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EXHIBIT (j(2))
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of February, 1997 by and between XXX
XXXXXX AMERICAN CAPITAL PRIME RATE INCOME TRUST, a Massachusetts business,
having its principal office and place of business at Oakbrook Terrace, Illinois
(the "Fund"), and ACCESS INVESTOR SERVICES, INC., a Delaware corporation,
having its principal office at Houston, Texas, and its principal place of
business at Kansas City, Missouri ("ACCESS").
R E C I T A L:
WHEREAS, the Fund desires to appoint ACCESS as its transfer agent,
dividend disbursing agent and shareholder service agent and ACCESS desires to
accept such appointments;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows: ARTICLE 1. TERMS OF
APPOINTMENT; DUTIES OF ACCESS.
ARTICLE 1. TERMS OF APPOINTMENT; DUTIES OF ACCESS.
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund hereby employs and appoints ACCESS as its transfer agent, dividend
disbursing agent and shareholder service agent.
1.02 ACCESS hereby accepts such employment and appointments and agrees
that on and after the effective date of this Agreement it will act as the
transfer agent, dividend disbursing agent and shareholder service agent for the
Fund on the terms and conditions set forth herein.
1.03 ACCESS agrees that its duties and obligations hereunder will be
performed in a competent, efficient and workmanlike manner with due diligence
in accordance with reasonable industry practice, and that the necessary
facilities, equipment and personnel for such performance will be provided.
1.04 ACCESS agrees to provide and maintain quantitative performance
objectives, including maximum target turn-around times and maximum target error
rates, for the various services provided hereunder. ACCESS also agrees to
provide a reporting system designed to provide the Board of Trustees of the
Fund (the "Board") on a quarterly basis with quantitative data comparing actual
performance for the period with the performance objectives. The foregoing
procedures are designed to provide a basis for continuing monitoring by the
Board of the quality of services rendered hereunder.
ARTICLE 2. FEES AND EXPENSES.
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2.01 For the services to be performed by ACCESS pursuant to this
Agreement, the Fund agrees to pay ACCESS the fee provided in the fee schedules
agreed upon from time to time by the Fund and ACCESS.
2.02 In addition to the amounts paid under section 2.01 above, the Fund
agrees to reimburse ACCESS promptly for its reasonable out-of-pocket expenses
or advances paid on its behalf by ACCESS in connection with its performance
under this Agreement for postage, freight, envelopes, checks, drafts,
continuous forms, reports and statements, telephone, telegraph, costs of
outside mailing firms, necessary outside record storage costs, media for
storage of records (e.g., microfilm, microfiche and computer tapes) and
printing costs incurred due to special requirements of the Fund. In addition,
any other special out-of-pocket expenses paid by ACCESS at the specific request
of the Fund will be promptly reimbursed by the Fund. Postage for mailings of
dividends, proxies, Fund reports and other mailings to all shareholder accounts
shall be advanced to ACCESS by the Fund three business days prior to the
mailing date of such materials. ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF
ACCESS.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF ACCESS.
ACCESS represents and warrants to the Fund that: 3.01 It is a
corporation duly organized and existing and in good standing under the laws of
the State of Delaware.
3.02 It is duly qualified to carry on its business in the states of
Texas and Missouri.
3.03 It is empowered under applicable laws and by its charter and
bylaws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have during the term of this Agreement
access to the necessary facilities, equipment and personnel to perform its
duties and obligations hereunder.
3.06 It will maintain a system regarding "as of" transactions as
follows: (a) Each "as of" transaction effected at a price other than that in
effect on the day of processing for which an estimate has not been given to the
Fund and which is necessitated by ACCESS' error, or delay for which ACCESS is
responsible or which could have been avoided through the exercise of reasonable
care, will be identified, and the net effect of such transactions determined,
on a daily basis for the Fund.
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(b) The cumulative net effect of the transactions included in
paragraph (a) above will be determined each day throughout each month.
If, on any day during the month, the cumulative net effect upon the Fund
is negative and exceeds an amount equivalent to 1/2 of 1 cent per share
of the Fund, ACCESS shall promptly make a payment to the Fund (in cash or
through use of a credit as described in paragraph (c) below) in such
amount as necessary to reduce the negative cumulative net effect to less
than 1/2 of 1 cent per share of the Fund. If on the last business day of
the month the cumulative net effect (adjusted by the amount of any
payments pursuant to the preceding sentence) upon the Fund is negative,
the Fund shall be entitled to a reduction in the monthly transfer agency
fee next payable by an equivalent amount, except as provided in paragraph
(c) below. If on the last business day of the month the cumulative net
effect (similarly adjusted) upon the Fund is positive, ACCESS shall be
entitled to recover certain past payments and reductions in fees, and to
a credit against all future payments and fee reductions made under this
paragraph to the Fund, as described in paragraph (c) below.
(c) At the end of each month, any positive cumulative net effect
upon the Fund shall be deemed to be a credit to ACCESS which shall first
be applied to recover any payments and fee reductions made by ACCESS to
the Fund under paragraph (b) above during the calendar year by increasing
the amount of the monthly transfer agency fee next payable in an amount
equal to prior payments and fee reductions made during such year, but not
exceeding the sum of that month's credit and credits arising in prior
months during such year to the extent such prior credits have not
previously been utilized as contemplated by this paragraph (c). Any
portion of a credit to ACCESS not so used shall remain as a credit to be
used as payment against the amount of any future negative cumulative net
effects that would otherwise require a payment or fee reduction to the
Fund pursuant to paragraph (b) above.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE FUND.
The Fund hereby represents and warrants that:
4.01 It is duly organized and existing and in good standing under the laws
of the commonwealth of Massachusetts.
4.02 It is empowered under applicable laws and regulations and by its
Declaration of Trust and by-laws to enter into and perform this Agreement.
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4.03 All requisite proceedings have been taken by its Board to authorize
it to enter into and perform this Agreement.
4.04 It is an closed-end, management investment company registered under
the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended, is currently effective and will remain effective, and appropriate
state securities laws filings have been made and will continue to be made, with
respect to all of its shares being offered for sale.
ARTICLE 5. INDEMNIFICATION.
5.01 ACCESS shall not be responsible for and the Fund shall indemnify and
hold ACCESS harmless from and against any and all losses, damages, costs,
charges, reasonable counsel fees, payments, expenses and liabilities arising
out of or attributable to:
(a) All actions of ACCESS required to be taken by ACCESS for the
benefit of the Fund pursuant to this Agreement, provided ACCESS has acted
in good faith with due diligence and without negligence or willful
misconduct.
(b) The reasonable reliance by ACCESS on, or reasonable use by
ACCESS of, information, records and documents which have been prepared or
maintained by or on behalf of the Fund or have been furnished to ACCESS
by or on behalf of the Fund.
(c) The reasonable reliance by ACCESS on, or the carrying out by
ACCESS of, any instructions or requests of the Fund.
(d) The offer or sale of the Fund's shares in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state or in violation of any stop
order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such shares in such state unless
such violation results from any failure by ACCESS to comply with written
instructions of the Fund that no offers or sales of the Fund's shares be
made in general or to the residents of a particular state.
(e) The Fund's refusal or failure to comply with the terms of this
Agreement, or the Fund's lack of good faith, negligence or willful
misconduct or the breach of any representation or warranty of the Fund
hereunder.
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5.02 ACCESS shall indemnify and hold the Fund harmless from and against
any and all losses, damages, costs, charges, reasonable counsel fees, payments,
expenses and liability arising out of or attributable to ACCESS' refusal or
failure to comply with the terms of this Agreement, or ACCESS' lack of good
faith, negligence or willful misconduct, or the breach of any representation or
warranty of ACCESS hereunder.
5.03 At any time ACCESS may apply to any authorized officer of the Fund
for instructions, and may consult with the Fund's legal counsel, at the expense
of the Fund, with respect to any matter arising in connection with the services
to be performed by ACCESS under this Agreement, and ACCESS shall not be liable
and shall be indemnified by the Fund for any action taken or omitted by it in
good faith in reasonable reliance upon such instructions or upon the opinion of
such counsel. ACCESS shall be protected and indemnified in acting upon any
paper or document reasonably believed by ACCESS to be genuine and to have been
signed by the proper person or persons and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. ACCESS shall also be protected and indemnified in recognizing
stock certificates which ACCESS reasonably believes to bear the proper manual
or facsimile signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or registrar, or of a co-transfer
agent or co-registrar.
5.04 In the event any party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage, or other causes reasonably beyond its control,
such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes.
5.05 In no event and under no circumstances shall any party to this
Agreement be liable to another party for consequential damages under any
provision of this Agreement or for any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which one party may be
required to indemnify another, 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. 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.
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ARTICLE 6. COVENANTS OF THE FUND AND ACCESS.
6.01 The Fund shall promptly furnish to ACCESS the following:
(a) Certified copies of the resolution of its Board authorizing the
appointment of ACCESS and the execution and delivery of this Agreement.
(b) Certified copies of its Declaration of Trust and by-laws and all
amendments thereto.
6.02 ACCESS hereby agrees to maintain facilities and procedures reasonably
acceptable to the Fund for safekeeping of share certificates, check forms and
facsimile signature imprinting devices, if any; and for the preparation or use,
and for keeping account of, such certificates, forms and devices.
6.03 ACCESS shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable; provided, however,
that all accounts, books and other records of the Fund (hereinafter referred to
as "Fund Records") prepared or maintained by ACCESS hereunder shall be
maintained and kept current in compliance with Section 31 of the Investment
Company Act of 1940 and the Rules thereunder (such Section and Rules being
hereinafter referred to as the "1940 Act Requirements"). To the extent
required by the 1940 Act Requirements, ACCESS agrees that all Fund Records
prepared or maintained by ACCESS hereunder are the property of the Fund and
shall be preserved and made available in accordance with the 1940 Act
Requirements, and shall be surrendered promptly to the Fund on its request.
ACCESS agrees at such reasonable times as may be requested by the Board and at
least quarterly to provide (i) written confirmation to the Board that all Fund
Records are maintained and kept current in accordance with the 1940 Act
Requirements, and (ii) such other reports regarding its performance hereunder
as may be reasonably requested by the Board.
6.04 ACCESS and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement
shall remain confidential, and shall not be voluntarily disclosed to any other
person, except as may be required by law.
6.05 In case of any requests or demands for the inspection of any of the
Fund Records, ACCESS will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such inspection.
ACCESS reserves the right, however, to exhibit such Fund Records to any person
whenever it is advised by its counsel that it may be held liable for the
failure to exhibit the Fund records to such person.
ARTICLE 7. TERM AND TERMINATION OF AGREEMENT.
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7.01 The initial term of this Agreement shall expire June 30, 1998, and
thereafter this Agreement shall automatically be renewed for successive one
year periods to begin on July 1 of each year unless either party provides
notice to the other party at least 30 days in advance of that date that this
Agreement is not to be renewed.
7.02 Notwithstanding the foregoing, either party may terminate this
Agreement for good and reasonable cause at any time by giving written notice to
the other party at least 120 days prior to the date on which such termination
is to be effective.
7.03 Any unpaid fees or reimbursable expenses payable to ACCESS at the
termination date of this Agreement shall be due on that termination date.
ACCESS agrees to use its best efforts to cooperate with the Fund and the
successor transfer agent or agents in accomplishing an orderly transition.
ARTICLE 8. MISCELLANEOUS.
8.01 Except as provided in section 8.03 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by any party without the
written consent of ACCESS or the Fund, as the case may be; provided, however,
that no consent shall be required for any merger of the Fund with, or any sale
of all or substantially all the assets of the Fund to, another investment
company.
8.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
8.03 ACCESS may, without further consent on the part of the Fund,
subcontract with DST, Inc., a Missouri corporation, or any other qualified
servicer, for the performance of data processing activities; provided, however,
that ACCESS shall be as fully responsible to the Fund for the acts and
omissions of DST, Inc. or other qualified servicer as it is for its own acts
and omissions.
8.04 ACCESS may, without further consent on the part of the Fund, provide
services to its affiliated companies. Such services may be provided at cost.
8.05 This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and supersedes any prior
agreement with respect thereto, whether oral or written, and this Agreement may
not be modified except by written instrument executed by the affected parties.
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8.06 The execution of this Agreement has been authorized by the Fund's
Trustees. This Plan is executed+ on behalf of the Fund or the Trustees of the
Fund as Trustees and not individually and that the obligations of this
Agreement are not binding upon any of the Trustees, officers or shareholders of
the Fund individually but are binding only upon the assets and property of the
Fund. A Certificate of Trust in respect of the Fund is on file with
Massachusetts' Secretary of State's Office.
8.07 In the event of a change in the business or regulatory environment
affecting all or any portion of this Agreement, the parties hereto agree to
renegotiate such affected portions in good faith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf and through their duly authorized
officers, as of the date first above written.
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
BY: /s/ Xxxxx Xxxxxx
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Assistant Secretary
ATTEST:
/s/ Xxxx Xxxxxxx
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Assistant Secretary
ACCESS INVESTOR SERVICES, INC.
BY: /s/ Xxxx Xxxxxxxxxx
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President and Chief Executive
Officer
ATTEST:
/s/ Xxxx Xxxxxxx
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Assistant Secretary
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SCHEDULE "A"
PRICING SCHEDULE
PRICE PER ACCOUNT PLUS OUT OF POCKETS
$21.34
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