TRANSFER AGENCY AGREEMENT
AGREEMENT dated as of May 23rd, 2003, between The Integrity Funds (the
"Fund"), a Delaware business trust, having its principal office and place of
business at 0 Xxxx Xxxxxx Xxxxx, Xxxxx, Xxxxx Xxxxxx 00000, and ND Resources,
Inc. (the "Transfer Agent"), a corporation organized under the laws of the
State of North Dakota with its principal place of business at 0 Xxxx Xxxxxx
Xxxxx, Xxxxx, Xxxxx Xxxxxx 00000.
WITNESSETH:
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That for and in consideration of the mutual promises hereinafter set forth,
the Fund and the Transfer Agent agree as follows:
Definitions.
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Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
(a) "Authorized Person" shall be deemed to include the President, the Vice
President, the Secretary, and the Treasurer of the Fund, the persons listed
in Appendix A hereto, and any other person, whether or not such person is an
officer of the Fund, duly authorized to give Oral Instructions or Written
Instructions on behalf of the Fund as indicated in a certificate furnished
to the Transfer Agent pursuant to Section 5(d) or 5(e) hereof as may be
received by the Transfer Agent from time to time.
(b) "Commission" shall have the meaning given it in the 1940 Act.
(c) "Custodian" refers to the custodian and any sub-custodian of all
securities and other property which the Fund may from time to time deposit
or cause to be deposited or held under the name or account of such
custodian.
(d) "Articles of Incorporation" shall mean the Fund's Articles of
Incorporation as now in effect and as the same may be amended from time to
time.
(e) "Officer" shall mean the President, Vice President, Secretary, and
Treasurer of the parties hereto.
(f) "Oral Instructions" shall mean instructions, other than written
instructions, actually received by the Transfer Agent from a person
reasonably believed by the Transfer Agent to be an Authorized Person.
(g) "Prospectus" shall mean any current prospectus and statement of
additional information relating to the registration of the Fund's shares
under the Securities Act of 1933, as amended, and the 1940 Act.
(h) "Shares" refers to the units into which the shareholders' proprietary
interests in the Fund are divided.
(i) "Shareholder" means a record owner of Shares.
(j) "Trustees" or "Board of Trustees" refers to the duly elected Trustees
of the Fund.
(k) "Written Instructions" shall mean a written or electronic
communication actually received by the Transfer Agent from an Authorized
Person or from a person reasonably believed by the Transfer Agent to be an
Authorized Person by telex or any other such system whereby the receiver of
such communication is able to verify through codes or otherwise with a
reasonable degree of certainty the authenticity of the sender of such
communications.
(1) The "1940 Act" refers to the Investment Company Act of 1940, and the
Rules and Regulations promulgated thereunder, all as amended from time to
time.
2. Appointment of the Transfer Agent.
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The Fund hereby appoints and constitutes the Transfer Agent as transfer
agent for its Shares and as Shareholder servicing agent, and the Transfer
Agent accepts such appointment and agrees to perform the duties hereinafter
set forth.
3. Compensation.
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(a) The Fund will compensate the Transfer Agent for the performance of its
obligations hereunder in accordance with the fees set forth in the written
schedule of fees annexed hereto as Schedule A and incorporated herein.
The Transfer Agent will xxxx the Fund as soon as practicable after the
end of each calendar month, and said xxxxxxxx will be detailed in accordance
with the Schedule A. The Fund will promptly pay to the Transfer Agent the
amount of such billing.
(b) Any compensation agreed to hereunder may be adjusted from time to time
upon mutual agreement by both parties hereto by attaching to Schedule A of
this Agreement a revised Fee Schedule, dated and signed by an Officer of
each party hereto.
4. Documents.
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In connection with the appointment of the Transfer Agent, the Fund shall, on
or before the date this Agreement goes into effect, but in any case, within a
reasonable period of time for the Transfer Agent to prepare to perform its
duties hereunder, furnish the Transfer Agent with the following documents:
(a) A certified copy of the Fund's Articles of Incorporation, as amended.
(b) A certified copy of the Fund's Bylaws, as amended.
(c) A copy of the resolution of the Trustees authorizing execution and
delivery of this Agreement.
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(d) If applicable, a specimen of the certificate for Shares of the Fund
in the form approved by the Trustees, with a certificate of the Secretary
of the Fund as to such approval.
(e) All account application forms and other documents relating to
Shareholder accounts or to any plan, program, or service offered by the Fund.
5. Further Documentation.
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The Fund will also furnish from time to time the following documents:
(a) The Fund's Registration Statement and each subsequent amendment to the
Fund's Registration Statement that is filed with the Commission.
(b) Certificates as to any change in any Officer, Trustee, or Investment
Adviser of the Fund.
(c) Such other certificates, documents, or opinions as the Transfer Agent
deems to be appropriate or necessary for the proper performance of its
duties hereunder.
6. Representations of the Fund.
----------------------------
The Fund represents to the Transfer Agent that Shares will be issued in
accordance with the terms of the Articles of Incorporation and the Prospectus
and that such Shares shall be validly issued, fully paid, and non-assessable
by the Fund.
In the event that the Trustees shall declare a distribution payable in
Shares, the Fund shall deliver to the Transfer Agent written notice of such
declaration signed on behalf of the Fund by an Officer of the Fund, upon which
the Transfer Agent shall be entitled to rely for all purposes, certifying (i)
the number of Shares involved, (ii) that all appropriate action has been taken,
and (iii) that any amendment to the Articles of Incorporation which may be
required has been filed and is effective. Such notice shall be accompanied by
an opinion of counsel for the Fund relating to the legal adequacy and effect of
the transaction. This provision shall not apply to Shares to be issued in the
normal course of reinvestment of any distributions or dividends in accordance
with the Fund's Prospectus.
7. Duties of the Transfer Agent.
-----------------------------
The Transfer Agent shall be responsible for administering and/or performing
transfer agent functions; for acting as service agent in connection with
dividend and distribution functions; and for performing Shareholder account and
administrative agent functions in connection with the issuance, transfer, and
redemption or repurchase (including coordination with the Custodian) of Shares.
The operating standards and procedures to be followed shall be determined from
time to time by agreement between the Transfer Agent and the Fund and shall be
expressed in a written schedule of duties of the Transfer Agent annexed hereto
as Schedule B and incorporated herein.
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8. Recordkeeping and Other Information.
------------------------------------
The Transfer Agent shall create and maintain all necessary records in
accordance with all applicable laws, rules and regulations, including, but not
limited to, records required by Section 31(a) of the 1940 Act and those records
pertaining to the various functions performed by it hereunder which are set
forth in Schedule B hereto. All records shall be available during regular
business hours for inspection and use by the Fund. Where applicable, such
records shall be maintained by the Transfer Agent for the periods and in the
places required by Rule 31a-2 under the 1940 Act.
Upon reasonable notice by the Fund, the Transfer Agent shall make available
during regular business hours its facilities and premises employed in
connection with the performance of its duties under this Agreement for
reasonable visitation by the Fund or any person retained by the Fund.
To the extent required by said Section 31 and the rules and regulations
thereunder, the Transfer Agent agrees that all such records prepared and
maintained by the Transfer Agent relating to the services to be performed by
the Transfer Agent hereunder are the property of the Fund.
The Transfer Agent and the Fund agree that all books, records, information,
and data pertaining to the business of the other party which are exchanged or
received in connection with this Agreement shall remain confidential and shall
not be voluntarily disclosed to any person, except as may be required by law.
In the case of any requests or demands for any inspection of the Shareholder
records of the Fund, the Transfer Agent will endeavor to notify the Fund and
to secure instructions from an authorized Officer of the Fund as to such
inspection.
9. Other Duties.
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In addition to the duties expressly set forth in Schedule B to this
Agreement, the Transfer Agent shall perform such other duties and functions,
and shall be paid such amounts therefore, as may from time to time be agreed
upon in writing between the Fund and the Transfer Agent. Such other duties
and functions shall be reflected in a written amendment to Schedule B, dated
and signed by an Officer of each party hereto.
10. Reliance by Transfer Agent; Instructions.
-----------------------------------------
(a) The Transfer Agent will be protected in acting upon Written or Oral
Instructions, as appropriate, believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice
of any change of authority of any person until receipt of a Written
Instruction thereof from the Fund. The Transfer Agent will also be protected
in processing Share certificates which it reasonably believes to bear the
proper manual or facsimile signatures of the Officers of the Fund and the
proper countersignature of the Transfer Agent.
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(b) At any time the Transfer Agent may apply to any Authorized Person of
the Fund for Written Instructions and may seek advice from legal counsel
for the Fund, or its own legal counsel, with respect to any matter arising
in connection with this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in good faith in accordance with
such Written Instructions or in accordance with the opinion of counsel for
the Fund or for the Transfer Agent; provided, however, that if such reliance
involves a potential material loss to the Fund, the Transfer Agent will
advise the Fund of any such action(s) to be taken in accordance with the
opinion of counsel to the Transfer Agent. Written Instructions requested by
the Transfer Agent will be provided by the Fund within a reasonable period
of time. In addition, the Transfer Agent, its officers, agents, or
employees, shall accept Oral Instructions or Written Instructions given to
them by any person representing or acting on behalf of the Fund only if said
representative is known by the Transfer Agent, or its officers, agents, or
employees, to be an Authorized Person. The Transfer Agent shall have no duty
or obligation to inquire into, nor shall the Transfer Agent be responsible
for, the legality of any act done by it upon the request or direction of an
Authorized Person.
(c) Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into,
and shall not be liable for:
(1) the legality of the issuance or sale of any Shares or the
sufficiency of the amount to be received therefore;
(2) the legality of the redemption of any Shares, or the propriety of
the amount to be paid therefore;
(3) the legality of the declaration of any dividend by the Trustees, or
the legality of the issuance of any Shares in payment of any dividend; or
(4) the legality of any recapitalization or readjustment of the Shares.
11. Acts of God. Etc.
-----------------
Neither the Transfer Agent nor the Fund will be liable or responsible for
delays or errors by reason of circumstances beyond its reasonable control,
including acts of civil or military authority, national emergencies, fire,
mechanical breakdown beyond its control, flood or catastrophe, acts of God,
insurrection, war, riots, or failure beyond its control of transportation,
communication, or power supply.
12. Duty of Care and Indemnification.
---------------------------------
The Fund and the Transfer Agent will indemnify each other against and hold
the other party harmless from any and all losses, claims, damages, liabilities,
or expenses (including reasonable counsel fees and expenses) resulting from
any claim, demand, action, or suit not resulting from the bad faith or
negligence of the other party, and arising out of, or in connection with, the
duties and responsibilities described hereunder. In addition, the Fund will
indemnify the Transfer Agent against and hold it harmless from any and all
losses, claims, damages, liabilities, or expenses (including reasonable counsel
fees and expenses) resulting from any claim demand, action, or suit as a
result of:
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(1) any action taken in accordance with Written or Oral Instructions,
or any other instructions, or Share certificates reasonably believed by
the Transfer Agent to be genuine and to be signed, countersigned or
executed, or orally communicated by an Authorized Person;
(2) any action taken in accordance with written or oral advice
reasonably believed by the Transfer Agent to have been given by counsel
for the Fund or its own counsel; or
(3) any action taken as a result of any error or omission in any record
(including but not limited to magnetic tapes, computer printouts, hard
copies, and microfilm copies) delivered or caused to be delivered by the
Fund to the Transfer Agent in connection with this Agreement.
In any case in which the Fund or the Transfer Agent may be asked to
indemnify or hold the other party harmless, the requesting party will provide
the other party with all pertinent facts concerning the situation in question
and will use reasonable care to identify and provide notice of any situation
which presents or appears likely to present a claim for indemnification. Each
party shall have the option to defend the other party against any claim which
may be the subject of this indemnification, and in the event that a party so
elects, such defense shall be conducted by counsel chosen by the party making
such election; and such counsel shall be satisfactory to the other party, and
thereupon such electing party shall take over complete defense of the claim,
and the requesting party shall sustain no further legal or other expenses in
such situation for which it seeks indemnification under this Section 12.
Neither party will confess any claim or make any compromise in any case in
which the other party will be asked to provide indemnification, except with
the other party's prior written consent. The obligations of the parties hereto
under this Section shall survive the termination of this Agreement.
13. Term and Termination.
---------------------
This Agreement shall become effective on the date first set forth above
(the "Effective Date") and shall continue in effect from year to year
thereafter as the parties may mutually agree; provided, that either party
hereto may terminate this Agreement by giving to the other party a notice in
writing specifying the date of such termination, which shall be not less than
60 days after the date of receipt of such notice. In the event such notice is
given by the Fund, it shall be accompanied by a resolution of the Board of
Trustees of the Fund, certified by the Secretary, electing to terminate this
Agreement and designating a successor transfer agent or transfer agents. Upon
such termination and at the expense of the Fund, the Transfer Agent will
deliver to such successor a certified list of Shareholders of the Fund (with
names, addresses, and taxpayer identification or Social Security numbers), an
historical record of the account of each Shareholder and the status thereof,
and all other relevant books, records, correspondence, and other data
established or maintained by the Transfer Agent under this Agreement in the
form reasonably acceptable to the Fund, and will cooperate in the transfer of
such duties and responsibilities, including provisions for assistance from the
Transfer Agent's personnel in the establishment of books, records, and other
data by such successor or successors.
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14. Amendment.
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This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
15. Subcontracting.
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Except as otherwise provided below, neither this Agreement nor any rights
or obligations hereunder may be assigned by either party without the express
written consent of the other party. The Transfer Agent may, in its sole
discretion and without further approval from the Fund, subcontract, in whole
or in part, for the performance of its obligations and duties hereunder with
any person or entity including, but not limited to, any affiliate or
subsidiary; provided, however, that (a) the Transfer Agent shall remain fully
responsible to the Fund for the acts and omissions of any agent or
subcontractor as it is for its own acts and omissions, and (b) to the extent
that the Transfer Agent subcontracts any functions or activities required or
performed by a registered transfer agent, the subcontracting party shall be a
duly registered transfer agent with the appropriate regulatory agency as
required under Section 17A of the Securities Exchange Act of 1934 and the
rules and regulations thereunder, as amended.
16. Use of Transfer Agent's Name.
-----------------------------
The Fund shall not use the name of the Transfer Agent in any Prospectus,
Statement of Additional Information, Shareholders' report, sales literature,
or other material relating to the Fund for other than internal use, in a
manner not approved prior thereto; provided, that the Transfer Agent shall
approve all reasonable uses of its name which merely refer in accurate terms
to its appointment hereunder or which are required by the Commission or a
state securities administrator.
17. Use of the Fund's Name.
-----------------------
The Transfer Agent shall not use the name of the Fund or material relating
to the Fund on any documents or forms for other than internal use in a manner
not approved prior thereto in writing; provided, that the Fund shall approve
all reasonable uses of its name which merely refer in accurate terms to the
appointment of the Transfer Agent or which are required by the Commission or
a state securities administrator.
18. Security.
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The Transfer Agent represents and warrants that, to the best of its
knowledge, the various procedures and systems which the Transfer Agent has
implemented or will implement with regard to safeguarding from loss or damage
attributable to fire; theft, or any other cause (including provision for 24
hours-a-day restricted access) of the Fund's records and other data and the
Transfer Agent's records, data, equipment, facilities, and other property
used in the performance of its obligations hereunder are adequate and that
it will make such changes therein from time to time as in its judgment are
required for the secure performance of its obligations hereunder. The parties
shall review such systems and procedures on a periodic basis.
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19. Miscellaneous.
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(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or the Transfer Agent shall
be sufficiently given if addressed to that party and received by it at its
office set forth below or at such other place as it may from time to time
designate in writing.
To the Fund:
The Integrity Funds
0 Xxxx Xxxxxx Xxxxx
Xxxxx, XX 00000
To the Transfer Agent:
ND Resources, Inc.
0 Xxxx Xxxxxx Xxxxx
Xxxxx, XX 00000
(b) 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 the Fund without the written
consent of the other party.
(c) This Agreement shall be construed in accordance with the laws of the
State of North Dakota.
(d) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
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20. Liability of Trustees, Officers, and Shareholders.
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The execution and delivery of this Agreement have been authorized by the
Trustees of the Fund and signed by an authorized Officer of the Fund, acting
as such, and neither such authorization by such Trustees nor such execution
and delivery by such Officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the Trustees or
Shareholders of the Fund, but bind only the property of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized as
of the day and year first above written.
THE INTEGRITY FUNDS
By/s/ Xxxxxx X. Xxxxxxx
----------------------
Date: May 23, 2003
Agreed and Accepted by:
ND RESOURCES, INC.
By/s/ Xxxxxx X. Xxxxxxx
----------------------
Date: May 23, 2003
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APPENDIX A
I, Xxxxxx X. Xxxxxxx, President of The Integrity Funds (the "Fund"), a
Delaware business trust, do hereby certify that the following individuals have
been duly authorized as Authorized Persons to give Oral Instructions and
Written Instructions on behalf of the Fund, and the signatures set forth
opposite their respective names are their true and correct signatures:
Name Signature
Xxxxxx X. Xxxxxxx /s/Xxxxxx X. Xxxxxxx
----------------------
/s/Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
/s/Xxxxx X. Xxxxxxx
----------------------
Xxxxx X. Xxxxxxx
/s/Xxxxxx Xxxxxx
----------------------
Xxxxxx Xxxxxx
/s/Xxxxx Xxxxx
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Xxxxx Xxxxx
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SCHEDULE A
FEE SCHEDULE
TRANSFER AGENT CHARGES
ND RESOURCES, INC.
For the Transfer Agency services provided under this agreement, each Fund
will pay to ND Resources, Inc. at the end of each calendar month a fee of
0.25% of average daily net assets with a minimum of $2,000 per month plus
reimbursement of out of pocket expenses. An additional fee with a minimum
of $500 per month will be charged for each additional share class.
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SCHEDULE B
DUTIES OF THE TRANSFER AGENT
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(See Exhibit 1 for Summary of Services.)
1. Shareholder Information.
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The Transfer Agent shall maintain a record of the number of Shares held
by each holder of record which shall include his address and taxpayer
identification number and which shall indicate whether such Shares are held in
certificated or uncertificated form.
2. Shareholder Services.
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The Transfer Agent will investigate all Shareholder inquiries relating to
Shareholder accounts and will answer all correspondence from Shareholders and
others relating to its duties hereunder and such other correspondence as may
from time to time be mutually agreed upon between the Transfer Agent and the
Fund. The Transfer Agent shall keep records of Shareholder correspondence and
replies thereto and of the lapse of time between the receipt of such
correspondence and the mailing of such replies.
3. State Registration Reports.
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The Transfer Agent shall furnish on a state-by-state basis sales reports and
such periodic and special reports as the Fund may reasonably request and such
other information, including Shareholder lists and statistical information
concerning accounts, as may be agreed upon from time to time between the Fund
and the Transfer Agent.
4. Mailing Communications to Shareholders; Proxy Materials.
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The Transfer Agent will address and mail to Shareholders of the Fund all
reports to Shareholders, dividend and distribution notices, and proxy material
for the Fund's meetings of Shareholders. In connection with meetings of
Shareholders, the Transfer Agent will report on proxies voted prior to
meetings, act as inspector of election at meetings, if so requested by the
Fund, and certify Shares voted at meetings.
5. Sales of Shares.
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(a) Processing of Investment Checks or Other Investments. Upon receipt of
any check or other instrument drawn or endorsed to it as agent for, or
identified as being for the account of the Fund for the purchase of Shares,
the Transfer Agent shall stamp the check with the date of receipt, shall
forthwith process the same for collection, and shall record the number of
Shares sold, the trade date, the price per Share, and the amount of money
to be delivered to the Custodian of the Fund for the sale of such Shares.
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(b) Issuance of Shares. Upon receipt of notification that the Custodian
has received the amount of money specified in the immediately preceding
paragraph, the Transfer Agent shall issue to and hold in the account of the
purchaser/Shareholder, or if no account is specified therein, in a new account
established in the name of the purchaser, the number of Shares such purchaser
is entitled to receive, as determined in accordance with applicable federal
law or regulation.
(c) Statements. On a quarterly basis, the Transfer Agent shall send to
the purchaser/Shareholder a statement of purchases which will show the new
Share balance, the Shares held under a particular plan, if any, for withdrawing
investments, the amount invested and the price paid for the newly purchased
Shares, or will be in such other form of statement as the Fund and the
Transfer Agent may agree from time to time.
(d) Suspension of Sale of Shares. The Transfer Agent shall not be required
to issue any Shares where it has received a Written Instruction from the Fund
or written notice from any appropriate federal or state authority that the sale
of the Shares of the Fund has been suspended or discontinued, and the Transfer
Agent shall be entitled to rely upon such Written Instructions or written
notification.
(e) Taxes in Connection with Issuance of Shares. Upon the issuance of any
Shares in accordance with the foregoing provisions of this Section, the
Transfer Agent shall not be responsible for the payment of any original issue
or other taxes required to be paid in connection with such issuance.
(f) Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer Agent will:
(1) give prompt notice of such return to the Fund or its designee;
(2) place a stop transfer order against all Shares issued as a result
of such check or order; and
(3) take such actions as the Transfer Agent may from time to time deem
appropriate.
6. Redemptions.
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(a) Requirements for Transfer or Redemption of Shares. The Transfer Agent
shall process all requests from Shareholders to transfer or redeem Shares in
accordance with the procedures set forth in the Prospectus and all
determinations of the number of Shares required to be redeemed to fund
designated monthly payments, automatic payments, or any other such distribution
or withdrawal plan.
The Transfer Agent will transfer or redeem Shares upon receipt of Written
Instructions and Share certificates, if any, properly endorsed for transfer
or redemption, accompanied by such documents as the Transfer Agent reasonably
may deem necessary to evidence the authority of the person making such transfer
or redemption, and bearing satisfactory evidence of the payment of stock
transfer taxes, if any.
Except to the extent inconsistent with the procedures set forth in the
Prospectus, the Transfer Agent reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the endorsement
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on the instructions is valid and genuine, and for that purpose it will require
a guarantee of signature by a member firm of a national securities exchange,
by any national bank or trust company, or by any member bank of the Federal
Reserve system. The Transfer Agent also reserves the right to refuse to
transfer or redeem Shares until it is satisfied that the requested transfer
or redemption is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or redemptions which the Transfer
Agent, in its good judgment, deems improper or unauthorized, or until it is
reasonably satisfied that there is no basis to any claims adverse to such
transfer or redemption.
The Transfer Agent may, in effecting transactions, rely upon the provisions
of the Uniform Act for the Simplification of Fiduciary Security Transfers or
the provisions of Article 8 of the Uniform Commercial Code, as the same may be
amended from time to time in the State of North Dakota, which in the opinion
of legal counsel for the Fund or of its own legal counsel protect it in not
requiring certain documents in connection with the transfer or redemption of
Shares. The Fund may authorize the Transfer Agent to waive the signature
guarantee in certain cases by Written Instructions.
For the purpose of the redemption of Shares which have been purchased within
15 days of a redemption request, the Transfer Agent may refuse to redeem such
Shares until the Transfer Agent has received fed funds for the purchase of
such Shares.
(b) Notice to Custodian and Fund. When Shares are redeemed, the Transfer
Agent shall, upon receipt of the instructions and documents in proper form,
deliver to the Custodian and the Fund a notification setting forth the number
of Shares to be redeemed. Such redemptions shall be reflected on appropriate
accounts maintained by the Transfer Agent reflecting outstanding Shares and
Shares attributed to individual accounts and, if applicable, any individual
withdrawal or distribution plan.
(c) Payment of Redemption Proceeds. The Transfer Agent shall, upon
receipt of the moneys paid to it by the Custodian for the redemption of Shares,
pay to the Shareholder, or his authorized agent or legal representative, such
moneys as are received from the Custodian, all in accordance with the
redemption procedures described in the Prospectus; provided, however, that
the Transfer Agent shall pay the proceeds of any redemption of Shares
purchased within 15 days of a redemption request to the Transfer Agent upon
a determination that good funds have been collected for the purchase of such
Shares. The Fund shall indemnify the Transfer Agent for any payment of
redemption proceeds or refusal to make such payment if the payment or refusal
to pay is in accordance with this Section.
The Transfer Agent shall not process or effect any redemptions pursuant to
a plan of distribution or redemption or in accordance with any other
Shareholder request upon the receipt by the Transfer Agent of notification of
the suspension of the determination of the Fund net asset value.
7. Dividends.
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(a) Notice to Transfer Agent and Custodian. Upon the declaration of each
dividend and each capital gains distribution by the Board of Trustees of the
Fund with respect to Shares, the Fund shall furnish to the Transfer Agent a
copy of a resolution of its Board of Trustees certified by the Secretary
setting forth with respect to the Shares the date of the declaration of such
dividend or distribution, the ex-dividend date, the date of payment thereof,
the record date as of which
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Shareholders entitled to payment shall be determined, the amount payable per
Share to the Shareholders of record as of that date, the total amount payable
to the Transfer Agent on the payment date, and whether such dividend or
distribution is to be paid in Shares at net asset value.
On or before the payment date specified in such resolution of the Board of
Trustees, the Fund will cause the Custodian of the Fund to pay to the Transfer
Agent sufficient cash to make payment to the Shareholders of record as of such
payment date.
(b) Payment of Dividends by the Transfer Agent. The Transfer Agent will,
on the designated monthly payment date, automatically reinvest all dividends in
additional Shares at net asset value (determined on such date) and mail to
each Shareholder on a quarterly basis at his address of record, or such other
address as the Shareholder may have designated, a statement showing the number
of full and fractional Shares (rounded to three decimal places) then currently
owned by the Shareholder and the net asset value of the Shares so credited to
the Shareholder's account; provided, however, that if the Transfer Agent has
on file a direction by the Shareholder to pay income dividends or capital
gains dividends, or both, in cash, such dividends shall be paid in accordance
with such instructions; and provided further, that in the event of the return
of two consecutive dividend checks as undeliverable, Transfer Agent shall
change such Shareholder account to a reinvestment account if so provided in
the Prospectus.
(c) Insufficient Funds for Payments. If the Transfer Agent does not receive
sufficient cash from the Custodian to make total dividend and/or distribution
payments to all Shareholders of the Fund as of the record date, the Transfer
Agent will, upon notifying the Fund, withhold payment to all Shareholders of
record as of the record date until such sufficient cash is provided to the
Transfer Agent.
(d) Information Returns. It is understood that the Transfer Agent shall
file such appropriate information returns concerning the payment of dividends,
return of capital, and capital gain distributions with the proper federal,
state, and local authorities as are required by law to be filed and shall be
responsible for the withholding of taxes, if any, due on such dividends or
distributions to Shareholders when required to withhold taxes under applicable
law.
