FUND SERVICES, INC. TRANSFER AGENCY AND SERVICES AGREEMENT
FUND
SERVICES, INC.
This
TRANSFER AGENCY AND SERVICES AGREEMENT is made as of this 7th day
of February, 2008, by and between Z-Seven Fund, Inc. (the “Company”), a
corporation duly organized and existing under the laws of the State of Maryland,
and Fund Services, Inc. (“FSI”), a corporation duly organized and existing under
the laws of the Commonwealth of Virginia.
WHEREAS, the Company is
registered as a non-diversified open-end management investment company under the
Investment Company Act of 1940, as amended (the “1940 Act”), and may issue its
shares of common stock with a par value of one dollar ($1.00) per share in
separate series and classes; and
WHEREAS, the Company currently
offers shares of beneficial interest (“shares”) in one series (herein referred
to as the “Fund”);
WHEREAS, the Company desires
that FSI serve as the transfer agent and dividend disbursing agent for the Fund
and FSI is willing to provide these services on the terms and conditions set
forth in this Agreement;
NOW THEREFORE, in
consideration of the mutual covenants and agreements contained herein, the
parties hereto, intending to be legally bound, agree as follows:
Section
1. Appointment. The
Company hereby appoints FSI to act as, and FSI agrees to act as, (i) transfer
agent for the authorized and issued Shares of the Fund, (ii) dividend disbursing
agent and (iii) agent in connection with any accumulation, open-account or
similar plans provided to the registered owners of Shares of the Fund
(“Shareholders”) and set out in the currently effective prospectus and statement
of additional information of the Fund (collectively, as currently in effect and
as amended or supplemented, the “Prospectus”), including, without limitation,
any periodic investment plan or periodic withdrawal program and FSI hereby
accepts such appointment.
Section 2. Delivery of Documents and
Other Information. In connection therewith, the Company has
delivered to FSI copies of (i) the Company’s Articles of Incorporation, as
amended and supplemented, and By-Laws (collectively, as amended from time to
time, “Organizational Documents”), (ii) the Company’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, (iv) each current plan of distribution or similar document adopted
by the Company 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 Company with respect to
the Fund, and shall promptly furnish FSI with all amendments of or supplements
to the foregoing. The Company shall deliver to FSI a certified copy
of the resolution(s) of the Board of Directors of the Company (the “Board”)
appointing FSI and authorizing the execution and delivery of this
Agreement.
Prior to the commencement of FSI’s
responsibilities under this Agreement, if applicable, the Company shall deliver
or cause to be delivered to FSI (i) an accurate list of Shareholders of the
Company, 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”).
Section
3. Duties. FSI agrees that in
accordance with procedures established from time to time by the Company on
behalf of the Fund, as applicable, FSI shall perform the
services set forth in Schedule A hereto. FSI may subcontract with
third parties to perform certain of the services required to be performed by FSI
hereunder, provided, however, that FSI shall remain principally responsible to
the Company for the acts and omissions of such other entities.
Except
with respect to FSI’s duties as set forth in this Agreement and except as
otherwise specifically provided herein, the Company assumes all responsibility
for ensuring that the Fund complies with all applicable requirements of the
Securities Act, the 1940 Act, the USA PATRIOT Act of 2001 (“USA PATRIOT Act”)
and any other laws, rules and regulations of governmental authorities with
jurisdiction over the Fund.
Section 4. Compensation and
Expenses. The Company agrees to pay FSI compensation for its
services provided pursuant to this Agreement, as set forth in Schedule C hereto,
or as shall be set forth in amendments to such schedule approved by the Board of
Directors of the Company (the “Board”) and FSI. Fees will begin to
accrue for the 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, 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 Fund (and other clients serviced by FSI).
In
connection with the services provided by FSI pursuant to this Agreement, the
Company, on behalf of the Fund, agrees to reimburse FSI for the expenses set
forth in Schedule C hereto. In addition, the Company, on behalf of
the Fund, shall reimburse FSI for all reasonable expenses and employee time (at
150% of salary)
attributable to any review of the Company’s accounts and records by the
Company’s independent accountants or any regulatory body outside of routine and
normal periodic reviews.
All fees
and reimbursements are payable in arrears on a monthly basis and the Company, on
behalf of the Fund, agrees to pay all fees and reimbursable expenses within five
(5) business days
following receipt of the respective billing notice.
Section
5. Recordkeeping. FSI
shall create and maintain all records required by applicable laws, rules and
regulations, including but not limited to records required by Section 31(a) of
the 1940 Act and the rules thereunder, as they may be amended from time to time,
pertaining to the various functions FSI performs under this Agreement and which
are not otherwise created or maintained by another party pursuant to contract
with the Company. All such records shall be the property of the
Company 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 Company’s request. The
Company and the Company’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
Company, copies of any such records shall be provided promptly by FSI to the
Company or the Company’s authorized representatives.
In case
of any requests or demands for the inspection of the Shareholder records of the
Company, FSI will endeavor to notify the Company and to secure instructions from
an authorized officer of the Company as to such inspection. FSI shall abide by
the Company’s instructions for granting or denying the inspection; provided,
however, that FSI may grant the inspection regardless of the Company’s
instructions if FSI is advised by counsel to FSI that failure to do so will
result in liability to FSI.
Section
6. Issuance and
Transfer of Shares. FSI shall make original issues of Shares
of the Fund in accordance with the Fund’s 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.
Transfers
of Shares of the Fund 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.
Section
7. Share
Certificates. The Company shall furnish to FSI a supply of
blank share certificates of the Fund 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 Company authorized to sign by the
Organizational Documents of the Company and, if required by the Organizational
Documents, shall bear the Company’s seal or a facsimile thereof. Unless
otherwise directed by the Company, 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 Company.
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 Company and
fully indemnified by the Company to FSI’s satisfaction.
In the
event that the Company informs FSI that the Fund 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.
Section 8. Share Purchases. Shares shall be issued
in accordance with the terms of the Prospectus after FSI or its agent receives
either:
(i) (A)
an instruction directing investment in the Fund, (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.
Section
9. Eligibility to Receive
Redemptions. Shares issued in the 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.
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 Fund:
(i) for
a wire received, at the time of the receipt of the wire;
(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
10. Representations
and Warranties of FSI. FSI represents and warrants to the Company
that:
(i) It
is a corporation duly organized and existing and in good standing under the laws
of the Commonwealth of Virginia;
(ii) It
is duly qualified to carry on its business in the Commonwealth of
Virginia;
(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 Section 17A of the 1934
Act.
Section
11. Representations
and Warranties of the Company. The Company represents and
warrants to FSI that:
(i) It
is a corporation duly organized and existing and in good standing under the laws
of the state of Maryland;
(ii) It
is empowered under applicable laws and by its Organizational Documents 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 Company, enforceable against the Company 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
Fund.
Section 12. Proprietary Information;
Confidentiality. The Company acknowledges
that the databases, computer programs, screen formats, report formats,
interactive design techniques, and documentation manuals maintained by FSI on
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
Company 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.
FSI
agrees on behalf of itself and its employees to treat confidentially all records
and other information relative to the Company and its shareholders received by
FSI in connection with this Agreement, including any non-public personal
information as defined by Regulation S-P, and that it shall not use or disclose
any such information except for the purpose of carrying out the terms of this
Agreement; provided, however, that FSI may disclose such information as required
by law or in connection with any requested disclosure to a regulatory authority
with appropriate jurisdiction after prior notification to, and approval of the
Company.
Upon
termination of this Agreement, each party shall return to the other party all
copies of confidential or Proprietary Information received from such other party
hereunder, other than materials or information required to be retained by such
party under applicable laws or regulations. Each party hereby agrees
to dispose of any “consumer report information,” as such term is defined in
Regulation S-P.
Section
13. Indemnification. FSI shall not be responsible
for, and the Fund shall indemnify and hold FSI harmless from and against, any
and all losses, damages, costs, charges, reasonable counsel fees (including the
defense of any law suit in which the Transfer Agent or affiliate is a named
party), payments, expenses and liability arising out of or attributable
to:
(a) 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
gross negligence, reckless disregard or willful misconduct;
(b) The
lack of good faith, gross negligence or willful misconduct of the
Company;
(c) The
reliance upon, and any subsequent use of or action taken or omitted, by FSI, or
its agents or subcontractors on: (i) the Materials or any other information,
records, documents, data, stock certificates or services, which are received by
FSI or its agents or subcontractors by machine readable input, facsimile, CRT
data entry, electronic instructions or other similar means authorized by the
Fund, and which have been prepared, maintained or performed by the Company or
any other person or firm on behalf of the Company; (ii) any instructions or
requests of the Company or any of its officers; (iii) any instructions or
opinions of legal counsel with respect to any matter arising in connection with
the services to be performed by FSI under this Agreement which are provided to
FSI after consultation with such legal counsel; or (iv) any paper or document,
reasonably believed to be genuine, authentic, or signed by the proper person or
persons;
(d) The
offer or sale of Shares in violation of federal or state securities laws or
regulations requiring that such Shares be registered or in violation of any stop
order or other determination or ruling by any federal or any state agency with
respect to the offer or sale of such Shares;
(e) The
processing of any checks or wires, including without limitation for deposit into
the Company’s demand deposit account maintained by FSI; or
(h) The
breach of any representation or warranty set forth in Section 11
above.
The Company shall not be responsible
for, and FSI shall indemnify and hold the Fund, its Board, officers, employees
and agents, harmless from and against any losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liability arising directly out
of or attributable to any action or failure of FSI to act as a result of FSI’s
lack of good faith, gross negligence or willful misconduct in the performance of
its services hereunder or the breach of any representation or warranty set forth
in Section 10 above.
In order that the indemnification
provisions contained in this Section 13 shall apply, upon the assertion of an
indemnification claim, the party seeking the indemnification shall promptly
notify the other party of such assertion, and shall keep the other party advised
with respect to all developments concerning such claim. The Company shall have
the option to participate with FSI in the defense of such claim or to defend
against said claim in its own name or that of FSI. 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
indemnifying party’s written consent, which consent shall not be unreasonably
withheld.
Section 14. Standard of Care/Limitation
of Liability.
(a) FSI shall be under no
duty to take any action on behalf of the Company except as necessary to fulfill
its duties and obligations as specifically set forth herein or as may be
specifically agreed to by FSI in writing. FSI shall at all times act
in good faith and agrees to use its best effect within reasonable limits to
ensure the accuracy of all services performed under this Agreement, but assumes
no responsibility for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from FSI’s, its employees’ or
its agents’ willful misfeasance, bad faith or gross negligence in the
performance of FSI’s duties under this Agreement, or by reason of reckless
disregard of FSI’s, its employees’ or its agents’ obligations and duties
hereunder. Notwithstanding the foregoing, the limitation on FSI’s
liability shall not apply to the extent any loss or damage results from any
fraud committed by FSI or any intentionally bad or malicious acts (that is, acts
or breaches undertaken purposefully under circumstances in which the person
acting knows or has reason to believe that such act or breach violates such
person’s obligations under this Agreement or can cause danger or harm) of
FSI.
(b) Without
limiting the generality of the foregoing or of any other provision of this
Agreement, (i) FSI shall not be liable for losses beyond its control, provided
that FSI has acted in accordance with the standard of care set forth above; and
(ii) FSI shall not be liable for (A) the validity or invalidity or authority or
lack thereof of any oral or written instructions provided by the Company, notice
or other instrument which conforms to the applicable requirements of this
Agreement, and which FSI reasonably believes to be genuine; or (B) subject to
Section 21, delays or errors or loss of data occurring by reason of
circumstances beyond FSI’s control, including fire, flood, catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
(c) With
respect to a Fund that does not value its assets in accordance with Rule 2a-7
under the 1940 Act (a money market fund), notwithstanding anything to the
contrary in this Agreement, FSI shall not be liable to the Company or any
shareholder of the Company for (i) any loss to the Company if a NAV Difference
for which FSI would otherwise be liable under this Agreement is less than $0.01
per Fund share or (ii) any loss to a shareholder of the Company if the NAV
Difference for which FSI would otherwise be liable under this Agreement is less
than or equal to 0.005 (1/2 of 1%) or if the loss in the shareholder’s account
with the Company is less than or equal to $10. Any loss for which FSI is
determined to be liable hereunder shall be reduced by the amount of gain which
inures to shareholders, whether to be collected by the Company or
not.
For purposes of this Agreement: (i)
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; (ii) NAV
Differences and any FSI or other responsible party liability therefrom are to be
calculated each time the Fund’s NAV is calculated; (iii) in calculating any NAV
Difference for which FSI would otherwise be liable under this Agreement for a
particular NAV error, Fund losses and gains shall be netted; and (iv) in
calculating any NAV Difference 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 losses and gains for the Fund’s fiscal
year shall be netted.
Section
15. Effectiveness. This Agreement shall
become effective as of the date first above written. 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 Fund.
Section
16. Holidays. Except
as required by laws and regulations governing investment companies, 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 or other day of
special observance on which FSI 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 Company and FSI are
open. FSI will be open for business on days when the Company is open
for business and/or as otherwise set forth in the Fund’s prospectus and
Statement of Additional Information.
Section 17. Termination. This
Agreement shall continue in effect with respect to the Fund until terminated;
provided, that continuance is specifically approved at least annually (i) by the
Board or by a vote of a majority of the outstanding voting securities of the
Fund and (ii) by a vote of a majority of Directors of the Fund who are not
parties to this Agreement or interested persons of any such party (other than as
Directors of the Fund).
This
Agreement may be terminated by either party at any time, without the payment of
a penalty upon ninety (90) days’ written notice to other party. Any
termination shall be effective as of the date specified in the notice or upon
such later date as may be mutually agreed upon by the parties. 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. If this
Agreement is terminated by the Company, the Company shall be responsible for all
out-of-pocket expenses or costs associated with the movement of records and
materials to the successor transfer agent and providing assistance to any
successor person in the establishment of the accounts and records necessary to
carry out the successor’s responsibilities. Additionally, FSI
reserves the right to charge for any other reasonable expenses associated with
such termination.
Section 18. Survival. The
obligations of Sections 4, 5, 10, 11, 12, 13, 14, 20, 21, 22, 24, 26, 27, 29 and
32 shall survive any termination of this Agreement.
Section
19. Additional Funds
and Classes. In the event that the Company establishes one or
more series of Shares or one or more classes of Shares after the effectiveness
of this Agreement, such series or classes, as the case may be, shall each become
a Fund and a Class under this Agreement. FSI or the Company may elect
not to make any such series or classes subject to this Agreement.
Section
20. Assignment; Third
Party Beneficiaries. This Agreement shall extend to and shall be binding
upon the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable 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. For the avoidance of doubt, a transaction
involving a merger or sale of substantially all of the assets of the Fund shall
not require the written consent of FSI.
Section 21. Force Majeure. In the event either
party is unable to perform its obligations under the terms of this Agreement
because of acts of God, acts of war or terrorism, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes; provided, however, that this provision shall not imply that FSI is
excused from maintaining reasonable business continuity plans to address
potential service outages.
Section
22. Limited
Recourse. FSI hereby acknowledges
that the Fund’s obligations hereunder with respect to the Shares are binding
only on the assets and property belonging to the Fund. The
obligations of the parties hereunder shall not be binding upon any of the
Directors, shareholders, nominees, officers, agents or employees of the Fund
personally, but shall bind only the property of the Fund. The
execution and delivery of this agreement by such officers shall not be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the Fund’s property.
Notwithstanding
any other provision of this Agreement, the parties agree that the assets and
liabilities of the Fund are separate and distinct from the assets and
liabilities of any subsequent fund of the Company and that no fund of the
Company shall be liable or shall be charged for any debt, obligation or
liability of any other Fund, whether arising under this Agreement or
otherwise.
Section
23. 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 Company or any
Shareholder or any purchase of Shares, excluding taxes assessed against FSI for
compensation received by it under this Agreement.
Section
24. Consequential
Damages. Notwithstanding anything in this Agreement to the
contrary, neither party shall be liable to the other party for consequential,
special or indirect losses or damages under any provision of this Agreement,
whether or not the likelihood of such losses or damages was known by either
party.
Section
25. Amendments.
This Agreement may be amended from time to time by a writing executed by the
Company and FSI.
Section
26. Governing
Law. This Agreement shall be governed by and construed to be
in accordance with the laws of the State of Maryland, without reference to
choice of law principles thereof, and in accordance with the applicable
provisions of the 1940 Act. To the extent that the applicable laws of
the State of Maryland, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
Section
27. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, understandings
and arrangements with respect to the subject matter hereof.
Section
28. Execution
in Counterparts. This
Agreement may be executed in two or more counterparts, each of which, when so
executed, shall be deemed to be an original, but such counterparts shall
together constitute but one and the same instrument.
Section
29. Severability. 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.
Section
30. Services Not
Exclusive. The services of FSI to the Company are not deemed
exclusive, and FSI shall be free to render similar services to others, to the
extent that such service does not affect FSI’s ability to perform its duties and
obligations hereunder.
Section
31. Headings. All
Section headings contained in this Agreement are for convenience of reference
only, do not form a part of this Agreement and will not affect in any way the
meaning or interpretation of this Agreement. Words used herein,
regardless of the number and gender specifically used, will be deemed and
construed to include any other number, singular or plural, and any other gender,
masculine, feminine, or neuter, as the contract requires.
Section
32. Waiver. Any
term or provision of this Agreement may be waived at any time by the party
entitled to the benefit thereof by written instrument executed by such
party. No failure of either party hereto to exercise any power or
right granted hereunder, or to insist upon strict compliance with any obligation
hereunder, and no custom or practice of the parties with regard to the terms of
performance hereof, will constitute a waiver of the rights of such party to
demand full and exact compliance with the terms of this Agreement.
Section 33. Notice. 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 at their
last known address. Notices to the Company shall be directed to 0000
Xxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Mr. Xxxx
Xxxxx, III; and notices to FSI shall be directed to: 0000 Xxxxx Xxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Mr. Xxxx Xxxxx,
III.
1-WA/2600256.8
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by
their duly authorized officers as of the day and year first above
written.
Z-SEVEN FUND, INC.
By: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
President
FUND SERVICES, INC.
By: /s/ Xxxx Xxxxx, III
Xxxx Xxxxx, III
President
1-WA/2600256.8
Schedule
A
to
the
between
Z-Seven
Fund, Inc. (the “Company”) and
Fund
Services, Inc. (“FSI”)
Dated
as of February 7, 2008
Services to be Provided by
FSI:
(a) FSI
agrees that in accordance with procedures established from time to time by
agreement between the Company on behalf of the Fund, 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, and (I) providing Shareholder account
information;
(ii) receive
for acceptance orders for the purchase of Shares and promptly deliver payment
and appropriate documentation therefore to the custodian of the 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
therefore 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;
(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
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 Company 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 Company, the Fund, that are authorized, based
upon data provided to it by the Company, and are issued and outstanding and
provide the Company 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 that will enable the Company to calculate the total number of Shares of
the Fund sold in each State;
(xiv) provide
necessary information to the Company to enable the Company to monitor and make
appropriate filings with respect to the escheatment laws of the various states
and territories of the United States;
(xv) oversee
the activities of proxy solicitation firms, if requested by the
Company;
(xvi) monitor
transactions in the Fund for market timing activity in accordance with the
Company’s policies and procedures, which may be amended from time to time;
and
(xvii) account
for and administer all shareholder account fees as provided in the Fund’s
Prospectus.
(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.
(c) The
Company 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 Company’s state registration status is solely limited to the reporting
of transactions to the Company, 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 Company or its administrator
or other agent.
(d) FSI
shall establish and maintain facilities and procedures reasonably acceptable to
the Company 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
Company for safekeeping of all records maintained by FSI pursuant to this
Agreement.
(e) FSI
shall cooperate with the 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) Anti-Money
Laundering (“AML”) Delegation. The Company has elected to delegate to
FSI certain AML duties under this Agreement and the parties have agreed to such
duties and terms as stated in the attached schedule (Schedule B entitled “AML
Delegation”), which may be changed from time to time subject to mutual written
agreement between the parties. FSI has adopted the necessary policies
and procedures, which are reasonably designed to carryout the AML Delegation,
and will provide a copy of such policies and procedures to the Company prior to
the commencement of this Agreement and will promptly provide the Company with
any material amendments thereto. FSI will strictly adhere to its
anti-money laundering procedures and controls.
A-
1-WA/2600256.8
Schedule
B
to
the
between
Z-Seven
Fund, Inc. (the “Company”) and
Fund
Services, Inc. (“FSI”)
Dated
as of February 7, 2008
AML
DELEGATION
|
1.
|
Delegation.
|
|
Subject
to the terms and conditions set forth in this Agreement, the Company
hereby delegates to FSI those aspects of the Company’s Anti-Money
Laundering Program (the “AML Program”) that are set forth in Section 4
below (the “Delegated Duties”). The Delegated Duties set forth in Section
4 may be amended, from time to time, by mutual agreement of the Company
and FSI upon the execution by such parties of a revised Schedule B bearing
a later date than the date hereof.
|
|
|
1.2
|
FSI
agrees to perform such Delegated Duties, with respect to the Fund
shareholders for which FSI maintains the applicable shareholder
information, subject to and in accordance with the terms and conditions of
this Agreement.
|
|
2.
|
Consent to
Examination. In connection with the performance by FSI
of the Delegated Duties, FSI understands and acknowledges that the Fund
remains responsible for assuring compliance with the USA PATRIOT Act of
2001 (“USA PATRIOT Act”) and the laws implementing the USA PATRIOT Act and
that the records FSI maintains for the Fund relating to the AML Program
may be subject, from time to time, to examination and/or inspection by
federal regulators in order that the regulators may evaluate such
compliance. FSI hereby consents to such examination and/or
inspection and agrees to cooperate with such federal regulators in
connection with their review. For purposes of such examination
and/or inspection, FSI will use its best efforts to make available, during
normal business hours and on reasonable notice, all required records and
information for review by such
regulators.
|
|
3.
|
Limitation on
Delegation. The Fund acknowledges and agrees that in
accepting the delegation hereunder, FSI is agreeing to perform only the
Delegated Duties, as may be amended from time to time, and is not
undertaking and shall not be responsible for any other aspect of the AML
Program or for the overall compliance by the Fund with the USA PATRIOT Act
or for any other matters that have not been delegated hereunder.
Additionally, the parties acknowledge and agree that FSI shall only be
responsible for performing the Delegated Duties with respect to the
accounts for which FSI maintains the applicable shareholder
information.
|
|
4.
|
Delegated
Duties.
|
|
4.1
|
Consistent
with the services provided by FSI and with respect to the applicable
shareholder information maintained by FSI, FSI
shall:
|
(a) Submit
all new account and registration maintenance transactions through the Office of
Foreign Assets Control (“OFAC”) database and such other lists or databases of
trade restricted individuals or entities as may be required from time to time by
applicable regulatory authorities;
(b) Submit
special payee checks through OFAC database;
(c) Review
redemption transactions that occur within thirty (30) days of account
establishment or maintenance;
(d) Review
wires sent pursuant to instructions other than those already on file with
FSI;
|
(e)
|
Review
accounts with small balances followed by large
purchases;
|
(f) Review
accounts with frequent activity within a specified date range followed by a
large redemption;
(g) On
a daily basis, review purchase and redemption activity per tax identification
number (“TIN”) within the Fund to determine if activity for that TIN exceeded
the $100,000 threshold on any given day;
(h) Compare
all new accounts and registration maintenance through the Known Offenders
database and notify the Company of any match.
(i) Monitor
and track cash equivalents under $10,000 for a rolling twelve-month period and
file any required reports with the IRS and issue the Shareholder notices
required by the IRS;
(j) Determine
when a suspicious activity report (“SAR”) should be filed as required by
regulations applicable to mutual funds and prepare and file the
SAR. Provide the Company with a copy of the SAR within a reasonable
time after filing; notify the Company if any further communication is received
from U.S. Department of the Treasury or other law enforcement agencies regarding
the SAR;
(k) Compare
account information to any FinCEN request received by the Company and provided
to FSI pursuant to USA PATRIOT Act Sec. 314(a). Provide the Company
with documents/information necessary to respond to requests under USA PATRIOT
Act Sec. 314(a) within required time frames;
(l) (i)
Verify the identity of any person seeking to open an account with the Fund, (ii)
maintain records of the information used to verify the person’s identity in
accordance with applicable regulations, (iii) determine whether the person
appears on any lists of known or suspected terrorists or terrorist organizations
provided to the Company by any government agency, and (iv) perform enhanced due
diligence with respect to any investor that FSI has reason to believe presents
high risk factors with regard to money laundering or terrorist financing, prior
to accepting an investment from such investor; and
(m) (i)
Monitor for any suspected money laundering activity with respect to
correspondent accounts for foreign financial institutions and private banking
accounts and report any such conduct required by applicable regulations, and
(ii) conduct due diligence on private banking accounts in the event that the
Fund changes its line of business in a manner that would involve the
establishment or maintenance of such accounts.
|
4.2
|
In
the event that FSI detects activity as a result of the foregoing
procedures, FSI shall timely file any required reports, promptly notify
appropriate government agencies and also immediately notify the Fund,
unless prohibited by applicable
law.
|
|
4.3
|
Recordkeeping.
FSI shall keep all records relating to the Delegated Duties for an
appropriate period of time and, at a minimum, the period of time required
by applicable law or regulation. FSI will provide the Company
with access to such records upon reasonable
request.
|
|
4.4
|
AML
Reporting to the Fund
|
|
(a)
|
On
a quarterly basis, FSI shall provide a report to the Fund on its
performance of the AML Delegated Duties, among other compliance items,
which report shall include information regarding the number
of: (i) potential incidents involving cash and cash equivalents
or unusual or suspicious activity, (ii) any required reports or forms that
have been filed on behalf of the Fund, (iii) outstanding customer
verification items, (iv) potential and confirmed matches against the known
offender and OFAC databases and (v) potential and confirmed matches in
connection with FinCen requests. Notwithstanding anything in
this Section 4.3(a) to the contrary, FSI reserves the right to amend and
update the form of its AML reporting from time to time to comply with new
or amended requirements of applicable
law.
|
|
(b)
|
At
least annually, FSI will arrange for independent testing (an audit) of the
AML services it provides to its clients on an organization-wide basis by a
qualified independent auditing firm. FSI will provide the AML
compliance officer of the Fund with the results of the audit and testing,
including any material deficiencies or weaknesses identified and any
remedial steps that will be taken or have been taken by FSI to address
such material deficiencies or
weaknesses.
|
|
(c)
|
On
an annual basis, FSI will provide the Fund with a written certification
that, among other things, it has implemented its AML Program and has
performed the Delegated Duties.
|
B-
1-WA/2600256.8
Amended
and Restated
Schedule
C-1
to
the
between
Z-Seven
Fund, Inc. (the “Company”) and
Fund
Services, Inc. (“FSI”)
Dated
as of December 5, 2008
FEE
SCHEDULE
The
greater of 6 basis points per year, or an annual maintenance fee of $16.00 per
open account and $3.00 per closed account; subject to an $18,000
annual minimum.
Internet
access for shareholder account look-up and broker account access, as well as VRU
(Voice Response Unit) access will be available to those portfolios wishing to
provide the service to their shareholders and/or brokers for an annual fee of
$9,000 per fund.
Out-of-pocket
expenses will be passed through as incurred, with no xxxx-up or set-off.
Out-of-pocket expenses include, but are not limited to:
Postage Forms
Telephone (Long Distance/800
Service) Mailing
House Expenses
Telephone (Dedicated
circuits) Proxy
Solicitation
Express
Charges Storage
Fees
Fund/SERV & Networking
Fees Bank
Account Maintenance Fees
FedWire/ACH/Swift
Fees Custom
Programming Costs
Special
Reports Conversion/Deconversion
Costs*
Special Training requested by
Fund SAS
70 Reporting
Annual AML
Review 22c-2
Compliance
Labor
costs associated with items covered under out-of-pocket provisions will be based
on the following schedule:
Principal/Officer $250.00/hr
Manager/Supervisor $175.00/hr
Programmer/Technical $150.00/hr
Administrative $75.00/hr
*Conversion
costs will be based on vendor per-account charges plus labor, billed at the
rates noted above.
C-
1-WA/2600256.8
