TRANSFER AGENCY AND SERVICE AGREEMENT
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AGREEMENT made as of the 19th day of June, 1993 by and between Freedom
Group of Tax Exempt Funds, a Massachusetts business trust having its
principal office and place of business at Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx (the "Trust"), and Xxxx Xxxxxxx Fund Services, Inc., a Delaware
corporation having its principal office and place of business at 000
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("JHFSI").
WITNESSETH:
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WHEREAS, the Trust desires to appoint JHFSI as its transfer agent,
dividend disbursing agent and agent in connection with certain other
activities, and JHFSI desires to accept such appointment;
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust presently offers shares of beneficial interest in
two (2) series, such series, together with all other series subsequently
established by the Trust and made subject to this Agreement in accordance with
Article 8, being herein referred to as the "Fund(s)";
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 Terms of Appointment: Duties of JHFSI
1.01 Subject to the terms and conditions set forth in this Agreement,
the Trust hereby, employs and appoints JHFSI to act as, and JHFSI agrees to
act as transfer agent for the Trust's authorized and issued shares of
beneficial interest ("Shares"), with any accumulation, open-account or similar
plans provided to the shareholders of the Funds ("Shareholders") and set out
in the currently effective prospectus of the Funds,
including without limitation any periodic investment plan or periodic
withdrawal program.
1.02 JHFSI agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Trust and JHFSI, JHFSI shall:
(i) Receive for acceptance orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation therefor to the Custodian of the Funds
(the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
(iii) Receive for acceptance, redemption requests and
redemption directions and deliver the appropriate
documentation therefor to the Custodian;
(iv) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the
redeeming Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(vii) Maintain records of account for and advise the Funds
and their Shareholders as to the foregoing; and
(viii) Record the issuance of Shares of the Funds and maintain
pursuant to SEC Rule 17Ad-l0(e) a record of the total
number of Shares of
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the Funds which are authorized, based upon data
provided to it by the Funds, and issued and
outstanding. JHFSI shall also provide the Funds on a
regular basis with the total number of Shares which are
authorized and issued and outstanding and shall have no
obligation, when recording the issuance of Shares, to
monitor the issuance of such Shares or to take
cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole
responsibility of the Funds.
(b) In addition to and not in lieu of the services set forth in the above
paragraph (a), JHFSI shall: (i) perform all of the customary services of a
transfer agent, dividend disbursing agent 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: maintaining all Shareholder accounts, preparing Shareholder meeting
lists, mailing proxies, receiving and tabulating proxies, mailing Shareholder
reports and prospectuses to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required with respect to
dividends and distributions by federal authorities for all Shareholders,
preparing and mailing confirmations forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information and (ii) provide
a system which will enable the Funds to monitor the total number of Shares sold
in each State.
(c) In addition, the Funds shall (i) identify to JHFSI in writing those
transactions and assets to be treated as exempt from the blue sky reporting for
each State and (ii) verify the establishment of transactions for each State on
the system prior to activation and thereafter monitor the daily activity for
each State. The responsibility of JHFSI for the Funds' blue sky State
registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Funds and the reporting of
such transactions to the Funds as provided above.
(d) Additionally, JHFSI shall:
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(i) Utilize a system to identify all share transactions which
involve purchase and redemption orders that are processed at a time other
than the time of the computation of net asset value per share next
computed after receipt of such orders, and shall compute the net effect
upon the Funds of such transactions so identified on a daily and
cumulative basis.
(ii) If upon any day the cumulative net effect of such
transactions upon a Fund is negative and exceed a dollar amount
equivalent to l/2 of l cent per share, JHFSI shall promptly make a
payment to the Fund in cash or through the use of a credit, in the manner
described in paragraph (iv) below, in such amount as may be necessary to
reduce the negative cumulative net effect to less than l/2 of l cent per
share.
(iii) If on the last business day of any month the cumulative
net effect upon a Fund (adjusted by the amount of all prior payments and
credits by JHFSI and the Fund) is negative, the Fund shall be entitled to
a reduction in the fee next payable under the Agreement by an equivalent
amount, except as provided in paragraph (iv) below. If on the last
business day in any month the cumulative net effect upon a Fund (adjusted
by the amount of all prior payments and credits by JHFSI and the Fund) is
positive, JHFSI shall be entitled to recover certain past payments and
reductions in fees, and to credit against all future payments and fee
reductions that may be required under the Agreement as herein described
in paragraph (iv) below.
(iv) At the end of each month, any positive cumulative net
effect upon a Fund shall be deemed to be a credit to JHFSI which shall
first be applied to permit JHFSI to recover any prior cash payments and
fee reductions made by it to the Fund under paragraphs (ii) and (iii)
above during the calendar year, by increasing the amount of the monthly
fee under the Agreement next payable in an amount equal to prior payments
and fee reductions made by JHFSI during such calendar year, but not
exceeding the sum of that month's credit and credits arising in prior
months during such calendar year to the extent such prior credits have
not previously been utilized as contemplated by this paragraph. Any
portion of a credit to JHFSI not so used by it shall remain as a credit
to be used as payment against the amount of any future negative
cumulative net effects that would otherwise require a cash payment or fee
reduction to be made to the Fund pursuant to paragraphs (ii) or (iii)
above (regardless of whether or not the credit
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or any portion thereof arose in the same calendar year as that in which
the negative cumulative net effects or any portion thereof arose).
(v) JHFSI shall supply to the Funds from time to time, as
mutually agreed upon, reports summarizing the transactions identified
pursuant to paragraph (i) above, and the daily and cumulative net effects
of such transactions, and shall advise the Funds at the end of each month
of the net cumulative effect at such time. JHFSI shall promptly advise
the Funds if at any time the cumulative net effect exceeds a dollar
amount equivalent to 1/2 of 1 cent per share.
(vi) In the event that this Agreement is terminated for whatever
cause, the Funds shall promptly pay to JHFSI an amount in cash equal to
the amount by which the cumulative net effect upon the Funds is positive
or, if the cumulative net effect upon the Funds is negative, JHFSI shall
promptly pay to the Funds an amount in cash equal to the amount of such
cumulative net effect.
Procedures applicable to certain of these services may be established from
time to time by agreement between the Fund and JHFSI but the failure of the
Funds to establish such procedures with respect to any service shall not in any
way diminish the duty and obligation of JHFSI to perform such services
hereunder.
Article 2 Fees and Expenses
2.01 For performance by JHFSI pursuant to this Agreement, the Funds
agree to pay JHFSI an annual maintenance fee for each Shareholder account as
set forth in the initial fee schedule attached hereto. Such fees and
out-of-pocket expenses and advances identified under Section 2.02 below may be
changed from time to time subject to mutual written agreement between the Trust
and JHFSI.
2.02 In addition to the fee paid under Section 2.01 above the Funds
agree to reimburse JHFSI for out-of-pocket expenses or advances incurred by
JHFSI for the items set out in the fee schedule attached hereto. In addition,
any other expenses incurred by JHFSI at the request or with the consent of the
Funds, will be reimbursed by the Funds.
2.03 The Funds agree to pay all fees and reimbursable expenses promptly
following the mailing of the respective billing notice. Postage for mailing of
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dividends, proxies, Fund reports and other mailings to all shareholder accounts
shall be advanced to JHFSI by the Funds at least seven (7) days prior to the
mailing date of such materials.
Article 3 Representations and Warranties of JHFSI
JHFSI represents and warrants to the Trust that:
3.01 It is a Delaware corporation duly organized and existing and in
good standing under the laws of the State of Delaware, and as a Foreign
Corporation under the Laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the Commonwealth
of Massachusetts.
3.03 It is empowered under applicable laws and by its charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4 Representations and Warranties of the Trust
The Trust represents and warrants to JHFSI that:
4.01 It is a trust duly organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts.
4.02 It is empowered under applicable laws and by its Declaration of
Trust and ByLaws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
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4.04 It is an open-end investment company registered under the
Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate state securities
law flings have been made and will continue to be made, with respect to all
Shares of the Funds being offered for sale.
Article 5 Indemnification
5.01 JHFSI shall not be responsible for, and the Trust shall indemnify
and hold JHFSI harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liabilities arising out of or
attributable to:
(a) All actions of JHFSI or its agent or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct.
(b) The Trust's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Trust's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Trust hereunder.
(c) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or 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 federal agency or any state
with respect to the offer or sale of such Shares in such state unless such
violation results from any action or omission by JHFSI or any of its agents or
subcontractors which fails to comply with written instructions of the Trust or
any officer of the Trust that no offers or sales be made in general or to the
residents of a particular state.
5.02 JHFSI shall indemnify and hold the Trust harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liabilities arising out of or attributed to any action or failure or
omission to act by JHFSI as a result of JHFSI's lack of good faith, negligence
or willful misconduct.
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5.03 At any time JHFSI may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by JHFSI under this
Agreement, and JHFSI and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. JHFSI, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Trust, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided JHFSI or its
agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Trust, and shall not be held to have
notice of any change of authority of any person, until receipt of written notice
thereof from the Trust. JHFSI, its agents and subcontractors shall also be
protected and indemnified in recognizing share certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the officer of the
Trust, and the proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement or for any act
or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
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Article 6 Covenants of the Trust and JHFSI
6.01 The Trust shall promptly furnish to JHFSI the following:
(a) A certified copy of the resolution of the Board of Trustees
authorizing both the appointment of JHFSI and the execution and delivery of this
Agreement.
(b) A copy of the Master Trust Agreement and By-Laws of the Trust and
all amendments thereto.
6.02 JHFSI hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of share
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 JHFSI shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the Rules thereunder, JHFSI agrees that all such records prepared or maintained
by JHFSI relating to the services to be performed by JHFSI hereunder are the
property of the Trust and will be preserved, maintained and made available in
accordance with such Section and Rules, and will be surrendered to the Fund on
and in accordance with its request.
6.04 JHFSI and the Trust 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, except as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, JHFSI will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
instruction. JHFSI reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its
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counsel that it may be held liable for the failure to exhibit the Shareholder
records to such person.
Article 7 Termination of Agreement
7.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days' written notice to the other.
7.02 Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Trust. Additionally, JHFSI reserves the right to charge for any other
reasonable expenses associated with such termination.
Article 8 Additional Funds
8.01 In the event that the Trust establishes one or more of series of
Shares in addition to the present series with respect to which it desires to
have JHFSI render services as a transfer agent under the terms hereof, it shall
so notify JHFSI in writing, and if JHFSI agrees in writing to provide such
services, such series of Shares shall become a Fund hereunder.
Article 9 Assignment
9.01 Except as provided in Section 9.03 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
9.03 JHFSI may, without further consent on the part of the Trust,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS") which is duly registered as a
transfer agent pursuant to Section 17A (c)(1) of the Securities Exchange Act of
1934 ("Section 17A (c)(1)"), (ii) or any other entity JHFSI deems appropriate in
order to comply with the terms and conditions of this Agreement, provided,
however, that JHFSI shall be as
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fully responsible to the Trust for the acts and omissions of any subcontractor
as it is for its own acts and omissions.
Article 10 Amendment
10.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
Article 11 Massachusetts Law to Apply
11.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
Article 12 Merger of Agreement
12.01 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written.
Article 13 Limitation on Liability
13.01 The Master Trust Agreement establishing the Trust, dated June 1,
1982, a copy of which, together with all amendments thereto, is on file in the
Office of the Secretary of the Commonwealth of Massachusetts, provides all
persons extending credit to, contracting with or having any claim against the
Trust shall look only to the assets of the Trust, and neither the shareholders
nor the Trustees, nor any of the Trust's officers, employees, or agents shall be
personally liable therefore.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ATTEST: FREEDOM GROUP OF TAX EXEMPT FUNDS
/s/ Xxxx Xxxxxxx BY: /s/ Xxxxxx X. Dodge
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Xxxxxx X. Dodge
Chairman
ATTEST: XXXX XXXXXXX FUND SERVICES, INC.
BY: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
President
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XXXX XXXXXXX FUND SERVICES, INC.
FEE INFORMATION FOR SERVICES AS
PLAN, TRANSFER AND DIVIDEND DISBURSING AGENT
FREEDOM MUTUAL FUND
FREEDOM GROUP OF TAX EXEMPT FUNDS
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GENERAL - Fees are based on an annual per shareholder account charge for
account maintenance plus out-of-pocket expenses. Annual maintenance charges
for various kinds of mutual funds are given below.
ANNUAL MAINTENANCE CHARGES - Fees are billable on a monthly basis at the rate
of 1/12 of the annual fee. A charge is made for an account in the month that
an account opens or closes.
Non-Direct Accounts $ 9.50
Direct Accounts $13.50
The following features will each be assessed additional charges as an add-on
to the annual per account rate.
Closed accounts per account, per month $ .10
Disaster Recovery/Emergency Backup per
account serviced, per year $ .25 each account
CHECKWRITING
Each check presented for payment $ 1.00
Set up of checkwriting function $ 5.00 per account
FREEDOM MUTUAL FUND XXXX XXXXXXX FUND SERVICES, INC.
FREEDOM CROUP OF TAX EXEMPT FUNDS
By: /s/ Xxxxxx X. Dodge By: Xxxxx X. Xxxx
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Title: Chairman & CEO Title: President & CEO
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Date: 06/11/93 Date: 6/4/94
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