FORM OF
TANAKA FUNDS, INC.
TRANSFER AGENCY AND SERVICES AGREEMENT
AGREEMENT made as of the ___ day of _________, 1998, by and between
TANAKA Funds, Inc., a Maryland corporation, with its principal office and place
of business at Two ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Corporation"),
and Forum Shareholder Services, LLC, a Delaware limited liability company with
its principal office and place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ ("Forum").
WHEREAS, the Corporation is authorized to issue shares in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets, and is authorized to divide those series into
separate classes; and
WHEREAS, the Corporation intends to offer shares in various series as
listed in Appendix A hereto (each such series, together with all other series
subsequently established by the Corporation and made subject to this Agreement
in accordance with Section 13, being herein referred to as a "Fund," and
collectively as the "Funds") and the Corporation intends to offer shares of
various classes of each Fund as listed in Appendix A hereto (each such class
together with all other classes subsequently established by the Corporation in a
Fund being herein referred to as a "Class," and collectively as the "Classes");
and
WHEREAS, the Corporation on behalf of the Funds desires to appoint
Forum as its transfer agent and dividend disbursing agent and Forum desires to
accept such appointment;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Corporation and Forum hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) Appointment. The Corporation, on behalf of the Funds, hereby
appoints Forum to act as, and Forum agrees to act as, (i) transfer agent for the
authorized and issued shares of beneficial interest of the Corporation
representing interests in each of the respective Funds and Classes thereof
("Shares"), (ii) dividend disbursing agent and (iii) agent in connection with
any accumulation, open-account or similar plans provided to the registered
owners of shares of any of the Funds ("Shareholders") and set out in the
currently effective prospectuses and statements of additional information
(collectively "prospectus") of the applicable Fund, including, without
limitation, any periodic investment plan or periodic withdrawal program.
(b) Document Delivery. The Corporation has delivered to Forum copies of
(i) the Corporation's Articles of Incorporation and Bylaws (collectively, as
amended from time to time, "Organic Documents"), (ii) the Corporation's
Registration Statement and all amendments thereto filed with the U.S. Securities
and Exchange Commission ("SEC") pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), or the Investment Company Act of 1940, as
amended
("1940 Act")(the "Registration Statement"), (iii) the Corporation's current
Prospectus and Statement of Additional Information of each Fund (collectively,
as currently in effect and as amended or supplemented, the "Prospectus"), (iv)
each current plan of distribution or similar document adopted by the Corporation
under Rule 12b-1 under the 1940 Act ("Plan") and each current shareholder
service plan or similar document adopted by the Corporation ("Service Plan"),
and (v) all procedures adopted by the Corporation with respect to the Funds
(i.e., repurchase agreement procedures), and shall promptly furnish Forum with
all amendments of or supplements to the foregoing. The Corporation shall deliver
to Forum a certified copy of the resolution of the Board of Directors of the
Corporation (the "Board") appointing Forum and authorizing the execution and
delivery of this Agreement.
SECTION 2. DUTIES OF FORUM
(a) Services. Forum agrees that in accordance with procedures
established from time to time by agreement between the Corporation on behalf of
each of the Funds, as applicable, and Forum, Forum will perform the following
services:
(i) provide the services of a transfer agent, dividend disbursing agent
and, as relevant, agent in connection with accumulation, open-account
or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program) that are customary for open-end
management investment companies including: (A) maintaining all
Shareholder accounts, (B) preparing Shareholder meeting lists, (C)
mailing proxies to Shareholders, (D) mailing Shareholder reports and
prospectuses to current Shareholders, (E) withholding taxes on U.S.
resident and non-resident alien accounts, (F) preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required by
federal authorities with respect to distributions for Shareholders, (G)
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, (H) preparing and
mailing activity statements for Shareholders, and (I) providing
Shareholder account information;
(ii) receive for acceptance orders for the purchase of Shares and
promptly deliver payment and appropriate documentation therefor to the
custodian of the applicable Fund (the "Custodian") or, in the case of
Fund's operating in a master-feeder or fund of funds structure, to the
transfer agent or interestholder recordkeeper for the master portfolios
in which the Fund invests;
(iii) pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
(iv) receive for acceptance redemption requests and deliver the
appropriate documentation therefor to the Custodian or, in the case of
Fund's operating in a master-feeder or fund of funds structure, to the
transfer agent or interestholder recordkeeper for the master portfolios
in which the Fund invests;
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(v) as and when it receives monies paid to it by the Custodian with
respect to any redemption, pay the redemption proceeds as required by
the prospectus pursuant to which the redeemed Shares were offered and
as instructed by the redeeming Shareholders;
(vi) effect transfers of Shares upon receipt of appropriate
instructions from Shareholders;
(vii) prepare and transmit to Shareholders (or credit the appropriate
Shareholder accounts) payments for all distributions declared by the
Corporation with respect to Shares;
(viii) issue share certificates and replacement share certificates for
those share certificates alleged to have been lost, stolen, or
destroyed upon receipt by Forum of indemnification satisfactory to
Forum and protecting Forum and the Corporation and, at the option of
Forum, issue replacement certificates in place of mutilated share
certificates upon presentation thereof without requiring
indemnification;
(ix) receive from Shareholders or debit Shareholder accounts for sales
commissions, including contingent deferred, deferred and other sales
charges, and service fees (i.e., wire redemption charges) and prepare
and transmit payments to underwriters, selected dealers and others for
commissions and service fees received;
(x) track shareholder accounts by financial intermediary source and
otherwise as requested by the Corporation and provide periodic
reporting to the Corporation or its administrator or other agent;
(xi) maintain records of account for and provide reports and statements
to the Corporation and Shareholders as to the foregoing;
(xii) record the issuance of Shares of the Corporation and maintain
pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934,
as amended ("1934 Act") a record of the total number of Shares of the
Corporation, each Fund and each Class thereof, that are authorized,
based upon data provided to it by the Corporation, and are issued and
outstanding and provide the Corporation on a regular basis a report of
the total number of Shares that are authorized and the total number of
Shares that are issued and outstanding; and
(xiii) provide a system which will enable the Corporation to calculate
the total number of Shares of each Fund and Class thereof sold in each
State.
(b) Other Services. Forum shall provide the following additional
services on behalf of the Corporation and such other services agreed to in
writing by the Corporation and Forum:
(i) monitor and make appropriate filings with respect to the
escheatment laws of the various states and territories of the United
States; and
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(ii) receive and tabulate proxy votes/oversee the activities of proxy
solicitation firms and coordinate the tabulation of proxy and
shareholder meeting votes.
(c) Blue Sky Matters. The Corporation or its administrator or other
agent (i) shall identify to Forum in writing those transactions and assets to be
treated as exempt from reporting for each state and territory of the United
States and for each foreign jurisdiction (collectively "States") and (ii) shall
monitor the sales activity with respect to Shareholders domiciled or resident in
each State. The responsibility of Forum for the Corporation's State registration
status is solely limited to the reporting of transactions to the Corporation,
and Forum 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 Corporation or its administrator or other agent.
(d) Safekeeping. Forum shall establish and maintain facilities and
procedures reasonably acceptable to the Corporation for the safekeeping,
control, preparation and use of share certificates, check forms, and facsimile
signature imprinting devices. Forum shall establish and maintain facilities and
procedures reasonably acceptable to the Corporation for safekeeping of all
records maintained by Forum pursuant to this Agreement.
(e) Cooperation With Accountants. Forum shall cooperate with each
Fund's independent public accountants and shall take reasonable action to make
all necessary information available to the accountants for the performance of
the accountants' duties.
(f) Responsibility for Compliance With Law. Except with respect to
Forum's duties as set forth in this Section 2 and except as otherwise
specifically provided herein, the Corporation assumes all responsibility for
ensuring that the Corporation complies with all applicable requirements of the
Securities Act, the 1940 Act and any laws, rules and regulations of governmental
authorities with jurisdiction over the Corporation. All references to any law in
this Agreement shall be deemed to include reference to the applicable rules and
regulations promulgated under authority of the law and all official
interpretations of such law or rules or regulations.
SECTION 3. RECORDKEEPING
(a) Predecessor Records. Prior to the commencement of Forum's
responsibilities under this Agreement, if applicable, the Corporation shall
deliver or cause to be delivered over to Forum (i) an accurate list of
Shareholders of the Corporation, showing each Shareholder's address of record,
number of Shares owned and whether such Shares are represented by outstanding
share certificates and (ii) all Shareholder records, files, and other materials
necessary or appropriate for proper performance of the functions assumed by
Forum under this Agreement (collectively referred to as the "Materials"). The
Corporation shall on behalf of each applicable Fund or Class indemnify and hold
Forum harmless from and against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable to
any error, omission, inaccuracy or other deficiency of the Materials, or out of
the failure of the
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Corporation to provide any portion of the Materials or to provide any
information in the Corporation's possession or control reasonably needed by
Forum to perform the services described in this Agreement.
(b) Recordkeeping. Forum shall keep records relating to the services to
be performed under this Agreement, in the form and manner as it may deem
advisable and as required by applicable law. To the extent required by Section
31 of the 1940 Act, and the rules thereunder, Forum agrees that all such records
prepared or maintained by Forum relating to the services to be performed by
Forum under this Agreement are the property of the Corporation and will be
preserved, maintained and made available in accordance with Section 31 of the
1940 Act and the rules thereunder, and will be surrendered promptly to the
Corporation on and in accordance with the Corporation's request. The Corporation
and the Corporation's authorized representatives shall have access to Forum's
records relating to the services to be performed under this Agreement at all
times during Forum's normal business hours. Upon the reasonable request of the
Corporation, copies of any such records shall be provided promptly by Forum to
the Corporation or the Corporation's authorized representatives.
(c) Confidentiality of Records. Forum and the Corporation 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.
(d) Inspection of Records by Others. In case of any requests or demands
for the inspection of the Shareholder records of the Corporation, Forum will
endeavor to notify the Corporation and to secure instructions from an authorized
officer of the Corporation as to such inspection. Forum shall abide by the
Corporation's instructions for granting or denying the inspection; provided,
however, that Forum may grant the inspection without instructions if Forum is
advised by counsel to Forum that failure to do so will result in liability to
Forum.
SECTION 4. ISSUANCE AND TRANSFER OF SHARES
(a) Issuance of Shares. Forum shall make original issues of Shares of
each Fund and Class thereof in accordance with the Corporation's then current
prospectus only upon receipt of (i) instructions requesting the issuance, (ii) a
certified copy of a resolution of the Board authorizing the issuance, (iii)
necessary funds for the payment of any original issue tax applicable to such
Shares, and (iv) an opinion of the Corporation's counsel as to the legality and
validity of the issuance, which opinion may provide that it is contingent upon
the filing by the Corporation of an appropriate notice with the SEC, as required
by Section 24 of the 1940 Act or the rules thereunder. If the opinion described
in (iv) above is contingent upon a filing under Section 24 of the 1940 Act, the
Corporation shall indemnify Forum for any liability arising from the failure of
the Corporation to comply with that section or the rules thereunder.
(b) Transfer of Shares. Transfers of Shares of each Fund and Class
thereof shall be registered on the Shareholder records maintained by Forum. In
registering transfers of Shares,
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Forum may rely upon the Uniform Commercial Code as in effect in the State of
Delaware or any other statutes that, in the opinion of Forum's counsel, protect
Forum and the Corporation from liability arising from (i) not requiring complete
documentation, (ii) registering a transfer without an adverse claim inquiry,
(iii) delaying registration for purposes of such inquiry or (iv) refusing
registration whenever an adverse claim requires such refusal. As Transfer Agent,
Forum will be responsible for delivery to the transferor and transferee of such
documentation as is required by the Uniform Commercial Code.
SECTION 5. SHARE CERTIFICATES
(a) Certificates. The Corporation shall furnish to Forum a supply of
blank share certificates of each Fund and Class thereof and, from time to time,
will renew such supply upon Forum's request. Blank share certificates shall be
signed manually or by facsimile signatures of officers of the Corporation
authorized to sign by the Organic Documents of the Corporation and, if required
by the Organic Documents, shall bear the Corporation's seal or a facsimile
thereof. Unless otherwise directed by the Corporation, Forum may issue or
register Share certificates reflecting the manual or facsimile signature of an
officer who has died, resigned or been removed by the Corporation.
(b) Endorsement; Transportation. New Share certificates shall be issued
by Forum upon surrender of outstanding Share certificates in the form deemed by
Forum to be properly endorsed for transfer and satisfactory evidence of
compliance with all applicable laws relating to the payment or collection of
taxes. Forum shall forward Share certificates in "non-negotiable" form by
first-class or registered mail, or by whatever means Forum deems equally
reliable and expeditious. Forum shall not mail Share certificates in
"negotiable" form unless requested in writing by the Corporation and fully
indemnified by the Corporation to Forum's satisfaction.
(c) Non-Issuance of Certificates. In the event that the Corporation
informs Forum that any Fund or Class thereof does not issue share certificates,
Forum shall not issue any such share certificates and the provisions of this
Agreement relating to share certificates shall not be applicable with respect to
those Funds or Classes thereof.
SECTION 6. SHARE PURCHASES; ELIGIBILITY TO RECEIVE DISTRIBUTIONS
(a) Purchase Orders. Shares shall be issued in accordance with the
terms of a Fund's or Class' prospectus after Forum or its agent receives either:
(i) (A) an instruction directing investment in a Fund or Class, (B) a
check (other than a third party check) or a wire or other electronic
payment in the amount designated in the instruction and (C), in the
case of an initial purchase, a completed account application; or
(ii) the information required for purchases pursuant to a selected
dealer agreement, processing organization agreement, or a similar
contract with a financial intermediary.
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(b) Distribution Eligibility. Shares issued in a Fund after receipt of
a completed purchase order shall be eligible to receive distributions of the
Fund at the time specified in the prospectus pursuant to which the Shares are
offered.
(c) Determination of Federal Funds. Shareholder payments shall be
considered Federal Funds no later than on the day indicated below unless other
times are noted in the prospectus of the applicable Class or Fund:
(i) for a wire received, at the time of the receipt of the wire;
(ii) for a check drawn on a member bank of the Federal Reserve System,
on the second Fund Business Day following receipt of the check; and
(iv) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as Forum is credited with Federal
Funds with respect to that check.
SECTION 7. FEES AND EXPENSES
(a) Fees. For the services provided by Forum pursuant to this
Agreement, the Corporation, on behalf of each Fund, agrees to pay Forum the fees
set forth in Clauses (i) and (ii) of Appendix B hereto. Fees will begin to
accrue for each Fund on the latter of the date of this Agreement or the date of
commencement of operations of the Fund. If fees begin to accrue in the middle of
a month or if this Agreement terminates before the end of any month, all fees
for the period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be prorated
according to the proportion that the period bears to the full month in which the
effectiveness or termination occurs. Upon the termination of this Agreement with
respect to a Fund, the Corporation shall pay to Forum such compensation as shall
be payable prior to the effective date of termination.
(b) Expenses. In connection with the services provided by Forum
pursuant to this Agreement, the Corporation, on behalf of each Fund, agrees to
reimburse Forum for the expenses set forth in Appendix B hereto. In addition,
the Corporation, on behalf of the applicable Fund, shall reimburse Forum for all
expenses and employee time (at 150% of salary) attributable to any review of the
Corporation's accounts and records by the Corporation's independent accountants
or any regulatory body outside of routine and normal periodic reviews. Should
the Corporation exercise its right to terminate this Agreement, the Corporation,
on behalf of the applicable Fund, shall reimburse Forum for all out-of-pocket
expenses and employee time (at 150% of salary) associated with the copying and
movement of records and material to any successor person and providing
assistance to any successor person in the establishment of the accounts and
records necessary to carry out the successor's responsibilities.
(c) Payment. All fees and reimbursements are payable in arrears on a
monthly basis and the Corporation, on behalf of the applicable Fund, agrees to
pay all fees and reimbursable expenses within five (5) business days following
receipt` of the respective billing notice.
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SECTION 8. REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties of Forum. Forum represents and
warrants to the Corporation that:
(i) It is a limited liability company duly organized and existing and
in good standing under the laws of the State of Delaware.
(ii) It is duly qualified to carry on its business in the State of
Maine.
(iii) It is empowered under applicable laws and by its Operating
Agreement to enter into this Agreement and perform its duties under
this Agreement.
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement and perform its duties under this
Agreement.
(v) It has access to the necessary facilities, equipment, and personnel
to perform its duties and obligations under this Agreement.
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of Forum, enforceable against Forum
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
(vii) It is registered as a transfer agent under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇ ▇▇▇.
(▇) Representations and Warranties of the Corporation. The Corporation
represents and warrants to Forum that:
(i) It is a corporation duly organized and existing and in good
standing under the laws of Maryland.
(ii) It is empowered under applicable laws and by its Organic Documents
to enter into this Agreement and perform its duties under this
Agreement.
(iii) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement and perform its duties under this
Agreement.
(iv) It is an open-end management investment company registered under
the 1940 Act.
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Corporation, enforceable
against the Corporation in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and
secured parties.
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(vi) A registration statement under the Securities Act is currently
effective and will remain effective, and appropriate State securities
law filings have been made and will continue to be made, with respect
to all Shares of the Funds and Classes of the Corporation being offered
for sale.
SECTION 9. PROPRIETARY INFORMATION
(a) Proprietary Information of Forum. The Corporation acknowledges that
the databases, computer programs, screen formats, report formats, interactive
design techniques, and documentation manuals maintained by Forum on databases
under the control and ownership of Forum or a third party constitute
copyrighted, trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to Forum or the third party. The
Corporation agrees to treat all Proprietary Information as proprietary to Forum
and further agrees that it shall not divulge any Proprietary Information to any
person or organization except as may be provided under this Agreement.
(b) Proprietary Information of the Corporation. Forum acknowledges that
the Shareholder list and all information related to Shareholders furnished to
Forum by the Corporation or by a Shareholder in connection with this Agreement
(collectively, "Customer Data") constitute proprietary information of
substantial value to the Corporation. In no event shall Proprietary Information
be deemed Customer Data. Forum agrees to treat all Customer Data as proprietary
to the Corporation and further agrees that it shall not divulge any Customer
Data to any person or organization except as may be provided under this
Agreement or as may be directed by the Corporation.
SECTION 10. INDEMNIFICATION
(a) Indemnification of Forum. Forum shall not be responsible for, and
the Corporation shall on behalf of each applicable Fund or Class thereof
indemnify and hold Forum harmless from and against, any and all losses, damages,
costs, charges, reasonable counsel fees, payments, expenses and liability
arising out of or attributable to:
(i) all actions of Forum 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;
(ii) the Corporation's lack of good faith or the Corporation's gross
negligence or willful misconduct;
(iii) the reliance on or use by Forum or its agents or subcontractors
of information, records, documents or services which have been
prepared, maintained or performed by the Corporation or any other
person or firm on behalf of the Corporation, including but not limited
to any previous transfer agent or registrar;
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(iv) the reasonable reliance on, or the carrying out by Forum or its
agents or subcontractors of, any instructions or requests of the
Corporation on behalf of the applicable Fund; and
(v) 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.
(b) Indemnification of Corporation. Forum shall indemnify and hold the
Corporation and each Fund or Class thereof harmless from and against any and all
losses, damages, costs, charges, reasonable counsel fees, payments, expenses and
liability arising out of or attributed to any action or failure or omission to
act by Forum as a result of Forum's lack of good faith, gross negligence or
willful misconduct with respect to the services performed under or in connection
with this Agreement.
(c) Reliance. At any time Forum may apply to any officer of the
Corporation for instructions, and may consult with legal counsel to the
Corporation or to Forum with respect to any matter arising in connection with
the services to be performed by Forum under this Agreement, and Forum and its
agents or subcontractors shall not be liable and shall be indemnified by the
Corporation on behalf of the applicable Fund for any action taken or omitted by
it in reasonable reliance upon such instructions or upon the advice of such
counsel. Forum, its agents and subcontractors shall be protected and indemnified
in acting upon (i) any paper or document furnished by or on behalf of the
Corporation, reasonably believed by Forum to be genuine and to have been signed
by the proper person or persons, (ii) any instruction, information, data,
records or documents provided Forum or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means authorized by the
Corporation, and (iii) any authorization, instruction, approval, item or set of
data, or information of any kind transmitted to Forum in person or by telephone,
vocal telegram or other electronic means, reasonably believed by Forum to be
genuine and to have been given by the proper person or persons. Forum shall not
be held to have notice of any change of authority of any person, until receipt
of written notice thereof from the Corporation. Forum, its agents and
subcontractors shall also be protected and indemnified in recognizing share
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Corporation, and the proper
countersignature of any former transfer agent or former registrar or of a
co-transfer agent or co-registrar of the Corporation.
(d) Reliance on Electronic Instructions. If the Corporation has the
ability to originate electronic instructions to Forum in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information, then in such event Forum shall be entitled to rely on the
validity and authenticity of such instruction without undertaking any further
inquiry as long as such instruction is undertaken in conformity with security
procedures established by Forum from time to time.
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(e) Use of Fund/SERV and Networking. The Corporation has authorized or
in the future may authorize Forum to act as a "Mutual Fund Services Member" for
the Corporation or various Funds. Fund/SERV and Networking are services
sponsored by the National Securities Clearing Corporation ("NSCC") and as used
herein have the meanings as set forth in the then current edition of NSCC Rules
and Procedures published by NSCC or such other similar publication as may exist
from time to time. The Corporation shall indemnify and hold Forum harmless from
and against any and all losses, damages, costs, charges, reasonable counsel
fees, payments, expenses and liability arising directly or indirectly out of or
attributed to any action or failure or omission to act by NSCC.
(f) Notification of Claims. In order that the indemnification
provisions contained in this Section shall apply, upon the assertion of a claim
for which either party may be required to indemnify the other, the party 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 in the defense of such claim
or to defend against said claim in its own name or in the name of the other
party. 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.
SECTION 11. EFFECTIVENESS, DURATION AND TERMINATION
(a) Effectiveness. This Agreement shall become effective with respect
to each Fund or Class on the later of the date on which the Corporation's
Registration Statement relating to the Shares of the Fund or Class becomes
effective or the date of the commencement of operations of the Fund or Class.
Upon effectiveness of this Agreement, it shall supersede all previous agreements
between the parties hereto covering the subject matter hereof insofar as such
Agreement may have been deemed to relate to the Funds.
(b) Duration. This Agreement shall continue in effect with respect to a
Fund until terminated; provided, that continuance is specifically approved at
least annually (i) by the Board or by a vote of a majority of the outstanding
voting securities of the Fund and (ii) by a vote of a majority of Directors of
the Corporation who are not parties to this Agreement or interested persons of
any such party (other than as Directors of the Corporation).
(c) Termination. This Agreement may be terminated with respect to a
Fund at any time, without the payment of any penalty (i) by the Board on 60
days' written notice to Forum or (ii) by Forum on 60 days' written notice to the
Corporation. Any termination shall be effective as of the date specified in the
notice. Upon notice of termination of this Agreement by either party, Forum
shall promptly transfer to the successor transfer agent the original or copies
of all books and records maintained by Forum under this Agreement including, in
the case of records maintained on computer systems, copies of such records in
machine-readable form, and shall cooperate with, and provide reasonable
assistance to, the successor transfer agent in the establishment of the books
and records necessary to carry out the successor transfer agent's
responsibilities.
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(d) Survival. The obligations of Sections 7, 9 and 10 shall survive any
termination of this Agreement.
SECTION 12. ADDITIONAL FUNDS AND CLASSES. In the event that the
Corporation 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 the case may be, shall become Funds and Classes under this
Agreement. Forum or the Corporation may elect not to make and such series or
classes subject to this Agreement.
SECTION 13. ASSIGNMENT. Except as otherwise provided in this Agreement,
neither this Agreement nor any rights or obligations under this Agreement may be
assigned by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns. Forum may, without further
consent on the part of the Corporation, subcontract for the performance hereof
with any entity, including affiliated persons of Forum; provided however, that
Forum shall be as fully responsible to the Corporation for the acts and
omissions of any subcontractor as Forum is for its own acts and omissions.
SECTION 14. FORCE MAJEURE. Forum shall not be responsible or liable for
any failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control including, without limitation, acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical
breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or
failure of the mails or any transportation medium, communication system or power
supply.
SECTION 15. LIMITATIONS OF LIABILITY OF THE DIRECTORS AND SHAREHOLDERS,
OFFICERS, EMPLOYEES AND AGENTS. The directors of the Corporation and the
shareholders of each Fund shall not be liable for any obligations of the
Corporation or of the Funds under this Agreement, and Forum agrees that, in
asserting any rights or claims under this Agreement, it shall look only to the
assets and property of the Corporation or the Fund to which Forum's rights or
claims relate in settlement of such rights or claims, and not to the directors
of the Corporation or the shareholders of the Funds.
SECTION 16. TAXES. Forum shall not be liable for any taxes, assessments
or governmental charges that may be levied or assessed on any basis whatsoever
in connection with the Corporation or any Shareholder or any purchase of Shares,
excluding taxes assessed against Forum for compensation received by it under
this Agreement.
SECTION 17. MISCELLANEOUS
(a) No Consequential Damages. Neither party to this Agreement shall be
liable to the other party for consequential damages under any provision of this
Agreement.
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(b) Amendments. No provisions of this Agreement may be amended or
modified in any manner except by a written agreement properly authorized and
executed by both parties hereto.
(c) Choice of Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of
Delaware.
(d) Entire Agreement. 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.
(e) Counterparts. This Agreement may be executed by the parties hereto
on any number of counterparts, and all of the counterparts taken together shall
be deemed to constitute one and the same instrument.
(f) Severability. If any part, term or provision of this Agreement is
held to be illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected, and the
rights and obligations of the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or provision held to be
illegal or invalid.
(g) Headings. Section and paragraph headings in this Agreement are
included for convenience only and are not to be used to construe or interpret
this Agreement.
(h) Notices. Notices, requests, instructions and communications
received by the parties at their respective principal addresses, or at such
other address as a party may have designated in writing, shall be deemed to have
been properly given.
(i) Business Days. Nothing contained in this Agreement is intended to
or shall require Forum, in any capacity hereunder, to perform any functions or
duties on any day other than a Fund Business Day. Functions or duties normally
scheduled to be performed on any day which is not a Fund Business Day shall be
performed on, and as of, the next Fund Business Day, unless otherwise required
by law.
(j) Distinction of Funds. Notwithstanding any other provision of this
Agreement, the parties agree that the assets and liabilities of each Fund of the
Corporation are separate and distinct from the assets and liabilities of each
other Fund and that no Fund shall be liable or shall be charged for any debt,
obligation or liability of any other Fund, whether arising under this Agreement
or otherwise.
(k) Nonliability of Affiliates. No affiliated person (as that term is
defined in the 1940 Act), employee, agent, director, officer or manager of Forum
shall be liable at law or in equity for Forum's obligations under this
Agreement.
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(l) Representation of Signatories. Each of the undersigned expressly
warrants and represents that they have full power and authority to sign this
Agreement on behalf of the party indicated and that their signature will bind
the party indicated to the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
persons, as of the day and year first above written.
TANAKA FUNDS, INC.
By:
---------------------------
[Officer name]
[Title]
FORUM SHAREHOLDER SERVICES, LLC
By:
---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
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TANAKA FUNDS, INC.
TRANSFER AGENCY AND SERVICE AGREEMENT
Appendix A
Fund and Classes
as of __________, 1998
Fund
TANAKA Growth Fund
Classes
R Share
B Share
A Share
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TANAKA FUNDS, INC.
TRANSFER AGENCY AND SERVICE AGREEMENT
Appendix B
Fees and Expenses
(i) Base Fee:
Fees per Fund with one Class
...................................$24,000 ($2,000 per month) [$18,000
($1,500 per month) for the first twelve months of this Agreement]
Fees per Fund with more than one Class
...................................$24,000 ($2,000 per month) [$18,000
($1,500 per month) for the first twelve months of this Agreement] plus
$12,000 ($1,000 per month) per each class above one.
The rates set forth above shall remain fixed through December 31, 1999.
On January 1, 2,000, and on each successive January 1, the rates may be
adjusted automatically by Forum without action of the Corporation to
reflect changes in the Consumer Price Index for the preceding calendar
year, as published by the U.S. Department of Labor, Bureau of Labor
Statistics. Forum shall notify the Corporation each year of the new
rates, if applicable.
(ii) Shareholder Account Fees:
$30 per Shareholder account per year.
Shareholder account fees are based upon the number of Shareholder
accounts as of the last Fund Business Day of the prior month.
(iii) Out-Of-Pocket and Related Expenses
The Corporation, on behalf of the applicable Fund, shall reimburse
Forum for all out-of-pocket and ancillary expenses in providing the
services described in this Agreement, including but not limited to the
cost of (or appropriate share of the cost of): (i) statement,
confirmation, envelope and stationary stock, (ii) share certificates,
(iii) printing of checks and drafts, (iv) postage, (v)
telecommunications, (vi) banking services (DDA account, wire and ACH,
check and draft clearing and lock box fees and charges), (vii) NSCC
Mutual Fund Service Member fees and expenses, (viii) outside proxy
solicitors and tabulators, (ix) proxy solicitation fees and (ix)
microfilm and microfiche. In addition, any other expenses incurred by
Forum at the request or with the consent of the Corporation, will be
reimbursed by the Corporation on behalf of the applicable Fund.
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