FORM OF TRANSFER AGENCY AGREEMENT
---------------------------------
AGREEMENT made this day of September, 1999 between X.xxx Funds (the
"Trust"), a Delaware business trust having its principal place of business at
000 Xxxxxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000, and X.xxx Asset Management, Inc.
("XAM"), a Delaware corporation having its principal place of business at 000
Xxxxxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000.
WHEREAS, the Trust is a registered investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), consisting of each of the
separate series listed on Appendix A hereto (as such Appendix A may be amended
from time to time) (each a "Fund" and collectively, the "Funds");
WHEREAS, pursuant to an Investment Advisory Agreement between the Trust and
XAM, dated September __, 1999 (the "Advisory Agreement"), XAM has agreed to
provide or procure transfer agency services for the Trust; and
WHEREAS, the Trust and XAM desire to set forth the terms and conditions on
which XAM shall provide such services.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services.
XAM shall perform for the Trust the transfer agent services set forth in
Schedule A hereto. XAM also agrees to perform for the Trust such special
services incidental to the performance of the services enumerated herein as
agreed to by the parties from time to time.
XAM may, in its discretion, appoint in writing other parties qualified to
perform transfer agency services reasonably acceptable to the Trust
(individually, a "Sub-transfer Agent") to carry out some or all of its
responsibilities under this Agreement with respect to a Fund; provided, however,
that the Sub-transfer Agent shall be the agent of XAM and not the agent of the
Trust or such Fund, and that XAM shall be fully responsible for the acts of such
Sub-transfer Agent and shall not be relieved of any of its responsibilities
hereunder by the appointment of such Sub-transfer Agent.
2. Fees and Expenses.
XAM shall be compensated for the services to be provided by XAM under this
Agreement, and shall be reimbursed for its out-of-pocket expenses in connection
with the provision of such services, from the fees paid to XAM under the
Advisory Agreement.
3. Effective Date.
This Agreement shall become effective as of the date first written above
(the "Effective Date").
4. Term.
This Agreement shall continue in effect with respect to a Fund for an
initial period of two years from the date of commencement. Thereafter, unless
otherwise terminated as provided herein, this Agreement shall be renewed
automatically for successive one-year periods. This Agreement may be terminated
without penalty by mutual agreement of the parties or upon the provision of 60
days advance written notice by one party to the other.
6. Uncontrollable Events.
XAM assumes no responsibility hereunder, and shall not be liable for any
damage, loss of data, delay or any other loss whatsoever caused by events beyond
its reasonable control.
7. Legal Advice.
XAM shall notify the Trust at any time XAM believes that it is in need of
the advice of counsel (other than counsel in the regular employ of XAM or any
affiliated companies) with regard to XAM's responsibilities and duties pursuant
to this Agreement; and after so notifying the Trust, XAM, at its discretion,
shall be entitled to seek, receive and act upon advice of legal counsel of its
choosing, such advice to be at the expense of the Trust or Funds unless relating
to a matter involving XAM's willful misfeasance, bad faith, gross negligence or
reckless disregard with respect to XAM's responsibilities and duties hereunder
and XAM shall in no event be liable to the Trust or any Fund or any shareholder
or beneficial owner of the Trust for any action reasonably taken pursuant to
such advice.
8. Instructions.
Whenever XAM is requested or authorized to take action hereunder pursuant
to instructions from a shareholder, or a properly authorized agent of a
shareholder ("shareholder's agent"), concerning an account in a Fund, XAM shall
be entitled to rely upon any certificate, letter or other instrument or
communication, believed by XAM to be genuine and to have been properly made,
signed or authorized by an officer or other authorized agent of the Trust or by
the shareholder or shareholder's agent, as the case may be, and shall be
entitled to receive as conclusive proof of any fact or matter required to be
ascertained by it hereunder a certificate signed by an officer of the Trust or
any other person authorized by the Trust's Board of Trustees (the "Trustees") or
by the shareholder or shareholder's agent, as the case may be.
As to the services to be provided hereunder, XAM may rely conclusively upon
the terms of the Prospectuses and Statement of Additional Information of the
Trust relating to the Funds to the extent that such services are described
therein unless XAM receives written instructions to the contrary in a timely
manner from the Trust.
9. Standard of Care; Reliance on Records and Instructions; Indemnification.
XAM shall use its best efforts to ensure the accuracy of all services
performed under this Agreement, but shall not be liable to the Trust for any
action taken or omitted by XAM in the absence of bad faith, willful misfeasance,
negligence or from reckless disregard by it of its obligations and duties. The
Trust agrees to indemnify and hold harmless XAM, its employees, agents,
directors, officers and nominees from and against any and all claims, demands,
actions and suits, whether groundless or otherwise, and from and against any and
all judgments, liabilities, losses, damages, costs, charges, counsel fees and
other expenses of every nature and character arising out of or in any way
relating to XAM's actions taken or nonactions with respect to the performance of
services under this Agreement or based, if applicable, upon reasonable reliance
on information, records, instructions or requests given or made to XAM by the
Trust, the investment adviser and on any records provided by any fund accountant
or custodian thereof; provided that this indemnification shall not apply to
actions or omissions of XAM in cases of its own bad faith, willful misfeasance,
negligence or from reckless disregard by it of its obligations and duties; and
further provided that prior to confessing any claim against it which may be the
subject of this indemnification, XAM shall give the Trust written notice of and
reasonable opportunity to defend against said claim in its own name or in the
name of XAM.
10. Record Retention and Confidentiality.
XAM shall keep and maintain on behalf of the Trust all books and records
which the Trust or XAM is, or may be, required to keep and maintain pursuant to
any applicable statutes, rules and regulations, including without limitation
Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as amended (the
"1940 Act"), relating to the maintenance of books and records in connection with
the services to be provided hereunder. XAM further agrees that all such books
and records shall be the property of the Trust and to make such books and
records available for inspection by the Trust or by the Securities and Exchange
Commission (the "Commission") at reasonable times and otherwise to keep
confidential all books and records and other information relative to the Trust
and its shareholders, except when requested to divulge such information by
duly-constituted authorities or court process, or requested by a shareholder or
shareholder's agent with respect to information concerning an account as to
which such shareholder has either a legal or beneficial interest or when
requested by the Trust, the shareholder, or shareholder's agent, or the dealer
of record as to such account.
11. Reports.
XAM will furnish to the Trust and to its properly-authorized auditors,
investment advisers, examiners, distributors, dealers, underwriters, salesmen,
insurance companies and others designated by the Trust in writing, such reports
at such times as are prescribed in Schedule B attached hereto, or as
subsequently agreed upon by the parties pursuant to an amendment to Schedule B.
The Trust agrees to examine each such report or copy promptly and will report or
cause to be reported any errors or discrepancies therein.
12. Rights of Ownership.
All computer programs and procedures developed to perform services required
to be provided by XAM under this Agreement are the property of XAM. All records
and other data except such computer programs and procedures are the exclusive
property of the Trust and all such other records and data will be furnished to
the Trust in appropriate form as soon as practicable after termination of this
Agreement for any reason.
13. Return of Records.
XAM may at its option at any time, and shall promptly upon the Trust's
demand, turn over to the Trust and cease to retain XAM's files, records and
documents created and maintained by XAM pursuant to this Agreement which are no
longer needed by XAM in the performance of its services or for its legal
protection. If not so turned over to the Trust, such documents and records will
be retained by XAM for six years from the year of creation. At the end of such
six-year period, such records and documents will be turned over to the Trust
unless the Trust authorizes in writing the destruction of such records and
documents.
14. Bank Accounts.
The Trust and the Funds shall establish and maintain such bank accounts
with such bank or banks as are selected by the Trust, as are necessary in order
that XAM may perform the services required to be performed hereunder. To the
extent that the performance of such services shall require XAM directly to
disburse amounts for payment of dividends, redemption proceeds or other
purposes, the Trust and Funds shall provide such bank or banks with all
instructions and authorizations necessary for XAM to effect such disbursements.
15. Representations of the Trust.
The Trust certifies to XAM that: (a) as of the close of business on the
Effective Date, each Fund which is in existence as of the Effective Date has
authorized unlimited shares, and (b) by virtue of its Trust Instrument, shares
of each Fund which are redeemed by the Trust may be sold by the Trust from its
treasury, and (c) this Agreement has been duly authorized by the Trust and, when
executed and delivered by the Trust, will constitute a legal, valid and binding
obligation of the Trust, enforceable against the Trust in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of creditors and
secured parties.
16. Representations of XAM.
XAM represents and warrants that: (a) XAM has been in, and shall continue
to be in, substantial compliance with all provisions of law, including Section
17A(c) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
required in connection with the performance of its duties under this Agreement;
and (b) the various procedures and systems which XAM has implemented with regard
to safekeeping from loss or damage attributable to fire, theft or any other
cause of the blank checks, records, and other data of the Trust and XAM's
records, data, equipment, facilities and other property used in the performance
of its obligations hereunder are adequate and that it will make such changes
therein from time to time as are required for the secure performance of its
obligations hereunder.
17. Insurance.
XAM shall notify the Trust should its insurance coverage with respect to
professional liability or errors and omissions coverage be canceled or reduced.
Such notification shall include the date of change and the reasons therefor. XAM
shall notify the Trust of any material claims against it with respect to
services performed under this Agreement, whether or not they may be covered by
insurance, and shall notify the Trust from time to time as may be appropriate of
the total outstanding claims made by XAM under its insurance coverage.
18. Information to be Furnished by the Trust and Funds.
The Trust has furnished to XAM the following:
(a) Copies of the Trust Instrument of the Trust and of any amendments
thereto, certified by the proper official of the state in which filed.
(b) Copies of the following documents:
1. The Trust's Bylaws and any amendments thereto;
2. Certified copies of resolutions of the Trustees covering the
following matters:
A. Approval of this Agreement and authorization of a specified
officer of the Trust to execute and deliver this Agreement
and authorization for specified officers of the Trust to
instruct XAM hereunder; and
B. Authorization of XAM to act as Transfer Agent for the Trust
on behalf of the Funds.
(c) A list of all officers of the Trust, together with specimen signatures
of those officers, who are authorized to instruct XAM in all matters.
(d) Prospectus and Statement of Additional Information;
(e) A certificate as to shares of beneficial interest or common stock of
the Trust authorized, issued, and outstanding as of the Effective Date
of XAM's appointment as Transfer Agent (or as of the date on which
XAM's services are commenced, whichever is the later date) and as to
receipt of full consideration by the Trust for all shares outstanding,
such statement to be certified by the Treasurer of the Trust.
19. Information Furnished by XAM.
XAM has furnished to the Trust the following:
(a) XAM's Articles of Incorporation.
(b) XAM's Bylaws and any amendments thereto.
(c) Certified copies of actions of XAM covering the following matters:
1. Approval of this Agreement, and authorization of a specified
officer of XAM to execute and deliver this Agreement;
2. Authorization of XAM to act as Transfer Agent for the Trust.
(d) A copy of the most recent independent accountants' report relating to
internal accounting control systems as filed with the Commission
pursuant to Rule 17Ad-13 under the Exchange Act.
20. Amendments to Documents.
The Trust shall furnish XAM written copies of any amendments to, or changes
in, any of the items referred to in Section 18 hereof forthwith upon such
amendments or changes becoming effective. In addition, the Trust agrees that no
amendments will be made to the Prospectus or Statement of Additional Information
of the Trust which might have the effect of changing the procedures employed by
XAM in providing the services agreed to hereunder or which amendment might
affect the duties of XAM hereunder unless the Trust first obtains XAM's approval
of such amendments or changes.
21. Reliance on Amendments.
XAM may rely on any amendments to or changes in any of the documents and
other items to be provided by the Trust pursuant to Sections 18 and 20 of this
Agreement and the Trust hereby indemnifies and holds harmless XAM from and
against any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, counsel fees and other expenses of every nature
and character which may result from actions or omissions on the part of XAM in
reasonable reliance upon such amendments and/or changes. Although XAM is
authorized to rely on the above-mentioned amendments to and changes in the
documents and other items to be provided pursuant to Sections 18 and 20 hereof,
XAM shall be under no duty to comply with or take any action as a result of any
of such amendments or changes unless the Trust first obtains XAM's written
consent to and approval of such amendments or changes.
22. Compliance with Law.
Except for the obligations of XAM set forth in Section 10 hereof, the Trust
assumes full responsibility for the preparation, contents, and distribution of
each prospectus of the Trust as to compliance with all applicable requirements
of the Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act, and
any other laws, rules and regulations of governmental authorities having
jurisdiction. XAM shall have no obligation to take cognizance of any laws
relating to the sale of the Trust's shares. The Trust represents and warrants
that no shares of the Trust will be offered to the public until the Trust's
registration statement under the 1933 Act and the 1940 Act has been declared or
becomes effective.
23. Notices.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: 000 Xxxxxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000, or at such
other address as such party may from time to time specify in writing to the
other party pursuant to this Section.
24. Headings.
Paragraph headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
25. Assignment.
This Agreement and the rights and duties hereunder shall not be assignable
by either of the parties hereto except by the specific written consent of the
other party. This Section 25 shall not limit or in any way affect XAM's right to
appoint a Sub-transfer Agent pursuant to Section 1 hereof. This Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
26. Governing Law.
This Agreement shall be governed by and provisions shall be construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
X.XXX FUNDS
By:
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Title:
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X.XXX ASSET MANAGEMENT, INC.
By:
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Title:
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SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
X.XXX FUNDS
AND
X.XXX ASSET MANAGEMENT, INC.
TRANSFER AGENCY SERVICES
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1. Shareholder Transactions
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a. Process shareholder purchase and redemption orders.
b. Set up account information, including address, dividend option,
taxpayer identification numbers and wire instructions.
c. Issue confirmations in compliance with Rule 10b-10 under the
Securities Exchange Act of 1934, as amended.
d. Issue periodic statements for shareholders.
e. Process transfers and exchanges.
f. Process dividend payments, including the purchase of new shares,
through dividend reimbursement.
2. Shareholder Information Services
--------------------------------
a. Make information available to shareholder servicing unit and other
remote access units regarding trade date, share price, current
holdings, yields, and dividend information.
b. Produce detailed history of transactions through duplicate or special
order statements upon request.
c. Provide mailing labels for distribution of financial reports,
prospectuses, proxy statements or marketing material to current
shareholders.
3. Compliance Reporting
--------------------
a. Provide reports to the Securities and Exchange Commission, the
National Association of Securities Dealers and the States in
which the Fund is registered.
b. Prepare and distribute appropriate Internal Revenue Service forms
for corresponding Fund and shareholder income and capital gains.
c. Issue tax withholding reports to the Internal Revenue Service.
4. Dealer/Load Processing (if applicable)
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a. Provide reports for tracking rights of accumulation and purchases made
under a Letter of Intent.
b. Account for separation of shareholder investments from transaction
sale charges for purchase of Fund shares.
c. Calculate fees due under 12b-1 plans for distribution and marketing
expenses.
d. Track sales and commission statistics by dealer and provide for
payment of commissions on direct shareholder purchases in a load Fund.
A-1
5. Shareholder Account Maintenance
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a. Maintain all shareholder records for each account in the Trust.
b. Issue customer statements on scheduled cycle, providing duplicate
second and third party copies if required.
c. Record shareholder account information changes.
d. Maintain account documentation files for each shareholder.
A-2
SCHEDULE B
TO THE TRANSFER AGENCY AGREEMENT
BETWEEN
X.XXX FUNDS
AND
X.XXX ASSET MANAGEMENT, INC.
REPORTS
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1. Daily Shareholder Activity Journal
2. Daily Fund Activity Summary Report
a. Beginning Balance
b. Dealer Transactions
c. Shareholder Transactions
d. Reinvested Dividends
e. Exchanges
f. Adjustments
g. Ending Balance
3. Daily Wire and Check Registers
4. Monthly Dealer Processing Reports
5. Monthly Dividend Reports
6. Sales Data Reports for Blue Sky Registration
7. Annual report by independent public accountants concerning XAM's
shareholder system and internal accounting control systems to be filed with
the Securities and Exchange Commission pursuant to Rule 17Ad-13 of the
Securities Exchange Act of 1934, as amended.
8. Such special reports and additional information that the parties may agree
upon, from time to time.
C-1
