FUND SERVICES, INC.
TRANSFER AGENT AGREEMENT
THIS AGREEMENT, between Valley Forge Capital Holdings Total Return
Fund, INc. (the "Fund"), a corporation operating as an open-end investment
company under the Investment Company Act of 1940, duly organized and existing
under the laws of the State of Maryland, and FUND SERVICES, INC., a corporation
organized under the laws of the State of Virginia ("FSI"), provides as follows:
WHEREAS, FSI has agreed to act as transfer agent for the purpose of
recording the transfer, issuance and redemption of Shares of the Fund,
transferring the Shares of the Fund, disbursing dividends and other
distributions to Shareholders, filing various tax forms, mailing shareholder
information and receiving and responding to various shareholder inquiries;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties do hereby agree as follows:
SECTION 1. The Fund hereby appoints FSI as its transfer agent and FSI
agrees to act in such capacity upon the terms set forth in this Agreement.
SECTION 2. The Fund shall furnish to FSI a supply of blank Share
Certificates and, from time to time, will renew such supply upon FSI's request.
Blank Share Certificates shall be signed manually or by facsimile signatures of
officers of the Fund and, if required by FSI, shall bear the Fund's seal or a
facsimile thereof.
SECTION 3. FSI shall make original issues of Shares of the Fund in
accordance with SECTIONS 13 and 14 below and the Fund's then current prospectus,
upon receipt of (i) Written Instructions requesting the issuance, (ii) a
certified copy of a resolution of the Fund's Board of Directors authorizing the
issuance, (iii) necessary funds for the payment of any original issue tax
applicable to such additional Shares, (iv) an opinion of the Fund's counsel as
to the legality and validity of the issuance, which opinion may provide that it
is contingent upon the filing by the Fund of an appropriate notice with the
Securities and Exchange Commission, as required by Rule 24f-2 of the Investment
Company Act of 1940, as amended from time to time. If the opinion described in
(iv) above is contingent upon a filing under such rule, the Fund shall fully
indemnify FSI for any liability arising from the failure of the Fund to comply
with such rule.
SECTION 4. Transfers of Shares of the Fund shall be registered and,
subject to the provisions of SECTION 10, new Share Certificates shall be issued
by FSI upon surrender of outstanding Share Certificates in the form deemed by
FSI to be properly endorsed for transfer, which form shall include (i) all
necessary endorsers' signatures guaranteed by a member firm of a national
securities exchange or a domestic commercial bank, (ii) such assurances as FSI
may deem necessary to evidence the genuineness and effectiveness of each
endorsement and (iii) satisfactory evidence of compliance with all applicable
laws relating to the payment or collection of taxes. FSI shall take reasonable
measures as instructed by the Fund and agreed upon by FSI to enable the Fund to
identify proposed transfers that, if effected, will likely cause the Fund to
fall within the Internal Revenue Code definitions of a personal holding company
and shall not make such transfers contrary to the Fund's instructions without
the prior written approval of the Fund and its counsel.
SECTION 5. FSI shall forward Share Certificates in "non-negotiable"
form by first-class or registered mail, or by whatever means FSI deems equally
reliable and expeditious. While in transit to the addressee, all deliveries of
Share Certificates shall be insured by FSI as it deems appropriate. FSI shall
not mail Share Certificates in "negotiable" form, unless requested in writing by
the Fund and fully indemnified by the Fund to FSI's satisfaction.
SECTION 6. In registering transfers of Shares the Fund, FSI may rely
upon the Uniform Commercial Code or any other statutes that, in the opinion of
FSI's counsel, protect FSI and the Fund from liability arising from (i) not
requiring complete documentation, (ii) registering a transfer without an adverse
claim inquiry, (iii) delaying registration for purposes of such inquiry, or (iv)
refusing registration whenever an adverse claim requires such refusal.
SECTION 7. FSI may issue new Share Certificates in place of those lost,
destroyed or stolen, upon receiving indemnity satisfactory to FSI and may issue
new Share Certificates in exchange for, and upon surrender of, mutilated Share
Certificates as FSI deems appropriate.
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SECTION 8. Unless otherwise directed by the Fund, FSI may issue or
register Share Certificates reflecting the signature, or facsimile thereof, of
an officer who has died, resigned or been removed by the Fund. The Fund shall
file promptly with FSI any approvals, adoptions, or ratifications of such
actions as may be required by law or FSI.
SECTION 9. FSI shall maintain customary stock registry records for the
Fund, noting the issuance, transfer or redemption of Shares and the issuance and
transfer of Share Certificates. FSI may also maintain for the Fund an account
entitled "Unissued Certificate Account," in which it will record the Shares, and
fractions thereof, issued and outstanding from time to time for which issuance
of Share Certificates has not been requested. FSI is authorized to keep records
for the Fund, containing the names and last known addresses of Shareholders and
Planholders, and the number of Shares, and fractions thereof, from time to time
owned by them for which no Share Certificates are outstanding. Each Shareholder
or Planholder will be assigned a single account number for the Fund, even though
Shares held under each Plan and Shares for which Certificates have been issued
will be accounted for separately. Whenever a Shareholder deposits Shares
represented by Share Certificates in a Plan that permits the deposit of Shares
thereunder, FSI upon receipt of the Share Certificates registered in the name of
the Shareholder (or if not registered, in proper form for transfer), shall
cancel such Share Certificates, debit the Shareholder's individual account,
credit the Shares to the Unissued Share Certificate Account pursuant to SECTION
10 below and credit the deposited Shares to the proper Plan account.
SECTION 10. FSI shall issue Share Certificates for Shares of the Fund
only upon receipt of a written request from a Shareholder. If Shares are
purchased without such request, FSI shall merely note on its stock registry
records the issuance of the Shares and fractions thereof and credit the Unissued
Certificate Account and the respective Shareholders' accounts with the Shares.
Whenever Shares, and fractions thereof, owned by Shareholders are surrendered
for redemption, FSI may process the transactions by making appropriate entries
in the
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stock transfer records, and debiting the Unissued Certificate Account and the
record of issued Shares outstanding; it shall be unnecessary for FSI to reissue
Share Certificates in the name of the Fund.
SECTION 11. FSI shall also perform the usual duties and functions
required of a stock transfer agent for a corporation, including but not limited
to (i) issuing Share Certificates as Treasury Shares, as directed by Written
Instructions, and (ii) transferring Share Certificates from one Shareholder to
another in the usual manner. FSI may rely conclusively and act without further
investigation upon any list, instruction, certification, authorization, Share
Certificate or other instrument or paper reasonably believed by it in good faith
to be genuine and unaltered, and to have been signed, countersigned or executed
or authorized by a duly-authorized person or persons, or by the Fund, upon the
advice of counsel for the Fund or for FSI, or upon the net asset value quotation
of the Service Agent, as hereinafter defined. FSI may record any transfer of
Share Certificates which it reasonably believes in good faith to have been
duly-authorized, or may refuse to record any transfer of Share Certificates if,
in good faith, it deems such refusal necessary in order to avoid any liability
on the part of either the Fund or FSI. The Fund agrees to indemnify and hold
harmless FSI from and against any and all losses, costs, claims, and liability
that it may suffer or incur by reason of such good faith reliance, action or
failure to act.
SECTION 12. FSI shall notify the Fund of any request or demand for the
inspection of the Fund's share records. FSI shall abide by the Fund's
instructions for granting or denying the inspection; provided, however, FSI may
grant the inspection without such instructions if it is advised by its counsel
that failure to do so will result in liability to FSI.
SECTION 13. For purposes of this Section, the Fund hereby instructs FSI
to consider Shareholder and Planholder payments as federal funds on the day
indicated below:
(a) for a wire received prior to 12:00 noon Eastern time, on the same
day;
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(b) for a wire received on or after 12:00 noon Eastern time, on the
next business day;
(c) for a check received prior to 12:00 noon Eastern time, on the
second business day following receipt; and
(d) for a check received on or after 12:00 noon Eastern time, on the
third business day following receipt.
Immediately after 4:00 p.m. Eastern time or such other time as the Fund may
reasonably specify (the "Valuation Time") on each day that the Fund and FSI are
open for business, FSI shall obtain from the Fund's service agent, as specified
by the Fund in writing to FSI, a quotation (on which it may conclusively rely)
of the net asset value, determined as of the Valuation Time on that day. On each
day FSI is open for business, it shall use the net asset value determined by the
Service Agent to compute the number of Shares and fractional Shares to be
purchased and the aggregate purchase proceeds to be deposited with the
Custodian. As necessary but no more frequently than daily (unless a more
frequent basis is agreed to by FSI), FSI shall place a purchase order with the
Custodian for the proper number of Shares and fractional Shares to be purchased
and promptly thereafter shall send written confirmation of such purchase to the
Custodian and the Fund.
SECTION 14. Having made the calculations required by SECTION 13, FSI
shall thereupon pay the Custodian the aggregate net asset value of Shares of the
Fund purchased. The aggregate number of Shares and fractional Shares purchased
shall then be issued daily and credited by FSI to the Unissued Certificate
Account. FSI shall also credit each Shareholder's separate account with the
number of shares purchased by such Shareholder. FSI shall promptly thereafter
mail written confirmation of the purchase to each Shareholder or Planholder, and
if requested, to a specified broker-dealer and the Fund. Each confirmation shall
indicate the prior Share balance, the new Share balance, the Shares held under a
Plan (if any), the Shares for which Share Certificates are outstanding (if any),
the amount invested and the price paid for the newly-purchased Shares.
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SECTION 15. Prior to the Valuation Time on each business day, as
specified in accordance with SECTION 13 above, FSI shall process all requests to
redeem Shares of the Fund and advise the Custodian of (i) the total number of
Shares of the Fund available for redemption and (ii) the number of Shares and
fractional Shares of the Fund requested to be redeemed. Upon confirmation of the
net asset value, FSI shall notify the Fund and the Custodian of the redemption,
apply the redemption proceeds in accordance with SECTION 16 and the Fund's
prospectus, record the redemption in the stock registry books, and debit the
redeemed Shares from the Unissued Certificate Account and the individual account
of the Shareholder or Planholder.
In lieu of carrying out the redemption procedures described in the
preceding paragraph, FSI may, at the request of the Fund, sell Shares of the
Fund to the Fund as repurchases from Shareholders and/or Planholders, provided
that the sales price is not less than the applicable redemption price. The
redemption procedures shall then be appropriately modified.
SECTION 16. The proceeds of redemption shall be remitted by FSI in
accordance with the Fund's then current prospectus as follows:
(a) By check mailed to the Shareholder or Planholder at his last known
address. The request and stock certificates, if any, for Shares being redeemed
must reflect a guarantee of the owner's signature by a domestic commercial bank
or trust company or a member firm of a national securities exchange. If Share
Certificates have not been issued to the redeeming Shareholder or Planholder,
the signature of the Shareholder or Planholder on the redemption request must be
similarly guaranteed. The Fund may authorize FSI in writing to waive the
signature guarantee for any specific transaction or classes of transactions;
(b) By wire to a designated bank or broker upon telephone request,
without signature guarantee, if such redemption procedure has been elected on
the Shareholder's or Planholder's account information form. Any change in the
designated bank or broker account will be acted upon by FSI only if made in
writing by the Planholder or Shareholder, with signature guaranteed as required
by paragraph (a) above;
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(c) In case of an expedited telephone redemption, by check payable to
the Shareholder or Planholder of record and mailed for deposit to the bank
account designated in the Shareholder account information form;
(d) By other procedures commonly followed by mutual funds, as set forth
in Written Instructions from the Fund and mutually agreed upon by the Fund and
FSI.
For purposes of redemption of shares of the Fund that have been
purchased by check within fifteen (15) days prior to receipt of the redemption
request, the Fund shall provide FSI with Written Instructions concerning the
time within which such requests may be honored.
The authority of FSI to perform its responsibilities under SECTIONS 15
and 16 shall be suspended if FSI receives notice of the suspension of the
determination of the Fund's net asset value.
SECTION 17. Upon the declaration of each dividend and each capital
gains distribution by the Fund's Board of Directors, the Fund shall notify FSI
of the date of such declaration, the amount payable per share, the record date
for determining the Shareholders entitled to payment, the payment and the
reinvestment date price.
SECTION 18. On or before each payment date the Fund will transfer, or
cause the Custodian to transfer, to FSI the total amount of the dividend or
distribution currently payable. FSI will, on the designated payment date,
reinvest all dividends in additional shares and shall thereupon pay the
Custodian the aggregate net asset value of the additional shares and shall
promptly mail to each Shareholder or Planholder at his last known address, a
statement showing the number of full and fractional shares (rounded to three
decimal places) then owned by the Shareholder or Planholder and the net asset
value of such shares; provided, however, that if a Shareholder or Planholder
elects to receive dividends in cash, FSI shall prepare a check in the
appropriate amount and mail it to him at his last known address within five (5)
business days after the designated payment date.
SECTION 19. FSI shall maintain records regarding the issuance and
redemption of Shares of the Fund and dividend reinvestments. Such records will
list the transactions effected for each Shareholder and Planholder and the
number
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of Shares and fractional Shares owned by each for which no Share Certificates
are outstanding. FSI agrees to make available upon request and to preserve for
the periods prescribed in Rule 31a-2 of the Investment Company Act of 1940 any
records related to services provided under this Agreement and required to be
maintained by Rule 31a-1 of such Act.
SECTION 20. FSI shall maintain those records necessary to enable the
Fund to file, in a timely manner, Form N-SAR (Semi-annual report) or any
successor monthly, quarterly or annual report required by the Investment Company
Act of 1940, or rules and regulations thereunder.
SECTION 21. FSI shall cooperate with the Fund's independent public
accountants and shall take reasonable action to make all necessary information
available to such accountants for the performance of their duties.
SECTION 22. In addition to the services described above, FSI will
perform other services for the Fund as mutually agreed upon in writing from time
to time, including but not limited to preparing and filing federal tax forms
with the Internal Revenue Service, mailing federal tax information to
Shareholders, mailing semi-annual Shareholder reports, preparing the annual list
of Shareholders and mailing notices of Shareholders' meetings, proxies and proxy
statements. FSI shall answer Shareholder inquiries related to their share
accounts and other correspondence requiring an answer from the Fund. FSI shall
maintain dated copies of written communications from Shareholders, and replies
thereto.
SECTION 23. Nothing contained in this Agreement is intended to or shall
require FSI, in any capacity hereunder, to perform any functions or duties on
any holiday, weekend or weekday on which day FSI or the New York Stock Exchange
is closed. Functions or duties normally scheduled to be performed on such days
shall be performed on, and as of, the next business day on which both the New
York Stock Exchange and FSI are open, unless otherwise required by law;
provided, however, that all purchase or redemption requests received by the Fund
for a date on which the Exchange is open but FSI is not shall be priced and
executed "as of" such date on the next business day FSI is open, unless
otherwise required by law.
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SECTION 24. The Fund agrees to pay FSI compensation for its services as
set forth in Schedule A attached hereto, or as shall be set forth in written
amendments to such Schedule approved by the Fund and FSI from time to time.
SECTION 25. FSI shall not be liable for any taxes, assessments or
governmental charges that my be levied or assessed on any basis whatsoever in
connection with the Fund, or any Plan thereof, Shareholder or Planholder,
excluding taxes assessed against FSI for compensation received by it hereunder.
SECTION 26. FSI shall not be liable for any non-negligent action taken
in good faith and reasonably believed by FSI to be within the powers conferred
upon it by this Agreement. The Fund shall indemnify FSI and hold it harmless
from and against any and all losses, claims, damages, liabilities or expenses
(including reasonable expenses for legal counsel) arising directly or indirectly
out of or in connection with this Agreement; provided such loss, claim, damage,
liability or expense is not the direct result of FSI's negligence or willful
misconduct, and provided further that FSI shall give the Fund notice and
reasonable opportunity to defend any such loss, claim, etc. in the name of the
Fund or FSI, or both. Without limiting the foregoing:
(a) FSI may rely upon the advice of the Fund or counsel to the Fund or
FSI, and upon statements of accountants, brokers and other persons believed by
FSI in good faith to be experts in the matters upon which they are consulted.
FSI shall not be liable for any action taken in good faith reliance upon such
advice or statements;
(b) FSI shall not be liable for any action reasonably taken in good
faith reliance upon any Written Instructions, Oral Instructions, including the
Service Agent's net asset value quotation, or certified copy of any resolution
of the Fund's Board of Directors; provided, however, that upon receipt of a
Written Instruction countermanding a prior Written or Oral Instruction that has
not been fully executed by FSI, FSI shall verify the content of the second
Written Instruction and honor it, to the extent possible. FSI may rely upon the
genuineness of any such document, or copy thereof, reasonably believed by FSI in
good faith to have been validly executed; and
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(c) FSI may rely, and shall be protected by the Fund in acting upon any
signature, instruction, request, letter of transmittal, certificate, opinion of
counsel, statement, instrument, report, notice, consent, order, or other paper
or document reasonably believed by it in good faith to be genuine and to have
been signed or presented by the purchaser, Fund or other proper party or
parties.
(d) The Fund shall, as soon as possible, amend its prospectus to
conform with the provisions of this Agreement and make all necessary filings of
the amended prospectus, and shall indemnify FSI for any loss, claim or expense
resulting from FSI's reliance upon the Fund's representations in this Agreement,
notwithstanding a contrary representation in its prospectus.
SECTION 27. Upon receipt of Written Instructions, FSI is authorized to
make payment upon redemption of Shares without a signature guarantee. The Fund
hereby agrees to indemnify and hold FSI harmless from any and all expenses,
damages, claims, suits, liabilities, action, demands or losses whatsoever
arising out of or in connection with a payment by FSI for redemption of Shares
without a signature guarantee. Upon the request of FSI, the Fund shall assume
the entire defense of any such action, suit or claim. FSI shall notify the Fund
in a timely manner of any such action, suit or claim.
SECTION 28. The Fund shall deliver or cause to be delivered over to FSI
(i) an accurate list of Shareholders of the Fund, showing each Shareholder's
last known address, number of Shares owned and whether such shares are
represented by outstanding Share Certificates or by non-certificated share
accounts, (ii) all records relating to Plans of the Fund, including original
applications signed by the Planholders and original plan accounts recording
payment, deductions, reinvestments, withdrawals and liquidations and (iii) all
shareholder records, files, and other materials necessary or appropriate for
proper performance of the functions assumed by FSI under this Agreement
(collectively referred to as the "Materials"). The Fund shall indemnify and hold
FSI harmless from any and all expenses, damages, claims, suits, liabilities,
actions, demands and losses arising out of or in connection with any error,
omission, inaccuracy or other deficiency of such Materials, or out of the
failure of the Fund to provide any portion of the Materials or to provide any
information needed by FSI to knowledgeably perform its functions.
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SECTION 29. FSI shall, at all times, act in good faith and shall use
whatever methods it deems appropriate to ensure the accuracy of all services
performed under this Agreement. FSI shall be liable only for loss or damage due
to errors caused by FSI's negligence, bad faith or willful misconduct or that of
its employees.
SECTION 30. This Agreement may be amended from time to time by a
written supplemental agreement executed by the Fund and FSI and without notice
to or approval of the Shareholders or Planholders; provided the intent and
purposes of any Plan, as stated from time to time in the Fund's prospectus, are
observed. The parties hereto may adopt procedures as may be appropriate or
practical under the circumstances, and FSI may conclusively rely on the
determination of the Fund that any procedure that has been approved by the Fund
does not conflict with or violate any requirement of its Articles of
Incorporation, By-Laws or prospectus, or any rule, regulation or requirement of
any regulatory body.
SECTION 31. The Fund shall file with FSI a certified copy of the
operative resolution of its Board of Directors authorizing the execution of
Written Instructions or the transmittal of Oral Instructions.
SECTION 32. The terms, as defined in this Section, whenever used in
this Agreement or in any amendment or supplement hereto, shall have the meanings
specified below, insofar as the context will allow:
(a) The Fund: The term Fund shall mean Valley Forge Capital Holdings
Total Return Fund.
(b) Custodian: The term Custodian shall mean Star Bank, NA.
(c) Series: The term Series shall mean The Total Return Fund Series or
other Series subsequently formed.
(d) Securities: The term Securities shall mean bonds, debentures,
notes, stocks, shares, evidences of indebtedness, and other securities and
investments from time to time owned by the Fund.
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(e) Share Certificates: The term Share Certificates shall mean the
stock certificates for the Shares of the Fund.
(f) Shareholders: The term Shareholders shall mean the registered
owners from time to time of the Shares of the Fund, as reflected on the stock
registry records of the Fund.
(g) Shares: The term Shares shall mean the issued and outstanding
shares of common stock of the Fund.
(h) Oral Instructions: The term Oral Instructions shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to FSI in person or by telephone, vocal telegram or other
electronic means, by a person or person reasonably believed in good faith by FSI
to be a person or person authorized by a resolution of the Board of Directors of
the Fund to give Oral Instructions on behalf of the Fund.
(i) Written Instructions: The term Written Instructions shall mean an
authorization, instruction, approval, item or set of data, or information of any
kind transmitted to FSI in original writing containing original signatures, or a
copy of such document transmitted by telecopy, including transmission of such
signature, or other mechanical or documentary means, at the request of a person
or persons reasonably believed in good faith by FSI to be a person or persons
authorized by a resolution of the Board of Directors of the Fund to give Written
Instructions on behalf of the Fund.
(j) Plan: The term Plan shall include such investment plan, dividends
or capital gains reinvestment plans, systematic withdrawal plans or other types
of plans set forth in the then current prospectus of the Fund (excluding any
qualified retirement plan that is a Shareholder of the Fund) in form acceptable
to FSI, adopted by the Fund from time to time and made available to its
Shareholders, including plans or accounts by self-employed individuals or
partnerships.
(k) Planholder: The term Planholder shall mean a Shareholder who, at
the time of reference, is participating in a Plan, including any underwriter,
representative or broker-dealer.
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SECTION 33. In the event that any check or other order for the payment
of money is returned unpaid for any reason, FSI shall promptly notify the Fund
of the non-payment.
SECTION 34. Either party may give sixty (60) days written notice to the
other of the termination of this Agreement, such termination to take effect at
the time specified in the notice.
SECTION 35. Any notice or other communication required by or permitted
to be given in connection with this Agreement shall be in writing, and shall be
delivered in person or sent by first-class mail, postage prepaid, to the
respective parties.
Notice to the Fund shall be given as follows until further notice:
Valley Forge Capital Holdings Total Return Fund, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxx, SVP
Notice to FSI shall be given as follows until further notice:
FUND SERVICES, INC.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxxxx, Xx., President
SECTION 36. The Fund represents and warrants to FSI that the execution
and delivery of this Transfer Agent Agreement by the undersigned officer of the
Fund has been duly and validly authorized by resolution of the Fund's Board of
Directors. FSI represents and warrants to the Fund that the execution and
delivery of this Agreement by the undersigned officer of FSI has also been duly
and validly authorized.
SECTION 37. This Agreement may be executed in more than one
counterpart, each of which shall be deemed to be an original.
SECTION 38. This Agreement shall extend to and shall bind the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the written consent of FSI
or by FSI without the written consent of the Fund, authorized or approved by a
resolution of the Fund's Board of Directors.
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SECTION 39. This Agreement shall be governed by the laws of the State
of Virginia.
WITNESS the following signatures:
Valley Forge Capital Holdings
By: Xxxxxxxx X. Xxxx
Title: President
Date: Oct 1, 1996
FUND SERVICES, INC.
By: Xxxxxxx X. Xxxxxxxxxx, Xx.
Title: President
Date: Oct. 16, 1996
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