TRANSFER AGENCY AND SHAREHOLDER
SERVICES AGREEMENT
AGREEMENT made as of the ____ day of ______ , 1999, by and between Lifetime
Achievement Fund, Inc. (the "Fund") and Xxx Xxxxxxxxx Services Corporation
("IMCS"). Unless otherwise noted, capitalized terms used herein shall have the
meanings set forth in Section 15 hereof.
WHEREAS, the Fund is an open-end investment company registered with the
Securities and Exchange Commission ("the SEC") under the Investment Company Act
of 1940 (the "1940 Act");
WHEREAS, the fund desires transfer agency functions for the purpose of
recording the transfer, issuance and redemption of Shares and funds,
transferring Shares, disbursing dividends and other distributions to
Shareholders of the Fund and performing such other services as further agreed
between Fund and IMSC; and
WHEREAS, the Fund desires certain shareholder services of IMSC with respect
to the Fund as further agreed between the Fund and IMSC;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained, the parties agree as follows:
1. APPOINTMENT. The Fund hereby appoints IMSC to provide the transfer
agency and shareholder services specified in this Agreement and any schedules to
this Agreement, and IMSC hereby accepts such appointment.
2. COMPENSATION.
(a) The Fund will compensate IMSC for the performance of its obligations
hereunder in accordance with the fees set forth in the written schedule of fees
attached hereto as Schedule A and incorporated by reference herein. Schedule A
does not include out-of-pocket expenses of IMSC, for which the Fund will
reimburse IMSC monthly.
Out-of-pocket disbursements shall include, but shall not be limited
to, the items specified in the written schedule of out-of-pocket charges
attached hereto as Schedule B and incorporated by reference herein. Schedule B
may be modified by IMSC upon not less than 30 days prior written notice to the
Fund, as mutually agreed upon. Unspecified out-of-pocket expenses shall be
limited to those out-of-pocket expenses reasonably incurred by IMSC in the
performance of its obligations hereunder.
(b) Any compensation agreed to hereunder may be adjusted from time to
time by replacing Schedule A of this Agreement with a revised Fee Schedule,
dated and signed by a duly authorized officer of each party hereto.
3. DUTIES OF IMSC.
(a) IMSC shall be responsible for administering and/or performing
transfer agent functions; for acting as service agent in connection with
dividend and distribution functions; and for providing certain shareholder
services. The operating standards and procedures to be followed shall be
determined by agreement between IMSC and the Fund and shall be expressed in a
written schedule of the duties of IMSC, attached hereto as Schedule C and
incorporated by reference herein.
(b) In addition to the duties expressly set forth in Schedule C to
this Agreement, IMSC shall perform such other duties and functions, and shall be
paid such amounts therefor, as may from time to time be agreed upon in writing
between the Fund and IMSC. Such other duties and functions shall be reflected in
a written amendment to Schedule C, dated and signed by a duly authorized officer
of each party hereto. The compensation for such other duties and functions shall
be reflected in a written amendment to Schedule A pursuant to subparagraph 2(b)
hereof.
(c) In rendering the services required under this Agreement, IMSC may,
at its expense, employ, consult or associate with itself such person or persons
as it believes necessary to assist it in carrying out its obligation under this
Agreement; provided that any such action shall not relieve IMSC of its
responsibilities hereunder.
(d) In the event that IMSC provides any services to the Fund or pays
or assumes any expenses of the Fund that IMSC is not obligated to provide, pay
or assume under this Agreement, IMSC shall not be obligated hereby to provide
the same or any similar service to the Fund or to pay or assume the same or any
similar expenses of the Fund in the future; provided that nothing contained
herein shall be deemed to relieve IMSC of any obligations to the Fund under any
separate agreement or arrangement between the parties.
4. DOCUMENTS. In connection with the appointment of IMSC (or as soon as
practicable thereafter), the Fund shall furnish IMSC with the following
documents:
(a) A copy of the resolutions of the Fund's Board of Directors
authorizing the execution and delivery of this Agreement;
(b) A specimen of the certificate for Shares of the Fund in the form
approved by the Fund's Board of Directors;
-2-
(c) Specimens of all account application forms and other documents
relating to Shareholder accounts or to any plan, program or service offered by
the Fund;
(d) A list of Shareholders of the Fund with the name, address and
taxpayer identification number of each Shareholder, and the number of Shares of
the Fund held by each, certificate numbers and denominations (if any
certificates have been issued) and lists of any accounts against which stop
transfer orders have been placed, together with the reasons therefor; and
(e) A signature card bearing the signatures of any officer of the Fund
or other Authorized Person who will sign Written Instructions.
5. FURTHER DOCUMENTATION. The Fund will also furnish from time to time the
following documents:
(a) Each resolution of the Fund's Board of Directors authorizing the
original issuance of Shares;
(b) The Registration Statement of the Fund and all pre-effective and
post-effective amendments thereto filed with the SEC;
(c) A copy of each amendment to the Articles of Incorporation and the
By-laws of the Fund;
(d) Copies of each vote of the Fund's Board of Directors designating
Authorized Persons;
(e) Certificates as to any change in any officer or Director of the
Fund;
(f) Such other certificates, documents or opinions as IMSC reasonably
deems appropriate or necessary for the proper performance of its duties
hereunder.
6. RECORDS. All records required to be maintained and preserved by the Fund
pursuant to the provisions or rules or regulations of the SEC under Section
31(a) of the 1940 Act and maintained and preserved by IMSC on behalf of the
Fund, including any such records maintained by IMSC in connection with the
performance of its obligations hereunder, are the property of the Fund and shall
be surrendered by IMSC, at the expense of the Fund, promptly on request by the
Fund; PROVIDED, that IMSC may, at the Fund's expense, make and retain copies of
any such records. Upon the reasonable request of the Fund or its agents, copies
of any such records shall be provided by IMSC to the Fund or to an Authorized
Person, at the Fund's expense.
-3-
7. SOFTWARE AND RELATED MATERIALS. All computer programs, written
procedures, and similar items developed or acquired and used by IMSC in
performing its obligations under this Agreement shall be the property of IMSC,
and the Fund will not acquire any ownership interest therein or property rights
with respect thereto.
8. SERVICES TO OTHER CLIENTS. Nothing contained herein shall limit the
freedom of IMSC or any affiliated person of IMSC to render services of the types
contemplated hereby to other persons, firms or corporations, including but not
limited to other investment companies, or to engage in other business
activities.
9. STANDARD OF CARE.
(a) IMSC shall give the Fund the benefit of IMSC's best judgment and
reasonable efforts in rendering to the Fund transfer agency and shareholder
services pursuant to paragraph 3 of this Agreement. As an inducement to IMSC's
undertaking to render these services, the Fund agrees that IMSC shall not be
liable under this Agreement for any mistake in judgment or in any other event
whatsoever, except for lack of good faith, provided that nothing in this
Agreement shall be deemed to protect or purport to protect IMSC against any
liability to the Fund or its Shareholders to which IMSC would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of IMSC's duties under this Agreement or by reason of IMSC's
reckless disregard of its obligations and duties hereunder.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) IMSC shall not be liable for losses beyond its
control, provided that IMSC has acted in accordance with the standard of care
set forth above; and (ii) IMSC shall not be under any duty or obligation to
inquire into and shall not be liable for (A) the validity or invalidity or
authority or lack thereof of any Oral or Written Instruction, notice or other
instrument which confirms to the applicable requirements of this Agreement, and
IMSC reasonably believes to be genuine; or (B) delays or errors or loss of data
occurring by reason of circumstances beyond IMSC's control, including service
interruptions caused by equipment failure, acts of civil or military authority,
national emergencies, labor difficulties, fire, flood, catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply.
(c) Notwithstanding anything in this Agreement to the contrary,
neither IMSC nor its affiliates shall be liable to the Fund for any
consequential, special or indirect losses or damages which the Fund may incur or
suffer by or as a consequence of IMSC's or its affiliates' performance of the
services provided hereunder, whether or not the likelihood of such losses or
damages was known by IMSC or its affiliates.
-4-
10. INSTRUCTIONS.
(a) IMSC will be protected in acting upon Written Instructions or Oral
Instructions reasonably believed to have been executed or orally communicated by
an Authorized Person and will not be held to have any notice of any change of
authority of any person until receipt of a Written Instruction thereof from the
Fund. IMSC may assume that any Written Instructions or Oral Instructions
received hereunder are not in any way inconsistent with the provisions of the
organizational documents of the Fund, or of any vote, resolution or proceeding
of the Fund's Board of Directors or of the Fund's Shareholders, unless and until
IMSC receives Written Instructions to the contrary. IMSC will also be protected
in processing Share Certificates that it reasonably believes to bear the proper
manual or facsimile signatures of a duly authorized officer of the Fund and that
bear the proper countersignatures of IMSC.
(b) IMSC may at any time apply to any Authorized Person of the Fund
for Oral or Written Instructions and may, at the Fund's expense, consult legal
counsel for the Fund, or its own legal counsel, with respect to any matter
arising in connection with this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in good faith in accordance with
such Written Instructions or in accordance with the opinion of counsel for the
Fund. Written Instructions requested by IMSC will be provided by the Fund within
a reasonable period of time. In addition, IMSC and its officers, agents or
employees, shall accept Oral Instructions or Written Instructions given to them
by any person representing or acting on behalf of the Fund, its officers, agents
or employees, as an Authorized Person. IMSC shall have no duty or obligation to
inquire into, nor shall IMSC be responsible for the legality of any act done by
it in reasonable reliance upon the request or direction of an Authorized Person.
(c) Notwithstanding any of the foregoing provisions of this Agreement,
IMSC shall be under no duty or obligation to inquire into, and shall not be
liable for: (i) the legality of the issuance or sale of any Shares or the
sufficiency of the amount to be received therefor; (ii) the legality of the
redemption of any Shares, or the propriety of the amount to be paid therefor;
(iii) the legality of the declaration of any dividend by the Fund's Board of
Directors, or the legality of the issuance of any Shares in payment of any
dividend; or (iv) the legality of any recapitalization or readjustment of the
Shares.
11. INDEMNIFICATION. The Fund will indemnify IMSC against and hold it
harmless from any and all losses, claims, damages, liabilities or expenses
resulting from any claim, demand, action or suit not resulting from the willful
misfeasance, bad faith or gross negligence of IMSC or its agents or
subcontractors, and arising out of, or in connection with, its duties on behalf
of the Fund hereunder, or by reason of IMSC's reckless disregard of its
obligations and duties hereunder.
-5-
In any case in which the Fund may be asked to indemnify or hold IMSC
harmless, the Fund shall be advised of all pertinent facts concerning the
situation in question and IMSC will use reasonable care to identify and notify
the Fund promptly concerning any situation which presents or appears likely to
present a claim for indemnification against the Fund. The Fund shall have the
option to defend IMSC against any claim that may be the subject of any such
indemnification, and, in the event that the Fund so elects, such defense shall
be conducted by counsel chosen by the Fund and satisfactory to IMSC, and
thereupon the Fund shall take over complete defense of the claim and IMSC shall
sustain no further legal or other expenses in such situation for which it seeks
indemnification under this Section 11. IMSC will not confess any claim or make
any compromise in any case in which the Fund will be asked to provide
indemnification, except with the Fund's prior written consent. The obligations
of the parties pursuant to this section shall survive the termination of this
Agreement.
12. AMENDMENT. Except as may be provided otherwise herein, this Agreement
may not be amended or modified in any manner except by a written agreement
executed by both parties.
13. ASSIGNMENT.
(a) Except as provided in Section 13(c) below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
(b) This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
(c) IMSC may, with notice to and consent on the part of the Fund,
which consent shall not be unreasonably withheld, subcontract for the
performance of certain services under this Agreement to qualified service
providers, which shall be registered as transfer agents under Section 17A of the
Securities Exchange Act of 1934 if such registration is required; provided,
however, that IMSC shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
14. TERMINATION OF AGREEMENT. This Agreement may be terminated by either
party upon at least sixty (60) days' prior written notice to the other party.
This Agreement shall automatically and immediately terminate in the event of its
assignment, except as provided in Section 13 hereof.
15. SUCCESSOR. In the event that in connection with the termination of this
Agreement, a successor of any of IMSC's duties or responsibilities hereunder is
designated by the Fund by written notice to IMSC, IMSC will cooperate in the
transfer
-6-
of such duties and responsibilities and the Fund shall pay any
reasonable expenses associated with transferring the books and records of the
Fund.
16. DURATION AND TERMINATION. This Agreement shall continue until
terminated by the Fund or by IMSC on sixty (60) days' prior written notice to
the other party. This Agreement shall automatically and immediately terminate in
the event of its assignment, except as provided in Section 13 hereof.
17. INTERPRETATION AND DEFINITION OF TERMS. Any question or interpretation
of any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretation thereof, if any.
Specifically, the terms "interested person," "assignment," and "affiliated
person," as used in this Agreement, shall have the meanings assigned to them by
Section 2(a) of the 1940 Act. In addition, whenever used in this Agreement, the
following words and phrases, unless the context requires, shall have the
following meaning.
(a) "Authorized Person" shall be deemed to include the President, any
Vice President, the Secretary or an Assistant Secretary, or the Treasurer or an
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
or Written Instructions on behalf of the Fund;
(b) "Custodian" refers to the custodian and any subcustodian of all
securities and other property that the Fund may from time to time deposit, or
cause to be deposited or held under the name or account of such custodian;
(c) "Articles of Incorporation" shall mean the Articles of
Incorporation of the Fund as amended by the Articles of Amendment and
Restatement dated October 15, 1999, and as may be further amended from time to
time;
(d) "Oral Instructions" shall mean instructions, other than Written
Instructions, actually received by IMSC from a person reasonably believed by
IMSC to be an Authorized Person;
(e) "Prospectus" shall mean the Fund's current prospectus and
statement of additional information relating to the registration of the Fund's
Shares under the Securities Act of 1933, as amended, and the 1940 Act;
(f) "Shares" refers to Shares of beneficial interest in the Fund;
(g) "Shareholder" means a record owner of Shares; and
-7-
(h) "Written Instructions" shall mean a written communication signed
by a person reasonably believed by IMSC to be an Authorized Person and actually
received by IMSC.
18. MISCELLANEOUS.
(a) This Agreement shall be construed in accordance with the laws of
the State of Florida, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act.
(b) The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
(c) The Fund's Articles of Incorporation has been filed with the
Secretary of State of the Commonwealth of Massachusetts. The obligations of the
Fund are not personally binding upon, nor shall resort be had to the private
property of, any of the Directors, Shareholders, officers, employees or agents
of the Fund, but only the Fund's property shall be bound.
(d) This Agreement may be executed by the parties hereto in any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notices shall be addressed (a) if to IMSC, at Via
Xxxxxx Financial Plaza, 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000 Xxxx Xxxxx, XX
00000, Attn: C. Xxxxxxx Xxxxxx; (b) if to the Fund, at 00000 Xxxx Xxxxx Xxxx,
Xxxxx, Xxxxxxxx 00000, Attn: Xxxxxx X. Xxxxxxx, or (c) if to neither of the
foregoing, at such other address as shall have been given by like notice to the
sender of any such notice or other communication by the other party. If notice
is sent during regular business hours, by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately. If
notice is sent by first-class mail, it shall be deemed to have been given three
days after it has been mailed. If notice is sent by messenger or overnight mail,
it shall be deemed to have been given on the day it is delivered.
-8-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
LIFETIME ACHIEVEMENT FUND, INC.
By:
-----------------------------
Xxxxxx X. Xxxxxxx, President
XXX XXXXXXXXX SERVICES CORP.
By:
-----------------------------
C. Xxxxxxx Xxxxxx, President
-9-
SCHEDULE A
The transfer agency and shareholder service fees are based on an annual per
account fee. These fees are payable monthly at the rate of 1/12 of the annual
fee and are charged with respect to all open accounts.
CLASS OF SHARES ANNUAL FEE RATE PER ACCOUNT
--------------- ---------------------------
[List each class] $20.00
-10-
SCHEDULE B
Out-of-Pocket Expenses
The Fund shall reimburse IMSC monthly for the following out-of-pocket expenses:
- postage and mailing (of Shareholder statements, confirmations,
dividend checks, year-end tax information returns, and other
Shareholder or custodian communications)
- mailing including labor charges - forms (statement stock, envelopes,
internal forms)
- proxy mailings
- outgoing wire charges
- checkwriting drafts
- National Securities Clearing Corporation transactions
- Fed check clearing charges
- dedicated toll-free telephone charges
- if applicable, magnetic tape and freight
- long-term off-site retention of records
- microfilm/microfiche
- stationery
- terminals, transmission lines and any expenses incurred in connection
with such terminals and lines (between IMSC and the Custodian)
- any other miscellaneous expenses reasonably incurred by IMSC as
mutually agreed upon.
The Fund agrees that postage and mailing expenses will be paid on the day of or
prior to mailing as agreed with IMSC. In addition, the Fund will promptly
reimburse IMSC for any other expenses incurred by IMSC as to which the Fund and
IMSC mutually agree in writing that such expenses are not otherwise properly
borne by IMSC as part of its duties and obligations under the Agreement.
-11-
SCHEDULE C
Duties of IMSC
(See Exhibit 1 for Summary of Services)
1. SHAREHOLDER INFORMATION. IMSC shall maintain a record of the
number of Shares held by each holder of record which shall include their
addresses and taxpayer identification numbers and which shall indicate
whether such Shares are held in certificated or uncertificated form.
2. SHAREHOLDER SERVICES. IMSC shall at its expense provide such of the
following shareholder and shareholder-related services as are required by the
Fund or its Shareholders:
(i) processing wire order purchase and redemption requests
transmitted or delivered to IMSC's office;
(ii) coordinating and monitoring purchase, redemption and
transfer requests transmitted by dealers to IMSC through the
facilities of the National Securities Clearing Corporation;
(iii) responding to written, telephonic and in-person inquiries
from existing Shareholders requesting information regarding
matters such as Shareholder account or transaction status,
the net asset value of the Fund's Shares, the Fund's
performance, the Fund's services and options, the Fund's
investment policies and portfolio holdings, and the Fund's
distribution and the taxation thereof.
(iv) resolving Shareholder account problems that are identified by
either Shareholders or brokers;
(v) dealing with Shareholder complaints and other correspondence
directed to or brought to the attention of IMSC;
(vi) generating or developing and distributing special data,
notices, reports, programs and literature required by large
Shareholders, by Shareholders with specialized informational
needs, or by Shareholders generally in light of developments
such as changes in tax or securities laws; and
(vii) providing executive, clerical and secretarial personnel
competent to carry out the above responsibilities.
-12-
3. STATE REGISTRATION REPORTS. IMSC shall furnish the Fund on a
state-by-state basis sales reports, such periodic and special reports as the
Fund may reasonably request, and such other information, including Shareholder
lists and statistical information concerning accounts, as may be agreed upon
from time to time between the Fund and IMSC.
4. SHARE CERTIFICATES.
(a) At the expense of the Fund, IMSC shall maintain an adequate supply
of blank share certificates for the Fund to meet the Fund's requirements
therefor. Such share certificates shall be properly signed by facsimile. The
Fund agrees that, notwithstanding the death, resignation, or removal of any
officer of the Fund whose signature appears on such certificates, IMSC may
continue to countersign certificates which bear such signatures until otherwise
directed by the Fund.
(b) IMSC shall issue replacement share certificates in lieu of certificates
which have been lost, stolen or destroyed without any further action by the
Fund's Board of Directors or any officer of the Fund, upon receipt by IMSC of
properly executed affidavits and lost certificate bonds, in form satisfactory to
IMSC, with the Fund and IMSC as obligees under the bond.
(c) IMSC shall also maintain a record of each certificate issued, the
number of Shares represented thereby and the holder of record. With respect to
Shares held in open accounts or uncertificated form, I.E., no certificate being
issued with respect thereto, IMSC shall maintain comparable records of the
record holders thereof, including their names, addresses and taxpayer
identification numbers. IMSC shall further maintain a stop transfer record on
lost and/or replaced certificates.
5. MAILING COMMUNICATIONS TO SHAREHOLDERS: PROXY MATERIALS. IMSC will
address and mail to Shareholders of the Fund all reports to Shareholders,
dividend and distribution notices and proxy material for the Fund's meetings of
Shareholders. In connection with meetings of Shareholders, IMSC will prepare
Shareholder lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies voted prior to
meetings, act as inspector of election at meetings and certify Shares voted at
meetings.
6. SALES OF SHARES.
(a) PROCESSING OF INVESTMENT CHECKS OR OTHER INVESTMENTS. Upon receipt
of any check or other instrument drawn or enclosed to it as agent for, or
identified as being for the account of the Fund, or drawn or endorsed to the
Fund for the purchase of Shares, IMSC shall stamp the check with the date of
receipt, shall forthwith process the same for collection, and shall record the
number of Shares sold,
-13-
the trade date and price per Share, and the amount of money to be delivered to
the Custodian for the sale of such Shares.
(b) ISSUANCE OF SHARES. Upon receipt of notification that the
Custodian has received the amount of money specified in the immediately
preceding paragraph, IMSC shall issue to and hold in the account of the
purchaser/Shareholder, or if no account is specified therein, in a new account
established in the name of the purchaser, the number of Shares such purchaser is
entitled to receive, as determined in accordance with applicable laws or
regulations.
(c) CONFIRMATION. IMSC shall send to the purchaser/Shareholder a
confirmation of each purchase which will show the new share balance, the Shares
held under a particular plan, if any, for withdrawing investments, the amount
invested and the price paid for the newly purchased Shares, or will be in such
other form as the Fund and IMSC may agree from time to time.
(d) SUSPENSION OF SALES OF SHARES. IMSC shall not be required to issue
any Shares of the Fund where it has received a Written Instruction from the Fund
or written notice from any appropriate federal or state authority that the sale
of the Shares of the Fund has been suspended or discounted, and IMSC shall be
entitled to rely upon such Written Instructions or written notification.
(e) TAXES IN CONNECTION WITH ISSUANCE OF SHARES. Upon the issuance of
any Shares in accordance with the foregoing provisions of this paragraph, IMSC
shall not be responsible for the payment of any original issue or other taxes
required to be paid in connection with such issuance.
(f) RETURNED CHECKS. In the event that any check or other order for
the payment of money is returned unpaid for any reason, IMSC shall: (i) give
prompt notice of such return to the Fund or its designee; (ii) place a stop
transfer order against all Shares issued as a result of such check or order; and
(iii) take such actions as IMSC may from time to time deem appropriate.
7. REDEMPTIONS.
(a) REQUIREMENTS FOR TRANSFER OF REDEMPTION OF SHARES. IMSC shall
process all requests from Shareholders to transfer or redeem Shares in
accordance with the procedures set forth in the Fund's Prospectus or as
authorized by the Fund pursuant to Written Instructions, including, but not
limited to, all requests from Shareholders to redeem Shares of the Fund and all
determinations of the number of Shares required to be redeemed to fund
designated monthly payments, automatic payments or any other such distribution
or withdrawal plan.
-14-
IMSC will transfer or redeem Shares upon receipt of Written
Instructions and Share certificates, if any, properly endorsed for transfer or
redemption, accompanied by such documents as IMSC reasonably may deem necessary
to evidence the authority of the person making such transfer or redemption, and
bearing satisfactory evidence of the payment of stock transfer taxes, if any.
IMSC reserves the right to refuse to transfer or redeem Shares
until it is satisfied that the endorsement on the instructions is valid and
genuine, and for that purpose it will require a guarantee of signature by a
guarantor meeting eligibility standards as may be adopted by IMSC from time to
time in accordance with applicable law. IMSC 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 IMSC, in its
reasonable judgment, deems improper or unauthorized, or until it is reasonably
satisfied that there is no basis to any claims adverse to such transfer or
redemption.
IMSC may, in effecting transactions, rely upon the provisions of
the Uniform Act for the Simplification of Fiduciary Security Transfers or the
provisions of Article 8 of the Uniform Commercial Code, as the same may be
amended from time to time in the Commonwealth of Massachusetts, which in the
opinion of legal counsel for the Fund or of its own legal counsel protect it in
not requiring certain documents in connection with the transfer or redemption of
Shares. The Fund may authorize IMSC to waive the signature guarantee in certain
cases by Written Instructions.
(b) NOTICE TO CUSTODIAN AND FUND. When Shares are redeemed, IMSC
shall, upon receipt of the instructions and documents in proper form, deliver to
the Custodian and the Fund a notification setting forth the number of Shares to
be redeemed. Such redemptions shall be reflected on appropriate accounts
maintained by IMSC reflecting outstanding Shares of the Fund and Shares
attributed to individual accounts and, if applicable, any individual withdrawal
or distribution plan.
(c) PAYMENT OF REDEMPTION PROCEEDS. IMSC shall, upon receipt of the
monies paid to it by the Custodian for the redemption of Shares, pay to the
Shareholder, or his authorized agent or legal representative, such monies are
received from the Custodian, all in accordance with the redemption procedures
described in the Fund's Prospectus. The Fund shall indemnify IMSC for any
payment of redemption proceeds or refusal to make such payment if the payment or
refusal to pay is in accordance with said written procedures.
IMSC shall not process or effect any redemption pursuant to a
plan of distribution or redemption or in accordance with any other Shareholder
request upon
-15-
the receipt by IMSC of notification of the suspension of the determination of
the Fund's net asset value.
8. DIVIDENDS.
(a) NOTICE TO IMSC AND CUSTODIAN. Upon the declaration of each
dividend and/or distribution by the Fund with respect to Shares of the Fund, the
Fund shall notify IMSC, with respect to Shares of (i) the date of the
declaration of such dividend or distribution, (ii) the ex-dividend date, (iii)
the date of payment thereof, (iv) the record date as of which Shareholders
entitled top payment shall be determined, (v) the amount payable per Share to
the Shareholders of record as of that date, (vi) the total amount payable to
IMSC on the payment date and (vii) whether such dividend or distribution is to
be paid in Shares of such class at net asset value.
On or before the payment date, the Fund will direct the Custodian
of the Fund to pay to IMSC sufficient cash to make payment of the dividend
and/or distribution to the Shareholders of record as of such payment date.
(b) PAYMENT OF DIVIDENDS BY IMSC. Unless otherwise elected by a
Shareholder, IMSC will, on the designated payment date, automatically reinvest
all dividends in additional Shares at net asset value (determined on dividend
reinvestment valuation date established by the Fund), and mail to each
Shareholder at his address of record, or such other address as the Shareholder
may have designated, a statement showing the number of full and fractional
Shares (rounded to three decimal places) then currently owned by the Shareholder
and the net asset value of the Shares so credited to the Shareholder's account.
All other dividends shall be paid in cash, by check, to Shareholders or their
designees.
(c) INSUFFICIENT FUNDS FOR PAYMENTS. If IMSC does not receive
sufficient cash from the Custodian to make total dividend and/or distribution
payments to all Shareholders of the Fund as of the record date, IMSC will, upon
notifying the Fund, withhold payment to all Shareholders of record as of the
record date until such sufficient cash is provided to IMSC.
(d) INFORMATION RETURNS. It is understood that IMSC shall file such
appropriate information returns concerning the payment of dividends, return of
capital and capital gain distributions with the proper federal, state and local
authorities as are required by law to be filed and shall be responsible for the
withholding of taxes, if any, due on such dividends or distributions to
Shareholders when required to withhold taxes under applicable law.
-16-
EXHIBIT 1
(to Schedule C)
Summary of Services
The services to be performed by IMSC shall be as follows:
A. DAILY RECORDS
Maintain daily on disc the following information with respect to each
Shareholder account as received:
- Name and Address (Zip Code)
- Balance of Shares held by IMSC
- State of residence code
- Beneficial owner code: I.E., male, female, joint tenant
(etc.) - Dividend code (reinvestment)
- Number of Shares held in certificate form
- Telephone number
- Tax information (certified tax information number, any
back-up withholding)
B. OTHER DAILY ACTIVITY
- Answer written inquiries received by IMSC relating to
Shareholder accounts (matters relating to portfolio
management, distribution of Shares and other management
policy questions will be referred to Fund).
- Furnish a Statement of Additional Information to any
Shareholder who requests (in writing or by telephone) such
statement from IMSC.
- Examine and process Share purchase applications in
accordance with the Fund's Prospectus.
- Furnish Forms W-9 and W-8 to all Shareholders whose initial
subscriptions for Shares did not include taxpayer
identification numbers.
-17-
- Process additional payments into established Shareholder
accounts in accordance with the Fund's Prospectus.
- Upon receipt of proper instructions and all required
documentation, process requests for redemption of Shares.
- Accounting for the Fund's front-end sales commissions and
broker's commissions.
- Identify redemption requests made with respect to accounts
in which Shares have been purchased within an agreed-upon
period of time for determining whether good funds have been
collected with respect to such purchase and process as
agreed by IMSC and the Fund.
- Examine and process all transfers of Shares, ensuring that
all transfer requirements and legal documents have been
supplied.
- Issue and mail replacement checks.
C. REPORTS PROVIDED TO THE FUND
Furnish the following reports to the Fund:
- Daily financial totals
- Monthly Form N-SAR information (sales/redemption)
- Monthly report of outstanding Shares
- Monthly analysis of accounts by beneficial owner code
- Monthly analysis of accounts by share range
D. DIVIDEND ACTIVITY
- Calculate and process Share dividends and distributions as
instructed by the Fund.
- Compute, prepare and mail all necessary reports to
Shareholders, federal and/or state authorities as requested
by the Fund.
-18-
E. MEETINGS OF SHAREHOLDERS
- Cause to be mailed proxy and related material for all
meetings of Shareholders. Tabulate returned proxies (proxies
must be adaptable to mechanical equipment of IMSC or its
agents) and supply daily reports when proxies are being
solicited.
- Prepare and submit to the Fund an Affidavit of Mailing.
- At the time of the meeting, furnish a certified list of
Shareholders, hard copy, microfilm and/or microfiche, if
requested by the Fund.
F. PERIODIC ACTIVITIES
- Cause to be mailed reports, Prospectuses and any other
enclosures requested by the Fund (material must be adaptable
to mechanical equipment of IMSC or its agents).
-19-
