EXHIBIT 9
TRANSFER AGENCY AGREEMENT
L. XXX XXXX & ASSOCIATES, an Arizona partnership (The "Transfer Agent"),
and XXXX SMALL & MID-CAP GROWTH FUND, INC., a Maryland corporation registered
with the Securities and Exchange Commission as an open-end investment company
(the "Fund"), agree that:
1. Definitions. Whenever used in this agreement, the following words and
phrases, unless the context otherwise requires, have the following meanings:
(a) "Articles of Incorporation" means the Articles of Incorporation of the
Fund as they may be amended from time to time;
(b) "Authorized Person" includes the Chairman, the President, any Vice
President, the Secretary or any Assistant Secretary, the Treasurer or any
Assistant Treasurer, of the Fund, or any other person, whether or not such
person is an Officer or employee of the Fund, duly authorized to give Oral
Instructions and Written Instructions on behalf of the Fund as indicated in a
certification pursuant to Section 6(d) or 6(e) as may be received by the
Transfer Agent from time to time;
(c) "Certificate" means any notice, instruction or other instrument in
writing, authorized or required by this agreement to be given to the Transfer
Agent, which is actually received by the Transfer Agent and signed on behalf of
the Fund by any two Officers thereof;
(d) "Commission" means the Securities and Exchange Commission;
(e) "Custodian" means the custodian of the securities and moneys owned by
the Fund, which is to be Founders Bank of Arizona unless and until the Transfer
Agent shall receive a certificate otherwise;
(f) "Directors" means the duly elected Directors of the Fund; "Board of
Directors" means the Board of Directors of the Fund;
(g) "Fund" means Xxxx Small & Mid-Cap Growth Fund, Inc., a Maryland
corporation;
(h) The "1940 Act" means the Investment Company Act of 1940 and the Rules
and Regulations of the Commission thereunder;
(i) "Officer" means the Chairman, the President, and Vice President, the
Secretary and the Treasurer of the Fund;
(j) "Oral Instructions" means instructions orally communicated and 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;
(k) "Prospectus" means the prospectus of the Fund relating to the Fund's
Shares that became effective most recently under the Securities Act of 1933, and
as it may subsequently have been supplemented;
(l) "Shares" means capital stock, $.01 par value per share, of the Fund;
(m) "Shareholder" means registered owner of Shares;
(n) "Written Instruction" means a written 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 communication;
2. Representation of Transfer Agent. The Transfer Agent does hereby
represent and warrant to the Fund that it is duly registered as a transfer agent
as provided in section 17A(c) of the Securities Exchange Act of 1934, as
amended.
3. Appointment of the Transfer Agent. The Fund appoints the Transfer Agent
as transfer agent for all of the Shares and as shareholder servicing agent for
the Fund. The Transfer Agent accepts such appointments and agrees to perform
the duties herein set forth.
4. Compensation.
(a) The Fund shall compensate the Transfer Agent for its services rendered
under this agreement in accordance with the fees set forth in the fee schedule
annexed hereto and incorporated herein.
(b) The compensation agreed to hereunder may be adjusted from time to time
by attaching a revised fee schedule, dated and signed by an Officer of each
party hereto, to this agreement.
(c) The Transfer Agent shall present a xxxx to the Fund as soon as
practicable after the end of each calendar month, detailed in accordance with
the fee schedule. The Fund shall promptly pay to the Transfer Agent the amount
of such billing.
5. Documents. In connection with the appointment of the Transfer Agent,
the Fund shall, on or before the date this Agreement goes into effect, file with
the Transfer Agent a copy of each of the following documents:
(a) The Articles of Incorporation, as then in effect;
(b) The bylaws of the Fund, as then in effect;
(c) The resolution of the Board of Directors authorizing this agreement;
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(d) All account application forms and other documents relating to
shareholder accounts or relating to any plan, program or service offered by the
Fund relating to the sale, holding or redemption of Shares.
6. Further Documentation. The Fund shall also furnish from time to time a
copy of each of the following documents:
(a) Each registration statement filed with the Commission, and all related
amendments and orders relating to the sale of Shares;
(b) Each amendment to the Articles of Incorporation and to the bylaws of
the Fund;
(c) Copies of each resolution of the Directors designating Authorized
Persons to give instructions to the Transfer Agent;
(d) A certificate of any change in any Officer or Director of the Fund;
(e) Such other certificates, documents or opinions as may mutually be
deemed necessary or appropriate for the Transfer Agent in the proper performance
of its duties.
7. Representations of the Fund. The Fund represents to the Transfer Agent
that, as of the date of this agreement, it is authorized to issue 25,000,000
Shares. When Shares are hereafter issued in accordance with the terms of sale
in the Prospectus, such Shares shall be validly issued, full paid and
nonassessable by the Fund.
8. Duties of the Transfer Agent.
(a) The Transfer Agent shall be responsible for administering and
performing the functions required for the Shares, for acting as service agent in
connection with dividends and distributions on the Shares, and for performing
shareholder account administrative agent functions in connection with the
issuance, transfer and redemption or repurchase (including coordination with the
Custodian) of the Shares. The details of 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 where appropriate, the Custodian.
(b) The Transfer Agent shall create and maintain all necessary records
including those specified in Section 17 hereof, 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. All records shall be available for
inspection and use by the Fund, including after termination of this agreement.
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.
(c) The Transfer Agent shall make available during regular business hours
all records and other data created and maintained pursuant to this agreement,
for reasonable audit and inspection by the Fund and any person retained by the
Fund. Upon reasonable notice by the Fund, the Transfer Agent shall make
available during regular business hours its facilities and
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premises employed in connection with its performance of this agreement for
reasonable visitation by the Fund and any person retained by the Fund.
(d) The Transfer Agent shall maintain records of the name of each
registered owner of Shares, the number of Shares (to the nearest one-thousandth
of a Share) owned by such registered owner and in the aggregate by all
registered owners and, to the extent it is able to do so, the address and tax
identification number of each registered owner. The Transfer Agent shall
maintain a stop transfer record when necessary.
(e) The Transfer Agent shall address and mail all communications by the
Fund to its Shareholders, including reports to Shareholders, dividend and
distribution notices, and notices of and proxy materials for meetings of
Shareholders.
(f) The Transfer Agent shall investigate all Shareholder inquiries relating
to accounts of the respective Shareholders, and shall answer all correspondence
from Shareholders, and to the extent appropriate, from securities brokers 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.
(g) The Transfer Agent shall furnish the Fund with reports of registration
of ownership of Shares, such periodic and special reports as the Fund may
reasonably request and the Transfer Agent can reasonably provide, and such other
information, including Shareholder lists and statistical information concerning
Shareholder accounts, as may be agreed upon from time to time between the Fund
and the Transfer Agent.
(h) In connection with special and annual meetings of Shareholders, the
Transfer Agent shall prepare lists of Shareholders, shall mail to the
Shareholders notices of the meetings and proxy materials, shall furnish to the
Fund affidavits of such mailings, shall process and tabulate the voting
instructions of the proxies returned by or for Shareholders, shall report to the
Fund on such returns and tabulations, shall report at each meeting on the number
of Shares represented at the meeting by proxy and, separately, by Shareholders
in person, shall act as teller at the meeting, and shall certify the voting of
holders of Shares.
9. Sales of Fund Shares.
(a) Whenever the Fund shall sell any of its Shares, the Fund shall deliver
or cause to be delivered to the Transfer Agent a Certificate duly specifying:
(i) the number of Shares sold, trade date and price per Share and the total
price; (ii) the amount of money to be delivered to the Custodian from the sale
of such Shares; and (iii) in the case of a new account, a new account
application or sufficient information with which to establish an account.
(b) The Transfer Agent shall, upon receipt by it of a check or other medium
of payment identified by it as funds or a claim of funds in payment of the
purchase price for sales of Shares (and where required, payable or endorsed to
the Transfer Agent as agent for, or identified as being for the account of, the
Fund), promptly deposit such check or other payment to the appropriate account
postings necessary to reflect the sale according to arrangements to be made
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between it and the Custodian. The Transfer Agent will notify the Fund, or its
designee, and the Custodian of all purchases and related account adjustments.
(c) Upon receipt of the notification required under paragraph (a) hereof,
the Transfer Agent shall issue to the purchaser a confirmation of the
information received under paragraph 9(a) (including, if needed, a request for
additional information needed for the account records).
(d) 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 by the Fund in
connection with such issuance.
(e) The Transfer Agent may establish such additional rules and regulations
governing the transfer or registration of certificates for Shares as it may deem
advisable and as are consistent with rules and regulations generally adopted by
bank transfer agents, except as it may be instructed otherwise by an Officer.
10. Failure of Payment. In the event that any check or other order for
the payment of the price of Shares sold by the Fund is for any reason not paid
upon demand for payment, the Transfer Agent will: (i) give prompt notice to the
Fund or its designee of such failure of payment; (ii) place a stop transfer
order against all Shares that were to have been issued in consideration for such
failed payment; and (iii) take such other steps as the Transfer Agent may, in
its discretion, deem appropriate or as the Fund or its designee may instruct.
11. Redemptions. The Transfer Agent shall duly process demands by
Shareholders for redemption of Shares only in accordance with the requirements
and procedures set forth in the Prospectus, except as and to the extent waived
or otherwise specified by an Officer in any individual redemption.
12. Transfers and Exchanges. The Transfer Agent shall duly process
transfers of registered ownership of Shares only in accordance with the
requirements and procedures set forth in the Prospectus applicable to
redemptions (modified, if necessary, to accommodate any difference in a transfer
from a redemption), except as and to the extent waived or otherwise specified by
an Officer in any individual transaction.
13. Right to Seek Assurances. The Transfer Agent reserves the right not
to process a transfer or redemption of 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 judgment, deems improper or unauthorized, or until it
is satisfied that there is no basis for any claims adverse to such transfer or
redemption. The Transfer Agent may, in effecting transfers, rely upon the
provisions of the Uniform Act for the Simplification of Fiduciary Security
Transfers of Arizona or the Uniform Commercial Code of Arizona, as they may be
amended from time to time, 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, and the Fund shall
indemnify the Transfer Agent for any act done or omitted by it in reliance upon
such laws or opinions of counsel of the Fund or of its own counsel.
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14. Distributions.
(a) The Fund shall promptly notify the Transfer Agent of the declaration of
any dividend or other distribution on Shares. The Fund shall furnish to the
Transfer Agent a resolution of the Board of Directors certified by the Secretary
declaring a dividend or distribution of a specified amount per Share or in the
aggregate, the medium of payment if payable other than in United States dollars,
and the record date and the payable date of the distribution if the declaration
was in an aggregate amount. In the event that the amount of the dividend or
distribution is declared in the aggregate, then promptly after the record date a
Certificate will be furnished to the Transfer Agent stating the per share
equivalent of the aggregate amount as of the record date.
(b) The Transfer Agent shall, on or before the payable date of any dividend
or distribution, notify the Custodian of the estimated amount of cash required
to pay the dividend or distribution, and the Fund agrees that, on or before the
mailing date of such dividend or distribution, it shall instruct the Custodian
to place in a dividend disbursing account funds equal to the cash amount to be
paid. As of the first calendar day after the record date, the Transfer Agent
shall record in the Share accounts of those registered Shareholders whose
dividends or distributions are to be reinvested in Shares the number and price
of the Shares so acquired priced at the applicable net asset value. The
Transfer Agent shall calculate, prepare and mail checks to Shareholders whose
dividends and other distributions are to be received by them in money.
(c) The Transfer Agent shall replace lost checks upon receipt of properly
executed affidavits, and will maintain stop payment orders against replaced
checks.
(d) The Transfer Agent shall not be liable for the propriety of payments
made in accordance with the resolutions of the Board of Directors.
(e) If the Transfer Agent does not receive from the Custodian sufficient
cash to make payment to all Shareholders as of the record date, the Transfer
Agent shall, 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.
15. Other Duties. In addition to the duties expressly provided for
herein, 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 in
writing.
16. Taxes. The Transfer Agent shall file such appropriate information
returns concerning the payment of dividends and capital gains distributions with
the proper Federal, state and local authorities as are required by law to be
filed by the Fund and shall withhold such sums as are required to be withheld by
applicable law.
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17. Books and Records.
(a) The Transfer Agent shall maintain records showing for each
Shareholder's account the following: (i) names, addresses and tax identification
numbers; (ii) numbers of shares held; (iii) historical information regarding the
account of each Shareholder, including dividends paid and date and price of all
transactions on a Shareholder's account; (iv) any stop or restraining order
placed against a Shareholder's account; (v) information on withholdings; (vi)
any capital gain or dividend reinvestment order, plan application, dividend
address and correspondence relating to the current maintenance of a
Shareholder's account; (vii) any information required in order for the Transfer
Agent to perform the calculations contemplated or required by this agreement;
and (viii) such other information and data as may be required by law.
(b) Any records required to be maintained by Rule 31a-1 under the 1940 Act
will be preserved for the periods prescribed in Rule 31a-2 under the 1940 Act.
Such records may be inspected by the Fund at reasonable times. The Transfer
Agent may, at its option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the Transfer Agent's files,
records and documents created and maintained by the Transfer Agent in
performance of its services or for its protection.
18. Reliance by Transfer Agent; Instructions
(a) The Transfer Agent shall be protected in acting upon any paper or
document believed by it to be genuine and to have been signed by an Authorized
Person, and shall not be held to have any notice of any change of authority of
any person until receipt of written certification thereof from the Fund. It
shall also be protected in processing Share certificates that it reasonably
believes to bear the proper manual or facsimile signatures of the Officers of
the Fund, but shall be responsible for the proper countersignature of the
Transfer Agent.
(b) At any time the Transfer Agent may apply to any Authorized Person of
the Fund for Written Instructions, and at the expense of the Fund, 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 with the opinion of such counsel and, apart
from that, in the exercise of reasonable care. In addition, the Transfer Agent,
its officers, agents or employees, shall accept instructions or requests given
to them by any person representing or acting on behalf of the Fund only if said
representative is known by the Transfer Agent, 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 Authorized
Persons of the Fund.
(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: (i) the legality of the issue or sale of any Shares of the
Fund, nor the sufficiency of the amount to be received therefor; (ii) the
legality of the redemption of any Shares of the Fund, nor the propriety of the
amount to be paid therefor; (iii) the legality of the declaration of any
dividend by the Fund, nor the legality of the issue of any dividend by the Fund,
nor the legality of the issue of any
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Shares of the Fund in payment of any stock dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares of the Fund.
19. Standard of Care and Indemnification.
(a) The Transfer Agent may, in connection with this agreement, employ
agents or attorneys in fact, or both, and shall not be liable for any loss
arising out of or in connection with its actions (which includes the actions of
its agents and attorneys in fact) under this agreement so long as it (which
includes its agents and attorneys in fact) acts in good faith and with due
diligence, and is not negligent or guilty of any willful misconduct.
(b) The Fund hereby agrees to indemnify and hold harmless the Transfer
Agent from and against any and all claims, demands, expenses and liabilities
(whether with or without basis in fact or law) of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted against the
Transfer Agent by any person by reason of, or as a result of: (i) any action
taken or omitted to be taken by the Transfer Agent in good faith in reliance
upon any Certificate, instrument, order or stock certificate believed by it to
be genuine and to be signed, countersigned or executed by any duly authorized
person, upon the Oral Instructions or Written Instructions of an Authorized
Person of the Fund or upon the opinion of legal counsel for the Fund or its own
counsel; or (ii) any action taken or omitted to be taken by the Transfer Agent
in good faith in reliance upon any law, act, regulation or interpretation of the
same even though the same may thereafter have been altered, changed, amended or
repealed. However, indemnification hereunder shall not apply to actions or
omissions of the Transfer Agent or its partners, employees or agents in case of
its own negligence, willful misconduct, bad faith, or reckless disregard of its
or their own duties hereunder.
(c) The Transfer Agent hereby agrees to indemnify and hold harmless the
Fund from and against any and all claims, demands, expenses and liabilities
(whether with or without basis in fact or law) of any and every nature which the
Fund may sustain or incur or which may be asserted against the Fund by any
person by reason of, or as a result of, the negligence or misconduct of the
Transfer Agent or its agents or contractors. However, indemnification hereunder
shall not apply to actions or omissions of the Fund or its directors, officers,
employees or agents in case of its own negligence, willful misconduct, bad
faith, or reckless disregard of its own or their own duties hereunder.
20. Affiliation Between Fund and Transfer Agent. It is understood that
the partners and employees of the Transfer Agent may be interested in the Fund
as directors, officers, employees, agents, Shareholders, or otherwise. The fact
that any officer, director, employee, agent or Shareholder (or two or more of
them) of the Fund is or may be an affiliated person (as defined in the 0000 Xxx)
of the Transfer Agent shall not affect the validity of this agreement.
21. Term.
(a) This agreement shall become effective on the date on which the Fund's
registration of its shares under the Securities Act of 1933 on form N-1A No.
333-___________ becomes effective under that Act (the "Effective Date") and
shall continue in effect from year to
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year thereafter, on and after March 20, 2000, so long as such continuance is
specifically approved at least annually both (i) by either the Board of
Directors, or by the vote of a majority of the outstanding voting securities of
the Fund (as defined in the 1940 Act), and (ii) by a vote of the majority of the
Directors who are not interested persons of the Fund (as defined in the 1940
Act), voting in person at a meeting of the Board of Directors called for the
purpose of voting on such approval.
(b) This agreement may be terminated at any time, without payment of
penalty, by the Board of Directors of the Fund, or by a vote of the holders of a
majority of the outstanding voting securities of the Fund, on not more than 60
days' written notice to the Transfer Agent. In the event such notice is given
by the Fund, it shall be accompanied by a resolution of the Board of Directors
certified by the Secretary, electing to terminate this agreement and designating
a successor transfer agent. This agreement may be terminated by the Transfer
Agent at any time upon 60 days' written notice to the Fund. This agreement
shall terminate automatically in the event of its assignment (as defined in
Section 2(a)(4) of the 1940 act).
22. Amendment. This agreement may not be amended or modified in any
manner except by a written agreement executed by both parties to this agreement,
and approved in the manner required by subparagraph 21(a) for the continuation
of the agreement.
23. Subcontracting. The Fund agrees that Transfer Agent may, in its
discretion, subcontract for certain of the services to be provided hereunder;
provided, however, that the Transfer Agent shall continue to be responsible to
the Fund for the performance of those services to the extent specified in this
agreement.
24. 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 with regard to safeguarding from loss or damage
attributable to fire, theft or any other cause (including provision for twenty-
four hours a day restricted access) the Fund's blank checks, 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.
25. Confidentiality of Records. The Transfer Agent agrees not to disclose
any information received from the Fund to any person except the Transfer Agent's
employees and agents, and shall use its best efforts to maintain such
information as confidential. Upon termination of this agreement, the Transfer
Agent shall return to the Fund all records in the possession and control of the
Transfer Agent related to the Fund's activities, other than the Transfer Agent's
own business records.
26. Miscellaneous.
(a) This agreement shall be construed in accordance with the laws of the
State of Arizona.
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(b) 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.
Dated October 1, 1998
L. XXX XXXX & ASSOCIATES
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxx, a general partner
XXXX SMALL & MID-CAP GROWTH FUND, INC.
By: /s/ L. Xxx Xxxx
--------------------------------------------
L. Xxx Xxxx, Chairman
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FEE SCHEDULE
Commencing on the date shares of Xxxx Small & Mid-Cap Growth Fund, Inc.
(the "Fund") are first offered for sale to the public, compensation payable by
the Fund to L. Xxx Xxxx & Associates (the "Transfer Agent") pursuant to Section
4 of the Transfer Agency agreement between the Fund and the Transfer Agent dated
October 1, 1998 shall be as follows:
Monthly fee per Shareholder account $ .75
Fee per Shareholder-initiated transaction--
purchase (other than by reinvestment in Fund
shares) transfer or redemption 1.00
Fee per account for dividend or distribution paid
(other than by reinvestment in Fund shares) .50
There is no charge for the processing changes in account information or for
furnishing information with respect to any account, and there is no charge for
opening a new account other than the $1 fee assessed for the initial purchase.
A dividend and distribution payable on the same date shall result in the
imposition of only one fee per account. The full monthly account fee will be
payable on an account that is open for any portion of a month. It is understood
that the Transfer Agent will make no charges for its services hereunder until
January 1, 2001.
Approved:
XXXX SMALL & MID-CAP GROWTH FUND, INC. L. XXX XXXX & ASSOCIATES
By: /s/ L. Xxx Xxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------------ -----------------------------------
Chairman a general partner
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