TRANSFER AGENCY AGREEMENT
AGREEMENT dated as of September 3, 2003, between The Integrity Funds (the
"Fund"), a Delaware statutory trust, having its principal office and place of
business at 0 Xxxx Xxxxxx Xxxxx, Xxxxx, Xxxxx Xxxxxx 00000, and Integrity Fund
Services, Inc. (the "Transfer Agent"), a corporation organized under the laws
of the State of North Dakota with its principal place of business at 0 Xxxx
Xxxxxx Xxxxx, Xxxxx, Xxxxx Xxxxxx 00000.
WITNESSETH:
That for and in consideration of the mutual promises hereinafter set forth,
the Fund and the Transfer Agent agree as follows:
Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Authorized Person" shall be deemed to include the President, the Vice
President, the Secretary, and the Treasurer of the Fund, the persons listed
in Appendix A hereto, and any other person, whether or not such person is an
officer of the Fund, duly authorized to give Oral Instructions or Written
Instructions on behalf of the Fund as indicated in a certificate furnished
to the Transfer Agent pursuant to Section 5(d) or 5(e) hereof as may be
received by the Transfer Agent from time to time.
(b) "Commission" shall have the meaning given it in the 1940 Act.
(c) "Custodian" refers to the custodian and any sub-custodian of all
securities and other property which the Fund may from time to time deposit
or cause to be deposited or held under the name or account of such custodian.
(d) "Declaration of Trust" shall mean the Fund's Declaration of Trust as
now in effect and as the same may be amended from time to time.
(e) "Officer" shall mean the President, Vice President, Secretary, and
Treasurer of the parties hereto.
(f) "Oral Instructions" shall mean instructions, other than written
instructions, actually received by the Transfer Agent from a person
reasonably believed by the Transfer Agent to be an Authorized Person.
(g) "Prospectus" shall mean any current prospectus and statement of
additional information relating to the registration of the Fund's shares
under the Securities Act of 1933, as amended, and the 1940 Act.
(h) "Shares" refers to the units into which the shareholders' proprietary
interests in the Fund are divided.
(i) "Shareholder" means a record owner of Shares.
(j) "Trustees" or "Board of Trustees" refers to the duly elected Trustees
of the Fund.
(k) "Written Instructions" shall mean a written or electronic
communication actually received by the Transfer Agent from an Authorized
Person or from a person reasonably believed by the Transfer Agent to be an
Authorized Person by telex or any other such system whereby the receiver of
such communication is able to verify through codes or otherwise with a
reasonable degree of certainty the authenticity of the sender of such
communications.
(1) The "1940 Act" refers to the Investment Company Act of 1940, and the
Rules and Regulations promulgated thereunder, all as amended from time to
time.
2. Appointment of the Transfer Agent.
The Fund hereby appoints and constitutes the Transfer Agent as
transfer agent for its Shares and as Shareholder servicing agent, and the
Transfer Agent accepts such appointment and agrees to perform the duties
hereinafter set forth.
3. Compensation.
(a) The Fund will compensate the Transfer Agent for the performance of its
obligations hereunder in accordance with the fees set forth in the written
schedule of fees annexed hereto as Schedule A and incorporated herein.
The Transfer Agent will xxxx the Fund as soon as practicable after the
end of each calendar month, and said xxxxxxxx will be detailed in accordance
with the Schedule A. The Fund will promptly pay to the Transfer Agent the
amount of such billing.
(b) Any compensation agreed to hereunder may be adjusted from time to time
upon mutual agreement by both parties hereto by attaching to Schedule A of
this Agreement a revised Fee Schedule, dated and signed by an Officer of
each party hereto.
4. Documents.
In connection with the appointment of the Transfer Agent, the Fund
shall, on or before the date this Agreement goes into effect, but in any
case, within a reasonable period of time for the Transfer Agent to prepare
to perform its duties hereunder, furnish the Transfer Agent with the
following documents:
(a) A certified copy of the Fund's Declaration of Trust, as amended.
(b) A certified copy of the Fund's Bylaws, as amended.
(c) A copy of the resolution of the Trustees authorizing execution and
delivery of this Agreement.
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(d) If applicable, a specimen of the certificate for Shares of the Fund
in the form approved by the Trustees, with a certificate of the Secretary
of the Fund as to such approval.
(e) All account application forms and other documents relating to
Shareholder accounts or to any plan, program, or service offered by the
Fund.
5. Further Documentation.
The Fund will also furnish from time to time the following documents:
(a) The Fund's Registration Statement and each subsequent amendment to the
Fund's Registration Statement that is filed with the Commission.
(b) Certificates as to any change in any Officer, Trustee, or Investment
Adviser of the Fund.
(c) Such other certificates, documents, or opinions as the Transfer Agent
deems to be appropriate or necessary for the proper performance of its
duties hereunder.
6. Representations of the Fund.
The Fund represents to the Transfer Agent that Shares will be issued
in accordance with the terms of the Declaration of Trust and the Prospectus
and that such Shares shall be validly issued, fully paid, and non-assessable
by the Fund.
In the event that the Trustees shall declare a distribution payable in
Shares, the Fund shall deliver to the Transfer Agent written notice of such
declaration signed on behalf of the Fund by an Officer of the Fund, upon
which the Transfer Agent shall be entitled to rely for all purposes,
certifying (i) the number of Shares involved, (ii) that all appropriate
action has been taken, and (iii) that any amendment to the Declaration of
Trust which may be required has been filed and is effective. Such notice
shall be accompanied by an opinion of counsel for the Fund relating to the
legal adequacy and effect of the transaction. This provision shall not apply
to Shares to be issued in the normal course of reinvestment of any
distributions or dividends in accordance with the Fund's Prospectus.
7. Duties of the Transfer Agent.
The Transfer Agent shall be responsible for administering and/or
performing transfer agent functions; for acting as service agent in
connection with dividend and distribution functions; and for performing
Shareholder account and administrative agent functions in connection with
the issuance, transfer, and redemption or repurchase (including coordination
with the Custodian) of Shares. The operating standards and procedures to be
followed shall be determined from time to time by agreement between the
Transfer Agent and the Fund and shall be expressed in a written schedule of
duties of the Transfer Agent annexed hereto as Schedule B and incorporated
herein.
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8. Recordkeeping and Other Information.
The Transfer Agent shall create and maintain all necessary records in
accordance with all applicable laws, rules and regulations, including, but
not limited to, records required by Section 31(a) of the 1940 Act and those
records pertaining to the various functions performed by it hereunder which
are set forth in Schedule B hereto. All records shall be available during
regular business hours for inspection and use by the Fund. Where applicable,
such records shall be maintained by the Transfer Agent for the periods and
in the places required by Rule 31a-2 under the 1940 Act.
Upon reasonable notice by the Fund, the Transfer Agent shall make
available during regular business hours its facilities and premises
employed in connection with the performance of its duties under this
Agreement for reasonable visitation by the Fund or any person retained by
the Fund.
To the extent required by said Section 31 and the rules and
regulations thereunder, the Transfer Agent agrees that all such records
prepared and maintained by the Transfer Agent relating to the services to
be performed by the Transfer Agent hereunder are the property of the Fund.
The Transfer Agent and the Fund agree that all books, records,
information, and data pertaining to the business of the other party which
are exchanged or received in connection with this Agreement shall remain
confidential and shall not be voluntarily disclosed to any person, except as
may be required by law. In the case of any requests or demands for any
inspection of the Shareholder records of the Fund, the Transfer Agent will
endeavor to notify the Fund and to secure instructions from an authorized
Officer of the Fund as to such inspection.
9. Other Duties.
In addition to the duties expressly set forth in Schedule B to this
Agreement, the Transfer Agent shall perform such other duties and
functions, and shall be paid such amounts therefore, as may from time to
time be agreed upon in writing between the Fund and the Transfer Agent.
Such other duties and functions shall be reflected in a written amendment
to Schedule B, dated and signed by an Officer of each party hereto.
10. Reliance by Transfer Agent; Instructions.
The Transfer Agent will be protected in acting upon Written or Oral
Instructions, as appropriate, believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any
notice of any change of authority of any person until receipt of a Written
Instruction thereof from the Fund. The Transfer Agent will also be pro-
tected in processing Share certificates which it reasonably believes to
bear the proper manual or facsimile signatures of the Officers of the Fund
and the proper countersignature of the Transfer Agent.
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(b) At any time the Transfer Agent may apply to any Authorized Person of
the Fund for Written Instructions and may seek advice from legal counsel
for the Fund, or its own legal counsel, with respect to any matter arising
in connection with this Agreement, and it shall not be liable for any action
taken or not taken or suffered by it in good faith in accordance with such
Written Instructions or in accordance with the opinion of counsel for the
Fund or for the Transfer Agent; provided, however, that if such reliance
involves a potential material loss to the Fund, the Transfer Agent will
advise the Fund of any such action(s) to be taken in accordance with the
opinion of counsel to the Transfer Agent. Written Instructions requested by
the Transfer Agent will be provided by the Fund within a reasonable period
of time. In addition, the Transfer Agent, its officers, agents, or
employees, shall accept Oral Instructions or Written Instructions given to
them by any person representing or acting on behalf of the Fund only if
said representative is known by the Transfer Agent, or its officers, agents,
or employees, to be an Authorized Person. The Transfer Agent shall have no
duty or obligation to inquire into, nor shall the Transfer Agent be
responsible for, the legality of any act done by it upon the request or
direction of an Authorized Person.
(c) Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into,
and shall not be liable for:
(1) the legality of the issuance or sale of any Shares or the
sufficiency of the amount to be received therefore;
(2) the legality of the redemption of any Shares, or the propriety of
the amount to be paid therefore;
(3) the legality of the declaration of any dividend by the Trustees,
or the legality of the issuance of any Shares in payment of any dividend; or
(4) the legality of any recapitalization or readjustment of the
Shares.
11. Acts of God. Etc.
Neither the Transfer Agent nor the Fund will be liable or responsible
for delays or errors by reason of circumstances beyond its reasonable
control, including acts of civil or military authority, national
emergencies, fire, mechanical breakdown beyond its control, flood or
catastrophe, acts of God, insurrection, war, riots, or failure beyond its
control of transportation, communication, or power supply.
12. Duty of Care and Indemnification.
The Fund and the Transfer Agent will indemnify each other against and
hold the other party harmless from any and all losses, claims, damages,
liabilities, or expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action, or suit not resulting from the bad
faith or negligence of the other party, and arising out of, or in
connection with, the duties and responsibilities described hereunder. In
addition, the Fund will indemnify the Transfer Agent against and hold it
harmless from any and all losses, claims, damages, liabilities, or expenses
(including reasonable counsel fees and expenses) resulting from any claim
demand, action, or suit as a result of:
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(1) any action taken in accordance with Written or Oral Instructions, or
any other instructions, or Share certificates reasonably believed by the
Transfer Agent to be genuine and to be signed, countersigned or executed,
or orally communicated by an Authorized Person;
(2) any action taken in accordance with written or oral advice reasonably
believed by the Transfer Agent to have been given by counsel for the Fund
or its own counsel; or
(3) any action taken as a result of any error or omission in any record
(including but not limited to magnetic tapes, computer printouts, hard
copies, and microfilm copies) delivered or caused to be delivered by the
Fund to the Transfer Agent in connection with this Agreement.
In any case in which the Fund or the Transfer Agent may be asked to
indemnify or hold the other party harmless, the requesting party will
provide the other party with all pertinent facts concerning the situation
in question and will use reasonable care to identify and provide notice
of any situation which presents or appears likely to present a claim for
indemnification. Each party shall have the option to defend the other
party against any claim which may be the subject of this indemnification,
and in the event that a party so elects, such defense shall be conducted
by counsel chosen by the party making such election; and such counsel shall
be satisfactory to the other party, and thereupon such electing party shall
take over complete defense of the claim, and the requesting party shall
sustain no further legal or other expenses in such situation for which it
seeks indemnification under this Section 12. Neither party will confess any
claim or make any compromise in any case in which the other party will be
asked to provide indemnification, except with the other party's prior
written consent. The obligations of the parties hereto under this Section
shall survive the termination of this Agreement.
13. Term and Termination.
This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in effect from year to year
thereafter as the parties may mutually agree; provided, that either party
hereto may terminate this Agreement by giving to the other party a notice
in writing specifying the date of such termination, which shall be not less
than 60 days after the date of receipt of such notice. In the event such
notice is given by the Fund, it shall be accompanied by a resolution of the
Board of Trustees of the Fund, certified by the Secretary, electing to
terminate this Agreement and designating a successor transfer agent or
transfer agents. Upon such termination and at the expense of the Fund, the
Transfer Agent will deliver to such successor a certified list of
Shareholders of the Fund (with names, addresses, and taxpayer identification
or Social Security numbers), an historical record of the account of each
Shareholder and the status thereof, and all other relevant books, records,
correspondence, and other data established or maintained by the Transfer
Agent under this Agreement in the form reasonably acceptable to the Fund,
and will cooperate in the transfer of such duties and responsibilities,
including provisions for assistance from the Transfer Agent's personnel in
the establishment of books, records, and other data by such successor or
successors.
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14. Amendment.
This Agreement may not be amended or modified in any manner except by
a written agreement executed by both parties.
15. Subcontracting.
Except as otherwise provided below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without the
express written consent of the other party. The Transfer Agent may, in its
sole discretion and without further approval from the Fund, subcontract, in
whole or in part, for the performance of its obligations and duties
hereunder with any person or entity including, but not limited to, any
affiliate or subsidiary; provided, however, that (a) the Transfer Agent
shall remain fully responsible to the Fund for the acts and omissions of any
agent or subcontractor as it is for its own acts and omissions, and (b) to
the extent that the Transfer Agent subcontracts any functions or activities
required or performed by a registered transfer agent, the subcontracting
party shall be a duly registered transfer agent with the appropriate
regulatory agency as required under Section 17A of the Securities Exchange
Act of 1934 and the rules and regulations thereunder, as amended.
16. Use of Transfer Agent's Name.
The Fund shall not use the name of the Transfer Agent in any
Prospectus, Statement of Additional Information, Shareholders' report, sales
literature, or other material relating to the Fund for other than internal
use, in a manner not approved prior thereto; provided, that the Transfer
Agent shall approve all reasonable uses of its name which merely refer in
accurate terms to its appointment hereunder or which are required by the
Commission or a state securities administrator.
17. Use of the Fund's Name.
The Transfer Agent shall not use the name of the Fund or material
relating to the Fund on any documents or forms for other than internal use
in a manner not approved prior thereto in writing; provided, that the Fund
shall approve all reasonable uses of its name which merely refer in accurate
terms to the appointment of the Transfer Agent or which are required by the
Commission or a state securities administrator.
18. Security.
The Transfer Agent represents and warrants that, to the best of its
knowledge, the various procedures and systems which the Transfer Agent has
implemented or will implement with regard to safeguarding from loss or
damage attributable to fire; theft, or any other cause (including provision
for 24 hours-a-day restricted access) of the Fund's records and other data
and the Transfer Agent's records, data, equipment, facilities, and other
property used in the performance of its obligations hereunder are adequate
and that it will make such changes therein from time to time as in its
judgment are required for the secure performance of its obligations
hereunder. The parties shall review such systems and procedures on a
periodic basis.
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19. Miscellaneous.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or the Transfer Agent shall
be sufficiently given if addressed to that party and received by it at its
office set forth below or at such other place as it may from time to time
designate in writing.
To the Fund:
The Integrity Funds
0 Xxxx Xxxxxx Xxxxx
Xxxxx, XX 00000
To the Transfer Agent:
Integrity Fund Services, Inc.
0 Xxxx Xxxxxx Xxxxx
Xxxxx, XX 00000
(b) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the other party.
(c) This Agreement shall be construed in accordance with the laws of the
State of North Dakota.
(d) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
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20. Liability of Trustees, Officers, and Shareholders.
The execution and delivery of this Agreement have been authorized by
the Trustees of the Fund and signed by an authorized Officer of the Fund,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such Officer shall be deemed to have been made by
any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon any
of the Trustees or Shareholders of the Fund, but bind only the property of
the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized as
of the day and year first above written.
THE INTEGRITY FUNDS
By /s/ Xxxxxx X. Xxxxxxx
----------------------
Date: September 3, 2003
Agreed and Accepted by:
INTEGRITY FUND SERVICES, INC.
By /s/ Xxxxxx X. Xxxxxxx
--------------------
Date: September 3, 2003
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APPENDIX A
I, Xxxxxx X. Xxxxxxx, President of The Integrity Funds (the "Fund"), a Delaware
statutory trust, do hereby certify that the following individuals have been
duly authorized as Authorized Persons to give Oral Instructions and Written
Instructions on behalf of the Fund, and the signatures set forth opposite their
respective names are their true and correct signatures:
Name Signature
Xxxxxx X. Xxxxxxx /s/Xxxxxx X. Xxxxxxx
---------------------
/s/Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
/s/Xxxxx X. Xxxxxxx
---------------------
Xxxxx X. Xxxxxxx
/s/Xxxxxx Xxxxxx
---------------------
Xxxxxx Xxxxxx
/s/Xxxxx Xxxxx
---------------------
Xxxxx Xxxxx
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SCHEDULE A
FEE SCHEDULE
TRANSFER AGENT CHARGES
INTEGRITY FUND SERVICES, INC.
For the Transfer Agency services provided under this agreement, each Fund will
pay to Integrity Fund Services, Inc. at the end of each calendar month a fee
of 0.25% of average daily net assets with a minimum of $2,000 per month plus
reimbursement of out of pocket expenses. An additional fee with a minimum of
$500 per month will be charged for each additional share class.
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SCHEDULE B
DUTIES OF THE TRANSFER AGENT
(See Exhibit 1 for Summary of Services.)
1. Shareholder Information.
The Transfer Agent shall maintain a record of the number of Shares
held by each holder of record which shall include his address and taxpayer
identification number and which shall indicate whether such Shares are held
in certificated or uncertificated form.
2. Shareholder Services.
The Transfer Agent will investigate all Shareholder inquiries relating
to Shareholder accounts and will answer all correspondence from Shareholders
and others relating to its duties hereunder and such other correspondence as
may from time to time be mutually agreed upon between the Transfer Agent and
the Fund. The Transfer Agent shall keep records of Shareholder
correspondence and replies thereto and of the lapse of time between the
receipt of such correspondence and the mailing of such replies.
3. State Registration Reports.
The Transfer Agent shall furnish on a state-by-state basis sales
reports and such periodic and special reports as the Fund may reasonably
request and such other information, including Shareholder lists and
statistical information concerning accounts, as may be agreed upon from time
to time between the Fund and the Transfer Agent.
4. Mailing Communications to Shareholders; Proxy Materials.
The Transfer Agent will address and mail to Shareholders of the Fund
all reports to Shareholders, dividend and distribution notices, and proxy
material for the Fund's meetings of Shareholders. In connection with
meetings of Shareholders, the Transfer Agent will report on proxies voted
prior to meetings, act as inspector of election at meetings, if so
requested by the Fund, and certify Shares voted at meetings.
5. Sales of Shares.
(a) Processing of Investment Checks or Other Investments. Upon receipt of
any check or other instrument drawn or endorsed to it as agent for, or
identified as being for the account of the Fund for the purchase of Shares,
the Transfer Agent shall stamp the check with the date of receipt, shall
forthwith process the same for collection, and shall record the number of
Shares sold, the trade date, the price per Share, and the amount of money to
be delivered to the Custodian of the Fund for the sale of such Shares.
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(b) Issuance of Shares. Upon receipt of notification that the Custodian
has received the amount of money specified in the immediately preceding
paragraph, the Transfer Agent shall issue to and hold in the account of the
purchaser/Shareholder, or if no account is specified therein, in a new
account established in the name of the purchaser, the number of Shares
such purchaser is entitled to receive, as determined in accordance with
applicable federal law or regulation.
(c) Statements. On a quarterly basis, the Transfer Agent shall send to
the purchaser/Shareholder a statement of purchases which will show the new
Share balance, the Shares held under a particular plan, if any, for
withdrawing investments, the amount invested and the price paid for the
newly purchased Shares, or will be in such other form of statement as the
Fund and the Transfer Agent may agree from time to time.
(d) Suspension of Sale of Shares. The Transfer Agent shall not be required
to issue any Shares where it has received a Written Instruction from the
Fund or written notice from any appropriate federal or state authority that
the sale of the Shares of the Fund has been suspended or discontinued, and
the Transfer Agent shall be entitled to rely upon such Written Instructions
or written notification.
(e) Taxes in Connection with Issuance of Shares. Upon the issuance of any
Shares in accordance with the foregoing provisions of this Section, the
Transfer Agent shall not be responsible for the payment of any original
issue or other taxes required to be paid in connection with such issuance.
(f) Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer Agent will:
(1) give prompt notice of such return to the Fund or its designee;
(2) place a stop transfer order against all Shares issued as a result
of such check or order; and
(3) take such actions as the Transfer Agent may from time to time
deem appropriate.
6. Redemptions.
(a) Requirements for Transfer or Redemption of Shares. The Transfer Agent
shall process all requests from Shareholders to transfer or redeem Shares
in accordance with the procedures set forth in the Prospectus and all
determinations of the number of Shares required to be redeemed to fund
designated monthly payments, automatic payments, or any other such
distribution or withdrawal plan.
The Transfer Agent will transfer or redeem Shares upon receipt of
Written Instructions and Share certificates, if any, properly endorsed for
transfer or redemption, accompanied by such documents as the Transfer Agent
reasonably may deem necessary to evidence the authority of the person making
such transfer or redemption, and bearing satisfactory evidence of the
payment of stock transfer taxes, if any.
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Except to the extent inconsistent with the procedures set forth in the
Prospectus, the Transfer Agent reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the endorsement on the instructions
is valid and genuine, and for that purpose it will require a guarantee of
signature by a member firm of a national securities exchange, by any
national bank or trust company, or by any member bank of the Federal Reserve
system. The Transfer Agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or redemptions which the Transfer
Agent, in its good judgment, deems improper or unauthorized, or until it is
reasonably satisfied that there is no basis to any claims adverse to such
transfer or redemption.
The Transfer Agent may, in effecting transactions, rely upon the
provisions of the Uniform Act for the Simplification of Fiduciary Security
Transfers or the provisions of Article 8 of the Uniform Commercial Code, as
the same may be amended from time to time in the State of North Dakota,
which in the opinion of legal counsel for the Fund or of its own legal
counsel protect it in not requiring certain documents in connection with
the transfer or redemption of Shares. The Fund may authorize the Transfer
Agent to waive the signature guarantee in certain cases by Written
Instructions.
For the purpose of the redemption of Shares which have been purchased
within 15 days of a redemption request, the Transfer Agent may refuse to
redeem such Shares until the Transfer Agent has received fed funds for the
purchase of such Shares.
(b) Notice to Custodian and Fund. When Shares are redeemed, the Transfer
Agent shall, upon receipt of the instructions and documents in proper form,
deliver to the Custodian and the Fund a notification setting forth the
number of Shares to be redeemed. Such redemptions shall be reflected on
appropriate accounts maintained by the Transfer Agent reflecting outstanding
Shares and Shares attributed to individual accounts and, if applicable, any
individual withdrawal or distribution plan.
(c) Payment of Redemption Proceeds. The Transfer Agent shall, upon receipt
of the moneys paid to it by the Custodian for the redemption of Shares, pay
to the Shareholder, or his authorized agent or legal representative, such
moneys as are received from the Custodian, all in accordance with the
redemption procedures described in the Prospectus; provided, however, that
the Transfer Agent shall pay the proceeds of any redemption of Shares
purchased within 15 days of a redemption request to the Transfer Agent upon
a determination that good funds have been collected for the purchase of such
Shares. The Fund shall indemnify the Transfer Agent for any payment of
redemption proceeds or refusal to make such payment if the payment or
refusal to pay is in accordance with this Section.
The Transfer Agent shall not process or effect any redemptions
pursuant to a plan of distribution or redemption or in accordance with
any other Shareholder request upon the receipt by the Transfer Agent of
notification of the suspension of the determination of the Fund net
asset value.
7. Dividends.
(a) Notice to Transfer Agent and Custodian. Upon the declaration of each
dividend and each capital gains distribution by the Board of Trustees of the
Fund with respect to Shares, the Fund shall furnish to the Transfer Agent a
copy of a resolution of its Board of Trustees certified by the Secretary
setting forth with respect to the Shares the date of the declaration of
such dividend or distribution, the ex-dividend date, the date of payment
thereof, the record date as of which
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Shareholders entitled to payment shall be determined, the amount
payable per Share to the Shareholders of record as of that date, the total
amount payable to the Transfer Agent on the payment date, and whether such
dividend or distribution is to be paid in Shares at net asset value.
On or before the payment date specified in such resolution of the
Board of Trustees, the Fund will cause the Custodian of the Fund to pay to
the Transfer Agent sufficient cash to make payment to the Shareholders of
record as of such payment date.
(b) Payment of Dividends by the Transfer Agent. The Transfer Agent will,
on the designated monthly payment date, automatically reinvest all dividends
in additional Shares at net asset value (determined on such date) and mail
to each Shareholder on a quarterly basis at his address of record, or such
other address as the Shareholder may have designated, a statement showing
the number of full and fractional Shares (rounded to three decimal places)
then currently owned by the Shareholder and the net asset value of the
Shares so credited to the Shareholder's account; provided, however, that
if the Transfer Agent has on file a direction by the Shareholder to pay
income dividends or capital gains dividends, or both, in cash, such
dividends shall be paid in accordance with such instructions; and provided
further, that in the event of the return of two consecutive dividend
checks as undeliverable, Transfer Agent shall change such Shareholder
account to a reinvestment account if so provided in the Prospectus.
(c) Insufficient Funds for Payments. If the Transfer Agent does not
receive sufficient cash from the Custodian to make total dividend and/or
distribution payments to all Shareholders of the Fund as of the record
date, the Transfer Agent will, upon notifying the Fund, withhold payment
to all Shareholders of record as of the record date until such sufficient
cash is provided to the Transfer Agent.
(d) Information Returns. It is understood that the Transfer Agent shall
file such appropriate information returns concerning the payment of
dividends, return of capital, and capital gain distributions with the
proper federal, state, and local authorities as are required by law to be
filed and shall be responsible for the withholding of taxes, if any, due
on such dividends or distributions to Shareholders when required to
withhold taxes under applicable law.
