Exhibit (h)(2)
TRANSFER AGENCY AND DIVIDEND
DISBURSING AGENCY AGREEMENT
AGREEMENT made as of the 26th day of February, 1998 by and
between WATERHOUSE INVESTORS FAMILY OF FUNDS, INC., a Maryland corporation
(the "Company"), on its own behalf and on behalf of its Waterhouse Investors
Dow Xxxxx Industrial Average(SM) Index Fund (the "Fund"), and NATIONAL INVESTOR
SERVICES CORP., a Delware corporation ("NISC").
WITNESSETH:
WHEREAS, the Company is an open-end, management investment
company registered as such under the Investment Company Act of 1940, as
amended, currently comprised of four separate investment portfolios; and
WHEREAS, the Company desires to appoint NISC to be the
Transfer Agent and Dividend Disbursing Agent for the Fund upon, and subject
to, the terms and provisions of this Agreement; and
WHEREAS, the NISC desires to accept such appointment upon,
and subject to, such terms and provisions.
NOW, THEREFORE, in consideration of the premises and mutual
convenants hereinafter contained, the Company and NISC agree as follows:
1. Appointment of NISC as Transfer Agent and Dividend Disbursing
Agent.
(a) The Company hereby appoints NISC to act as Transfer
Agent and Dividend Disbursing Agent for the Fund upon, and subject to, the
terms and provisions of this Agreement.
(b) NISC hereby accepts the appointment as Transfer Agent
and Dividend Disbursing Agent for the Fund, and agrees to act as such upon,
and subject to, the terms and provisions of this Agreement.
2. Definitions. In this Agreement:
(1) The term "Act" means the Investment Company Act of 1940,
as amended, and any rule or regulation thereunder;
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(2) The term "Account" means any account of a Shareholder,
or, if the shares are held in an account in the name of
Waterhouse Securities, Inc. or other broker-dealer for
benefit of an identified customer, such account, and
includes any Plan Account;
(3) The term "application" means an application made by a
Shareholder or prospective Shareholder respecting the
opening of an Account;
(4) The term "Instruction" means an instruction in writing
given on behalf of the Company to NISC, and signed on behalf
of the Company by the President, any Vice President, the
Secretary or the Treasurer of the Comp or other authorized
person;
(5) The term "Plan Account" means an account opened by a
Shareholder or prospective Shareholder in respect of a
"sweep account" (in each case by whatever name referred to
in the Prospectus), and may also include an account relating
to any other plan if and when provision is made for such
plan in the Prospectus;
(6) The term "Prospectus" includes the Prospectus and the
Statement of Additional Information of the Company as from
time to time in effect;
(7) The term "Shareholder" means a holder of record of
Shares;
(8) The term "Shares" means shares of stock of the Fund.
3. Duties of NISC as Transfer Agent and Dividend Disbursing Agent.
(a) Subject to the other provisions of the Agreement, NISC
hereby agrees to perform the following functions as Transfer Agent and
Dividend Disbursing Agent for the Fund: (i) processing the issuance, transfer
and redemption of Shares, and recording the same in the appropriate Accounts;
(ii) opening, maintaining, servicing and closing Accounts; (iii) acting as
agent for the Shareholders and/or customers of Waterhouse Securities, Inc. or
other broker-dealer in connection with Plan Accounts, upon the terms and
subject to the conditions contained in the Prospectus and application relating
to the specific Plan Account; (iv) exchanging the investment of an investor
into or from the Shares of one or more other investment companies (or
portfolios thereof) if and to the extent permitted by the Prospectus at the
direction of such investor; (v) examining and approving legal transfers; (vi)
replacing lost, stolen or destroyed certificates, if any,
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representing Shares, in accordance with, and subject to, procedures and
conditions adopted by the Company; (vii) furnishing confirmations of purchases
and sales relating to Shares as required by applicable law; (viii) furnishing
appropriate periodic and year end statements relating to Accounts, together
with additional enclosures, including appropriate income tax information and
income tax forms duly completed, as required by applicable law; (ix) mailing
annual, semi-annual and quarterly reports and dividend notices prepared by or
on behalf of the Fund, and mailing new Prospectuses upon their issue to
Shareholders as required by applicable law; (x) furnishing such periodic
statements of transactions effected by NISC, reconciliations, balances and
summaries as the Fund may reasonably request; (xi) withholding taxes on
non-resident alien Accounts, and preparing and filing U.S. Treasury Department
Form 1099 and other appropriate forms as required by applicable law with
respect to dividends and distributions; and (xii) processing dividend and
distribution payments, including reinvesting dividends for full and fractional
shares and disbursing cash dividends, as applicable.
(b) NISC agrees to act as proxy agent in connection with the
holding of annual, if any, and special meetings of Shareholders, mailing such
notices, proxies and proxy statements in connection with the holding of such
meetings as may be required by applicable law, receiving and tabulating votes
cast by proxy and communicating to the Company the results of such tabulation
accompanied by appropriate certificates, and preparing and furnishing to the
Company certified lists of Shareholders (of the Fund or one or more of its
investment portfolios, as appropriate) as of such date, in such form and
containing such information as may be required by the Company.
(c) NISC agrees to deal with, and answer in a timely manner,
all correspondence and inquires relating to the functions of NISC under this
Agreement with respect to Accounts.
(d) NISC agrees to furnish to the Company or its designated
agent such information at such intervals as is necessary for the Company to
comply with the registration and/or the reporting requirements (including
applicable escheat laws) of the Securities and Exchange Commission, state
securities or Blue Sky authorities or other governmental authorities.
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(e) NISC agrees to provide to the Company such information
as may reasonably be required to enable the Company to reconcile the number of
outstanding Shares of the Fund between the NISC's records and the account
books of the Company.
(f) Notwithstanding anything in the foregoing provisions of
this section 3, NISC agrees to perform its functions thereunder subject to
such modification (whether in respect of particular cases or in any particular
class of cases) as may from time to time be contained in an Instruction.
(g) In providing for any or all of the services indicated in
this section 3, and in satisfaction of its obligations to provide such
services, NISC may enter into agreements with one or more other persons to
provide such services to the Fund, provided that any such agreement shall have
been approved by the Board of Directors of the Company, provided further that
NISC shall be as fully responsible to the Company for the acts and omissions
of such persons as it would be for its own acts or omissions hereunder.
4. Compensation. For the services provided to the Company by NISC
pursuant to this Agreement, the Fund shall pay NISC on the first business day
of each calendar month a fee for the previous month at an annual rate equal to
.05 of 1% of the Fund's average daily net assets. The value of the Fund's net
assets shall be computed at the times and in the manner specified in the
Company's registration statement on Form N-1A, as amended from time to time
(the "Registration Statement"). Compensation by the Fund of NISC shall
commence on the date of the first receipt by the Fund of the proceeds of the
sale of its Shares as described in the Registration Statement, and the fee for
the period from the date the Fund shall first receive the proceeds of the sale
of its Shares as aforesaid to the end of the month during which such proceeds
are so received, shall be pro-rated according to the proportion that such
period bears to the full monthly period. Upon termination of this Agreement
before the end of a month, the fee for such part of that month shall be
pro-rated according to the proportion that such period bears to the full
monthly period and shall be payable within seven (7) days after the date of
termination of this Agreement.
5. Maintenance of Records, Right of Inspection. In connection with
the performance of its duties hereunder, NISC shall maintain such books and
records relating to transactions effected by NISC as are required by the Act,
or by any other applicable provision of law, rule or regulation, to be
maintained by the Company or its transfer agent
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with respect to transactions. NISC shall preserve, or cause to be preserved,
any such books and records for such periods as may be required by any such
law, rule or regulation and as may be agreed upon from time to time between
NISC and the Company. In addition, NISC agrees to maintain and preserve master
files and historical computer tapes on a daily basis in multiple separate
locations a sufficient distance apart to insure preservation of at least one
copy of such information. NISC agrees that it will, in a timely manner, make
available to and permit, any officer, accountant, attorney or authorized agent
of the Company to examine and make transcripts and copies (including photocopies
and computer or other electronic information storage media and print-outs) of
any and all of the books and records which are maintained pursuant to this
Agreement.
6. Confidential Relationship. NISC agrees that it will, on behalf of
itself and its officers and employees, treat all transactions contemplated by
this Agreement, and all information germane thereto, as confidential and not
to be disclosed to any person (other than the Shareholder concerned, or the
Company, or as may be disclosed in the examination of any books or records by
any person lawfully entitled to examine the same) except as may be authorized
by the Company by way of an Instruction.
7. Indemnification.
(a) NISC shall not be liable to the Company or the Fund for
any error of judgment or mistake of law or for any loss arising out of any act
or omission by NISC in the performance of its duties hereunder. Nothing herein
contained shall be construed to protect NISC against any liability to the
Company, the Fund, Shareholders or any investment adviser to the Company to
which NISC shall otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reckless
disregard of its obligations and duties hereunder.
(b) The Company, on behalf of the Fund, agrees to indemnify
and hold harmless NISC and any sub-agent from and against all charges, claims,
expenses (including legal fees) and liabilities reasonably incurred by NISC
and each sub-agent in connection with the performance of its duties hereunder,
except such as may arise from NISC's or sub-agent's willful misfeasance, bad
faith, gross negligence in the performance of its duties or by reckless
disregard of its obligations and duties hereunder. Subject to the requirements
of the Act, such expenses shall be paid by the Company in advance of the final
disposition of any
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matter upon invoice by NISC or a sub-agent and receipt by the Company of an
undertaking from NISC or such sub-agent to repay such amounts if it shall
ultimately be established that NISC is not entitled to payment of such
expenses hereunder.
(c) As used in this section 7, the term "NISC" and
"sub-agent" shall include any affiliates of NISC and each sub-agent performing
services for the Company contemplated hereby and directors, officers, agents
and employees of NISC, each such sub-agent and such affiliates.
8. Regarding NISC.
(a) NISC warrants and represents that its officers and
supervisory personnel or agents (including any sub-transfer agents or
sub-dividend disbursing agents) charged with carrying out its functions as
Transfer Agent and Dividend Disbursing Agent for the Company possess the
special skill and technical knowledge appropriate for that purpose. NISC shall
at all times exercise due care and diligence in the performance of its
functions as Transfer Agent and Dividend Disbursing Agent for the Company.
NISC agrees that, in determining whether it has exercised due care and
diligence, its conduct shall be measured by the standard applicable to persons
possessing such special skill and technical knowledge.
(b) NISC warrants and represents that it is duly authorized
and permitted to act as Transfer Agent and Dividend Disbursing Agent under all
applicable laws and that it will immediately notify the Company of any
revocation of such authority or permission or of the commencement of any
proceeding or other action which may lead to such revocation.
9. Termination.
(a) This Agreement shall become effective as of the date
first above written and shall thereafter continue from year to year. This
Agreement may be terminated by the Company or NISC (without penalty to the
Company or NISC) provided that the terminating party gives the other party
written notice of such termination at least sixty (60) days in advance, except
that the Company may terminate this Agreement immediately upon written notice
to NISC if the authority or permission of NISC to act as Transfer Agent and
Dividend Disbursing Agent has been revoked of if any proceeding or other
action which the Company reasonably believes will lead to such revocation has
been commenced.
(b) Upon termination of this Agreement, NISC shall deliver
all unissued and canceled stock certificates representing Shares, if any,
remaining in its possession, and
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all Shareholder records, books, stock ledgers, instruments and other documents
(including computer or other electronically stored information) made or
accumulated in the performance of its duties as Transfer Agent and Dividend
Disbursing Agent for the Company along with a certified locator document
clearly indicating the complete contents therein, to such successor as may be
specified in a notice to termination or Instruction. The Company assumes all
responsibility for failure thereafter to produce any paper, record or document
so delivered and identified in the locator document, if and when required to
be produced.
10. Amendment. Except to the extent that the performance by NISC of
its functions under this Agreement may from time to time be modified by an
Instruction, this Agreement may be amended or modified by the parties hereto
only if such amendment is specifically approved by the Board of Directors of
the Company, including a majority of the Directors who are not " interested
persons" of the Company within the meaning of the Act and who have no direct
or indirect interest in this Agreement, and such amendment is set forth in a
written instrument executed by each of the parties hereto.
11. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New York
as at the time in effect and the applicable provisions of the Act. To the
extent that the applicable law of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Act, the
latter shall control.
12. Counterparts. This Agreement may be executed by the parties
hereto in counterparts and if executed in more than one counterpart the
separate instruments shall constitute one agreement.
13. Notices. All notices or other communications hereunder to either
party shall be in writing and shall be deemed to be received on the earlier of
the date actually received or on the fourth day after the postmark if such
notice is mailed first class postage prepaid. Notice shall be addressed: (a)
if to NISC, to: President, National Investors Service Corp., 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000; or (b) if to the Company, to: President, Waterhouse
Investors Family of Funds, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx 00000 or at such
other address as either party may designate by written notice to the other.
Notice also shall be deemed sufficient if given by telex, telecopier, telegram
or similar means of same day delivery (with a confirming copy by mail as
provided herein).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective duly authorized officers as of the day and year
above written.
WATERHOUSE INVESTORS FAMILY
OF FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
NATIONAL INVESTOR SERVICES CORP.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
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