EXHIBIT 9.2
TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made as of the 31st day of December, 1995 by and
between XXX XXXXXXX FUNDS, INC., a Maryland corporation having its
principal place of business at ____________________________________(the
"Corporation"), and SUNSTONE FINANCIAL GROUP, INC., a Wisconsin
corporation, having its principal place of business at 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000 (the "Sunstone"):
WHEREAS, the Corporation is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company and is authorized to issue shares of common stock
("Shares") in separate series with each such series representing the
interests in a separate portfolio of securities and other assets;
WHEREAS, the Corporation desires to retain Sunstone to render the
transfer agency and other services contemplated hereby with respect to
each of the investment portfolios of the Corporation as are listed on
Schedule A hereto and any additional investment portfolios the Corporation
and Sunstone may agree upon and include on Schedule A as such Schedule may
be amended from time to time (such investment portfolios and any
additional investment portfolios are individually referred to as a Fund
and collectively the "Funds"), and Sunstone is willing to render such
services.
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
ARTICLE I
APPOINTMENT OF TRANSFER AGENT
A. Appointment. The Corporation hereby constitutes and appoints
Sunstone as transfer agent and dividend disbursing agent of all the Shares
of the Funds during the period of this Agreement, and Sunstone hereby
accepts such appointment as transfer agent and dividend disbursing agent
and agrees to perform the duties thereof as hereinafter set forth.
2. Sunstone shall perform the transfer agent and dividend
disbursing agent services described on Schedule B hereto. To the extent
that a Fund requests Sunstone to perform any additional services in a
manner not consistent with Sunstone's usual processing procedures,
Sunstone and the Fund shall mutually agree as to the services to be
accomplished, the manner of accomplishment and the compensation to which
Sunstone shall be entitled with respect thereto.
3. Sunstone may, in its discretion, appoint in writing other
parties qualified to perform transfer agency and shareholder services
reasonably acceptable to the Funds (individually, a "Sub-transfer Agent")
to carry out some or all of its responsibilities under this Agreement with
respect to a Fund; provided, however, that unless the Fund shall enter
into a written agreement with such Sub-transfer Agent, the Sub-transfer
Agent shall be the agent of Sunstone and not the agent of the Corporation
or such Fund and, in such event Sunstone shall be fully responsible for
the acts or omissions of such Sub-transfer Agent and shall not be relieved
of any of its responsibilities hereunder by the appointment of such Sub-
transfer Agent.
4. Sunstone shall have no duties or responsibilities
whatsoever hereunder except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation
shall be implied in this Agreement against Sunstone.
B. Documents/Records.
1. In connection with such appointment, the Corporation shall
deliver or cause to be delivered the following documents to Sunstone:
a) A copy of the Articles of Incorporation and By-laws of
the Corporation and all amendments thereto certified by the Secretary of
the Corporation;
b) A copy of the resolutions of the Board of Directors of
the Corporation certified by the Secretary of the Corporation appointing
Sunstone and authorizing the execution of this Transfer Agency Agreement
on behalf of the Funds and designating certain persons to sign stock
certificates, if any, and give or authorize others to give written or oral
instructions and requests on behalf of the Funds;
c) A certificate signed by the Secretary of the
Corporation specifying: the number of authorized Shares and the number of
such authorized Shares issued and currently outstanding; the names and
specimen signatures of the officers of the Corporation authorized to sign
written stock certificates and the individuals authorized to provide oral
instructions and to sign written instructions and requests; and the name
and address of the legal counsel for the Corporation;
d) In the event the Corporation issues Share
certificates, specimen Share certificates for each Fund in the form
approved by the Board of Directors of the Corporation (and in a format
compatible with Sunstone's operating system), together with a Certificate
signed by the Secretary of the Corporation as to such approval;
e) Copies of the Corporation's Registration Statement, as
amended to date, and the most recently filed Post-Effective Amendment
thereto, filed by the Corporation with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "1933 Act"),
and under the 1940 Act, as amended, together with any applications filed
in connection therewith; and
f) Opinion of counsel for the Corporation with respect to
the Corporation's organization and existence under the laws of its state
of organization, the validity of the authorized and outstanding Shares,
whether such Shares are fully paid and non-assessable and the status of
such Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to registration,
that they have been registered and that the Registration Statement has
become effective or, if exempt, the specific grounds therefor.)
2. The Corporation agrees to deliver or to cause to be
delivered to Sunstone in Milwaukee, Wisconsin, at the Corporation s
expense, all of its shareholder account records relating to the Funds in a
format acceptable to Sunstone and all such other documents, records and
information as Sunstone may reasonably request in order for Sunstone to
perform its services hereunder.
ARTICLE II
COMPENSATION & EXPENSES
A. Compensation. In consideration for its services hereunder as
transfer agent and dividend disbursing agent, each Fund will pay to
Sunstone such compensation as shall be set forth in a separate fee
schedule to be agreed to by each Fund and Sunstone from time to time. A
copy of the initial fee schedule is attached hereto as Schedule C.
B. Expenses. The Corporation on behalf of each Fund also agrees to
promptly reimburse Sunstone for all reasonable out-of-pocket expenses or
disbursements incurred by Sunstone in connection with the performance of
services under this Agreement including, but not limited to, expenses for
postage, express delivery services, freight charges, envelopes, checks,
drafts, forms (continuous or otherwise), specially requested reports and
statements, bank account service fees and charges, telephone calls,
telegraphs, stationery supplies, outside printing and mailing firms,
magnetic tapes, reels or cartridges (if sent to a Fund or to a third party
at a Fund's request) and magnetic tape handling charges, on-site and off-
site record storage, media for storage of records (e.g., microfilm,
microfiche, optical platters, computer tapes and disks), computer
equipment installed at a Fund's request at a Fund's or a third party's
premises, telecommunications equipment, telephone/telecommunication lines
between a Fund and its agents, on one hand, and Sunstone on the other,
proxy soliciting, processing and/or tabulating costs, transmission of
statement data for remote printing or processing, and transaction fees to
the extent any of the foregoing are paid by Sunstone. Postage is payable
in advance and is due at least seven days prior to the anticipated mail
date. Other out-of pocket expenses are payable in advance if so requested
by Sunstone. In the event Sunstone requests advance payment, Sunstone
shall not be obligated to incur such expenses or perform the related
service(s) until payment is received. Sunstone may, at its option,
arrange to have various service providers submit invoices directly to the
Funds for payment of out-of pocket expenses reimbursable hereunder. In
addition to the foregoing, any other expenses incurred by Sunstone at the
request or with the consent of a Fund will be promptly reimbursed by the
respective Fund.
C. Payment Procedures.
1. Amounts due hereunder shall be due and paid by the
respective Fund on or before the thirtieth (30th) day after the date of
the statement therefor (the "Due Date"). Service fees are billed monthly,
and out-of-pocket expenses are billed as incurred (unless prepayment is
requested by Sunstone). Sunstone may, at its option, arrange to have
various service providers submit invoices directly to the Funds for
payment of out-of-pocket expenses reimbursable hereunder. The Corporation
is aware that its failure to pay all amounts in a timely fashion so that
they will be received by Sunstone on or before the Due Date will give rise
to costs to Sunstone not contemplated by this Agreement, including but not
limited to carrying, processing and accounting charges. Accordingly, in
the event that any amounts due hereunder are not received by Sunstone
within ten (10) days of the date of a notice of past due amounts, a Fund
shall pay a late charge equal to one and one-half percent (1.5%) per month
or the maximum amount permitted by law, whichever is less from the date of
the past due notice to the date of Sunstone's receipt of payment of such
past due amount. In addition, the Fund shall pay reasonable attorney s
fees and court costs of Sunstone if any amounts due Sunstone are collected
by or through an attorney. The parties hereby agree that such late charge
represents a fair and reasonable computation of the costs incurred by
reason of late payment or payment of amounts not properly due. Acceptance
of such late charge shall in no event constitute a waiver of the Fund s
default or prevent the non-defaulting party from exercising any other
rights and remedies available to it.
2. In the event that any charges are disputed, the Fund shall,
on or before the Due Date, pay all undisputed amounts due hereunder and
notify Sunstone in writing of any disputed charges for out-of-pocket
expenses which it is disputing in good faith. Payment for such disputed
charges shall be due on or before the close of the fifth (5th) business
day after the day on which Sunstone provides to the Fund documentation
which an objective observer would agree reasonably supports the disputed
charges (the "Revised Due Date"). Late charges shall not begin to accrue
as to charges disputed in good faith until the first day after the Revised
Due Date.
ARTICLE III
PROCESSING AND PROCEDURES
A. Issuance, Redemption and Transfer of Shares
1. Sunstone acknowledges that it has received a copy of the
Fund's Prospectus (as hereinafter defined), which Prospectus describes how
sales and redemptions of shares of each Fund shall be made and Sunstone
agrees to accept purchase orders and redemption requests with respect to
Fund shares on each Fund Business Day in accordance with such Prospectus.
"Fund Business Day" shall be deemed to be each day on which the New York
Stock Exchange is open for trading, and "Prospectus" shall mean the last
Fund prospectus actually received by Sunstone from the Fund with respect
to which the Fund has indicated a registration statement under the 1933
Act has become effective, including the Statement of Additional
Information, incorporated by reference therein.
2. On each Fund Business Day Sunstone shall, as of the time at
which the net asset value of the Fund is computed, issue to and redeem
from the accounts specified in a purchase order or redemption request,
which in accordance with the Prospectus is effective on such day, the
appropriate number of full and fractional Shares based on the net asset
value per Share of such Fund specified in an advice received on such Fund
Business Day from or on behalf of the Fund.
3. Upon the issuance of any Shares in accordance with this
Agreement, Sunstone 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 of any Shares.
4. Sunstone shall not be required to issue any Shares after it
has received from an Officer (as herein defined) of the Fund or from an
appropriate federal or state authority written notification that the sale
of Shares has been suspended or discontinued, and Sunstone shall be
entitled to rely upon such written notification. "Officer" shall be
deemed to be the Corporation's President, any Vice President, Secretary,
Treasurer, Controller, any Assistant Controller, any Assistant Treasurer
and any Assistant Secretary of the Corporation, and any other person duly
authorized by the Board of Directors of the Corporation to execute any
certificate, instruction, notice or other instrument or provide oral
instructions on behalf of the Corporation, and disclosed to Sunstone, as
such individuals may be amended from time to time and disclosed in writing
to Sunstone, and any person reasonably believed by Sunstone to be such a
person.
5. Upon receipt of a proper redemption request and monies paid
to it by the Custodian in connection with a redemption of Shares, Sunstone
shall cancel the redeemed Shares and after making appropriate deduction
for any withholding of taxes required of it by applicable law, make
payment in accordance with the Fund's redemption and payment procedures
described in the Prospectus.
6. (a) Except as otherwise provided in sub-paragraph (b) of
this paragraph, Shares will be transferred or redeemed upon presentation
to Sunstone of Share certificates, if any, or instructions properly
endorsed for transfer or redemption, accompanied by such documents as
Sunstone deems necessary to evidence the authority of the person making
such transfer or redemption, and bearing satisfactory evidence of the
payment of stock transfer taxes. Sunstone reserves the right to refuse to
transfer or redeem Shares until it is satisfied that the endorsement on
the stock certificate, if any, or instructions is valid and genuine, and
for that purpose it will require, unless otherwise instructed by an
authorized officer of the Fund or except as provided in sub-paragraph (b)
of this paragraph, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. Sunstone 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 Sunstone, in its judgment, deems improper
or unauthorized, or until it is satisfied that there is no basis to any
claims adverse to such transfer or redemption. Sunstone may, in effecting
transfers and redemptions of Shares, rely upon those provisions of the
Uniform Act for the Simplification of Fiduciary Security Transfers or the
Uniform Commercial Code, as the same may be amended from time to time,
applicable to the transfer of securities, and the Corporation shall
indemnify Sunstone for any act done or omitted by it in good faith in
reliance upon such laws.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, Sunstone shall be fully
protected by each Fund in not requiring any instruments, documents,
assurances, endorsements or guarantees, including, without limitation, any
signature guarantees, in connection with a redemption, or transfer, of
Shares whenever Sunstone reasonably believes that requiring the same would
be inconsistent with the transfer and redemption procedures as described
in the Prospectus.
7. Notwithstanding any provision contained in this Agreement
to the contrary, Sunstone shall not be required or expected to require, as
a condition to any transfer or redemption of any Shares pursuant to a
computer tape or electronic data transmission, any documents to evidence
the authority of the person requesting the transfer or redemption and/or
the payment of any stock transfer taxes, and shall be fully protected in
acting in accordance with the applicable provisions of this Article.
8. In connection with each purchase and each redemption of
Shares, Sunstone shall send such statements as are prescribed by the
Federal securities laws applicable to transfer agents or as described in
the Prospectus. If the Prospectus indicates that certificates for Shares
are available and if specifically requested in writing by any shareholder,
or if otherwise required hereunder, Sunstone will countersign, issue and
mail to such shareholder at the address set forth in the records of
Sunstone a Share certificate for any full Share requested.
9. On each Fund Business Day Sunstone shall supply the Fund
with a statement specifying with respect to the immediately preceding Fund
Business Day: the total number of Shares of the Fund (including
fractional Shares) issued and outstanding at the opening of business on
such day; the total number of Shares of the Fund sold on such day; the
total number of Shares of the Fund and the dollar amount redeemed from
Shareholders by Sunstone on such day; and the total number of Shares of
the Fund issued and outstanding.
10. Procedures for effecting purchase, redemption or transfer
transactions accepted from investors by telephone or other methods shall
be established by mutual agreement between the Funds and Sunstone
consistent with the terms of the Prospectus. Sunstone upon notice to a
Fund may establish such additional procedures, rules and regulations
governing the transfer or registration of Share certificates, if any, or
the purchase, redemption or transfer of Shares, as it may deem advisable
and consistent with the Prospectus and such rules and regulations
generally adopted by mutual fund transfer agents. Sunstone shall not be
liable, and shall be held harmless by the Funds, for its actions or
omissions which are consistent with the foregoing procedures.
B. Dividends and Distributions.
1. The Corporation shall furnish to Sunstone a copy of a
resolution of its Board of Directors, certified by the Secretary or any
Assistant Secretary, either (i) setting forth the date of the declaration
of a dividend or distribution, the date of accrual or payment, as the case
may be, thereof, the record date as of which shareholders entitled to
payment, or accrual, as the case may be, shall be determined, the amount
per Share of such dividend or distribution, the payment date on which all
previously accrued and unpaid dividends are to be paid, and the total
amount, if any, payable to Sunstone on such payment date, or (ii)
authorizing the declaration of dividends and distributions on a daily or
other periodic basis and authorizing Sunstone to rely on a certificate of
an Officer setting forth the information described in subsection (i) of
this paragraph.
2. In connection with a reinvestment of a dividend or
distribution of Shares of a Fund, Sunstone shall as of each Fund Business
Day, as specified in a certificate or resolution described in paragraph 1,
issue Shares of the Fund based on the net asset value per Share of such
Fund specified in an advice received from or on behalf of the Fund on such
Fund Business Day.
3. Upon the mail date specified in such certificate or
resolution, as the case may be, the Fund shall, in the case of a cash
dividend or distribution, cause the Custodian to deposit in an account in
the name of Sunstone on behalf of the Fund, an amount of cash, if any,
sufficient for Sunstone to make the payment, as of the mail date,
specified in such Certificate or resolution, as the case may be, to the
Shareholders who were of record on the record date. Sunstone will, upon
receipt of any such cash, make payment of such cash dividends or
distributions to the shareholders of record as of the record date.
Sunstone shall not be liable for any improper payments made in good faith
and in accordance with a certificate or resolution described in the
preceding paragraph. If Sunstone shall not receive from the Custodian
sufficient cash to make payments of any cash dividend or distribution to
all shareholders of the Fund as of the record date, Sunstone shall, upon
notifying the Fund, withhold payment to all shareholders of record as of
the record date until sufficient cash is provided to Sunstone.
4. It is understood that Sunstone in its capacity as transfer
agent and dividend disbursing agent shall in no way be responsible for the
determination of the rate or form of dividends or capital gain
distributions due to the shareholders pursuant to the terms of this
Agreement. It is further understood that Sunstone shall file such
appropriate information returns concerning the payment of dividend and
capital gain distributions with the proper federal and state authorities
as are required by law to be filed by the Funds but shall in no way be
responsible for the collection or withholding of taxes due on such
dividends or distributions due to shareholders, except and only to the
extent, required by applicable law.
C. Authorization and Issuance of Shares; Recapitalization or
Capital Adjustment.
1. Prior to the effective date of any increase or decrease in
the total number of Shares authorized to be issued, or the issuance of any
additional Shares of a Fund pursuant to stock dividends, stock splits or
similar transactions, the Corporation agrees to deliver to Sunstone such
documents, certificates, reports and legal opinions as Sunstone may
reasonably request.
2. In the case of any negative stock split, recapitalization
or other capital adjustment requiring a change in the form of Share
certificates, Sunstone will issue Share certificates in the new form in
exchange for, or upon transfer of, outstanding Share certificates in the
old form, upon receiving:
(a) A certificate of an Officer authorizing the issuance
of the Share certificates in the new form, a certified copy of any
amendment to the Articles of Incorporation with respect to the change, and
such other documents and information as Sunstone may reasonably request.
(b) In the event the Funds issue Share certificates,
specimen Share certificates for each Fund in the new form approved by the
Board of Directors, with a certificate signed by the Secretary of the
Corporation as to such approval.
3. In the event a Fund issues Share certificates, the Fund at
its expense shall furnish Sunstone with a sufficient supply of blank Share
certificates in the new form and from time to time will replenish such
supply upon the request of Sunstone. Such blank Share certificates shall
be compatible with Sunstone's system and shall be properly signed by
facsimile or otherwise by Officers of the Corporation authorized by law or
by the By-Laws to sign Share certificates and, if required shall bear the
corporate Seal or facsimile thereof. Each Fund agrees to indemnify and
exonerate, save and hold Sunstone harmless, from and against any and all
claims or demands that may be asserted against Sunstone with respect to
the genuineness of any Share certificate supplied to Sunstone.
4. In the event a Fund issues Share certificates, Sunstone may
issue new Share certificates in place of certificates represented to have
been lost, stolen, or destroyed upon receiving written instructions from
the shareholder accompanied by proof of an indemnity or surety bond issued
by a recognized insurance institution specified by the Fund or Sunstone.
If Sunstone receives written notification from the shareholder or broker
dealer that the certificate issued was never received, and such
notification is made within 30 days of the date of issuance, Sunstone may
reissue the certificate without requiring a surety bond. Sunstone may
also reissue certificates which are represented as lost, stolen, or
destroyed without requiring a surety bond provided that the notification
is in writing and accompanied by an indemnification signed on behalf of a
member firm of the New York Stock Exchange and signed by an officer of
said firm with the signature guaranteed. Notwithstanding the foregoing,
Sunstone will reissue a certificate upon written authorization from an
Officer of the Fund.
D. Records.
1. Sunstone shall keep such records as are specified in
Schedule D hereto in the form and manner, and for such period, as it may
deem advisable but not inconsistent with the rules and regulations of
appropriate government authorities, in particular Rules 31a-2 and 31a-3
under the 1940 Act. Sunstone may deliver to the Funds from time to time
at its discretion, for safekeeping or disposition by a Fund in accordance
with law, such records, papers and documents accumulated in the execution
of its duties as such transfer agent, as Sunstone may deem expedient,
other than those which Sunstone is itself required to maintain pursuant to
applicable laws and regulations. The Funds shall assume all
responsibility for any failure thereafter to produce any record, paper,
canceled Share certificate, or other document so returned, if and when
required. To the extent required by Section 31 of the 1940 Act and the
rules and regulations thereunder, the records specified in Schedule D
hereto maintained by Sunstone, which have not been previously delivered to
a Fund pursuant to the foregoing provisions of this paragraph, shall be
considered to be the property of the Fund, shall be made available upon
request for inspection by the officers, employees, and auditors of the
Fund, and shall be delivered to the Fund promptly upon request and in any
event upon the date of termination of this Agreement, in the form and
manner kept by Sunstone on such date of termination or such earlier date
as may be requested by the Fund.
2. Sunstone agrees to keep all records and other information
relative to the Funds and their shareholders confidential. In case of any
requests or demands for the inspection of the shareholder records of a
Fund, Sunstone will endeavor to notify the Fund promptly and to secure
instructions from an Officer as to such inspection. Sunstone reserves the
right, however, to exhibit the shareholder records to any person whenever
it receives advice from its counsel that there is a reasonable likelihood
that Sunstone will be held liable for the failure to exhibit the
shareholder records to such person; provided, however, that in connection
with any such disclosure Sunstone shall promptly notify the Fund that such
disclosure has been made or is to be made. Notwithstanding the foregoing,
Sunstone may disclose information when requested by a shareholder
concerning an account as to which such shareholder claims a legal or
beneficial interest or when requested by the Funds, the shareholder or the
dealer of record as to such account.
3. Sunstone shall only be responsible for the safekeeping and
maintenance of transfer agency records, canceled certificates, if any, and
correspondence of a Fund created or produced prior to the time of
conversion which are under its control and acknowledged in a writing to
the Fund to be in its possession. Any expenses or liabilities incurred by
Sunstone as a result of shareholder inquiries, regulatory compliance or
audits related to such records shall be the responsibility of the Funds.
ARTICLE IV
CONCERNING THE CORPORATION
A. Representations. The Corporation represents and warrants to
Sunstone that:
(a) It is a corporation duly organized and existing under the
laws of the State of Maryland, it is empowered under applicable laws and
by its Articles of Incorporation and By-Laws to enter into and perform
this Agreement, and all requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(b) It is an investment company registered under the 1940 Act.
(c) A registration statement under the 1933 Act with respect to
the Shares is effective. The Corporation shall notify Sunstone if such
registration statement or any state securities registrations have been
terminated, lapse or a stop order has been entered with respect to the
Shares.
B. Covenants.
1. The Corporation will file with Sunstone copies of all
material amendments to its Articles of Incorporation and By-laws made
after the date of this Agreement. Each copy of the Articles of
Incorporation of the Funds and copies of all amendments thereto shall be
certified by the Secretary of the Corporation. Each copy of the By-Laws
and copies of all amendments thereto, and copies of resolutions of the
Board of Directors, shall be certified by the Secretary of the
Corporation.
2. The Corporation shall promptly deliver to Sunstone written
notice of any change in the Officers authorized to sign Share
certificates, if any, notifications or requests, or provide oral
instructions, together with a specimen signature of each new Officer. In
the event any Officer who shall have signed manually or whose facsimile
signature shall have been affixed to blank Share certificates shall die,
resign or be removed prior to issuance of such Share certificates,
Sunstone may issue such Share certificates of the Fund notwithstanding
such death, resignation or removal, and the Funds shall promptly deliver
to Sunstone such approval, adoption or ratification as may be required by
law.
3. The Corporation shall deliver to Sunstone the Fund s
currently effective Prospectus and, for purposes of this Agreement,
Sunstone shall not be deemed to have notice of any information contained
in such Prospectus until a reasonable time after it is actually received
by Sunstone.
4. All requisite steps will be taken by the Funds from time to
time when and as necessary to register the Funds' shares for sale in all
states in which Funds' shares shall at the time be offered for sale and
require registration. If at any time a Fund receives notice of any stop
order or other proceeding in any such state affecting such registration or
the sale of Fund's shares, or of any stop order or other proceeding under
the federal securities laws affecting the sale of the Fund's shares, the
Fund will give prompt notice thereof to Sunstone.
5. The Corporation will comply with all applicable
requirements of the 1933 Act, the Securities Exchange Act of 1934, as
amended, the 1940 Act, blue sky laws, and any other applicable laws, rules
and regulations.
6. The Corporation agrees that prior to effecting any change
in the Prospectus which would increase or alter the duties and obligations
of Sunstone hereunder, it shall advise Sunstone of such proposed change at
least 30 days prior to the intended date of the same, and shall proceed
with such change only if it shall have received the written consent of
Sunstone thereto, which shall not be unreasonably withheld.
ARTICLE V
CONCERNING THE TRANSFER AGENT
A. Representations. Sunstone represents and warrants to the Fund
that:
(a) It is a corporation duly organized and existing under the
laws of the State of Wisconsin, is empowered under applicable law and by
its Articles of Incorporation and By-Laws to enter into and perform this
Agreement, and all requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(b) It is duly registered as a transfer agent under Section 17A
of the Securities Exchange Act of 1934, as amended, to the extent
required.
B. Limitation of Liability; Indemnification.
1. Sunstone shall use its best efforts to ensure the accuracy
of all services performed under this Agreement, but shall not be liable
for any loss or damage, including counsel fees, resulting from its actions
or omissions to act or otherwise, in the absence of its bad faith, willful
misfeasance, negligence or reckless disregard of its duties under this
Agreement.
2. The Corporation on behalf of the Funds agrees to indemnify
and hold harmless Sunstone, its employees, agents, directors, officers and
nominees from and against any and all claims, demands, actions and suits,
whether groundless or otherwise, and from and against any and all
judgments, liabilities, losses, damages, costs, charges, counsel fees and
other expenses of every nature and character arising out of or in any way
relating to Sunstone's actions taken or nonactions with respect to the
performance of services under this Agreement or based, if applicable, upon
reliance on information, records, instructions (oral or written) or
requests given or made to Sunstone by the Funds, its officers, directors,
agents or representatives; provided that this indemnification shall not
apply to actions or omissions of Sunstone in cases of its own willful
misfeasance or negligence, and further provided that prior to confessing
any claim against it which may be the subject of this indemnification,
Sunstone shall give the Funds written notice of and reasonable opportunity
to defend against said claim in its own name or in the name of Sunstone.
The indemnity and defense provisions provided hereunder shall indefinitely
survive the termination of this Agreement.
3. Sunstone agrees to indemnify and hold harmless the Funds,
its employees, agents, directors, officers and nominees from and against
any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities,
losses, damages, costs, charges, counsel fees and other expenses of every
nature and character resulting from Sunstone's bad faith, willful
misfeasance, negligence or reckless disregard of its duties under this
Agreement; provided that prior to confessing any claim against it which
may be the subject of this indemnification, the Funds shall give Sunstone
written notice of and reasonable opportunity to defend against said claim
in its own name or in the name of the Funds. The indemnity and defense
provisions provided hereunder shall indefinitely survive the termination
of this Agreement.
4. Sunstone assumes no responsibility hereunder, and shall not
be liable, for any damage, loss of data, errors, delay or any other loss
whatsoever caused by events beyond its reasonable control. Sunstone will,
however, take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond Sunstone's control.
5. Notwithstanding anything herein to the contrary, Sunstone
shall not be liable and shall be indemnified in acting upon any writing or
document reasonably believed by it to be genuine and to have been signed
or made by an Officer or verbal instructions which the individual
receiving the instructions on behalf of Sunstone reasonably believes in
good faith to have been given by an Officer, and Sunstone shall not be
held to have any notice of any change of authority of any person until
receipt of written notice thereof from a Fund or such person. Sunstone
shall not be liable to a Fund with respect to any redemption draft on
which the signature of the drawer is forged nor shall Sunstone be liable
for any alteration or absence or forgery of any endorsement, it being
understood that Sunstone's sole responsibility with respect to inspecting
redemption drafts is to use reasonable care to verify the drawer s
signature against signatures on file. It shall also be protected in
processing Share certificates, if any, which bear the proper
countersignature of Sunstone and which it reasonably believes to bear the
proper manual or facsimile signature of the Officers.
6. IN NO EVENT AND UNDER NO CIRCUMSTANCES SHALL EITHER PARTY
TO THIS AGREEMENT BE LIABLE TO ANYONE, INCLUDING, WITHOUT LIMITATION TO
THE OTHER PARTY, FOR CONSEQUENTIAL OR PUNITIVE DAMAGES FOR ANY ACT OR
FAILURE TO ACT UNDER ANY PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF
THE POSSIBILITY THEREOF.
7. At any time Sunstone may request instructions and/or
receive directions from an Officer with respect to any matter arising in
connection with Sunstone's duties and obligations under this Agreement,
and Sunstone shall not be liable for any action taken or permitted by it
in good faith in accordance with such instructions or directions. Such
request for instructions by Sunstone may set forth any action proposed to
be taken or omitted by Sunstone with respect to its duties or obligations
under this Agreement and the date on and/or which such action shall be
taken. Sunstone shall not be liable for any action taken or omitted in
accordance with a proposal included in any such request on or after the
date specified therein unless, prior to taking or omitting any such
action, Sunstone has received instructions in response to such application
specifying the action to be taken or omitted. Sunstone may consult
counsel of the Corporation, or upon notice to the Corporation, its own
counsel, at the expense of the Corporation and shall be fully protected
with respect to anything done or omitted by it in good faith in accordance
with the advice or opinion of counsel to the Corporation or its own
counsel.
8. Notwithstanding any of the provisions of this Agreement,
Sunstone shall be under no duty or obligation under this Agreement to
inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the authority of a
Fund, as the case may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a
redemption of any Shares, the propriety of the amount to be paid therefor,
or the authority of a Fund, as the case may be, to request such transfer
or redemption;
(c) The legality of the declaration of any dividend by a
Fund, or the legality of the issue of any Shares in payment of any stock
dividend, or the legality of any recapitalization or readjustment of
Shares.
ARTICLE V
TERM
1. This Agreement shall remain in full force and effect for a
period of two (2) years from the date hereof, the initial term, and
thereafter shall automatically extend for additional, successive twelve
(12) month terms unless earlier terminated as provided below.
2. Either of the parties hereto may terminate this Agreement
after the initial term by giving to the other party a notice in writing
specifying the date of such termination, which shall be not less than
ninety (90) days after the date of receipt of such notice. In the event
such notice is given by a Fund, it shall be accompanied by a copy of a
resolution of the Board of Directors of the Corporation, certified by the
Secretary or any Assistant Secretary, electing to terminate this Agreement
and designating the successor transfer agent or transfer agents. In the
event such notice is given by Sunstone, the Fund shall on or before the
termination date, deliver to Sunstone a copy of a resolution of its Board
of Directors certified by the Secretary or any Assistant Secretary
designating a successor transfer agent or transfer agents. In the absence
of such designation by the Fund, the Fund shall upon the date specified in
the notice of termination of this Agreement and delivery of the records
maintained hereunder, be deemed to be its own transfer agent and Sunstone
shall thereby be relieved of all duties and responsibilities pursuant to
this Agreement. Fees and out-of-pocket expenses incurred by Sunstone, but
unpaid by a Fund upon such termination, shall be immediately due and
payable upon and notwithstanding such termination.
3. In the event this Agreement is terminated as provided
herein, Sunstone, upon the written request of a Fund, shall deliver the
records of the Fund to the Fund or its successor transfer agent in the
form maintained by Sunstone. The Fund shall be responsible to Sunstone
for all out-of-pocket expenses and for the reasonable costs and expenses
associated with the preparation and delivery of such media, including: (a)
any custom programming requested by a Fund in connection with the
preparation of such media; (b) transportation of forms and other Fund
materials used in connection with the processing of Fund transactions by
Sunstone; and (c) transportation of Fund records and files in the
possession of Sunstone. Sunstone shall not reduce the level of service
provided to the Fund following notice of termination by the Fund.
ARTICLE VI
MISCELLANEOUS
A. Notices. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to a Fund or the Corporation
shall be sufficiently given if addressed to the Corporation and mailed and
delivered to the President at _______________________________, or at such
other place as the Corporation may from time to time designate in writing.
Any notice or other instrument in writing, authorized or required by this
Agreement to be given to Sunstone shall be sufficiently given if addressed
to Sunstone and mailed or delivered to the President at 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as
Sunstone may from time to time designate in writing.
B. Amendments/Assignments.
1. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the formality
of this Agreement.
2. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and assigns. This
Agreement shall not be assignable by either party without the written
consent of the other party except that Sunstone may assign this Agreement
to an affiliate with advance written notice to the Corporation.
C. Wisconsin Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Wisconsin. If any
part, term or provision of this Agreement is determined by the courts or
any regulatory authority having jurisdiction over the issue to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights
and obligations of the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or provision held to
be illegal or invalid.
D. Counterparts. 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. Back-up Facility. During the terms of this Agreement, Sunstone
shall provide a facility capable of safeguarding the transfer agency and
dividend disbursing records of the Fund in case of damage to the primary
facility providing those services (the "Back-Up Facility"). Transfer of
the transfer agency and dividend records of the Fund to the Back-Up
Facility shall commence as soon as practicable after damage to the primary
facility results in an inability to provide the transfer agency and
dividend disbursing services. After the primary facility has recovered,
Sunstone shall again utilize it to provide the transfer agency and
dividend disbursing services to the Fund. Sunstone shall use reasonable
efforts to provide the services described in this Agreement from the Back-
Up Facility.
F. Prior Transfer Agent(s). Sunstone will endeavor to assist in
resolving shareholder inquiries and errors relating to the period during
which prior transfer agents acted as such for the Fund. Any such
inquiries or errors which cannot be expediently resolved by Sunstone will
be referred to the Fund.
G. Non-Exclusive; Other Agreements. The services of Sunstone
hereunder are not deemed exclusive and Sunstone shall be free to render
similar services to others. Except as specifically provided herein, this
Agreement does not in any way affect any other agreements entered into
among the parties hereto and any actions taken or omitted by any party
hereunder shall not affect any rights or obligations of any other party
hereunder.
H. Captions. The captions in the 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective corporate officer, thereunto duly
authorized and their respective corporate seals to be hereunto affixed, as
the day and year first above written.
SUNSTONE FINANCIAL GROUP, INC. HX FUNDS, INC.
By: ______________________________ By: ________________________________
(Signature) (Signature)
_____________________________ ________________________________
(Name) (Name)
_____________________________ ________________________________
(Title) (Title)
_____________________________ ________________________________
(Date Signed) (Date Signed)
SCHEDULE A
HX Micro-Cap Fund
HX Emerging Growth Fund
HX Mid-Cap Fund
SCHEDULE B
SERVICES TO HX FUNDS, INC.
[x] Maintenance of shareholder accounts
- Maintain records for each shareholder account;
- Scan account documents for electronic storage;
- Issue customer statements;
- Record changes to shareholder account information;
- Maintain account documentation files for each shareholder; and
- Establish and maintain XXX accounts.
[x] Shareholder servicing and shareholder transactions
- Respond to written and telephone (recorded lines) inquiries from
shareholders for information about their accounts;
- Process shareholder purchase and redemption orders, including
those of automatic investment and systematic withdrawal plans;
- Set up account information, including address, dividend options,
taxpayer identification numbers and wire instructions;
- Issue transaction confirmations;
- Process transfers and exchanges; and
- Process dividend payments by check, wire or ACH or purchase new
shares through dividend reinvestment.
[x] Compliance reporting and proxy processing
- Provide required reports to the Securities and Exchange Commission,
the National Association of Securities Dealers and the states in
which each fund is registered;
- Prepare and distribute required Internal Revenue Service forms
relating to earned income and capital gains to fund and
shareholders;
- Issue tax withholding reports to the Internal Revenue Service; and
- Mail, process and tabulate proxies.
[x] Dealer/load processing (if applicable)
- Provide dealer access through NSCC's FundSERV;
- Calculate fees due under 12b-1 plans for distribution and marketing
expenses; and
[x] Telephone service representatives on-line access
- Respond to shareholder or dealer inquiries related to:
[x] Account registration;
[x] Share balances;
[x] Account options;
[x] Dividend and capital gain distribution status;
[x] Withholding status;
[x] Transaction dates and types;
[x] Shares traded;
[x] Social security number/tax ID number;
[x] External account number;
[x] Address;
[x] Customer or account type;
[x] Dealer, branch and rep information;
[x] Dollars available/not available in the account;
[x] Shares purchased/redeemed today;
[x] Dividend accrual, current dividend period; and
[x] Market value of shares.
[x] Standard reports
- Shareholder base analysis (monthly)
- New account listing (weekly)
- Purchases, redemptions, exchanges (monthly)
- Servicing summary (monthly)
- Rule 12b-1 reports (monthly)
Other Service Features
In addition to the standard features listed above, Sunstone's system
offers additional features to meet specialized needs.
[x] Specialized needs
- 12b-1 fee calculations*
- Multiple account look-up options
- Cross-fund account queries
- Cross-account queries
- Comprehensive reporting by various criteria*
- Consolidated statements
- Duplicate statements to third parties
- Multiple address option
- Labels to all shareholders or selected groups*
- Proxy generation and tabulation*
- Cross-fund dividend reinvestment
- User-defined transaction descriptions
- User-defined transaction rules
- Fund-level processing options
- Systematic withdrawals
- Automatic periodic purchases and automatic investment plans
- Correspondence system capabilities
*available at additional cost
SCHEDULE C
FEE SCHEDULE
[To be provided.]
SCHEDULE D
RECORDS MAINTAINED BY SUNSTONE
Account applications
Canceled certificates plus stock powers and supporting documents
Checks including check registers, reconciliation records, any adjustment
records and tax withholding documentation
Indemnity bonds for replacement of lost or missing stock certificates and
checks
Liquidation, redemption, withdrawal and transfer requests including stock
powers, signature guarantees and any supporting documentation
Shareholder correspondence
Shareholder transaction records
Share transaction history of the Funds
