EXHIBIT (h)
Transfer Agent and Dividend Disbursing Agent Service Agreement
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
SERVICE AGREEMENT
This Agreement made on May 31, 1991 between Tax Free Fund of Vermont, Inc.,
a Vermont corporation (hereinafter called "Fund") and Vermont Fund Advisors,
Inc., a Vermont corporation (hereinafter called "Agent").
WHEREAS the Fund desires to appoint Advisor as Transfer Agent and Dividend
Disbursing Agent for the Fund and Advisor desires to accept such
appointment
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
SECTION 1. TERMS OF--APPOINTMENT
1.01 Subject to the conditions set forth in this Agreement, the Fund hereby
employs and appoints Agent as Transfer Agent and Dividend Disbursing Agent
effective June 1, 1991.
1.02 Agent hereby accepts such employment and appointment and agrees that on and
after the effective date of its appointment it will act as the Fund's
Transfer Agent and Dividend Disbursing Agent. Agent agrees that it will
also act as agent in connection with any periodic investment plan, periodic
withdrawal program or other accumulation, open-account or similar plans for
the Fund's shareholders.
1.03 Agent agrees to provide the necessary facilities, equipment and personnel
to perform its duties and obligations hereunder in accordance with industry
practice.
1.04 Agent agrees that it will perform all of the usual and ordinary services as
Transfer Agent and Dividend Disbursing Agent and as agent for the various
shareholder accounts including but not limited to: maintaining all
shareholder accounts, preparing annual shareholder meeting lists,
withholding taxes as required by law, disbursing income dividends and
capital gains distributions, preparing and filing United States Treasury
Department Form 1099 documents for all shareholders, preparing and mailing
confirmation forms to shareholders for all purchases and redemptions of
Fund shares and other confirmable transactions in shareholder accounts,
recording reinvestment of dividends and distributions in Fund shares in
shareholder accounts, causing redemption of shares and disbursements to be
made to withdrawal planholders and (if and to the extent not performed by
the Fund) mailing proxies, receiving and tabulating proxies and mailing
shareholder reports and prospectuses,, all in accordance with the rules,
regulations and procedures of the Fund as put forth in the Bylaws of the
Fund, the Registration Statement dated May 31, 1991 and filed by the Fund
with the Securities and Exchange Commission, any amendments made from time
to time in such Registration Statement and any other procedures adopted by
the Fund for performing such tasks. The Bylaws and Registration Statement
dated May 31, 1991 are attached hereto as Appendices A and B, respectively,
and 'made a part hereof. Any amendments to the documents comprising
Appendices B and C will be promptly provided to Agent by Fund and when
received by Agent shall be incorporated in this Agreement.
SECTION 2. RECEIPT OF FUNDS: SHARE PURCHASE ORDERS
2.01 Upon receipt at the United States Post Office station designated by Agent
or at the business office of the Agent of any check or other order for the
payment of money drawn or endorsed to Agent as Transfer Agent for the Fund,
as plan agent for any shareholder of the Fund or otherwise identified as
being for the account of the Fund, Agent shall be responsible for
transporting such check or other order from such Post Office station to the
business office of the Agent and shall stamp the check or other order with
the date of receipt, shall forthwith process such check or other order for
collection and, no later than the opening of business on the second
business day following receipt of such check or such other order, shall
credit federal funds to the Fund in the face amount of the check or other
order and shall deposit the amount due the Fund in the bank account
maintained for the Fund. Upon receipt of funds through the Federal Reserve
Wire System or conversion into federal funds of funds transmitted by any
other bank wire transfer system, Agent shall notify the Fund of such
deposits and shall, on a daily basis, notify the Fund of the total amount
so deposited.
2.02 Upon receipt of a check or other order in payment for shares of the Fund
purchased by an investor accompanied, in the case of a new account, by a
completed account application, Agent shall process such order in accordance
with the procedures set forth in the Fund's current prospectus and credit
the investor's share account with the number of shares so purchased, and
shall promptly mail the investor a confirmation notice of such credit and
shall provide a copy of such notice to the Fund all such actions are
subject to any further instructions which the Fund may give to Agent with
respect to acceptance of orders for shares so received by Agent.
2.03 Within thirty (30) calendar days after the receipt of any check in the
amount of more than $50,000, Agent will call the paying bank to confirm
that the check has been paid. Fund will be notified immediately if Agent
receives information that payment for any such check has been refused.
Further, if Agent is unable to confirm that any such check has been paid
within thirty (30) calendar days of receipt by Agent of such check, Fund
will promptly be so notified. Proceeds of a redemption of any shares
purchased by such check will not be disbursed and mailed to shareholder
until payment of the check has been confirmed.
2.04 The Fund expects that situations may develop whereby it would be beneficial
to determine if an investor who has placed an order for shares has
sufficient funds in such investors drawing account(s) to provide funds
sufficient to pay for the shares purchased. Upon receipt of a request from
the Fund, Agent will contact the investor's bank and request confirmation
that funds sufficient to pay in full the purchase cost of shares ordered
are currently credited to the shareholder's account. The results of any
such calls will be provided to the Fund.
2.05 Agent will maintain written documentation of each telephone call which is
placed in accordance with subsections 2.03 and 2.04 above.
2.06 Notwithstanding any statement herein to the contrary, Agent shall have
unqualified ability to inquire as to the status of any check or other order
received in payment for shares of the Fund as Agent may deem appropriate or
necessary to protect both the Fund and the Agent.
SECTION 3. RETURNEQ CHECKS
In the event that any check or other order for the payment of money is
returned unpaid for any reason, Agent shall;
3.01 Give prompt notification to the Fund of the non-payment of said check;
3.02 Take such other steps, including re-depositing such check or other order
for collection or redelivering such check or other order to the investor as
Agent may, in its discretion, deem appropriate or as the Fund may instruct.
3.03 If the check or other order remains unpaid after such additional step(s)
have been taken and, in the absence of instructions from the Fund, Agent
shall implement such further procedures as may be necessary to enable Fund
to redeem any shares purchased with such returned check or other order.
Upon redemption, Agent shall credit the proceeds of such redemption plus
any dividends declared with respect to such shares up to the amount paid
for such shares to the Fund's account. Agent shall forward such returned
check or other order to the investor who originally submitted same. In the
eventthat the amount paid for such shares exceeds the proceeds of the
redemption of such shares plus the amount of any dividends declared with
respect to such shares, Agent shall receive reimbursement of such excess
from Fund.
SECTION 4. REDEMPTIONS
Agent shall receive and shall stamp with the date of receipt all written
requests for the redemption of shares of Fund and shall record on a proper
document all telephonic requests for redemption of shares of the Fund and shall
process such redemption requests as follows:
4.01 Upon receipt of a request for redemption, Agent will determine if any of
the shares to be redeemed have been purchased within the previous thirty
(30) calendar days. If it is determined that any portion of the shares to
be redeemed have been purchased within the previous thirty (30) calendar
days, Agent will promptly obtain the necessary information relative to the
check(s) used to purchase such shares and will contact the paying bank
requesting positive confirmation that the check(s) in question has been
paid.
4.02 If such redemption request complies with the standards for redemption as
approved by the Fund and if it is determined that none of the shares to be
redeemed have been purchased within the previous thirty (30) calendar days
or if Agent has not received information that the check(s) in question were
returned to Agent as unpaid by the close of Agent's business on the date of
receipt of the redemption request, Agent shall notify Fund of the total
number of shares presented and covered by such requests received by Agent
on said date. on or prior to the seventh calendar day succeeding any such
request for redemption, Agent shall, from cash available in the bank
account maintained by the Fund, pay the applicable redemption price per
share times the number of shares to be redeemed to the investor all as set
forth in the Bylaws and the then current prospectus of the Fund.
4.03 If by the end of the seventh calendar day after receipt of a redemption
request Agent has been unable to determine the status of any check(s) in
question, Agent will calculate the amount due to the shareholder for shares
which were purchased and credited to the shareholder's account over thirty
(30) calendar days prior to receipt of the redemption request and will send
a check representing the proceeds of the redemption of these shares to the
shareholder, together with a letter of explanation. Funds representing
redemption of shares purchased within the prior thirty (30) calendar days
will be held until the paying bank can confirm payment of the check(s) used
for purchase of such shares.
4.04 If any request for redemption does not comply with any standards for
redemption approved by the Fund, Agent shall promptly notify the
shareholder of such fact(s) together with the reason(s) therefor, and shall
effect such redemption at the price applicable to the date and time of
receipt of documents complying with such standards.
SECTION 5. XXXXXXXXXXX.XX BE FURNISHED TO SHAREHOLDERS
5.01 Agent shall answer such correspondence from shareholders relating to their
accounts and such other correspondence as may from time to time be mutually
agreed upon by Agent and Fund.
5.02 Agent shall mail such proxy cards and other material supplied to Agent by
Fund in connection with shareholder meetings and reports to shareholders
and shall receive, examine and tabulate returned proxies and certify the
resulting shareholder vote to the Fund.
SECTION 6. FEES AND EXPENSES
6.01 For the services to be rendered by Agent pursuant to paragraph 1.04, the
Fund agrees to pay Agent a fee, equal to 0.08 annually, computed daily on
the net asset value of the Fund.
6.02 The Fund agrees to promptly reimburse Agent for all reasonable
out-of-pocket expenses or advances incurred by Agent in connection with the
performance of services performed by Agent under this Agreement including,
but not limited to, expenditures for reasonable counsel fees, postage,
envelopes, checks, continuous forms, reports and statements, telephone,
telegraph, facsimile, stationery, supplies, record storage costs and
storage media so long as supplies purchased are expected to last for a
reasonable period of time. In addition, any other expenses incurred by
Agent at the request or with the consent of Fund will be promptly
reimbursed by Fund.
SECTION 7. REPRESENTATIONS AND WARRANTIES
Agent represents and warranties to the Fund that:
7.01 It is a corporation duly organized and existing in good standing under the
laws of the State of Vermont.
7.02 It is empowered under applicable laws and by its Articles of Association
and Bylaws to enter into and perform the services contemplated by this
Agreement;
7.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement; and
7.04 It has and will continue to have and maintain the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
7.05 It has registered with the Securities and Exchange commission as a Transfer
Agent pursuant to section 17A of the securities Exchange Act of 1934.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warranties to the Agent that:
8.01 It is a corporation duly organized and existing under the laws of the State
of Vermont;
8.02 It is an open-end diversified management investment company registered
under the Investment Company Act of 1940;
8.03 A registration statement under the Securities Act of 1933 is currently
effective with respect to all shares of the Fund being offered for sale;
8.04 The Fund is empowered under the applicable laws and regulations and by its
Articles of Association and Bylaws to enter into and perform this
Agreement.
SECTION 9. INDEMNIFICATION
9.01 Agent shall not be responsible for and the Fund shall indemnify and hold
Agent harmless from and against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions of Agent required to be taken by Agent pursuant to this
Agreement provided that Agent has acted in good faith and with due
diligence.
(b) The reliance on or use by Agent of information furnished or records
and documents received by Agent which have been prepared and/or
maintained by the Fund or any other person on behalf of the Fund.
(c) Defaults by dealers with respect to share orders previously entered.
(d) The reliance on or the carrying out of any instructions or requests of
the Fund.
(e) The reliance on procedures developed or approved by or interpretations
of the prospectus of the Fund relative to performing the tasks herein
assigned to Agent.
((f) The offer of sale of the Fund's shares in violation of any requirement
under the securities laws or regulations of any state that such shares
be registered in such state or in violation of any stop order or other
determination or ruling by any state with respect to the offer or sale
of such shares in such ( unless such violation results from Agent's
failure to comply with written instructions of the Fund that no offers
or sales be made in or to residents of such state).
9.02 It is hereby understood that if the Fund is asked to indemnify or save
Agent harmless, the Fund shall be fully and promptly advised of all
pertinent facts concerning the situation in question and it is further
understood that Agent will use all reasonable care to identify and notify
the Fund promptly concerning any situation which presents or appears likely
to present the probability of such a claim for indemnification against the
Fund. The Fund shall have the option to defend Agent against any claim
which may be the subject of this indemnification and in the event that the
Fund so elects it will so notify Agent and thereupon the Fund shall take
over complete defense of the claim and Agent shall, in such an event,
initiate no further legal or other expenses for which it shall seek
indemnification. Agent shall in no case confess any claim or make any
compromise in any case in which the Fund will be asked to indemnify Agent
except with the Fund's prior written consent. In the event of any advance
of funds for any purpose made by Agent resulting from authorizations or
instructions of the Fund or in the event that Agent shall incur any claims,
liabilities or related expenses in connection with the performance of this
Agreement, except such as may arise from its own negligent action,
negligent failure to act or willful misconduct, any property at any time
held for the account of the Fund shall be security therefor.
9.03 Agent shall indemnify and hold the Fund harmless from and against any and
all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of Agent's failure to comply with the terms of this
Agreement or which arise out of Agent's negligence or misconduct.
9.04 At any time Agent may apply to any officer of the Fund for instructions and
may consult with legalcounsel for the Fund at the expense of the Fund with
respect to any matter arising in connection with the services to be
performed by Agent under this Agreement and Agent shall be indemnified by
the Fund for any action taken or omitted by Agent in good faith in reliance
upon such instructions or upon the opinion of counsel for the Fund. Agent
shall be protected and indemnified in acting upon any paper or document
believed by it to be genuine and to have been signed by the proper person
or persons and shall not be held to have notice of any change of authority
of any person until written receipt thereof is provided to Agent by the
Fund.
SECTION 10. COVENANTS OF THE AGENTS AND THE FUND
10.01 The Fund shall promptly furnish to Agent the following:
(a) A certified copy of the resolution of the Board of Directors of the
Fund authorizing the Appointment of Agent and the execution and
delivery of this Agreement.
(b) A certified copy of the Articles of Association and Bylaws of the Fund
and all amendments thereto.
10.02Agent hereby agrees to establish and maintain facilities and procedures
reasonably acceptable to the Fund for safekeeping of check forms and
facsimile signature imprinting devices, if any; and for the preparation or
use and accounting for such forms and devices.
10.03To the extent required by Section 31 of the Investment Company Act of 1940
and rules and regulations thereunder, Agent agrees that all records
maintained by Agent relating to the services to be performed by Agent under
this Agreement are the property of the Fund and will be preserved and
surrendered promptly to the Fund on request.
10.04Agent and Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement
shall remain confidential and shall not be voluntarily disclosed to any
other person.
SECTION 11. TERMINATION AND AGREEMENT
11.01This Agreement shall terminate on the same date that the Investment
Advisory Agreement between the Agent and the Fund, Appendix B attached
hereto and made a part hereof, shall terminate.
SECTION 12 ASSIGNMENT
12.01Neither this Agreement nor any rights or obligations hereunder may be
assigned by Agent without the written consent of the Fund.
12.02This Agreement shall inure to the benefit of and be binding upon the
parties and their respective successors and assigns.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their corporate seals by and
through their duly authorized officers as of the day and year first above
written.
TAX FREE FUND OF VERMONT, INC.
By: /s/ Xxxx X. Xxxxxxx President
Attest: /s/ Xxxxxxxxx Xxxxx
VERMONT FUND ADVISORS, INC.
By: /s/ Xxxx X. Xxxxxxx
President
Attest: /s/ Xxxxxxxxx Xxxxx
