BY THE PARTIES RELATED TO AN UNEXCUSED TERMINATION OF THIS
AGREEMENT, UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR SPECIAL OR PUNITIVE DAMAGES, OR CONSEQUENTIAL LOSS OR DAMAGE, OR
ANY LOSS OF PROFITS, GOODWILL, BUSINESS OPPORTUNITY, BUSINESS, REVENUE OR
ANTICIPATED SAVINGS, IN RELATION TO THIS AGREEMENT, WHETHER OR NOT THE
RELEVANT LOSS WAS FORESEEABLE, OR THE PARTY WAS ADVISED OF THE POSSIBILITY
OF SUCH LOSS OR DAMAGE OR THAT SUCH LOSS WAS IN CONTEMPLATION OF THE OTHER
PARTY.
7. INDEMNITY.(A) INDEMNITY BY THE CLIENT. The Client will indemnify the
Service Provider, its Affiliates and its and their respective officers,
directors, employees and representatives (each, an "INDEMNITEE") for, and
will defend and hold each Indemnitee harmless from, all losses, costs,
damages and expenses (including reasonable legal fees) incurred by the
Service Provider or such person in any action or proceeding between the
Service Provider and the Client or between the Service Provider and any
third party arising from or in connection with the performance of this
Agreement (each referred to as a "LOSS"), imposed on, incurred by, or
asserted against the Service Provider in connection with or arising out of
the following:
(i) this Agreement, except any Loss resulting from the willful default,
fraud or gross negligence of the Service Provider or any
Administrative Support Provider, in each case in connection with the
Services; or
(ii) any alleged untrue statement of a material fact contained in any
Offering Document of the Client or arising out of or based upon any
alleged omission to state a material fact required to be stated in any
Offering Document or necessary to make the statements in any Offering
Document not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished in
writing to the Client by the Service Provider specifically for use in
the Offering Document.
(B) NOTIFICATION, PARTICIPATION; INDEMNITOR CONSENT. Upon the assertion of a
claim for which the Client may be required to indemnify any Indemnitee, the
Indemnitee must promptly notify the Client of such assertion, and will keep
the Client advised with respect to all developments concerning such claim.
The Client will have the option to participate with the Indemnitee in the
defense of such claim or to defend against said claim in its own name or in
the name of the Indemnitee. The Indemnitee shall in no case confess any
claim or make any compromise in any case in which the Client may be
required to indemnify it except with the Client's prior written consent,
which shall not be unreasonably withheld, conditioned or delayed;
notwithstanding Section 7(A) hereof, in the event the Indemnitee has not
secured such consent the Client will have no obligation to indemnify the
Indemnitee.
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8. FEES AND EXPENSES
(A) FEE SCHEDULE. The Client will pay all fees, expenses, charges and
obligations incurred from time to time in relation to the Services in
accordance with the terms of Schedule 4 (the "FEE SCHEDULE"), together with
any other amounts payable to the Service Provider under this Agreement.
(B) TAXES. The Service Provider shall not be liable for any taxes, assessments
or governmental charges that may be levied or assessed on any basis
whatsoever in connection with the Client or any Customer, excluding taxes,
if any, assessed against the Service Provider related to its income or
assets.
9. REPRESENTATIONS
(A) GENERAL. The Client and the Service Provider each represents at the date
this Agreement is entered into and any Service is used or provided that:
(i) It is duly organized and in good standing in every jurisdiction where
it is required so to be;
(ii) It has the power and authority to sign and to perform its obligations
under this Agreement;
(iii) This Agreement is duly authorized and signed and is its legal, valid
and binding obligation, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties
generally;
(iv) Any consent, authorization or instruction required in connection with
its execution and performance of this Agreement has been provided by
any relevant third party;
(v) Any act required by any relevant governmental or other authority to
be done in connection with its execution and performance of this
Agreement has been or will be done (and will be renewed if necessary);
and
(vi) Its performance of this Agreement will not violate or breach any
applicable law, regulation, contract or other requirement.
(B) CLIENT. The Client also represents at the date this Agreement is entered
into and any Service is used or provided that:
(i) Where it acts as an agent on behalf of any of its own Customers,
whether or not expressly identified to the Service Provider from time
to time, any such Customers will not be customers or indirect
customers of the Service Provider;
(ii) It has not relied on any oral or written representation made by the
Service Provider or any person on its behalf other than those
contained in this Agreement;
(iii) Client's decision to retain the Service Provider is not conditioned
on or influenced by the amount of assets that any Service Provider
Affiliate or any customers of the Service Provider or such Service
Provider Affiliates may from time to time invest in or through the
Client; and
(iv) This Agreement has been presented to, reviewed and approved by the
Board of Directors or Trustees of the Client (collectively, the
"BOARD").
(C) SERVICE PROVIDER. The Service Provider also represents at the date this
Agreement is entered into and any Service is used or provided:
(i) it has commercially reasonable data security and business continuity
controls and plans; and
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(ii) it has access to the necessary facilities, equipment, and personnel
to perform its duties and obligations under this Agreement.
10. TERM AND TERMINATION
(A) TERM. This Agreement will begin on the Effective Date and have an initial
term of [__] years from the Effective Date (the "INITIAL TERM").
Thereafter, unless otherwise terminated pursuant to Section 10(B), this
Agreement shall be renewed automatically for successive one year periods
("ROLLOVER PERIODS").
(B) TERMINATION. Subject to Section 10(C):
(i) Either Party may terminate this Agreement with or without cause, by
provision of a written notice of non-renewal provided at least 90 days
prior to the end of the Initial Term or any Rollover Period (which
notice of non-renewal will cause this Agreement to terminate as of the
end of the Initial Term or such Rollover Period, as applicable).
(ii) Either Party may terminate this Agreement with cause on at least
thirty (30) days' written notice to the other Party if the other party
has materially breached any of its obligations hereunder; provided,
however, that (i) the termination notice will describe the breach;
(ii) no such termination will be effective if, with respect to any
breach that is capable of being cured prior to the date set forth in
the termination notice, the breaching Party has reasonably cured such
breach; and (iii) subject to applicable Law, no such thirty (30) day
notice period shall be required in the event the other Party is
insolvent or has submitted a voluntary petition for administration.
(iii) This Agreement may be further terminated by either party immediately
in the event of:
(a) the winding up of or the appointment of an examiner or receiver
or liquidator to the other party or on the happening of a like
event whether at the direction of an appropriate regulatory
agency or court of competent jurisdiction or otherwise; or
(b) the other party no longer being permitted or able to perform its
obligations under this Agreement pursuant to applicable law or
regulation.
(C) TERMINATION-RELATED OBLIGATIONS. Related to termination of this Agreement:
(i) If the Client has terminated this Agreement without cause during the
Initial Term or any Rollover Period, the Client will make a one-time
cash payment to Service Provider as liquidated damages for such
default, an amount equal to the balance that would be due Service
Provider for its services under this Agreement during the lesser of
(x) the balance of the Initial Term or any applicable Rollover Period,
as the case may be, or (y) 12 months, assuming for purposes of the
calculation of the one-time payment that the fees that would be earned
by Service Provider for each month would be based upon the average
fees payable to Service Provider monthly during the 12 months before
the date of the event that triggers such payment ("LIQUIDATED
DAMAGES"). In the event that the Client is, in part or in whole,
liquidated, dissolved, merged into a third party, acquired by a third
party, or involved in any other transaction that materially reduces
the assets and/or accounts serviced by Service Provider pursuant to
this Agreement, the liquidated damages provision set forth above will
apply, and will be adjusted ratably if any of the events described
above is partial. Any liquidated damages amount payable to Service
Provider will be payable on or before the date of the event that
triggers the payment obligation. Inasmuch as a default by Client will
cause substantial damages to Service Provider and because of the
difficulty of estimating the damages that will result, the Parties
agree that the Liquidated Damages is a reasonable forecast of probable
actual loss to Service Provider and that this sum is agreed to as
liquidated damages and not as a penalty.
(ii) Upon termination, the Service Provider will, at the expense and
direction of the Client, transfer to the Client or any successor
service provider(s) to the Client copies of all Client Records,
subject to the payment by the Client of unpaid and undisputed amounts
due to the Service Provider hereunder,
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including any Liquidated Damages. If by the termination date the
Client has not given Instructions to deliver the Client Records, the
Service Provider will keep the Client Records for up to twelve
calendar months until the Client provides Instructions to deliver the
Client Records, provided that the Service Provider will be entitled to
receive from the Client then-standard fees for maintaining the Client
Records, including costs associated with administration of the
records. Service Provider shall be entitled to destroy the Client
Records if: (a) Client has not given Instructions to deliver the
Client Records at the end of twelve calendar months after termination
or (b) if Client has not paid fees for maintaining such Client Records
within thirty days of notice of such unpaid fees. The Service Provider
will provide no other services to or for the benefit of the Client or
any successor service provider in connection with the termination or
expiration of this Agreement unless specifically agreed in writing by
the Service Provider or as set forth in the Services Schedule.
(D) SURVIVING TERMS. The rights and obligations contained in Sections 2(D),
2(E), 5(A), 5(C)-(F), 6-8, and 10- 12 of this Agreement will survive the
termination of this Agreement.
11. GOVERNING LAW AND ARBITRATION
(A) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the internal laws (and not the laws of conflicts) of the
State of Massachusetts.
(B) ARBITRATION. To the extent permitted by applicable law, each Party agrees
that any controversy arising out of or relating to this Agreement or the
Services provided hereunder, shall be resolved by arbitration conducted in
Boston, Massachusetts pursuant to the rules of the American Arbitration
Association.
(D) SOVEREIGN IMMUNITY. The Client and the Service Provider each irrevocably
waives, with respect to itself and its revenues and assets, all immunity on
the grounds of sovereignty or similar grounds in respect of its obligations
under this Agreement.
12. MISCELLANEOUS
(A) ENTIRE AGREEMENT; AMENDMENTS. This Agreement consists exclusively of this
document together with any schedules and supersedes any prior agreement
related to the subject matter hereof, whether oral or written. In case of
inconsistency between the terms of this Agreement and the terms of any
Schedule, appendix of exhibit hereto, the terms of this Agreement will
prevail, provided that in the case of an inconsistency between this
Agreement and the Service Schedule, the terms of the Service Schedule will
prevail. Except as specified in this Agreement, this Agreement may only be
modified by written agreement of the Client and the Service Provider.
(B) SEVERABILITY. If any provision of this Agreement is or becomes illegal,
invalid or unenforceable under any applicable law, the remaining provisions
will remain in full force and effect (as will that provision under any
other law).
(C) WAIVER OF RIGHTS. Subject to Section 5(A), no failure or delay of the
Client or the Service Provider in exercising any right or remedy under this
Agreement will constitute a waiver of that right. Any waiver of any right
will be limited to the specific instance. The exclusion or omission of any
provision or term from this Agreement will not be deemed to be a waiver of
any right or remedy the Client or the Service Provider may have under
applicable law.
(D) RECORDINGS. The Client and the Service Provider consent to telephonic or
electronic recordings for security and quality of service purposes and
agree that either may produce telephonic or electronic recordings or
computer records as evidence in any proceedings brought in connection with
this Agreement.
(E) ASSIGNMENT. No party may assign any of its rights or obligations under
this Agreement without the other's prior written consent, which consent
will not be unreasonably withheld or delayed; provided that the Service
Provider may make such assignment to an Affiliate.
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PAGE 9
(F) HEADINGS. Titles to Sections of this Agreement are included for
convenience of reference only and will be disregarded in construing the
language contained in this Agreement.
(G) COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which will be an original, but all of which together will constitute one
and the same agreement.
(H) THIRD PARTY BENEFICIARIES OR JOINT VENTURE. There are no third party
beneficiaries to this Agreement. This Agreement does not create a joint
venture or partnership between the Parties.
(I) CERTAIN COMMUNICATIONS. The Client hereby acknowledges that it has
requested the delivery of Reports, Client Records and other information
processed and/or maintained by the Service Provider hereunder in an
unencrypted manner and accepts the risk that such delivery means may expose
such information to disclosure through media and hardware that are not
within the control of the Service Provider during the delivery process.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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PAGE 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized.
NORTHEAST RETIREMENT SERVICES, INC. THE KP FUNDS(ON BEHALF OF ITS SERIES AND
CLASSES LISTED ON SCHEDULE 5 TO THIS AGREEMENT)
By: _______________________________ By: ___________________________________________
Name: _____________________________ Name: _________________________________________
Title: ____________________________ Title: ________________________________________
Date: _____________________________ Date: _________________________________________
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PAGE 11
SCHEDULE 1 TO SERVICES AGREEMENT
DEFINITIONS
"ADMINISTRATIVE SUPPORT PROVIDER" has the meaning set forth in Section 2(E)(iv)
of the Agreement.
"AFFILIATE" means, with respect to any Person, any other Person that is
controlled by, controls, or is under common control with such Person; for
purposes hereof, "control" of a Person means (i) ownership of, or possession of
the right to vote, more than 25% of the outstanding voting equity of that
person or (ii) the right to control the appointment of the board of directors,
management or executive officers of that person. Notwithstanding the
foregoing, the U.S. Government shall not be deemed to be an Affiliate of
Service Provider.
" BUSINESS DAY" means any day on which the NYSE is open for business.
" AGREEMENT" means the Service Agreement to which this Schedule 1 is attached
and any appendices and schedules attached hereto, in each case as they may be
amended from time to time.
"AUTHORIZED PERSON" means the Client or any Person authorized by the Client to
act on its behalf in the performance of any act, discretion or duty under the
Agreement (including, for the avoidance of doubt, any officer or employee of
such Person) in a notice reasonably acceptable to the Service Provider.
" CHANGE CONTROL PROCESS" has the meaning set forth in Section 2(B) of the
Agreement.
" CLASS" means a class of a Fund.
" CLIENT RECORDS" has the meaning set forth in Section 5(B) of the Agreement.
" CLIENT" has the meaning set forth in the preamble to this Agreement and
includes successors-in-interest; unless the context will require otherwise.
"CONFIDENTIAL INFORMATION" includes all tangible and intangible information and
materials being disclosed in connection with this Agreement by one of the
Parties ("DISCLOSING PARTY") to the other Party ("RECEIVING PARTY"), in any
form or medium (and without regard to whether the information is owned by a
Party or by a third party), that satisfy at least one of the following
criteria:
(i) information related to the Disclosing Party's, its Affiliates' or its
third party licensors' or vendors' trade secrets, customers, business
plans, strategies, forecasts or forecast assumptions, operations,
methods of doing business, records, finances, assets, Proprietary
Information, technology, software, systems data or other proprietary
or confidential business or technical information;
(ii) information designated as confidential in writing by the Disclosing
Party or information that the Receiving Party should reasonably know
to be information that is of a confidential or proprietary nature; or
(iii) any information derived from, or developed by reference to or
use of, any information described in the preceding clauses (i) and
(ii).
provided, however, that, notwithstanding the foregoing, the following will not
be considered Confidential Information: (A) information that is disclosed to
the Receiving Party without any obligation of confidentiality by a third person
who has a right to make such disclosure; (B) information that is or becomes
publicly known without violation of this Agreement by the Receiving Party; or
(C) information that is independently developed by the Receiving Party or its
employees or Affiliates without reference to the Disclosing Party's
information.
" CUSTODIAN" has the meaning set forth in Section 2(E)(iii) of the Agreement.
" CUSTOMER DATA" has the meaning set forth in Section 5(D)(ii) of the
Agreement.
"CUSTOMER" means any Person to whom the Client sells, directly or indirectly,
securities, products or services the sale or servicing of which are supported by
the Services provided under the Agreement.
" DEPENDENCIES" has the meaning set forth in Schedule 3 to the Agreement.
" EFFECTIVE DATE" means the date first set forth on page 1 of the Agreement.
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SCHEDULE 1 TO SERVICES AGREEMENT
PAGE 1
" FEE SCHEDULE" means Schedule 4 to the Agreement.
" FORCE MAJEURE EVENT" has the meaning set forth in Section 2(D) of the
Agreement.
" FUND" means series of the Client.
" GOVERNMENTAL AUTHORITY" means any regulatory agency, court, other
governmental body or self-regulatory agency with jurisdiction over a Party.
" INDEMNITEE" has the meaning set forth in Section 7(A) of the Agreement
" INITIAL TERM" has the meaning set forth in Section 10(A) of the Agreement.
" INSTRUCTIONS" means any and all instructions (including approvals, consents
and notices) received by the Service Provider from, or reasonably believed by
the Service Provider to be from, any Authorized Person, including any
instructions communicated through any manual or electronic medium or system
agreed between the Client and the Service Provider.
" INTERMEDIARY" has the meaning set forth in Section 2(E)(i) of the Agreement.
" INVESTMENT ADVISER" has the meaning set forth in Section 2(E)(i) of the
Agreement.
" INVESTMENT METHODS" has the meaning set forth in Section 5(D)(ii) of the
Agreement.
" LAWS" means any statutes, rules and regulations of any governmental authority
and applicable judicial or regulatory interpretations thereof.
" LIQUIDATED DAMAGES" has the meaning set forth in Section 10(C)(i) of the
Agreement.
" LOSS" has the meaning set forth in Section 7 of the Agreement.
" NON-DISCRETIONARY SUBCONTRACTORS" has the meaning set forth in Section
2(E)(iii) of the Agreement.
" OFFERING DOCUMENT" has the meaning set forth in Section 5(F) of the
Agreement.
" ORGANIC DOCUMENTS" means, for any incorporated or unincorporated entity, the
documents pursuant to which the entity was formed as a legal entity, as such
documents may be amended from time to time.
" PARTIES" means the Client and the Service Provider.
" PERSON" means any natural person or incorporated or unincorporated entity.
" POLICIES AND PROCEDURES" means the written policies and procedures of the
Client in any way related to the Services, including any such policies and
procedures contained in the Organic Documents and the Offering Documents.
" PORTFOLIO DATA" has the meaning set forth in Section 5(D)(ii) of the
Agreement.
" PROPRIETARY INFORMATION" has the meaning set forth in Section 5(D)(i) of the
Agreement.
" REPORT" has the meaning set forth in Section 5(A) of the Agreement.
" ROLLOVER PERIODS" has the meaning set forth in Section 10(A) of the
Agreement.
" SECURITY PROCEDURES" has the meaning set forth in Section 3(B) of the
Agreement.
" SERVICE CHANGE" has the meaning set forth in Section 2(B) of the Agreement.
" SERVICE PROVIDER" has the meaning set forth in the preamble to this Agreement
and includes successors-in-interest.
" SERVICES SCHEDULE" means Schedule 2 to the Agreement.
" SERVICES" means the services set forth in Schedule 2 to the Agreement.
" STANDARD OF CARE" has the meaning set forth in Section 6(A) of the
Agreement.
" TERM" means the period between the Effective Date and the date this Agreement
is terminated.
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SCHEDULE 1 TO SERVICES AGREEMENT
PAGE 2
SCHEDULE 2 TO SERVICES AGREEMENT -- SERVICES
I. SERVICES
1. Shareholder Transactions
(a) Process shareholder purchase and redemption orders.
(b) Set up account information, including address, dividend option,
taxpayer identification numbers and wire instructions.
(c) Issue confirmations for purchases, redemptions and other confirmable
transactions.
(d) Issue periodic statements for shareholders.
(e) Process dividend payments, including the purchase of new shares,
through dividend reimbursement.
2. Shareholder Information Services
(a) Produce detailed history of transactions through duplicate or special
order statements upon request.
(b) Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to current
shareholders, upon request.
(c) Respond to shareholder calls and correspondence other than those for
Fund information and related inquiries.
3. Shareholder Account Maintenance
(a) Maintain all shareholder records for each account in the Client.
(b) Issue customer statements on scheduled cycle, providing duplicate
second and third party copies if required.
(c) Record shareholder account information changes.
(d) Maintain account documentation files for each shareholder.
(e) Determine/identify lost shareholders and facilitate escheatment of
funds to applicable states consistent with applicable Laws.
4. Blue Sky Services
(a) Prepare such reports, applications and documents (including reports
regarding the sale and redemption of shares in a Fund as may be
required in order to comply with Federal and state securities laws) to
register the shares of the Client ("SHARES") with state securities
authorities, monitor the sale of Shares for compliance with state
securities laws, and file with the appropriate state securities
authorities the registration statements and reports for the Client and
the Shares and all amendments thereto, to register and keep effective
the registration of the Client and the Shares with state securities
authorities to enable the Client to make a continuous offering of its
Shares pursuant to Service Provider's state registration, renewal and
sales reporting procedures, which shall be made available to the
Client upon request.
(b) The Client shall be responsible for identifying to Service Provider
in writing those transactions and assets to be treated as exempt from
reporting for each state and territory of the United States and for
each foreign jurisdiction.
5. Money Laundering Prevention Services
In each case consistent with and as required or permitted by the written
anti-money laundering program (" AML PROGRAM") of the Client, Service
Provider shall:
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SCHEDULE 2 TO SERVICES AGREEMENT
PAGE 1
(a) Where appropriate and information is available, take reasonable
measures to verify shareholder identity upon opening new accounts and
retain documentation supporting verification of shareholder identity.
(b) Place holds on transactions in shareholder accounts or freeze assets
in shareholder accounts pursuant to instructions from the Client's
anti-money laundering compliance officer ("AML Compliance Officer").
(c) Comply with the "Travel Rule" requirements set forth in 31 CFR
1024.410(e) regarding the generation and receipt of wires on behalf of
the Client in amounts exceeding $3,000.
(d) Review shareholder names against lists of suspected terrorist and
terrorist organizations supplied by the Office of Foreign Asset
Control.
II. NOTES AND CONDITIONS RELATED TO TRANSFER AGENCY SERVICES
1. The Client shall establish in its name any bank accounts, including direct
deposit account(s), settlement accounts, etc., necessary or appropriate for
Service Provider to perform the transfer agency services provided
hereunder. The Client shall also obtain overdraft (daylight and overnight)
facilities and other services with respect to the accounts as it deems
appropriate to effect shareholder and custody settlement. The Client grants
Service Provider, as the Client's agent, the power and authority to
facilitate the set-up of such accounts on behalf of the Client with such
bank or banks as are acceptable to the Client. In addition, the Client
authorizes Service Provider, who may appoint its employees, to instruct the
bank(s) and the Custodian regarding the movement of money into, out of and
between the Client's accounts and shall provide such bank or banks with all
instructions and authorizations necessary for Service Provider to effect
such money movements.
2. Service Provider may require any or all of the following in connection
with the original issue of Shares: (a) Instructions requesting the
issuance, (b) evidence that the Board has authorized the issuance, (c) any
required funds for the payment of any original issue tax applicable to such
Shares, and (d) an opinion of the counsel to the Client about the legality
and validity of the issuance.
3. Shares shall be issued in accordance with the terms of a Fund's or Class'
Prospectus after Service Provider or its agent receives either of the
following, in each case in good order and with such additional items or
materials as may be required by the Client's Procedures and Service
Provider's operational procedures:
(i) (A) an instruction directing investment in a Fund or Class, (B)
a wire or other electronic payment in the amount designated in
the instruction and (C), in the case of an initial purchase, a
completed account application; or
(ii) the information required for purchases pursuant to a selected
dealer agreement, processing organization agreement, or a similar
contract with a financial intermediary.
4. The Client acknowledges and agrees that deviations requested by the Client
from Service Provider's written transfer agent compliance procedures
("EXCEPTIONS") may involve operational and compliance risks, including a
substantial risk of loss. Service Provider may in its sole discretion
determine whether to permit an Exception. Exceptions must be requested and
accepted in writing and shall be deemed to remain effective until the
Client revokes the Exception request in writing. Notwithstanding any
provision in this Agreement that expressly or by implication provides to
the contrary, as long as Service Provider acts in good faith, Service
Provider shall have no liability for any loss, liability, expenses or
damages to the Client or any shareholder resulting from such an Exception.
5. Service Provider is hereby granted such power and authority as may be
necessary to establish one or more bank accounts for the Client with such
bank or banks as are acceptable to the Client, as may be necessary or
appropriate from time to time in connection with the transfer agency
services to be performed hereunder. The Client shall be deemed to be the
customer of such bank or banks for purposes of such accounts and shall
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SCHEDULE 2 TO SERVICES AGREEMENT
PAGE 2
execute all requisite account opening documents in connection with such
accounts. To the extent that the performance of such services hereunder
shall require Service Provider to disburse amounts from such accounts in
payment of dividends, redemption proceeds or for other purposes hereunder,
the Client shall provide such bank or banks with all instructions and
authorizations necessary for Service Provider to effect such disbursements.
6. Client represents and warrants that:
(a) (i) by virtue of its Charter, Shares that are redeemed by the Client
may be resold by the Client and (ii) all Shares that are offered to
the public are covered by an effective registration statement under
the Securities Act of 1933, as amended and the 1940 Act.
(b) (i) The Client has adopted the AML Program, which has been provided
to Service Provider and the Client's AML Compliance Officer, (ii) the
AML Program has been reasonably designed to facilitate Compliance by
the Client with applicable anti-money laundering Laws and regulations
(collectively, the "APPLICABLE AML LAWS") in all relevant respects,
(iii) the AML Program and the designation of the AML Compliance
Officer have been approved by the Board, (iv) the delegation of
certain services thereunder to Service Provider, as provided in
Schedule 2 of this Agreement, has been approved by the Board, and (v)
the Client will submit any material amendments to the AML Program to
Service Provider for Service Provider's review and consent prior to
adoption.
7. Subject to its obligations herein with respect to "blue sky" filings,
Service Provider shall have no obligation to take cognizance hereunder of
laws relating to the sale of the Funds' shares.
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SCHEDULE 2 TO SERVICES AGREEMENT
PAGE 3
SCHEDULE 3 TO SERVICES AGREEMENT
DEPENDENCIES
The Service Provider's delivery of the Services is dependent upon:
(A) The Client and its employees, agents, subcontractors and predecessor
service providers (including Investment Advisors, Custodian and
Intermediaries) providing information and, as applicable, Instructions to
the Service Provider promptly, accurately and in agreed formats and by
agreed media.
(B) The Client and its employees, agents, subcontractors and predecessor
service providers cooperating where reasonably required with the Service
Provider.
(C) The communications systems operated by the Client and third parties (other
than Administrative Support Providers) in respect of activities that
interface with the Services remaining fully operational.
(D) The authority, accuracy, truth and completeness of any information or data
provided by the Client and its employees, agents, subcontractors and
predecessor service providers (including Investment Advisors, Custodian and
Intermediaries) that is reasonably requested by the Service Provider or is
otherwise provided to the Service Provider by Persons for whom the Service
Provider is not responsible under the Agreement.
(E) The Client and its employees, agents, subcontractors and predecessor
service providers (including Investment Advisors, Custodian and
Intermediaries) providing the Service Provider with any reasonable
assistance and cooperation requested by the Service Provider in connection
with the management and resolution of discrepancies requiring escalation
between the Parties.
(F) The Client informing the Service Provider on a timely basis of any
modification to, or replacement of, any agreement to which it is a party
that is relevant to the provision of the Services.
(G) The Client and any third parties that are not the agents or employees of
the Service Provider meeting their respective responsibilities, as set
forth in the Agreement and, with respect to such third parties, as listed
in the Services Schedule or agreed by the Client or such third parties from
time to time, including applicable cut-off times.
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SCHEDULE 3 TO SERVICES AGREEMENT
PAGE 1
SCHEDULE 4 TO SERVICES AGREEMENT
FEE SCHEDULE
1. FEES
[TO BE INSERTED]
2. OUT-OF-POCKET EXPENSES AND MISCELLANEOUS CHARGES
In addition to the above fees, Service Provider shall be entitled to receive
payment for all out-of-pocket expenses and miscellaneous charges incurred by the
Service Provider in performing the Services under the Agreement.
3. ANNUAL FEE INCREASE
Commencing on the one-year anniversary of the Effective Date and annually
thereafter, the Service Provider may annually increase the fixed fees and other
fees expressed as stated dollar amounts in this Agreement by up to an amount
equal to the greater of: (a) the most recent annual percentage increase in
consumer prices for services as measured by the United States Consumer Price
Index entitled "All Services Less Rent of Shelter" or a similar index should
such index no longer be published, and (b) 10%.
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SCHEDULE 4 TO SERVICES AGREEMENT
PAGE 1
SCHEDULE 5 TO SERVICES AGREEMENT
LIST OF FUNDS
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SCHEDULE 5 TO SERVICES AGREEMENT
PAGE 1
