EXHIBIT (h)(2)
TRANSFER AGENCY AND SERVICE AGREEMENT
WITH AMERICAN DATA SERVICES, INC.
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made the 30th day of June 1999, and amended on March 16, 2000 by and
between the ORBITEX Group of Funds, a Delaware Business Trust, having its
principal office and place of business at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000
(the "Trust"), and American Data Services, Inc., a New York corporation having
its principal office and place of business at the Hauppauge Corporate Center,
000 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx 00000 ("ADS").
WHEREAS, the Trust(1) consists of various series (collectively referred to as
the "Funds") of diversified and non-diversified, open-end management
investment company registered with the United States Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust offers shares in the series (each such series,
together with all other series subsequently established by the Trust and made
subject to this Agreement in accordance herewith, being herein referred to as a
"Fund", and collectively as the "Funds") and the Trust offers shares of various
classes of each Fund (each such class together with all other classes
subsequently established by the Trust in a Fund being herein referred to as a
"Class," and collectively as the "Classes") listed in Schedule A; and
WHEREAS, the Trust on behalf of the Funds desires to appoint ADS as its
transfer agent, dividend disbursing agent and agent in connection with certain
other activities, and ADS desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Trust and ADS hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF AMERICAN DATA SERVICES, INC.
1.01 Subject to the terms and conditions set forth in this agreement,
the Trust, on behalf of the Funds, hereby employs and appoints ADS to act as,
and ADS agrees to act as its transfer agent for the Fund's authorized and issued
shares of its common stock, ("Shares"), dividend disbursing agent and agent in
connection with any accumulation, open-account or similar plans provided to the
shareholders of the fund ("Shareholders") set out in the currently effective
prospectus and statement of additional information ("prospectus") of theTrust.
1.02 ADS agrees that it will perform the following services:
(a) In accordance with procedures established from time to
time by agreement between the Trust and ADS, ADS shall:
I. Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation therefore to
the Custodian of the Trust authorized by the Board of Directors of the
Trust (the "Custodian");
II. Pursuant to purchase orders, issue the appropriate number of Shares and
hold such Shares in the appropriate Shareholder account;
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(1) The term "Trust" shall refer to the ORBITEX Group of Funds, and each series
of the ORBITEX Group of Funds that is approved by the Board of Trustees of the
ORBITEX Group of Funds for inclusion under the terms of this agreement, and each
series that is so approved shall be subject to the terms of this Agreement
without the need for an amendment of or addition to this Agreement.
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III. Receive for acceptance redemption requests and redemption directions
and deliver the appropriate documentation therefore to the Custodian;
IV. 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;
V. Effect transfers of Shares by the registered owners thereof upon receipt
of appropriate instructions;
VI. Prepare and transmit payments for dividends and distributions declared by
the Trust;
VII. Maintain records of account for and advise the Trust and its Shareholders
as to the foregoing; and
VIII.Record the issuance of shares of each Fund and maintain pursuant to SEC
Rule 17Ad-10(e) a record of the total number of shares of each Fund which
are authorized, based upon data provided to it by each Fund, and issued and
outstanding. ADS shall also provide each Fund on a regular basis with the
total number of shares which are authorized and 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 each Fund.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), ADS shall:
I. Perform all of the customary services of a transfer agent, dividend
disbursing agent, including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, receiving
and tabulating proxies, mailing Shareholder reports and prospectuses to
current Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts, preparing and filing U.S. Treasury Department Forms 1099
and other appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders, preparing and
mailing confirmation forms and statements of account to Shareholders for
all purchases redemption's of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information and (ii)
provide a system and reports which will enable each Fund to monitor the
total number of Shares sold in each State.
(c) In addition, the Trust shall (i) identify to ADS in writing
those transactions and shares to be treated as exempt from
blue sky reporting for each State and (ii) verify the
establishment of such transactions for each state on the
system prior to activation and thereafter monitor the daily
activity for each State as provided by ADS. The responsibility
of ADS for the Trust's blue sky State registration status is
solely limited to the initial establishment of transactions
subject to blue sky compliance by the Trust and the reporting
of such transactions to the Trust as provided above.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Trust and ADS.
2. FEES AND EXPENSES.
2.01 For performance by ADS pursuant to this Agreement, the Trust
agrees to pay ADS an annual maintenance fee for each Shareholder account and
transaction fees for each portfolio or class of shares serviced under this
Agreement (See Schedule A) as set out in the fee schedule attached hereto. 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 ADS.
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2.02 In addition to the fee paid under Section 2.01 above, the Trust
agrees to reimburse ADS for out-of-pocket expenses or advances incurred by ADS
for the items set out in the fee schedule attached hereto. In addition, any
other expenses incurred by ADS at the request or with the consent of the Trust,
will be reimbursed by the Trust.
2.03 The Trust agrees to pay all fees and reimbursable expenses within
five days following the receipt of the respective billing notice. Postage for
mailing of dividends, proxies, Trust reports and other mailings to all
shareholder accounts shall be advanced to ADS by the Trust at least seven (7)
days prior to the mailing date of such materials.
3. REPRESENTATIONS AND WARRANTIES OF AMERICAN DATA SERVICES, INC..
ADS represents and warrants to the Trust that:
3.01 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.02 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.03 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.04 ADS is duly registered as a transfer agent under the Securities
Act of 1934 and shall continue to be registered throughout the remainder of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST.
The Trust represents and warrants to ADS that;
4.01 It is empowered under applicable laws and by its Articles of
Incorporation, By-Laws, and Declaration of Trust to enter into and perform this
Agreement.
4.02 All proceedings required by said Articles of Incorporation,
By-Laws, and Declaration of Trust have been taken to authorize it to enter into
and perform this Agreement.
4.03 It is an open-end management investment company registered
under the Investment Company Act of 1940.
4.04 A registration statement under the Securities Act of 1933 is
currently or will become effective and will remain effective, and appropriate
state securities law filings as required, have been or will be made and will
continue to be made, with respect to all Shares of the Trust being offered for
sale.
5. INDEMNIFICATION.
5.01 ADS shall not be responsible for, and the Trust shall indemnify
and hold ADS harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
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(a) All actions of ADS 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 or willful misconduct.
(b) The Trust's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Trust's lack good faith, gross
negligence or willful misconduct or which arise out of the breach of
any representation or warranty of the Trust hereunder.
(c) The reliance on or use by ADS or its agents or subcontractors of
information, records and documents which (i) are received by ADS or its
agents or subcontractors and furnished to it by or on behalf of the
Trust, and (ii) have been prepared and/or maintained by the Trust or
any other person or firm on behalf of the Trust.
(d) The reliance on, or the carrying out by ADS or its agents or
subcontractors of any 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.
5.02 ADS shall indemnify and hold the Trust harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or failure or
omission to act by ADS as a result of ADS's lack of good faith, gross negligence
or willful misconduct.
5.03 At any time ADS may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by ADS under this
Agreement, and ADS and its agents or subcontractors shall not be liable and
shall be indemnified by the Trust for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. ADS, its
agents and 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 ADS 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 of written notice thereof
from the Trust. ADS, 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 for damages 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 or for any act
or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party of seeking 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 party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in
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any case in which the other party may be required to indemnify it except with
the other party's prior written consent.
6. COVENANTS OF THE TRUST AND AMERICAN DATA SERVICES, NC..
6.01 The Trust shall promptly furnish to ADS a certified copy of the
resolution of the Board of Trustees of the Trust authorizing the appointment of
ADS and the execution and delivery of this Agreement.
6.02 ADS 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 ADS 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, and
the Rules thereunder, ADS agrees that all such records prepared or maintained by
ADS relating to the services to be performed by ADS hereunder 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.
6.04 ADS 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.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, ADS will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
inspection. ADS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person, and shall
promptly notify the Trust of any unusual request to inspect or copy the
shareholder records of the Trust or the receipt of any other unusual request to
inspect, copy or produce the records of the Trust.
7. TERMINATION OF AGREEMENT.
7.01 This Agreement shall become effective as of the date hereof. Upon
effectiveness of this Agreement, is 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 Trust or any of the Funds.
7.02 This Agreement shall remain in effect for a period of three (3) years from
the date of its effectiveness and shall continue in effect for successive
twelve-month periods; provided , that a continuance is specifically approved at
least annually after the initial period by the Board or a vote of a majority of
the outstanding voting securities of the Fund.
7.03 This Agreement may be terminated with respect to the Trust or any
of the Funds at anytime (i) by the Board on 90 days' written notice to ADS or
(ii) by ADS on 90 days' written notice to the Fund.
7.04 The obligations of Sections 3 and 4 shall survive any termination
of this Agreement.
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7.05 Should any of the Funds exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and material will
be borne by said Fund(s). Additionally, ADS reserves the right to charge for any
other reasonable expenses associated with such termination.
8. ADDITIONAL FUNDS AND CLASSES.
8.01 In the event that the Trust 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 is the case may be,
shall becomes Funds and Classes under this Agreement.
9. ASSIGNMENT.
9.01 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.
10. AMENDMENT.
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 Trustees of the Trust.
11. NEW YORK LAWS TO APPLY.
11.01 The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York as at the time
in effect and the applicable provisions of the 1940 Act. To the extent that the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control.
12. MERGER OF AGREEMENT.
12.01 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.
13. NOTICES.
All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when received or when sent by telex or
facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Trust: To ADS:
M. Fyzul Khan Xxxxxxx Xxxxx
Secretary President
ORBITEX Group of Funds American Data Services, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx 000 Xxxxx Xxxxxxx, Xxxxx 000
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Xxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ORBITEX Group of Funds AMERICAN DATA SERVICES, INC.
By: By:
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Xxxxx X. Xxxxxx, President Xxxxxxx Xxxxx, President
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SCHEDULE A
FUND LISTING
Orbitex Internet Fund
Orbitex Emerging Technology Fund
Orbitex Strategic Infrastructure Fund
Orbitex Health & Biotechnology Fund
Orbitex Financial Services Fund
Orbitex Focus 30 Fund
SCHEDULE B
TRANSFER AGENCY AND SHAREHOLDER SERVICE FEE SCHEDULE
For the services rendered by ADS in its capacity as transfer agent, each
Fund approved by the Board of Trustees of the Trust for inclusion hereunder
shall pay ADS, within ten (10) days after receipt of an invoice from ADS at the
beginning of each month, a fee, calculated as a combination of account
maintenance charges plus transaction charges as follows:
ACCOUNT MAINTENANCE FEES
The greater of (no prorating for partial months):
(1) Minimum maintenance charge per portfolio/class $2,000.00/ month
OR,
(2) Based upon the total of all open/closed accounts (1) per portfolio/class
upon the following annual rates
(billed monthly):
FUND TYPE:
Dividend calculated and
paid annually, semi-annually, quarterly..............$14.00 per account
Dividend calculated and paid monthly.................$16.00 per account
Dividend accrued daily and paid monthly .............$18.00 per account
All Closed accounts will be invoiced $ 2.00 per account on an annual basis. (2)
(1) All accounts closed during a month will be considered as open accounts for
billing purposes in the month the account is closed.
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(2) Closed accounts remain on the shareholder files until all 1099's and 5498's
have been distributed to the shareholders and send via mag-media to the IRS.
TRANSACTION FEES
New account set-up ...........................................$5.00 each
Retirement account set-up.....................................$10.00 each
24 HOUR AUTOMATED VOICE RESPONSE:
Initial set-up (one-time) charge per portfolio - $750.00
Monthly maintenance charge per portfolio - $50.00
On each annual anniversary date of this Agreement, the fees enumerated above may
be increased by the change in the Consumer Price Index for the Northeast region
(CPI) for the twelve month period ending with the month preceding such annual
anniversary date. Any CPI increases not charged in any given year may be
included in prospective CPI fee increases in future years.
XXX PLAN FEES
The following fees will be charged directly to the shareholder account:
Annual maintenance fee ............................... $15.00 /account *
Incoming transfer from prior custodian ............... $12.00
Distribution to a participant ........................ $15.00
Refund of excess contribution ........................ $15.00
Transfer to successor custodian ...................... $15.00
Automatic periodic distributions .................... $15.00/year per account
* Includes Bank Custody Fee.
OUT OF POCKET EXPENSES
The Fund shall reimburse ADS for any out-of-pocket expenses, exclusive
of salaries, advanced by ADS in connection with but not limited to the costs for
printing fund documents, (i.e. printing of confirmation forms, shareholder
statements, redemption/dividend checks, envelopes, financial statements, proxy
statement, fund prospectus, etc.) proxy solicitation and mailing expenses,
travel requested by the
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Fund, telephone toll charges, 800-line costs and fees, facsimile and data
transmission costs, stationery and supplies (related to Fund records), record
storage, postage (plus a $0.085 service charge for all mailings), pro-rata
portion of annual SAS-70 audit letter, telex and courier charges incurred in
connection with the performance of its duties hereunder. ADS shall provide the
Fund with a monthly invoice of such expenses and the Fund shall reimburse ADS
within fifteen (15) days after receipt thereof.
SPECIAL REPORTS
All reports and/or analyses requested by the Fund that are not included
in the fee schedule, shall be subject to an additional charge, agreed upon in
advance, based upon the following rates:
Labor:
Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $45.00/hr.
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