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EXHIBIT (h)(2)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
DCM SERIES TRUST
AND
AMERICAN DATA SERVICES, INC.
[LOGO]
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INDEX
1. TERMS OF APPOINTMENT; DUTIES OF ADS.................................... 3
2. FEES AND EXPENSES...................................................... 4
3. REPRESENTATIONS AND WARRANTIES OF ADS.................................. 4
4. REPRESENTATIONS AND WARRANTIES OF THE FUND............................. 5
5. INDEMNIFICATION........................................................ 5
6. COVENANTS OF THE FUND AND ADS.......................................... 6
7. TERMINATION OF AGREEMENT............................................... 7
8. ASSIGNMENT............................................................. 7
9. AMENDMENT.............................................................. 7
10. NEW YORK LAWS TO APPLY................................................ 7
11. MERGER OF AGREEMENT................................................... 8
12. NOTICES............................................................... 8
FEE SCHEDULE............................................................... 9
(A) ACCOUNT MAINTENANCE CHARGE:............................................ 9
PLUS,...................................................................... 9
(B) TRANSACTION FEES:...................................................... 9
(C) 24 HOUR AUTOMATED VOICE RESPONSE:...................................... 10
(D) FUND/SERV.............................................................. 10
(E) INTERNET ACCESS:....................................................... 10
FEE INCREASES........................................................... 10
(F) XXX PLAN FEES:......................................................... 10
(G) EXPENSES:.............................................................. 11
(H) SPECIAL REPORTS:....................................................... 11
(I) SERVICE DEPOSIT:....................................................... 11
(J) CONVERSION CHARGE: (EXISTING FUNDS ONLY, NEW FUNDS PLEASE IGNORE)...... 11
SCHEDULE A................................................................. 13
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TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made the 12th day of October 1999, by and between DCM Series Trust, a
Massachusetts business trust, having its principal office and place of business
at 0 Xxxxx Xxxxxx, Xxxxxx, XX 00000 (the "Trust"), and American Data Services,
Inc., a New York corporation having its principal office and place of business
at the Hauppauge Corporate Center, 000 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx
Xxxx 00000 ("ADS")
WHEREAS, the Trust is offering shares of beneficial interest (the
"Shares") in an investment portfolio known as the "DCM Growth Fund" (the
"Fund"), which is a series of the Trust; and
WHEREAS, the Fund desires to appoint ADS as its transfer agent,
dividend disbursing agent and agent in connection with certain other activities,
and ADS desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF ADS
1.01 Subject to the terms and conditions set forth in this agreement,
the Fund hereby employs and appoints ADS to act as, and ADS agrees to act as
transfer agent for the Fund's authorized and issued Shares, dividend disbursing
agent and agent in connection with any accumulation, open-account or similar
plans provided to the shareholders of the Fund ("Shareholders") set out in the
currently effective prospectus and statement of additional information
("prospectus") of the Fund.
1.02 ADS agrees that it will perform the following services:
(a) In accordance with procedures established from time to
time by agreement between the Fund and ADS, ADS shall:
I. Receive for acceptance orders for the purchase of Shares, and promptly
deliver payment and appropriate documentation therefore to the Custodian of
the Fund authorized by the Board of Trustees of the Trust (the
"Custodian");
II. Pursuant to purchase orders, issue the appropriate number of Shares and
hold such Shares in the appropriate Shareholder account;
III. Receive for acceptance redemption requests and redemption directions and
deliver the appropriate documentation therefore to the Custodian;
IV. At the appropriate time as and when it receives monies paid to it by the
Custodian with respect to any redemption, pay over or cause to be paid over
in the appropriate manner such monies as instructed by the redeeming
Shareholders;
V. Effect transfers of Shares by the registered owners thereof upon receipt of
appropriate instructions or pursuant to applicable law;
VI. Prepare and transmit payments for dividends and distributions declared by
the Fund;
VII. Maintain records of account for and advise the Fund and its Shareholders as
to the foregoing; and
VIII.Record the issuance of Shares of the Fund and maintain pursuant to Rule
17Ad-10(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") a record of the total number of Shares of the Fund which
are authorized, based upon data provided to it by the Fund,
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and issued and outstanding. ADS shall also provide the Fund on a regular
basis with the total number of Shares which are authorized and issued and
outstanding and shall have no obligation, when recording the issuance of
Shares, to monitor the issuance of such Shares or to take cognizance of any
laws relating to the issuance or sale of such Shares, which functions shall
be the sole responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in the above
paragraph (a), ADS shall perform all of the customary services of a
transfer agent, dividend and disbursing agent, including but not
limited to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, receiving and tabulating
proxies, mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts, preparing and filing U.S. Treasury Department Forms
1099 and other appropriate forms required with respect to dividends
and distributions by federal authorities for all Shareholders,
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, preparing and
mailing activity statements for Shareholders, and providing
Shareholder account information and providing a system and reports
which will enable the Fund to monitor the total number of Shares sold
in each State.
(c) In addition, the Fund shall (i) identify to ADS in writing those
transactions and shares to be treated as exempt from blue sky
reporting for each State and (ii) verify the establishment of such
transactions for each state on the system prior to activation and
thereafter monitor the daily activity for each State as provided by
ADS. The responsibility of ADS for the Fund's blue sky State
eligibility status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund and the
reporting of such transactions to the Fund as provided above.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and ADS.
2. FEES AND EXPENSES
2.01 For performance by ADS pursuant to this Agreement, the Trust
agrees to pay ADS an annual maintenance fee for each Shareholder account and
transaction fees for each portfolio or class of shares serviced under this
Agreement (see Schedule A) as set out in the fee schedule attached hereto. Such
fees and out-of pocket expenses and advances identified under Section 2.02 below
may be changed from time to time subject to mutual written agreement between the
Trust and ADS.
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse ADS for out-of-pocket expenses or advances incurred by ADS
for the items set out in the fee schedule attached hereto. In addition, any
other expenses incurred by ADS at the request or with the consent of the Fund,
will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses within
five (5) days following the receipt of the respective billing notice. Postage
for mailing of dividends, proxies, Fund reports and other mailings to all
Shareholder accounts shall be advanced to ADS by the Fund at least seven (7)
days prior to the mailing date of such materials.
3. REPRESENTATIONS AND WARRANTIES OF ADS
ADS represents and warrants to the Fund that:
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3.01 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.02 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.03 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.04 ADS is duly registered as a transfer agent under the Exchange Act
and shall continue to be registered throughout the remainder of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to ADS that:
4.01 It is empowered under applicable laws and by its By-Laws and
Declaration of Trust to enter into and perform this Agreement.
4.02 All proceedings required by said By-Laws and Declaration of Trust
have been taken to authorize it to enter into and perform this Agreement.
4.03 It is an open-end management investment company registered under
the Investment Company Act of 1940 as amended (the "1940 Act").
4.04 A registration statement under the Securities Act of 1933, as
amended is currently or will become effective and will remain effective, and
appropriate state securities law filings as required, have been or will be made
and will continue to be made, with respect to all Shares of the Fund being
offered for sale.
5. INDEMNIFICATION
5.01 ADS shall not be responsible for, and the Fund shall indemnify and
hold ADS harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) All actions of ADS or its agents or subcontractors required to be taken
pursuant to this Agreement, provided that such actions are taken in
good faith and without gross negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, gross
negligence or willful misconduct or which arise out of the breach of
any representation or warranty of the Fund hereunder.
(c) The reliance on or use by ADS or its agents or subcontractors of
information, records and documents which (i) are received by ADS or its
agents or subcontractors and furnished to it by or on behalf of the
Fund, and (ii) have been prepared and/or maintained by the Fund or any
other person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by ADS or its agents or
subcontractors of any instructions or requests of the Fund.
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(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state
or in violation of any stop order or other determination or ruling by
any federal agency or any state with respect to the offer or sale of
such Shares in such state.
5.02 ADS shall indemnify and hold the Fund harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or failure or
omission to act by ADS as a result of ADS's lack of good faith, gross negligence
or willful misconduct.
5.03 At any time ADS may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by ADS under this
Agreement, and ADS and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. ADS, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided ADS or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. ADS, its agents and subcontractors shall also be protected and
indemnified in recognizing share certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers of the Fund, and
the proper countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6. COVENANTS OF THE TRUST AND ADS
6.01 The Trust shall promptly furnish to ADS a certified copy of the
resolution of the Board of Trustees of the Trust authorizing the appointment of
ADS and the execution and delivery of this Agreement.
6.02 ADS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of share
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
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6.03 ADS shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act, as amended, and the Rules thereunder,
ADS agrees that all such records prepared or maintained by ADS relating to the
services to be performed by ADS hereunder are the property of the Fund and will
be preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in accordance with
its request.
6.04 ADS and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, ADS will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Trust as to such
inspection. ADS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person, and shall
promptly notify the Fund of any unusual request to inspect or copy the
Shareholder records of the Fund or the receipt of any other unusual request to
inspect, copy or produce the records of the Fund.
7. TERMINATION OF AGREEMENT
7.01 This Agreement shall become effective as of the date hereof and
shall remain in force for a period of three (3) years, provided however, that
both parties to this Agreement have the option to terminate the Agreement upon
ninety (90) days prior written notice. At the end of the first three (3) years
of this Agreement and each anniversary date thereafter, unless this Agreement is
replaced by a new agreement or notice is formally given to terminate this
Agreement by either party, this Agreement will automatically be renewed for an
additional twelve (12) months.
7.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, ADS reserves the right to charge for any other
reasonable costs and expenses associated with such termination.
8. ASSIGNMENT
8.01 Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other party.
8.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
9. AMENDMENT
9.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
10. NEW YORK LAWS TO APPLY
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10.01 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 1940 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 1940 Act, the latter shall
control.
11. MERGER OF AGREEMENT
11.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
12. NOTICES.
All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when received or when sent by telex or
facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Trust: To ADS:
Xxxxxxxx X. Xxxxx Xxxxxxx Xxxxx
Co-Chairman and Vice President President
DCM Series Trust American Data Services, Inc.
0 Xxxxx Xxxxxx 000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
DCM Series Trust AMERICAN DATA SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx Xxxxx
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Xxxxxxxx X. Xxxxx Xxxxxxx Xxxxx, President
Co-Chairman and Vice President
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FEE SCHEDULE
For the services rendered by ADS in its capacity as transfer agent, the
Fund shall pay ADS, within ten (10) days after receipt of an invoice from ADS at
the beginning of each month, a fee, calculated as a combination of account
maintenance charges plus transaction charges as follows:
(a) ACCOUNT MAINTENANCE CHARGE:
The greater of (no prorating for partial months):
(1) Minimum maintenance charge per portfolio/class ($1,000.00/ month)
OR,
(2) Based upon the total of all open/closed accounts (1) per portfolio/class
upon the following annual rates (billed monthly):
FUND TYPE:
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Dividend calculated and
paid annually, semi-annually, quarterly................... $ 9.00 per account
Dividend calculated and paid monthly....................... $12.00 per account
Dividend accrued daily and paid monthly ................... $16.00 per account
Closed accounts ................. $ 2.00 per account (2)
(1) All accounts closed during a month will be considered as open accounts
for billing purposes in the month the account is closed.
(2) Closed accounts remain on the shareholder files until all Forms 1099
and 5498 have been distributed to the shareholders and sent via
mag-media to the IRS.
PLUS,
(b) TRANSACTION FEES:
Trade Entry (purchase/liquidation) and maintenance transactions $ 1.50 each
New account set-up ........................................... $ 3.00 each
Customer service calls ........................................ $ 1.25 each
Correspondence/ information requests .......................... $ 1.75 each
Check preparation ............................................. $ .50 each
Liquidations paid by wire transfer ............................ $ 3.00 each
ACH charge .................................................... $ .45 each
SWP ........................................................... $ 1.00 each
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(c) 24 HOUR AUTOMATED VOICE RESPONSE:
Initial set-up (one-time) charge per portfolio - $750.00
Monthly maintenance charge per portfolio - $50.00
All calls processed through automated voice response will be billed as a
customer service call listed in (b) above.
(d) FUND/SERV
All portfolios processed through Fund/SERV will be subject to an additional
monthly charge of $250.00
All transactions processed through Fund/SERV will be billed at the transaction
fee rates listed in (b) above.
(e) INTERNET ACCESS:
Each shareholder/adviser/broker hit billed at $0.25 per hit.
(f) XXX PLAN FEES:
The following fees will be charged directly to the shareholder account:
Annual maintenance fee ......................................... $15.00 /account *
Incoming transfer from prior custodian ......................... $12.00
Distribution to a participant .................................. $15.00
Refund of excess contribution .................................. $15.00
Transfer to successor custodian ................................ $15.00
Automatic periodic distributions .............................. $15.00/year per account
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* Includes $8.00 Bank Custody Fee.
(g) EXPENSES:
The Fund shall reimburse ADS for any out-of-pocket expenses, exclusive
of salaries, advanced by ADS in connection with but not limited to the costs for
printing Fund documents, (i.e. printing of confirmation forms, shareholder
statements, redemption/dividend checks, envelopes, financial statements, proxy
statement, Fund prospectus, etc.) proxy solicitation and mailing expenses,
travel requested by the Fund, telephone toll charges, 800-line costs and fees,
facsimile and data transmission costs, stationery and supplies (related to Fund
records), record storage, postage (plus a $0.085 service charge for all
mailings), pro-rata portion of annual SAS-70 audit letter, telex and courier
charges incurred in connection with the performance of its duties hereunder. ADS
shall provide the Fund with a monthly invoice of such expenses and the Fund
shall reimburse ADS within fifteen (15) days after receipt thereof.
(h) SPECIAL REPORTS:
All reports and/or analyses requested by the Fund that are not included
in the fee schedule, shall be subject to an additional charge, agreed upon in
advance, based upon the following rates:
Labor:
Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $ 45.00/hr.
(i) SERVICE DEPOSIT:
The Fund will remit to ADS upon execution of this Agreement a security
deposit of equal to one (1) month's shareholder service fee. The service deposit
computation will be based either on the total number of shareholder accounts
(open and closed) of each portfolio to be serviced or the minimum fee, whichever
is greater, as of the execution date of this Agreement. The Fund will have the
option to have the security deposit applied to the last month's service fee, or
applied to any new contract between the Fund and ADS.
However, if the Fund elects or is forced to terminate this Agreement
for any reason what-so-ever other than a material breach by ADS (including, but
not limited to, the voluntary or involuntary termination of the Fund,
liquidation of the Fund's assets, the sale or merger of the Fund or its assets
to any successor entity) prior to the termination date of this Agreement as
specified in Paragraph 7 of this Agreement, the Fund will forfeit the security
deposit paid to ADS upon execution of this Agreement
(j) CONVERSION CHARGE: (EXISTING FUNDS ONLY, NEW FUNDS PLEASE IGNORE)
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There will be a charge to convert the Fund's shareholder accounting
records on to the ADS stock transfer system. In addition, ADS will be reimbursed
for all out-of-pocket expenses, enumerated in paragraph (b) above and data media
conversion costs, incurred during the conversion process.
The conversion charge will be estimated and agreed upon in advance by
the Fund and ADS. The charge will be based upon the quantity of records to be
converted and the condition of the previous service agents records.
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SCHEDULE A
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
DCM Growth Fund
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