Exhibit (h)(1)(c)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
XXXXXX STATE TAX-FREE INCOME SERIES
and
XXXXXXX SERVICE CORPORATION
TRANSFER AGENCY AND SERVICE AGREEMENT
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AGREEMENT made as of February 1, 2001, by and between XXXXXX STATE
TAX-FREE INCOME SERIES, a Massachusetts business trust, having its principal
office and place of business at 000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000 (the "Trust") and XXXXXXX SERVICE CORPORATION, a Massachusetts
corporation, having its principal office and place of business at Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Agent").
WHEREAS, the Trust desires to appoint the Agent as a transfer
agent, dividend disbursing agent and agent in connection with certain other
activities on behalf of the Class S shares of each series of the Fund listed on
the attached Schedule A and the Agent desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1. Terms of Appointment: Duties of the Agent.
------------------------------------------
1.01. Subject to the terms and conditions set forth in this Agreement,
the Trust hereby employs and appoints the Agent to act as, and the Agent agrees
to act as, transfer agent for the Trust's authorized and issued Class S shares
of beneficial interest ("Shares") of each series of the Fund listed on the
attached Schedule A, dividend disbursing agent and agent in connection with any
accumulation, open-account or similar plans provided to the shareholders of the
Trust ("Shareholders") and set out in a currently effective prospectus
("Prospectus") or currently effective statement of additional information
("Statement of Additional Information") of the Trust, including without
limitation any periodic investment plan or periodic withdrawal program. The term
"Trust" shall be deemed to apply to each series of Shares, unless the context
otherwise requires.
1.02. The Agent agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Trust and the Agent, the Agent shall:
(i) Receive for acceptance orders for the purchase of
Shares and promptly deliver payment and appropriate
documentation thereof to the duly authorized custodian
of the Trust (the "Custodian").
(ii) Pursuant to orders for the purchase of Shares, record
the purchase of the appropriate number of Shares in the
Shareholder's account and, if requested by the
Shareholder, and if the Trustees of the Trust have
authorized the issuance of stock certificates, issue a
certificate for the appropriate number of Shares;
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(iii) Pursuant to instructions provided by Shareholders,
reinvest income dividends and capital gain
distributions;
(iv) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(v) Provide an appropriate response to Shareholders with
respect to all correspondence and rejected trades;
(vi) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the
redeeming Shareholders;
(vii) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(viii) Prepare and transmit payments for dividends and
distributions declared by the Trust ;
(ix) Report abandoned property to the various states as
authorized by the Trust in accordance with policies and
principles agreed upon by the Trust and Agent;
(x) Maintain records of account for and advise the Trust
and its Shareholders as to the foregoing;
(xi) Record the issuance of Shares of the Trust and maintain
an accurate control book with respect to Shares
pursuant to SEC Rule 17Ad-10(e) under the Securities
Exchange Act of 1934. The Agent shall also provide the
Trust on a regular basis with the total number of
Shares which are issued and outstanding and shall have
no obligation, when recording the issuance of Shares,
to monitor the issuance of such Shares or to take
cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole
responsibility of the Trust ;
(xii) Respond to all telephone inquiries from Shareholders or
their authorized representatives regarding the status
of Shareholder accounts;
(xiii) Respond to correspondence from Shareholders or their
authorized representatives regarding the status of
Shareholder accounts or information related to
Shareholder accounts; and
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(xiv) Perform all Shareholder account maintenance updates.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Agent shall: (i) perform the
customary services of a transfer agent, dividend disbursing agent and, as
relevant, agent in connection with accumulation, open-account or similar plans
(including without limitation any periodic investment plan or periodic
withdrawal program). The detailed definition, frequency, limitations and
associated costs (if any) set out in the attached fee schedule, include but are
not limited to: maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing proxy statements and proxies, receiving and tabulating
proxies, mailing shareholder reports and prospectuses to current Shareholders,
and withholding all applicable taxes (including but limited to all withholding
taxes imposed under the U.S. Internal Revenue Code and Treasury regulations
promulgated thereunder, and applicable state and local laws to the extent
consistent with good industry practice), preparing and filing U.S. Treasury
Department Forms 1099, Form 941 when applicable and other appropriate forms
required with respect to dividends, distributions and taxes withheld on
Shareholder accounts by federal authorities for all registered Shareholders,
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other conformable
transactions in Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information, (ii) provide
daily and monthly a written report and access to information which will enable
the Trust to monitor the total number of Shares sold and the aggregate public
offering price thereof in each State by the Trust , added by sales in each State
of the registered Shareholder or dealer branch office, as defined by the Trust,
and (iii) if directed by the Trust, (A) each confirmation of the purchase which
establishes a new account will be accompanied by a Prospectus and any amendment
or supplement thereto, and (B) a Prospectus, and any amendment or supplement
thereto, will be mailed to each Shareholder at the time a confirmation of the
first purchase by such Shareholder, subsequent to the effective date of a
Prospectus or any amendment or supplement thereto, is mailed to such
Shareholders.
(c) In addition, the Trust shall (i) identify to the Agent in writing
those transactions and assets to be treated as exempt from blue sky reporting to
the Trust for each state and (ii) approve those transactions to be included for
each state on the blue sky program prior to activation and thereafter monitor
the daily activity for each state. The responsibility of the Agent for the
Trust's blue sky State registration and compliance status is solely limited to
the initial establishment of transactions subject to blue sky compliance by the
Trust and the reporting of such transactions as provided above.
(d) The Agent shall utilize a system to identify all share transactions
which involve purchase and redemption orders that are processed at a time other
than the time of the computation of net asset value per share next computed
after receipt of such orders, and shall compute the net effect upon the company
of such transactions so identified on a daily and cumulative basis.
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(e) The Agent shall supply to the Trust from time to time, as mutually
agreed upon, reports summarizing the transactions identified pursuant to
paragraph (d) above, and the daily and cumulative net effects of such
transactions, and shall advise the Trust at the end of each month of the net
cumulative effect at such time. The Agent shall promptly advise the Trust if at
any time the cumulative net effect exceeds a dollar amount equivalent to 1/2 of
1 cent per outstanding Share.
(f) The Agent shall make appropriate arrangements with banking
institutions in connection with effecting timely redemptions of shares by the
Write-a-Check redemption feature described in the Trust's Prospectus and
Statement of Additional Information, if applicable.
1.03. The Agent's offices, personnel and computer and other equipment
shall be adequate to perform the services contemplated by this Agreement for the
Trust and for other investment companies advised by Xxxxxxx Xxxxxx Investments,
Inc. and its affiliates. The Agent shall notify the Trust in the event that it
proposes to provide such services for any investment companies or other entities
other than those managed by Xxxxxxx Xxxxxx Investments, Inc. and its affiliates.
Article 2. Fees and Expenses
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2.01. For the performance by the Agent pursuant to this Agreement,
the Agent shall be paid an annual maintenance fee for each Shareholder account
as set out in a fee schedule agreed to by both parties in writing. Such fees and
out-of-pocket expenses and advances identified under Section 2.02 below may be
changed from time to time subject to mutual written agreement between the Trust
and the Agent, as approved by a majority of the Trustees who are not "interested
persons" (as defined in the Investment Trust Act of 1940) of the Trust.
2.02. In addition to the fee paid under Section 2.01 above, the Agent
shall be reimbursed for out-of-pocket expenses or advances incurred by the Agent
for the items set out in the fee schedule agreed to by both parties in writing.
In addition, any other expenses incurred by the Agent at the request or with the
consent of the Trust will be reimbursed.
2.03. All reimbursable expenses shall be paid promptly, the terms,
method and procedures for which are detailed on the fee schedule agreed to by
both parties in writing. Postage for mailing of dividends, proxy statements,
Trust reports and other mailings to all Shareholder accounts shall be advanced
to the Agent at least two (2) days prior to the mailing date of such materials.
2.04. The Trust may engage accounting firms or other consultants to
evaluate the fees paid to, and quality of services rendered by, the Agent
hereunder, and such firms or other consultants shall be provided access by the
Agent to such information as may be reasonably required in connection with such
engagement. The Agent will give due
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consideration and regard to the recommendations to the Trust in connection with
such engagement, but shall not be bound thereby.
3. Representations and Warranties of the Agent.
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The Agent represents and warrants to the Trust that:
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3.01. It is a corporation duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
3.02. It has the legal power and authority to carry on its business in The
Commonwealth of Massachusetts.
3.03. It is empowered under applicable laws and by its charter and by-laws
to enter into and perform this Agreement.
3.04. All requisite proceedings have been taken to authorize it to enter
into and perform this Agreement.
3.05. It is duly registered as a transfer agent under Section 17A of the
Securities Exchange Act of 1934, as amended.
3.06. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
Article 4. Representations and Warranties of the Trust.
--------------------------------------------
The Trust represents and warrants to the Agent that:
-----
4.01. It is a business trust duly organized and existing and in good
standing under the laws of Massachusetts.
4.02. It is empowered under applicable laws and by its Declaration of Trust
and By-Laws to enter into and perform this Agreement.
4.03. All proceedings required by said Declaration of Trust and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
4.04. It is an investment company registered under the Investment Company
Act of 1940, as amended.
4.05. A registration statement under the Securities Act of 1933 is
currently effective (or will be effective prior to commencement by the Agent of
performance of services hereunder) and will remain effective, and appropriate
state securities law filings have been made and/or will continue to be made,
with respect to all Shares of the Trust being offered for sale.
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Article 5. Indemnification
---------------
5.01. To the extent that the Agent acts in good faith and without
negligence or willful misconduct, the Agent shall not be responsible for, and
the Trust shall indemnify and hold the Agent harmless from and against, any and
all losses, damages, costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(a) All actions of the Agent or its agents or
subcontractors required to be taken and correctly
executed pursuant to this Agreement.
(b) The Trust's lack of good faith, negligence or willful
misconduct or which arise out of the breach of any
representation or warranty of the Trust hereunder.
(c) The reasonable reliance on or use by the Agent or its
agents or subcontractors of information, records and
documents or services which are received or relied upon
by the Agent or its agents or subcontractors and
furnished to it or performed by or on behalf of the
Trust.
(d) The reasonable reliance on, or the carrying out by the
Agent or its agents or subcontractors of, any written
instructions or requests of the Trust.
(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or
regulations, or the securities laws or regulations of
any state that such Shares be registered in such state,
or in violation of any stop order or other
determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares
in such state, unless such violation is the result of
the Agent's negligent or willful failure to comply with
the provisions of Section 1.02(b) of this Agreement.
5.02. The Agent shall indemnify and hold the Trust harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liabilities arising out of or attributable to the Agent's refusal
or failure to comply with the terms of this Agreement (whether as a result of
the acts or omissions of the Agent or of its agents or subcontractors) or
arising out of the lack of good faith, negligence or willful misconduct of the
Agent, or its agents or subcontractors, or arising out of the breach of any
representation or warranty of the Agent hereunder.
5.03. At any time the Agent may apply to any officer of the Trust for
instructions, and may consult with outside legal counsel with respect to any
matter arising in connection with the services to be performed by the Agent
under this Agreement, and the Agent and its agents or subcontractors shall not
be liable and shall be indemnified by the Trust for any action reasonably taken
or omitted by it in reliance upon such instructions or upon the opinion of such
counsel. The Agent, its agents and
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subcontractors shall be protected and indemnified in acting upon any paper
or document furnished by or on behalf of the Trust, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided to the Agent or
its agents or subcontractors by machine-readable input, telex, CRT data entry or
other similar means authorized by the Trust, and shall not be held to have
notice of any change of authority of any person, until receipt by the Agent of
written notice thereof from the Trust. The Agent, its agents and subcontractors
shall also be protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or facsimile signatures of the
officers of the Trust, and the proper countersignature of any former transfer
agent or registrar, or of a co-transfer agent or co-registrar.
5.04. In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable to the other for
any damages resulting from such failure to perform or otherwise from such
causes.
5.05. Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement, but each
shall be liable for general damages resulting from breach of this Agreement. For
the purposes of this Agreement, the term "general damages" shall include but
shall not be limited to:
(a) All costs of correcting errors made by the Agent or its
agents or subcontractors in Trust shareholder accounts,
including the expense of computer time, computer
programming and personnel;
(b) Amounts which the Trust is liable to pay to a person
(or his representative) who has purchased or redeemed,
or caused to be repurchased, Shares at a price which is
higher, in the case of a purchase, or lower, in the
case of a redemption or repurchase, than correct net
asset value per Share, but only to the extent that the
price at which such Shares were purchased, redeemed or
repurchased was incorrect as a result of either (i) one
or more errors caused by the Agent or its agents or
subcontractors in processing shareholder accounts of
the Trust or (ii) the posting by the Agent of the
purchase, redemption or repurchase of Shares subsequent
to the time such purchase, redemption or repurchase
should have been posted pursuant to laws and
regulations applicable to open-end investment
companies, if the delay is caused by the Agent, its
agents or subcontractors;
(c) The value of dividends and distributions which were not
credited on Shares because of the failure of the Agent
or its agents or subcontractors to timely post the
purchase of such Shares;
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(d) The value of dividends and distributions which were
incorrectly credited on Shares because of the failure
of the Agent or its agents or subcontractors to timely
post the redemption or repurchase of such Shares;
(e) The value of dividends and distributions, some portion
of which was incorrectly credited, or was not credited,
on Shares because of the application by the Agent or
its agents or subcontractor of an incorrect dividend or
distribution factor or otherwise;
(f) Penalties and interest which the Trust is required to
pay because of the failure of the Agent or its agents
or subcontractors to comply with the information
reporting and withholding (including backup
withholding) requirements of the Internal Revenue Code
of 1986, as amended, and applicable Treasury
regulations thereunder, applicable to Trust Shareholder
accounts: and
(g) Interest in accordance with the laws of The
Commonwealth of Massachusetts on any damages from the
date of the breach of this Agreement.
5.06. In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim or loss for which either
party may be required to indemnify the other, the party seeking indemnification
shall promptly notify the other party of such assertion or loss, 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
at its expense with the party seeking indemnification in the defense of such
claim. The party seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
5.07. Losses incurred by the Trust arising from the Agent effecting a share
transaction at a trade (pricing) date prior to the processing date shall be
governed by a separate agreement between the Agent and the Trust.
The obligations of the parties hereto under this Article 5 shall survive
the termination of this Agreement.
Article 6. Covenants of the Trust and the Agent.
-------------------------------------
6.01. The Trust shall promptly furnish to the Agent the following:
(a) A certified copy of the resolution of the Board of
Trustees of the Trust authorizing the appointment of
the Agent and the execution and delivery of this
Agreement.
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(b) A copy of the Declaration of Trust and By-Laws of the
Trust and all amendments thereto.
6.02. The Agent hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account, of such certificates,
forms and devices.
6.03. The Agent shall at all times maintain insurance coverage which is
reasonable and customary in light of its duties hereunder and its other
obligations and activities.
6.04. The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, (the
"Act") and the Rules thereunder, the Agent agrees that all such records prepared
or maintained by the Agent relating to the services to be performed by the Agent
hereunder and those records that the Trust and the Agent agree from time to time
to be the records of the Trust are the property of the Trust and will be
preserved, maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Trust on and in accordance with
its request. Records surrendered hereunder shall be in machine readable form,
except to the extent that the Agent has maintained such a record only in paper
form.
6.05. The Agent and the Trust agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential and shall not be voluntarily disclosed to any other person,
except as may be required by law.
6.06. In case of any requests or demands for the inspection of the
Shareholders records of the Trust, the Agent will endeavor to notify the Trust
and to secure instructions from an authorized officer of the Trust as to such
inspection. The Agent reserves the right, however, to exhibit the Shareholders
records to any person whenever it is reasonably advised by its counsel that it
may be held liable for the failure to exhibit the Shareholders records to such
person.
6.07. The Agent agrees to maintain or provide for redundant facilities or a
compatible configuration and to maintain or provide for backup of the Trust's
master and input files and to store such files in a secure off-premises location
so that in the event of a power failure or other interruption of whatever cause
at the location of such files the Trust's records are maintained intact and
transactions can be processed at another location.
6.08. The Agent acknowledges that the Trust, as a registered investment
company under the Act, is subject to the provisions of the Act and the rules and
regulations thereunder, and that the offer and sale of the Trust 's Shares are
subject to the
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provisions of federal and state laws and regulations applicable to the
offer and sale of securities. The Trust acknowledges that the Agent is not
responsible for the Trust's compliance with such laws and regulations. If the
Trust advises the Agent that a procedure of the Agent related to the discharge
of its obligations hereunder has or may have the effect of causing the Trust to
violate any of such laws or regulations, the Agent shall use its best efforts to
develop a mutually agreeable alternative procedure which does not have such
effect.
Article 7. Termination of Agreement.
-------------------------
7.01. This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
7.02. Should the Trust exercise its right to terminate, all reasonable
out-of-pocket expenses of the Agent associated with the movement of records and
materials required by this Agreement will be borne by the Trust . Additionally,
the Agent reserves the right to charge for any other reasonable expenses
associated with such termination.
Article 8. Additional Series.
-----------------
8.01. In the event that the Trust establishes one or more series of Shares
with respect to which it desires to have the Agent render services as transfer
agent under the terms hereof, it shall so notify the Agent in writing, and
unless the Agent objects in writing to providing such services, the term "Trust
" hereunder, unless the context otherwise requires, shall be deemed to include
each such series of Shares. All recordkeeping and reporting shall be done
separately for each series. Unless the Trust and the Agent agree to an amended
fee schedule, the fee schedule attached hereto shall apply to each series
separately.
Article 9. Assignment.
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9.01. Except as provided in Section 9.03 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
9.02. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
9.03. The Agent may, with notice to and consent on the part of the Trust,
which consent shall not be unreasonably withheld, subcontract for the
performance of certain services under this Agreement to qualified service
providers, which shall be registered as transfer agents under Section 17A of the
Securities Exchange Act of 1934 if such registration is required; provided,
however, that the Agent shall be as fully responsible to
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the Trust for the acts and omissions of any subcontractor as it is for its
own acts and omissions.
Article 10. Amendment.
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10.01. This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Directors or Trustees of each party.
Article 11. Massachusetts Law to Apply.
---------------------------
11.01. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
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Article 12. Form N-SAR.
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12.01. The Agent shall maintain such records as shall enable the Trust to
fulfill the requirements of Form N-SAR or any successor report which must be
filed with the Securities and Exchange Commission.
Article 13. Merger of Agreement.
--------------------
13.01. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof or
thereof whether oral or written.
Article 14. Counterparts.
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14.01. This Agreement may be executed by the parties hereto in any number
of counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
Article 15. Limitation of Liability of the Trustees and the Shareholders.
------------------------------------------------------------
15.01 It is understood and expressly stipulated that none of the Trustees,
officers, agents, or shareholders of the Trust shall be personally liable
hereunder. The name of the Trust is the designation of the Trustees for the time
being under the Trust's Declaration of Trust, as the same is now stated or may
hereafter be amended, and all persons dealing with the trust must look solely to
the property of the trust for the enforcement of any claims against the trust as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the trust. No series of the
Trust, if any, shall be liable for the obligations of any other series.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
XXXXXX STATE TAX-FREE INCOME SERIES
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx
Title: President
XXXXXXX SERVICE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
Title: President
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Schedule A
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Xxxxxx CA Tax-Free Income Fund Class S
Xxxxxx NY Tax-Free Income Fund Class S
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