Exhibit (h)
FUND SERVICES, INC.
TRANSFER AGENCY AND SERVICES AGREEMENT
AGREEMENT made as of______________, by and between Ameritor Security Trust
(the "Fund"), a business trust operating as an open-end investment company under
the Investment Company Act of 1940, duly organized and existing under the laws
of the District of Columbia, and FUND SERVICES, INC. ("FSI"), a corporation
organized under the laws of the State of Virginia, provides as follows:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and
may issue its shares of beneficial interest, no par value, in separate series
and classes; and
WHEREAS, the Fund may offer shares in various series (each such series,
together with all other series subsequently established by the Fund and made
subject to this Agreement in accordance with Section 12, being herein referred
to as a "Fund," and collectively as the "Funds") and the Fund may in the future
offer shares of various classes of each Fund (each such class together with all
other classes subsequently established by the Fund in a Fund being herein
referred to as a "Class," and collectively as the "Classes");
WHEREAS, the Fund has established a class of shares known as the "Shepherd
Class Shares;
WHEREAS, the Fund desires that FSI perform as the transfer agent and
dividend disbursing agent for the Shepherd Class Shares ("Shepherd Class") of
the Fund and FSI is willing to provide these services on the terms and
conditions set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Fund and FSI hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) The Fund, on behalf of the Funds, hereby appoints FSI to act as, and
FSI agrees to act as, (i) transfer agent for the authorized and issued shares of
the Shepherd Class ("Shares"), (ii) dividend disbursing agent and (iii) agent in
connection with any accumulation, open-account or similar plans provided to the
registered owners of Shares ("Shareholders") and set out in the currently
effective prospectuses and statements of additional information (collectively
"prospectus") of the applicable Fund, including, without limitation, any
periodic investment plan or periodic withdrawal program.
(b) In connection therewith, the Fund has delivered to FSI copies of (i)
the Fund's Trust Instrument and Bylaws (collectively, as amended from time to
time, "Organic Documents"), (ii) the Fund's Registration Statement and all
amendments thereto filed with the
U.S. Securities and Exchange Commission ("SEC") pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), or the 1940 Act (the "Registration
Statement"), (iii) the Fund's current Prospectus and Statement of Additional
Information of each Fund (collectively, as currently in effect and as amended or
supplemented, the "Prospectus"), (iv) each current plan of distribution or
similar document adopted by the Fund under Rule 12b-1 under the 1940 Act
("Plan") and each current shareholder service plan or similar document adopted
by the Fund ("Service Plan"), and (v) all applicable procedures adopted by the
Fund with respect to the Funds, and shall promptly furnish FSI with all
amendments of or supplements to the foregoing. The Fund shall deliver to FSI a
certified copy of the resolution of the Board of Trustees of the Fund (the
"Board") appointing FSI and authorizing the execution and delivery of this
Agreement.
SECTION 2. DUTIES OF FSI
(a) FSI agrees that in accordance with procedures established from time to
time by agreement between the Fund on behalf of each of the Funds, as
applicable, and FSI, FSI will perform the following services:
(i) provide the 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) that are customary for open-end management
investment companies including: (A) maintaining all Shareholder accounts,
(B) preparing Shareholder meeting lists, (C) mailing proxies and related
materials to Shareholders, (D) mailing Shareholder reports and prospectuses
to current Shareholders, (E) withholding taxes on U.S. resident and
non-resident alien accounts, (F) preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required by federal
authorities with respect to distributions for Shareholders, (G) preparing
and mailing confirmation forms and statements of account to Shareholders
for all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, (H) preparing and mailing activity
statements for Shareholders at a minimum, following each transaction and
each quarter-end, and (I) providing Shareholder account information;
(ii) receive for acceptance orders for the purchase of Shares and promptly
deliver payment and appropriate documentation therefor to the custodian of
the applicable Fund (the "Custodian");
(iii) pursuant to purchase orders, issue the appropriate number of Shares
and hold such Shares in the appropriate Shareholder account;
(iv) receive for acceptance redemption requests and deliver the appropriate
documentation therefor to the Custodian;
(v) as and when it receives monies paid to it by the Custodian with respect
to any redemption, pay the redemption proceeds as required by the
prospectus pursuant to which the redeemed Shares were offered and as
instructed by the redeeming Shareholders;
2
(vi) effect transfers of Shares upon receipt of appropriate instructions
from Shareholders;
(vii) prepare and transmit to Shareholders (or credit the appropriate
Shareholder accounts) payments for all distributions declared by the Fund
with respect to Shares;
(viii) issue share certificates and replacement share certificates for
those share certificates alleged to have been lost, stolen, or destroyed
upon receipt by FSI of indemnification satisfactory to FSI and protecting
FSI and the Fund and, at the option of FSI, issue replacement certificates
in place of mutilated share certificates upon presentation thereof without
requiring indemnification;
(ix) receive from Shareholders or debit Shareholder accounts for sales
commissions, including contingent deferred, deferred and other sales
charges, and service fees (i.e., wire redemption charges) and prepare and
transmit payments, as appropriate, to the underwriter or Fund Manager for
commissions and service fees received;
(x) track shareholder accounts by financial intermediary source and
otherwise as reasonably requested by the Fund and provide periodic
reporting to the Fund or its administrator or other agent;
(xi) maintain records of account for and provide reports and statements to
the Fund and Shareholders as to the foregoing;
(xii) record the issuance of Shares of the Fund and maintain pursuant to
Rule 17Ad-10(e) under the Securities Exchange Act of 1934, as amended
("1934 Act") a record of the total number of Shares of the Fund, each Fund
and each Class thereof, that are authorized, based upon data provided to it
by the Fund, and are issued and outstanding and provide the Fund on a
regular basis a report of the total number of Shares that are authorized
and the total number of Shares that are issued and outstanding;
(xiii) provide a system which will enable the Fund to calculate the total
number of Shares of each Fund and Class thereof sold in each State;
(xiv) provide necessary information to the Fund to enable to Fund to
monitor and make appropriate filings with respect to the escheatment laws
of the various states and territories of the United States; and
(xv) oversee the activities of proxy solicitation firms, if requested by
the Fund.
(b) FSI shall receive and tabulate proxy votes, coordinate the tabulation
of proxy and shareholder meeting votes and perform such other additional
services as may be specified from time to time by the Fund, all pursuant to
mutually acceptable compensation and implementation agreements.
3
(c) The Fund or its administrator or other agent (i) shall identify to FSI
in writing those transactions and assets to be treated as exempt from reporting
for each state and territory of the United States and for each foreign
jurisdiction (collectively "States") and (ii) shall monitor the sales activity
with respect to Shareholders domiciled or resident in each State. The
responsibility of FSI for the Fund's State registration status is solely limited
to the reporting of transactions to the Fund, and FSI 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 Fund or its
administrator or other agent.
(d) FSI shall establish and maintain facilities and procedures reasonably
acceptable to the Fund for the safekeeping, control, preparation and use of
share certificates, check forms, and facsimile signature imprinting devices. FSI
shall establish and maintain facilities and procedures reasonably acceptable to
the Fund for safekeeping of all records maintained by FSI pursuant to this
Agreement.
(e) FSI shall cooperate with each Fund's independent public accountants and
shall take reasonable action to make all necessary information available to the
accountants for the performance of the accountants' duties.
(f) Except with respect to FSI's duties as set forth in this Section 2 and
except as otherwise specifically provided herein, the Fund assumes all
responsibility for ensuring that the Fund complies with all applicable
requirements of the Securities Act, the 1940 Act and any laws, rules and
regulations of governmental authorities with jurisdiction over the Fund. All
references to any law in this Agreement shall be deemed to include reference to
the applicable rules and regulations promulgated under authority of the law and
all official interpretations of such law or rules or regulations.
SECTION 3. RECORDKEEPING
(a) Prior to the commencement of FSI's responsibilities under this
Agreement, if applicable, 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 address of record, number of Shares owned and whether such Shares
are represented by outstanding share certificates and (ii) 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 on behalf of each applicable
Fund or Class indemnify and hold FSI harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability
arising out of or attributable to any error, omission, inaccuracy or other
deficiency of the Materials, or out of the failure of the Fund to provide any
portion of the Materials or to provide any information in the Fund's possession
or control reasonably needed by FSI to perform the services described in this
Agreement.
(b) FSI shall keep records relating to the services to be performed under
this Agreement, in the form and manner as it may deem advisable and as required
by applicable law. To the extent required by Section 31 of the 1940 Act, and the
rules thereunder, FSI agrees that all
4
such records prepared or maintained by FSI relating to the services to be
performed by FSI under this Agreement are the property of the Fund and will be
preserved, maintained and made available in accordance with Section 31 of the
1940 Act and the rules thereunder, and will be surrendered promptly to the Fund
on and in accordance with the Fund's request. The Fund and the Fund's authorized
representatives shall have access to FSI's records relating to the services to
be performed under this Agreement at all times during FSI's normal business
hours. Upon the reasonable request of the Fund, copies of any such records shall
be provided promptly by FSI to the Fund or the Fund's authorized
representatives.
(c) FSI and the Fund agree that all books, records, information, and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person, except
as may be required by law.
(d) In case of any requests or demands for the inspection of the
Shareholder records of the Fund, FSI will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. FSI shall abide by the Fund's instructions for granting or denying
the inspection; provided, however, that FSI may grant the inspection regardless
of the Fund's instructions if FSI is advised by counsel to FSI that failure to
do so will result in liability to FSI.
SECTION 4. ISSUANCE AND TRANSFER OF SHARES
(a) FSI shall make original issues of Shares of each Fund and Class thereof
in accordance with the Fund's then current prospectus only upon receipt of (i)
instructions requesting the issuance, (ii) a certified copy of a resolution of
the Board authorizing the issuance, (iii) necessary funds for the payment of any
original issue tax applicable to such Shares, and (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 SEC, as required by Section 24 of the 1940 Act or the rules
thereunder. If the opinion described in (iv) above is contingent upon a filing
under Section 24 of the 1940 Act, the Fund shall indemnify FSI for any liability
arising from the failure of the Fund to comply with that section or the rules
thereunder.
(b) Transfers of Shares of each Fund and Class thereof shall be registered
on the Shareholder records maintained by FSI. In registering transfers of
Shares, FSI may rely upon the Uniform Commercial Code as in effect in the State
of Virginia 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. As transfer agent,
FSI will be responsible for delivery to the transferor and transferee of such
documentation as is required by the Uniform Commercial Code.
5
SECTION 5. SHARE CERTIFICATES
(a) The Fund shall furnish to FSI a supply of blank share certificates of
each Fund and Class thereof 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 authorized to sign by the Organic Documents
of the Fund and, if required by the Organic Documents, shall bear the Fund's
seal or a facsimile thereof. Unless otherwise directed by the Fund, FSI may
issue or register Share certificates reflecting the manual or facsimile
signature of an officer who has died, resigned or been removed by the Fund.
(b) 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 and satisfactory evidence of compliance with all applicable laws
relating to the payment or collection of taxes. 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. 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.
(c) In the event that the Fund informs FSI that any Fund or Class thereof
does not issue share certificates, FSI shall not issue any such share
certificates and the provisions of this Agreement relating to share certificates
shall not be applicable with respect to those Funds or Classes thereof.
SECTION 6. SHARE PURCHASES; ELIGIBILITY TO RECEIVE DISTRIBUTIONS
(a) Shares shall be issued in accordance with the terms of a Fund's or
Class' prospectus after FSI or its agent receives either:
(i) (A) an instruction directing investment in a Fund or Class, (B) a check
(other than a third party check) or a wire or other electronic payment in
the amount designated in the instruction and (C), in the case of an initial
purchase, a completed account application; or
(ii) the information required for purchases pursuant to a selected dealer
agreement, processing organization agreement, or a similar contract with a
financial intermediary.
(b) Shares issued in a Fund after receipt of a completed purchase order
shall be eligible to receive distributions of the Fund at the time specified in
the prospectus pursuant to which the Shares are offered.
(c) Shareholder payments shall be considered Federal Funds no later than on
the day indicated below unless other times are noted in the prospectus of the
applicable Class or Fund:
(i) for a wire received, at the time of the receipt of the wire;
6
(ii) for a check drawn on a member bank of the Federal Reserve System, on
the next Fund business day following receipt of the check; and
(iii) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as FSI is credited with Federal Funds
with respect to that check.
SECTION 7. COMPENSATION AND EXPENSES
(a) For the services provided by FSI pursuant to this Agreement, the Fund,
on behalf of each Fund, agrees to pay FSI the fees set forth in Appendix A
hereto. Fees will begin to accrue for each Fund on the latter of the date of
this Agreement or the date of commencement of operations of the Fund. If fees
begin to accrue in the middle of a month or if this Agreement terminates before
the end of any month, all fees for the period from that date to the end of that
month or from the beginning of that month to the date of termination, as the
case may be, shall be prorated according to the proportion that the period bears
to the full month in which the effectiveness or termination occurs. Upon the
termination of this Agreement with respect to a Fund, the Fund shall pay to FSI
such compensation as shall be payable prior to the effective date of
termination. The Fund acknowledges that FSI may from time to time earn money on
amounts in the deposit accounts maintained by FSI to service the Funds (and
other clients serviced by FSI).
(b) In connection with the services provided by FSI pursuant to this
Agreement, the Fund, on behalf of each Fund, agrees to reimburse FSI for the
expenses set forth in Appendix A hereto. In addition, the Fund, on behalf of the
applicable Fund, shall reimburse FSI for all reasonable incurred expenses and
employee time (at 150% of salary) attributable to any review of the Fund's
accounts and records by the Fund's independent accountants or any regulatory
body outside of routine and normal periodic reviews. Routine and normal period
reviews shall, at a minimum, include the review of the Fund's annual and
semi-annual financial statements by the Fund's accountants, and routine
examinations by any regulator having jurisdiction over the Fund. Should the Fund
exercise its right to terminate this Agreement, the Fund, on behalf of the
applicable Fund, shall reimburse FSI at rates set forth in Appendix A for all
reasonable incurred out-of-pocket expenses and employee time associated with the
copying and movement of records and material to any successor person and
providing assistance to any successor person in the establishment of the
accounts and records necessary to carry out the successor's responsibilities.
(c) All fees and reimbursements are payable in arrears on a monthly basis
and the Fund, on behalf of the applicable Fund, agrees to pay all fees and
reimbursable expenses within five (5) business days following receipt of the
respective billing notice.
SECTION 8. REPRESENTATIONS AND WARRANTIES
(a) FSI represents and warrants to the Fund that:
(i) It is a corporation duly organized and existing and in good standing
under the laws of the State of Virginia;
(ii) It is duly qualified to carry on its business in the State of
Virginia;
7
(iii) It is empowered under applicable laws and by its By-Laws to enter
into this Agreement and perform its duties under this Agreement;
(iv) All requisite corporate proceedings have been taken to authorize it to
enter into this Agreement and perform its duties under this Agreement;
(v) It has access to the necessary facilities, equipment, and personnel to
perform its duties and obligations under this Agreement;
(vi) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of FSI, enforceable against FSI 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; and
(vii) It is registered as a transfer agent under Xxxxxxx 00X xx xxx 0000
Xxx.
(x) The Fund represents and warrants to FSI that:
(i) It is a business trust duly organized and existing and in good standing
under the laws of the District of Columbia;
(ii) It is empowered under applicable laws and by its By-Laws to enter into
this Agreement and perform its duties under this Agreement;
(iii) All requisite corporate proceedings have been taken to authorize it
to enter into this Agreement and perform its duties under this Agreement;
(iv) It is an open-end management investment company registered under the
1940 Act;
(v) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of the Fund, enforceable against the Fund 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; and
(vi) A registration statement under the Securities Act is currently
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 Funds and Classes of the Fund being offered for sale.
SECTION 9. PROPRIETARY INFORMATION
(a) The Fund acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals maintained by FSI on
8
databases under the control and ownership of FSI or a third party constitute
copyrighted, trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to FSI or the third party. The
Fund agrees to treat all Proprietary Information as proprietary to FSI and
further agrees that it shall not divulge any Proprietary Information to any
person or organization except as may be provided under this Agreement.
(b) FSI acknowledges that the Shareholder list and all information related
to Shareholders furnished to FSI by the Fund or by a Shareholder in connection
with this Agreement (collectively, "Customer Data") constitute proprietary
information of substantial value to the Fund. In no event shall Proprietary
Information be deemed Customer Data. FSI agrees to treat all Customer Data as
proprietary to the Fund and further agrees that it shall not divulge any
Customer Data to any person or organization except as may be provided under this
Agreement or as may be directed by the Fund.
SECTION 10. INDEMNIFICATION
(a) FSI shall not be responsible for, and the Fund shall on behalf of each
applicable Fund or Class thereof indemnify and hold FSI harmless from and
against, any and all losses, damages, costs, charges, reasonable counsel fees,
payments, expenses and liability arising out of or attributable to:
(i) all actions of FSI or its agents 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;
(ii) the Fund's lack of good faith or the Fund's negligence or willful
misconduct;
(iii) the reliance on or use by FSI or its agents or subcontractors of
information, records, documents or services which have been prepared,
maintained or performed by the Fund or any other person or firm on behalf
of the Fund, including but not limited to any previous transfer agent or
registrar;
(iv) the reasonable reliance on, or the carrying out by FSI or its agents
or subcontractors of, any instructions or requests of the Fund on behalf of
the applicable Fund, so long as these instructions or requests are believed
to be genuine; and
(v) 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.
(b) FSI shall indemnify and hold harmless the Fund and each Fund or Class
thereof from and against any and all losses, damages, costs, charges, reasonable
counsel fees, payments, expenses and liability arising out of or attributable to
any action or failure or omission to act by FSI as a result of FSI's lack of
good faith, negligence or willful misconduct with respect
9
to the services performed under or in connection with this Agreement; provided,
however, that FSI shall indemnify and hold the Fund and each Fund or Class
thereof harmless from and against any and all losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liability with regard to "as of"
adjustments arising out of or attributed to any processing of Shareholder
purchase and redemption requests at an incorrect NAV as a result of FSI's lack
of good faith, negligence or willful misconduct as follows:
(i) FSI shall reimburse each applicable Fund (or Class) for any net losses
to the Fund (or Class) during each NAV Error Period resulting from an NAV
Difference that is at least $0.01 per Fund share. FSI shall reimburse the
Fund (or Class) and each Fund (or Class) shareholder for any losses
experienced by the Fund or any Fund shareholder, as applicable, during each
NAV Error Period resulting from an NAV Difference that is at least $0.01
per Fund share and that, as a percentage of Recalculated NAV of such Fund
(or Class), is at least 1/2 of 1%; provided, however, that FSI shall not be
responsible for reimbursing any Fund with respect to any shareholder that
experiences an aggregate loss during any NAV Error Period of less than $10.
(ii) For purposes of this Agreement, (1) the NAV Difference shall mean the
difference between the NAV at which a shareholder purchase or redemption
should have been effected ("Recalculated NAV") and the NAV at which the
purchase or redemption is effected, (2) NAV Error Period shall mean any
Fund business day or series of two or more consecutive Fund business days
during which an NAV Difference of $0.01 per Fund share or more exists, (3)
NAV Differences and any FSI liability therefrom are to be calculated each
time a Fund's (or Class's) NAV is calculated, (4) in calculating any amount
for which FSI would otherwise be liable under this Agreement for a
particular NAV error, Fund (or Class) losses and gains shall be netted and
(5) in calculating any amount for which FSI would otherwise be liable under
this Agreement for a particular NAV error that continues for a period
covering more than one NAV determination, Fund (or Class) losses and gains
for the period shall be netted.
(iii) In the event that the SEC policy with respect to the error
correction, as reflected herein, changes any time after the date hereof the
more restrictive of the provisions of the revised SEC policy, or the terms
of this Agreement shall govern, so that the Fund and/or shareholders
affected by the error shall receive the greater of the amounts due under
the Agreement or the revised SEC policy.
(c) At any time FSI may apply to any officer of the Fund for instructions,
and may consult with legal counsel to the Fund or to FSI with respect to any
matter arising in connection with the services to be performed by FSI under this
Agreement, and FSI and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund on behalf of the applicable Fund for any action
taken or omitted by it in reasonable reliance upon such instructions or upon the
advice of such counsel. FSI, its agents and subcontractors shall be protected
and indemnified in acting upon (i) any paper or document furnished by or on
behalf of the Fund, reasonably believed by FSI to be genuine and to have been
signed by the proper person or persons, (ii) any instruction, information, data,
records or documents provided FSI or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means
10
reasonably believed by FSI to be authorized by the Fund, and (iii) any
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, reasonably believed by FSI to be genuine and to have been
given by the proper person or persons. FSI shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. FSI, 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 officers of the Fund, and
the proper countersignature of any former transfer agent or former registrar or
of a co-transfer agent or co-registrar of the Fund.
(d) If the Fund has the ability to originate electronic instructions to FSI
in order to (i) effect the transfer or movement of cash or Shares or (ii)
transmit Shareholder information or other information, then in such event FSI
shall be entitled to rely on the validity and authenticity of such instruction
without undertaking any further inquiry as long as such instruction is
undertaken in conformity with security procedures established by FSI from time
to time.
(e) The Fund has authorized or in the future may authorize FSI to act as a
"Mutual Fund Services Member" for the Fund or various Funds. Fund/SERV and
Networking are services sponsored by the National Securities Clearing
Corporation ("NSCC") and as used herein have the meanings as set forth in the
then current edition of NSCC Rules and Procedures published by NSCC or such
other similar publication as may exist from time to time. The Fund shall
indemnify and hold FSI harmless from and against any and all losses, damages,
costs, charges, reasonable counsel fees, payments, expenses and liability
arising directly or indirectly out of or attributed to any action or failure or
omission to act by NSCC.
(f) In order that the indemnification provisions contained in this Section
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 in writing 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 or to defend
against said claim in its own name or in the name of the other party. 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.
SECTION 11. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each Fund or
Class on the later of the date on which the Fund's Registration Statement
relating to the Shares of the Fund or Class becomes effective or the date of the
commencement of operations of the Fund or Class. Upon effectiveness of this
Agreement, it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have been
deemed to relate to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund until
terminated; provided, that continuance is specifically approved at least
annually (i) by the Board or by a vote
11
of a majority of the outstanding voting securities of the Fund and (ii) by a
vote of a majority of trustees of the Fund who are not parties to this Agreement
or interested persons of any such party (other than as trustees of the Fund).
(c) This Agreement may be terminated with respect to a Fund at any time,
without the payment of any penalty (i) by the Board on sixty (60) days' written
notice to FSI or (ii) by FSI on sixty (60) days' written notice to the Fund. Any
termination shall be effective as of the date specified in the notice or upon
such later date as may be mutually agreed. Upon notice of termination of this
Agreement by either party, FSI shall promptly transfer to the successor transfer
agent the original or copies of all books and records maintained by FSI under
this Agreement including, in the case of records maintained on computer systems,
copies of such records in machine-readable form, and shall cooperate with, and
provide reasonable assistance to, the successor transfer agent in the
establishment of the books and records necessary to carry out the successor
transfer agent's responsibilities.
(d) The obligations of Sections 3, 7, 8, 9, 10, 14, 15, and 17 shall
survive any termination of this Agreement.
SECTION 12. ADDITIONAL FUNDS AND CLASSES
In the event that the Fund establishes one or more series of Shares or one
or more classes of Shares after the effectiveness of this Agreement, such series
of Shares or classes of Shares, as the case may be, shall become Funds and
Classes under this Agreement. FSI or the Fund may elect not to make any such
series or classes subject to this Agreement.
SECTION 13. ASSIGNMENT
Except as otherwise provided in this Agreement, neither this Agreement nor
any rights or obligations under this Agreement may be assigned by either party
without the written consent of the other party. This Agreement shall inure to
the benefit of and be binding upon the parties and their respective permitted
successors and assigns. FSI may, without further consent on the part of the
Fund, subcontract for the performance hereof with any entity, including
affiliated persons of FSI; provided however, that FSI shall be as fully
responsible to the Fund for the acts and omissions of any subcontractor as FSI
is for its own acts and omissions.
SECTION 14. FORCE MAJEURE
FSI shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdowns, flood or
catastrophe, acts of God, insurrection, terrorist activity, war, riots or
failure of the mails or any transportation medium, communication system or power
supply, provided, however, that FSI shall maintain industry standard disaster
recovery policies.
12
SECTION 15. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The trustees of the Fund and the shareholders of each Fund shall not be
liable for any obligations of the Fund or of the Funds under this Agreement, and
FSI agrees that, in asserting any rights or claims under this Agreement, it
shall look only to the assets and property of the Fund to which FSI's rights or
claims relate in settlement of such rights or claims, and not to the Directors
of the Fund or the shareholders of the Funds.
SECTION 16. TAXES
FSI shall not be liable for any taxes, assessments or governmental charges
that may be levied or assessed on any basis whatsoever in connection with the
Fund or any Shareholder or any purchase of Shares, excluding taxes assessed
against FSI for compensation received by it under this Agreement.
SECTION 17. ANTI MONEY LAUNDERING POLICIES
FSI agrees to maintain in effect appropriate policies and procedures
sufficient to ensure compliance with federal anti-money laundering laws and
regulations and will make such policies and procedures available for inspection
by the Fund upon request.
SECTION 18. MISCELLANEOUS
(a) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
(b) Except to add new Funds and Classes in accordance with Section 12, no
provisions of this Agreement may be amended or modified in any manner except by
a written agreement properly authorized and executed by both parties hereto.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Virginia.
(d) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid. This Agreement shall be construed as if drafted jointly by both FSI and
the Fund and no presumptions shall arise favoring any party by virtue of
authorship of any provision of this Agreement.
13
(g) Section and paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
(h) Notices, requests, instructions and communications received by the
parties at their respective principal addresses, or at such other address as a
party may have designated in writing, shall be deemed to have been properly
given.
(i) Nothing contained in this Agreement is intended to or shall require
FSI, in any capacity hereunder, to perform any functions or duties on any day
other than a business day on which the New York Stock Exchange is open for
business. Functions or duties normally scheduled to be performed on any day
which is not a business day on which the New York Stock Exchange is open shall
be performed on, and as of, the next business day, unless otherwise required by
law.
(j) Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Series of the Fund are separate
and distinct from the assets and liabilities of each other Series and that no
Series shall be liable or shall be charged for any debt, obligation or liability
of any other Series, whether arising under this Agreement or otherwise.
(k) No affiliated person (as that term is defined in the 1940 Act),
employee, agent, director, officer or manager of FSI shall be liable at law or
in equity for FSI's obligations under this Agreement.
(l) Each of the undersigned expressly warrants and represents that they
have full power and authority to sign this Agreement on behalf of the party
indicated and that their signature will bind the party indicated to the terms
hereof and each party hereto warrants and represents that this Agreement, when
executed and delivered, will constitute a legal, valid and binding obligation of
the party, enforceable against the party 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.
(m) The terms and "affiliated person," "assignment" and "vote of a majority
of the outstanding voting securities" shall have the meanings ascribed thereto
in the 1940 Act.
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
persons, as of the day and year first above written.
AMERITOR SECURITY TRUST
By:
-------------------------------------
FUND SERVICES, INC.
By:
-------------------------------------
15
Attachment A
FEE SCHEDULE
Fees for Transfer Agent services, per portfolio or class, are as shown below:
10 Basis points of Average Daily Net Assets on the first $50,000,000.00
8 Basis points of Average Daily Net Assets on the next $50,000,000.00
6 Basis points of Average Daily Net Assets on assets over $100,000,000.00
Minimum annual fee is $12,000.00.
Fees are payable monthly at 1/12 the annual rate.
For new share classes established within a Portfolio, fees will be billed at the
10 basis point rate until the annual fees for that class exceed the $12,000.00
minimum or until the new class has been active for a period of two years,
whichever occurs first.
Voice Response Unit (VRU) Fees:
Set up fee: $ 1,000.00
Monthly Maintenance Fee: $ 250.00/month
Per call fees: $ 0.15/call
Internet Access (look-up only):
Set up fee: $ 1,500.00
Monthly Maintenance Fee: $ 750.00/month
Out of pocket expenses are in addition to the above rates and will be billed
monthly, as incurred, with no xxxx-up or set-off. Out of pocket expense items
include, but are not limited to: fund documents (shareholder transaction or
periodic statements, tax forms, check stock, proxy statements, envelopes, etc.),
postage, telephone expense (800 numbers, fund-related long distance charges,
facsimile telephone expense), outside mailing services (when necessary),
printing/duplicating costs, etc.
The one-time set-up fee - $1,000.00.
The charge for conversion of data files from the current Transfer Agent system
to FSI's system will be $2.50/account plus out of pocket expenses. The cost of
any special programming or systems development required will be included in the
out of pocket expenses.
16
