D
EXHIBIT (h)(2)
TRANSFER AGENCY AND SERVICE AGREEMENT
TRANSFER AGENCY AND SERVICE AGREEMENT, made this _____ day of
__________, 1999 (the "Agreement"), by and between Xxxxxx Xxxxxx & Company, Inc.
("Xxxxxx Xxxxxx"), a Tennessee corporation having its principal place of
business in Memphis, Tennessee, and Xxxxxx Xxxxxx Select Fund, Inc. (the
"Fund"), a Maryland corporation.
WHEREAS, the Fund is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act") and currently has two distinct series of shares of common stock
which have been designated, Xxxxxx Xxxxxx Intermediate Bond Fund and Xxxxxx
Xxxxxx High Income Fund (each a "Portfolio"); and
WHEREAS, the shares of each Portfolio may be further divided into
separate classes (each a "Class"); and
WHEREAS, the Fund wishes to retain Xxxxxx Xxxxxx to serve as transfer
agent, registrar, dividend disbursing agent and shareholder servicing agent to
each Portfolio, and Xxxxxx Xxxxxx wishes to furnish such services.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. APPOINTMENTS. The Fund hereby appoints Xxxxxx Xxxxxx as transfer
agent, registrar, dividend disbursing agent and shareholder servicing agent for
the Fund and its Portfolio, and Xxxxxx Xxxxxx hereby accepts such appointment
and agrees to perform the duties thereof in accordance with the terms and
conditions set forth herein.
2. DOCUMENTATION. The Fund (or the applicable Portfolio, as
appropriate) will furnish Xxxxxx Xxxxxx with all documents, certificates,
contracts, forms, and opinions which Xxxxxx Xxxxxx, in its discretion, deems
necessary or appropriate in connection with the proper performance of its duties
hereunder.
3. AUTHORIZED SHARES. The Fund represents to Xxxxxx Xxxxxx that its
Articles of Incorporation permit it to issue 1,000,000,000 full and fractional
shares of beneficial interest with par value of $.001, which may be issued in
series and classes.
4. SERVICES TO BE PERFORMED.
a) In accordance with the Fund's current Prospectus and Statement of
Additional Information (the "Prospectus") and procedures
established from time to time by agreement between the Fund and
Xxxxxx Xxxxxx, Xxxxxx Xxxxxx shall:
i. Receive for acceptance, orders for the purchase of shares of
each Portfolio, and promptly deliver payment and appropriate
documentation therefor to the custodian of the Fund (the
"Custodian");
ii. Pursuant to purchase orders, issue the appropriate number of
shares of each Portfolio and Class and hold such shares in
the appropriate shareholder account;
iii. Receive for acceptance, redemption requests and redemption
directions and deliver the appropriate documentation
therefor to the Custodian;
iv. At the appropriate time as and when the Fund 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 shareholders of each
Portfolio upon receipt of appropriate instructions;
vi. Prepare and transmit payments for dividends and
distributions declared by the Fund (or a particular
Portfolio);
vii. Maintain records of account for and advise the Fund and its
shareholders as to the foregoing; and
viii.Record the issuance of shares of the Fund and maintain
pursuant to Securities and Exchange Commission ("SEC") Rule
17Ad-10(e) a record of the total number of shares of the
Fund which are authorized, based upon and provided to it by
the Fund, and issued and outstanding. Xxxxxx Xxxxxx shall
also provide the Fund on a regular basis with the total
number of shares of each Portfolio and Class 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 the Fund.
b) In addition to and not in lieu of the services set forth in the
above paragraph (a), Xxxxxx Xxxxxx shall: (i) perform all of the
customary services of a transfer agent, shareholder servicing
agent, registrar, 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); 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 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,
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preparing and mailing confirmations and statements of account to
shareholders for all purchases and redemptions of shares of each
Portfolio and other confirmable transactions in shareholders
accounts, preparing and mailing activity statements of
shareholders, and providing shareholder account information and
(ii) provide a system which will enable the Fund to monitor the
total number of shares of each Portfolio and each Class thereof
sold in each State. The Fund shall (i) identify to Xxxxxx Xxxxxx
in writing those transactions and assets to be treated as exempt
from the blue sky reporting for each State and (ii) verify the
establishment of transactions for each State on the system prior
to activation and thereafter monitor the daily activity for each
State. The responsibility of Xxxxxx Xxxxxx for the Fund's blue
sky State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by
the Fund and the reporting of such transactions to the Fund as
provided above.
c) Procedures applicable to certain of these services described in
paragraphs (a) and (b) may be established from time to time by
agreement between the Fund and Xxxxxx Xxxxxx and shall be subject
to the review and approval of the Fund. The failure of the Fund
to establish such procedures with respect to any service shall
not in any way diminish the duty and obligation of Xxxxxx Xxxxxx
to perform such services hereunder.
5. RECORD KEEPING AND OTHER INFORMATION. Xxxxxx Xxxxxx shall,
commencing on the effective date of this Agreement, create and maintain all
necessary shareholder accounting records in accordance with all applicable laws,
rules and regulations, including but not limited to records required by Section
31(a) of the Investment Company Act of 1940, as amended (the "1940 Act"), and
the Rules thereunder, as amended from time to time. All such records shall be
the property of the Fund and shall be available for inspection and use by the
Fund. Where applicable, such records shall be maintained by Xxxxxx Xxxxxx for
the periods and in the places required by Rule 31a-2 under the 1940 Act.
6. AUDIT, INSPECTION AND VISITATION. Xxxxxx Xxxxxx shall make available
during regular business hours all records and other data created and maintained
pursuant to this Agreement for reasonable audit and inspection by the SEC, the
Fund or any person retained by the Fund.
7. COMPENSATION. Xxxxxx Xxxxxx shall be compensated by the Fund on a
monthly basis for the services performed for each Portfolio hereunder, the rate
of compensation being set forth in Schedule A hereto. Expenses incurred by
Xxxxxx Xxxxxx and not included within Schedule A hereto shall be reimbursed to
Xxxxxx Xxxxxx by the Fund, as appropriate; such expenses may include, but are
not limited to, special forms and postage for mailing of said forms. Such
charges shall be payable in full upon receipt of billing invoice; in lieu of
reimbursing Xxxxxx Xxxxxx for such expenses, the Fund may, in its discretion,
directly pay such expenses.
8. USE OF NAMES. The Fund shall not use the name of Xxxxxx Xxxxxx in
any prospectus, sales literature or other material relating to the Fund in any
manner not approved prior thereto by Xxxxxx Xxxxxx; provided, however, that
Xxxxxx Xxxxxx shall approve all uses of its name which merely refer in accurate
terms to its appointment hereunder or which are required by the SEC or a State
Securities Commission; and provided further, that in no event shall such
approval be unreasonably withheld.
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9. SECURITY. Xxxxxx Xxxxxx represents and warrants that, to the best of
its knowledge, the various procedures and systems which Xxxxxx Xxxxxx proposes
to implement with regard to safeguarding from loss or damage attributable to
fire, theft or any other cause (including provision for twenty-four hour a day
restricted access) the Fund's blank checks, records and other data and Xxxxxx
Xxxxxx'x records, data, equipment, facilities and other property used in the
performance of its obligations hereunder are adequate and that it will implement
them in the manner proposed and make such changes therein from time to time as
in its judgment are required for the secure performance of obligations
hereunder.
10. RESPONSIBILITY OF XXXXXX XXXXXX; LIMITATION OF LIABILITY. Xxxxxx
Xxxxxx shall be held to the exercise of reasonable care in carrying out the
provisions of this Agreement, but the Fund shall indemnify and hold Xxxxxx
Xxxxxx harmless against any losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from any claim,
demand, action or suit brought by any person (including a shareholder naming the
Fund as a party) other than the Fund arising out of, or in connection with,
Xxxxxx Xxxxxx'x performance of its obligations hereunder, provided, that Xxxxxx
Xxxxxx does not act with bad faith, willful misfeasance, reckless disregard of
its obligations and duties, or gross negligence.
The Fund shall also indemnify and hold Xxxxxx Xxxxxx harmless against
any losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit
(except to the extent contributed to by Xxxxxx Xxxxxx'x bad faith, willful
misfeasance, reckless disregard of its obligations and duties, or gross
negligence) resulting from the negligence of the Fund, or Xxxxxx Xxxxxx'x acting
upon any instructions reasonably believed by it to have been executed or
communicated by any person duly authorized by the Fund, or as a result of Xxxxxx
Xxxxxx'x acting in reliance upon advice reasonably believed by Xxxxxx Xxxxxx to
have been given by counsel for the Fund, or as a result of Xxxxxx Xxxxxx'x
acting in reliance upon any instrument reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
In no event shall Xxxxxx Xxxxxx be liable for indirect, special, or
consequential damages (even if Xxxxxx Xxxxxx has been advised of the possibility
of such damages) arising from the obligations assumed hereunder and the services
provided for by this Agreement, including but not limited to lost profits, loss
of use of the shareholder accounting system, cost of capital, cost of substitute
facilities, programs or services, downtime costs, or claims of the Fund's
shareholders for such damage.
11. FORCE MAJEURE. Xxxxxx Xxxxxx shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, Xxxxxx Xxxxxx shall take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
12. AMENDMENTS. Xxxxxx Xxxxxx and the Fund shall regularly consult with
each other regarding Xxxxxx Xxxxxx'x performance of its obligations hereunder.
Any change in the Fund's registration statements under the Securities Act of
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1933, as amended, or the 1940 Act or in the forms relating to any plan, program
or service offered by the Prospectus which would require a change in Xxxxxx
Xxxxxx'x obligations hereunder shall be subject to Xxxxxx Xxxxxx'x approval,
which shall not be unreasonably withheld. Neither this Agreement nor any
provisions hereof may be changed, waived, discharged, or terminated orally, but
only by written instrument which shall make specific reference to this Agreement
and which shall be signed by the party against which enforcement of such change,
waiver, discharge or termination is sought.
13. TERM OF AGREEMENT. This Agreement shall become effective as of its
execution. Thereafter, the Agreement will be renewed automatically on an annual
basis; provided, however, that this Agreement may be terminated at any time by
either party upon at least sixty days' prior written notice to the other party
and provided further that this Agreement may be terminated immediately at any
time for cause either by the Fund or Xxxxxx Xxxxxx. Any such termination shall
not affect the rights and obligations of the parties under Paragraphs 10 and 11
hereof. In the event that the Fund designates a successor to any of Xxxxxx
Xxxxxx'x obligations hereunder, Xxxxxx Xxxxxx shall, at the expense and
direction of the Fund, transfer to such successor all relevant books, records
and other data of the Fund established or maintained by Xxxxxx Xxxxxx hereunder
and shall cooperate in the transfer of such duties and responsibilities,
including provision for assistance from Xxxxxx Xxxxxx'x cognizant personnel in
the establishment of books, records and other data by such successor. Historical
records will be transferred in accordance with all then current laws and
industry regulations.
14. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Maryland. The captions in this Agreement
are included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
XXXXXX XXXXXX & COMPANY, INC.
By___________________________________
Title:
XXXXXX XXXXXX SELECT FUND, INC.
By___________________________________
Title:
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TRANSFER AGENCY AND SERVICE AGREEMENT
SCHEDULE A
For its services under this Transfer Agency and Service Agreement,
Xxxxxx Xxxxxx & Company, Inc., is entitled to receive from Xxxxxx Xxxxxx Select
Fund, Inc. (the "Fund"), an annual fee of $4,000 per month, or $48,000 per year
until such time as the Fund's net assets reach $35,000,000, at which time the
fee will become $5,000 per month, or $60,000 per year.
Dated:______________________
