EXHIBIT (h)(ii)
TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of _____, 2003,
by and between Xxxxxxxx Funds, Inc., a Maryland corporation (the "Company") and
U.S. Bancorp Fund Services, LLC, a Wisconsin limited liability company
("USBFS").
WHEREAS, the Company 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 beneficial interest in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, USBFS is, among other things, in the business of administering
transfer and dividend disbursing agent functions for the benefit of its
customers; and
WHEREAS, the Company desires to retain USBFS to provide transfer and
dividend disbursing agent services to each series of the Company listed on
Exhibit A hereto (as amended from time to time) (each a "Fund", collectively the
"Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
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:
1. Appointment of USBFS as Transfer Agent
The Company hereby appoints USBFS as transfer agent of the Company on the
terms and conditions set forth in this Agreement, and USBFS hereby accepts
such appointment and agrees to perform the services and duties set forth in
this Agreement.
2. Services and Duties of USBFS
USBFS shall perform all of the customary services of a transfer agent and
dividend disbursing agent for the Funds, and as relevant, agent in
connection with accumulation, open account or similar plans (including
without limitation any periodic investment plan or periodic withdrawal
program), including but not limited to:
A. Receive and process all orders for the purchase, exchange, and/or
redemption of shares in accordance with Rule 22c-1 of the Investment
Company Act of 1940 ("the 1940 Act").
B. Process purchase orders with prompt delivery, where appropriate, of
payment and supporting documentation to the Company's custodian, and
issue the appropriate number of uncertificated shares with such
uncertificated shares being held in the appropriate shareholder
account.
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C. Arrange for issuance of shares obtained through transfers of funds
from Fund shareholders' accounts at financial institutions and arrange
for the exchange of shares for shares of other eligible investment
companies, when permitted by the Fund's current prospectus
("Prospectus").
D. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Company's
custodian.
E. Pay monies upon receipt from the Company's custodian, where relevant,
in accordance with the instructions of redeeming shareholders.
F. Process transfers of shares in accordance with the shareholder's
instructions.
G. Process exchanges between Funds and/or classes of shares of Funds both
within the same family of funds and with a First American Money Market
Fund, if applicable.
H. Prepare and transmit payments for dividends and distributions declared
by the Company with respect to the Fund, after deducting any amount
required to be withheld by any applicable laws, rules and regulations
and in accordance with shareholder instructions.
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (e.g., systematic withdrawal, automatic
investment, dividend reinvestment).
J. Record the issuance of shares of the Fund and maintain, pursuant to
Rule 17Ad-10(e) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), a record of the total number of
shares of the Fund which are authorized, issued and outstanding.
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies.
L. Mail shareholder reports and Prospectuses to current shareholders.
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders.
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Company.
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O. Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate federal
authorities any taxes to be withheld on dividends and distributions
paid by the Company, all as required by applicable federal tax laws
and regulations.
P. Provide a Blue Sky system that will enable the Company to monitor the
total number of shares of the Fund sold in each state. In addition,
the Company or its agent, including USBFS, shall identify to USBFS in
writing those transactions and assets to be treated as exempt from the
Blue Sky reporting for each state. The responsibility of USBFS for the
Company's Blue Sky state registration status is solely limited to the
initial compliance by the Company and the reporting of such
transactions to the Company or its agent.
Q. Answer correspondence from shareholders, securities brokers and others
relating to USBFS's duties hereunder and such other correspondence as
may from time to time be mutually agreed upon between USBFS and the
Company.
R. Reimburse the Fund each month for all material losses resulting from
"as of" processing errors for which USBFS is responsible in accordance
with the "as of" processing guidelines set forth on Exhibit C hereto.
3. Representations of USBFS
USBFS represents and warrants to the Company that:
A. It is a limited liability corporation duly organized, existing and in
good standing under the laws of Wisconsin;
B. It is a registered transfer agent under the Exchange Act.
C. It is duly qualified to carry on its business in the State of
Wisconsin;
D. It is empowered under applicable laws and by its charter and bylaws to
enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to authorize it to
enter and perform this Agreement;
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
G. It will comply with all applicable requirements of the Securities Act
of 1933, as amended, and the Exchange Act, the 1940 Act, and any laws,
rules, and regulations of governmental authorities having
jurisdiction.
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4. Representations of the Company
The Company represents and warrants to USBFS that:
A. The Company is an open-end investment company under the 1940 Act;
B. The Company is a corporation organized, existing, and in good standing
under the laws of Maryland;
C. The Company is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Articles of Incorporation
have been taken to authorize it to enter into and perform this
Agreement;
E. The Company will comply with all applicable requirements of the
Securities Act, the Exchange Act, the 1940 Act, and any laws, rules
and regulations of governmental authorities having jurisdiction; and
F. A registration statement under the Securities Act will be made
effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect
to all shares of the Company being offered for sale.
5. Compensation
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit B hereto
(as amended from time to time). The Company shall pay all fees and
reimbursable expenses within thirty (30) calendar days following receipt of
the billing notice, except for any fee or expense subject to a good faith
dispute. The Company shall notify USBFS in writing within thirty (30)
calendar days following receipt of each invoice if the Company is disputing
any amounts in good faith. The Company shall settle such disputed amounts
within ten (10) calendar days of the day on which the parties agree to the
amount to be paid. With the exception of any fee or expense the Company is
disputing in good faith as set forth above, unpaid invoices shall accrue a
finance charge of one and one-half percent (1 1/2%) per month, after the
due date. Notwithstanding anything to the contrary, amounts owed by the
Company to USBFS shall only be paid out of assets and property of the
particular Fund involved.
6. Indemnification; Limitation of Liability
A. USBFS shall exercise reasonable care in the performance of its duties
under this Agreement. USBFS shall not be liable for any error of
judgment or mistake of
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law or for any loss suffered by the Company in connection with matters
to which this Agreement relates, including losses resulting from
mechanical breakdowns or the failure of communication or power
supplies beyond USBFS's control, except a loss arising out of or
relating to USBFS's refusal or failure to comply with the terms of
this Agreement or from bad faith, negligence, or willful misconduct on
its part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, if USBFS has
exercised reasonable care in the performance of its duties under this
Agreement, the Company shall indemnify and hold harmless USBFS from
and against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable attorneys'
fees) which USBFS may sustain or incur or which may be asserted
against USBFS by any person arising out of any action taken or omitted
to be taken by it in performing the services hereunder, except for any
and all claims, demands, losses, expenses, and liabilities arising out
of or relating to USBFS's refusal or failure to comply with the terms
of this Agreement or from bad faith, negligence or from willful
misconduct on its part in performance of its duties under this
Agreement, (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to USBFS by any
duly authorized officer of the Company, such duly authorized officer
to be included in a list of authorized officers furnished to USBFS and
as amended from time to time in writing by resolution of the Board of
Directors of the Company (the "Board of Directors" or "Directors").
USBFS shall indemnify and hold the Company harmless from and against
any and all claims, demands, losses, expenses, and liabilities of any
and every nature (including reasonable attorneys' fees) that the
Company may sustain or incur or that may be asserted against the
Company by any person arising out of any action taken or omitted to be
taken by USBFS as a result of USBFS's refusal or failure to comply
with the terms of this Agreement, its bad faith, negligence, or
willful misconduct.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, USBFS shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond USBFS's control. USBFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of USBFS. USBFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency
use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Company shall be
entitled to inspect USBFS's premises and operating capabilities at any
time during regular business hours of USBFS, upon reasonable notice to
USBFS.
Notwithstanding the above, USBFS reserves the right to reprocess and
correct administrative errors at its own expense.
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B. In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the indemnitor may
be asked to indemnify or hold the indemnitee harmless, the indemnitor
shall be fully and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood that the
indemnitee will use all reasonable care to notify the indemnitor
promptly concerning any situation that presents or appears likely to
present the probability of a claim for indemnification. The indemnitor
shall have the option to defend the indemnitee against any claim that
may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon
the indemnitor shall take over complete defense of the claim, and the
indemnitee shall in such situation initiate no further legal or other
expenses for which it shall seek indemnification under this section.
The indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked to
indemnify the indemnitee except with the indemnitor's prior written
consent.
7. Proprietary and Confidential Information
USBFS agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Company all
records and other information relative to the Company and prior, present,
or potential shareholders (and clients of said shareholders) and not to use
such records and information for any purpose other than the performance of
its responsibilities and duties hereunder, except after prior notification
to and approval in writing by the Company, which approval shall not be
unreasonably withheld and may not be withheld where USBFS may be exposed to
civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities, or
when so requested by the Company.
Further, USBFS will adhere to the privacy policies adopted by the Company
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time (the "Act"). Notwithstanding the foregoing, USBFS will not
share any nonpublic personal information concerning any of the Company's
shareholders with any third party unless specifically directed by the
Company or allowed under one of the exceptions noted under the Act.
8. Anti-Money Laundering Program
The Company acknowledges that it has had an opportunity to review, consider
and comment upon the procedures provided by USBFS describing various tools
designed to promote the detection and reporting of potential money
laundering activity by monitoring certain aspects of shareholder activity
(the "Monitoring Procedures") as well as written procedures for verifying a
customer's identity (the "Customer Identification Procedures"), together
referred to as the "Procedures," and the Company has determined that the
Procedures, as part of the Company's overall anti-money laundering program,
are
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reasonably designed to prevent the Fund from being used for money
laundering or the financing of terrorist activities and to achieve
compliance with the applicable provision of the Bank Secrecy Act and the
implementing regulations thereunder.
Based on this determination, the Company hereby instructs and directs USBFS
to implement the Procedures on the Company's behalf, as such may be amended
or revised from time to time.
It is contemplated that these Procedures will be amended from time to time
by the parties as additional regulations are adopted and/or regulatory
guidance is provided relating to the Company's anti-money laundering
responsibilities.
USBFS agrees to provide to the Company:
(a) Prompt written notification of any transaction or combination of
transactions that USBFS believes, based on the Procedures, evidence
money laundering activity in connection with the Company or any
shareholder of the Fund;
(b) Prompt written notification of any customer(s) that USBFS reasonably
believes, based upon the Procedures, to be engaged in money laundering
activity, provided that the Company agrees not to communicate this
information to the customer;
(c) Any reports received by USBFS from any government agency or applicable
industry self-regulatory organization pertaining to USBFS's anti-money
laundering monitoring on behalf of the Company;
(d) Prompt written notification of any action taken in response to
anti-money laundering violations as described in (a), (b) or (c); and
(e) An annual report of its monitoring and customer identification
activities on behalf of the Company. USBFS shall provide such other
reports on the monitoring and customer identification activities
conducted at the direction of the Company as may be agreed to from
time to time by USBFS and the Company.
The Company hereby directs, and USBFS acknowledges, that USBFS shall (i)
permit federal regulators access to such information and records maintained
by USBFS and relating to USBFS's implementation of the Procedures on behalf
of the Company, as they may request, and (ii) permit such federal
regulators to inspect USBFS's implementation of the Procedures on behalf of
the Company.
9. Term of Agreement; Amendment
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of three years. Subsequent to the
initial three-year term, this Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or
such shorter period as is mutually agreed upon by the parties. However,
this Agreement may be amended by mutual written consent of the parties.
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10. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the Company
by written notice to USBFS, USBFS will promptly, upon such termination and
at the expense of the Company, transfer to such successor all relevant
books, records, correspondence, and other data established or maintained by
USBFS under this Agreement in a form reasonably acceptable to the Company
(if such form differs from the form in which USBFS has maintained, the
Company shall pay any expenses associated with transferring the data to
such form), and will cooperate in the transfer of such duties and
responsibilities, including provision for assistance from USBFS's personnel
in the establishment of books, records, and other data by such successor.
11. Records
USBFS shall keep records relating to the services to be performed hereunder
in the form and manner, and for such period, as it may deem advisable and
is agreeable to the Company, but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section
31 of the 1940 Act and the rules thereunder. USBFS agrees that all such
records prepared or maintained by USBFS relating to the services to be
performed by USBFS hereunder are the property of the Company and will be
preserved, maintained, and made available in accordance with such
applicable sections and rules of the 1940 Act and will be promptly
surrendered to the Company on and in accordance with its request. Further,
federal examiners shall have access to information and records relating to
anti-money laundering activities performed by USBFS hereunder and USBFS
consents to any inspection authorized by law or regulation in connection
thereof.
12. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Wisconsin, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control, and nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or order of the Securities and
Exchange Commission thereunder.
13. Data Necessary to Perform Services
The Company or its agent, which may be USBFS, shall furnish to USBFS the
data necessary to perform the services described herein at such times and
in such form as mutually agreed upon. If USBFS is also acting in another
capacity for the Company, nothing herein shall be deemed to relieve USBFS
of any of its obligations in such capacity.
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14. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party.
15. Notices
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given on the date
delivered personally or by courier service, or three (3) days after sent by
registered or certified mail, postage prepaid, return receipt requested, or
on the date sent and confirmed received by facsimile transmission to the
other party's address set forth below: Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
Xxxxxxxx Funds, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000X
Xxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
XXXXXXXX FUNDS, INC. U.S. BANCORP FUND SERVICES, LLC
By: ______________________________ By: ________________________________
Title: __________________________ Title: ______________________________
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Exhibit A
to the
Transfer Agent Servicing Agreement
Fund Names
Separate Series of Xxxxxxxx Funds, Inc.
Name of Series Date Added
-------------- ----------
Xxxxxxxx Core Investment Fund
Xxxxxxxx Select Industries Fund
Grizzly Short Fund
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Exhibit B
to the
Transfer Agent Servicing Agreement
Fee Schedule
Xxxxxxxx Funds, Inc.
Transfer Agent and Shareholder Servicing
Annual Fee Schedule
$15.00 per shareholder account (open)
$11.00 per networked (matrix level 3) account (open)
Minimum annual fee of $44,500 (Allocated between the three series of Xxxxxxxx
Funds, Inc. (Xxxxxxxx Core Investment Fund, Xxxxxxxx Select Industries Fund and
Grizzly Short Fund) based on percentage of average net assets each month.)
Plus out-of-pocket expenses, including, but not limited to:
o Telephone - toll-free lines, call transfers, etc.
o Mailing, sorting and postage
o Programming
o Stationery/envelopes
o Mailing
o Insurance
o Proxies
o Retention of records
o Microfilm/fiche of records
o Special reports
o ACH fees
o NSCC charges
o All other out-of-pocket expenses
Other
o Telephone exchanges $5.00/exchange
o Wire transfers $15.00/transfer
o Returned check or ACH $25.00/return check
o Stop payment $20.00/stop payment
o Research requests $5.00/research request
Fees and out-of-pocket expenses are billed to each fund monthly.
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Exhibit C
to the
Transfer Agent Servicing Agreement
As Of Processing Policy
USBFS will reimburse each Fund for any net material loss that may exist on
the Fund's books and for which USBFS is responsible, at the end of each calendar
month. "Net Material Loss" shall be defined as any remaining loss, after netting
losses against any gains, which impacts a Fund's net asset value per share by
more than 1/2 cent. Gains and losses will be reflected on the Fund's daily share
sheet, and the Fund will be reimbursed for any net material loss on a monthly
basis. USBFS will reset the as of ledger each calendar month so that any losses
which do not exceed the materiality threshold of 1/2 cent will not be carried
forward to the next succeeding month. USBFS will notify the advisor to the Fund
on the daily share sheet of any losses for which the advisor may be held
accountable.
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