TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of July, 2003,
by and between The Merger Fund VL, a Delaware statutory trust (the "Fund") and
U.S. Bancorp Fund Services, LLC, a Wisconsin limited liability company
("USBFS").
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company, and
is authorized to issue shares of beneficial interest in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets;
WHEREAS, USBFS is, among other things, in the business of administering
transfer and dividend disbursing agent functions for the benefit of its
customers; and
WHEREAS, the Fund desires to retain USBFS to provide transfer and dividend
disbursing agent services to each series of the Fund listed on Exhibit A hereto
(as amended from time to time) (each a "Fund", collectively the "Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. Appointment of USBFS as Transfer Agent
The Fund hereby appoints USBFS as transfer agent of the Fund on the terms
and conditions set forth in this Agreement, and USBFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement.
2. Services and Duties of USBFS
USBFS shall perform all of the customary services of a transfer agent and
dividend disbursing agent for the Funds, 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:
A. Receive orders for the purchase of shares.
B. Process purchase orders with prompt delivery, where appropriate, of
payment and supporting documentation to the Fund's custodian, and
issue the appropriate number of uncertificated shares with such
uncertificated shares being held in the appropriate shareholder
account.
C. Arrange for issuance of shares obtained through transfers of funds
from Fund shareholders' accounts at financial institutions and arrange
for the exchange of shares for shares of other eligible investment
companies, when permitted by the Fund's current prospectus
("Prospectus").
D. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Fund's custodian.
E. Pay monies upon receipt from the Fund's custodian, where relevant, in
accordance with the instructions of redeeming shareholders.
F. Process transfers of shares in accordance with the shareholder's
instructions.
G. Process exchanges between Funds and/or classes of shares of Funds both
within the same family of funds and with a First American Money Market
Fund, if applicable.
H. Prepare and transmit payments for dividends and distributions declared
by the Fund with respect to the Fund, after deducting any amount
required to be withheld by any applicable laws, rules and regulations
and in accordance with shareholder instructions.
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (e.g., systematic withdrawal, automatic
investment, dividend reinvestment).
J. Record the issuance of shares of the Fund and maintain, pursuant to
Rule 17Ad-10(e) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), a record of the total number of
shares of the Fund which are authorized, issued and outstanding.
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies.
L. Mail shareholder reports and Prospectuses to current shareholders.
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders.
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Fund.
O. Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate federal
authorities any taxes to be withheld on dividends and distributions
paid by the Fund, all as required by applicable federal tax laws and
regulations.
P. Provide a Blue Sky system that will enable the Fund to monitor the
total number of shares of the Fund sold in each state. In addition,
the Fund or its agent, including USBFS, shall identify to USBFS in
writing those transactions and assets to be treated as exempt from the
Blue Sky reporting for each state. FundFundFund
Q. Answer correspondence from shareholders, securities brokers and others
relating to USBFS's duties hereunder and such other correspondence as
may from time to time be mutually agreed upon between USBFS and the
Fund.
R. Reimburse the Fund each month for all material losses resulting from
"as of" processing errors for which USBFS is responsible in accordance
with the "as of" processing guidelines set forth on Exhibit C hereto.
3. Compensation
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit B hereto
(as amended from time to time). The Fund shall pay all fees and
reimbursable expenses within thirty (30) calendar days following receipt of
the billing notice, except for any fee or expense subject to a good faith
dispute. The Fund shall notify USBFS in writing within thirty (30) calendar
days following receipt of each invoice if the Fund is disputing any amounts
in good faith. The Fund shall settle such disputed amounts within ten (10)
calendar days of the day on which the parties agree to the amount to be
paid. With the exception of any fee or expense the Fund is disputing in
good faith as set forth above, unpaid invoices shall accrue a finance
charge of one and one-half percent (1 1/2%) per month, after the due date.
Notwithstanding anything to the contrary, amounts owed by the Fund to USBFS
shall only be paid out of assets and property of the particular Fund
involved.
4. Indemnification; Limitation of Liability
A. USBFS shall exercise reasonable care in the performance of its duties
under this Agreement. USBFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond USBFS's control, except a loss
arising out of or relating to USBFS's refusal or failure to comply
with the terms of this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance of its duties under
this Agreement. Notwithstanding any other provision of this Agreement,
if USBFS has exercised reasonable care in the performance of its
duties under this Agreement, the Fund shall indemnify and hold
harmless USBFS from and against any and all claims, demands, losses,
expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) which USBFS may sustain or incur or which
may be asserted against USBFS by any person arising out of any action
taken or omitted to be taken by it in performing the services
hereunder, except for any and all claims, demands, losses, expenses,
and liabilities arising out of or relating to USBFS's refusal or
failure to comply with the terms of this Agreement or from bad faith,
negligence or from willful misconduct on its part in performance of
its duties under this Agreement, (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral instruction
provided to USBFS by any duly authorized officer of the Fund, such
duly authorized officer to be included in a list of authorized
officers furnished to USBFS and as amended from time to time in
writing by resolution of the Board of Trustees of the Fund (the "Board
of Trustees" or "Trustees").
USBFS shall indemnify and hold the Fund harmless from and against any
and all claims, demands, losses, expenses, and liabilities of any and
every nature (including reasonable attorneys' fees) that the Fund may
sustain or incur or that may be asserted against the Fund by any
person arising out of any action taken or omitted to be taken by USBFS
as a result of USBFS's refusal or failure to comply with the terms of
this Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, USBFS shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond USBFS's control. USBFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of USBFS. USBFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency
use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Fund shall be entitled
to inspect USBFS's premises and operating capabilities at any time
during regular business hours of USBFS, upon reasonable notice to
USBFS.
Notwithstanding the above, USBFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the indemnitor may
be asked to indemnify or hold the indemnitee harmless, the indemnitor
shall be fully and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood that the
indemnitee will use all reasonable care to notify the indemnitor
promptly concerning any situation that presents or appears likely to
present the probability of a claim for indemnification. The indemnitor
shall have the option to defend the indemnitee against any claim that
may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon
the indemnitor shall take over complete defense of the claim, and the
indemnitee shall in such situation initiate no further legal or other
expenses for which it shall seek indemnification under this section.
The indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked to
indemnify the indemnitee except with the indemnitor's prior written
consent.
5. Proprietary and Confidential Information
USBFS agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Fund all
records and other information relative to the Fund and prior, present, or
potential shareholders (and clients of said shareholders) and not to use
such records and information for any purpose other than the performance of
its responsibilities and duties hereunder, except after prior notification
to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where USBFS may be exposed to
civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities, or
when so requested by the Fund.
Further, USBFS will adhere to the privacy policies adopted by the Fund
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time (the "Act"). Notwithstanding the foregoing, USBFS will not
share any nonpublic personal information concerning any of the Fund's
shareholders with any third party unless specifically directed by the Fund
or allowed under one of the exceptions noted under the Act.
6. Anti-Money Laundering Program
The Fund acknowledges that it has had an opportunity to review, consider
and comment upon the procedures provided by USBFS describing various tools
designed to promote the detection and reporting of potential money
laundering activity by monitoring certain aspects of shareholder activity
(the "Monitoring Procedures") as well as written procedures for verifying a
customer's identity (the "Customer Identification Procedures"), together
referred to as the "Procedures," and the Fund has determined that the
Procedures, as part of the Fund's overall anti-money laundering program,
are reasonably designed to prevent the Fund from being used for money
laundering or the financing of terrorist activities and to achieve
compliance with the applicable provision of the Bank Secrecy Act and the
implementing regulations thereunder.
Based on this determination, the Fund hereby instructs and directs USBFS to
implement the Procedures on the Fund's behalf, as such may be amended or
revised from time to time.
It is contemplated that these Procedures will be amended from time to time
by the parties as additional regulations are adopted and/or regulatory
guidance is provided relating to the Fund's anti-money laundering
responsibilities.
USBFS agrees to provide to the Fund:
(a) Prompt written notification of any transaction or combination of
transactions that USBFS believes, based on the Procedures, evidence
money laundering activity in connection with the Fund or any
shareholder of the Fund;
(b) Prompt written notification of any customer(s) that USBFS reasonably
believes, based upon the Procedures, to be engaged in money laundering
activity, provided that the Fund agrees not to communicate this
information to the customer;
(c) Any reports received by USBFS from any government agency or applicable
industry self-regulatory organization pertaining to USBFS's anti-money
laundering monitoring on behalf of the Fund;
(d) Prompt written notification of any action taken in response to
anti-money laundering violations as described in (a), (b) or (c); and
(e) An annual report of its monitoring and customer identification
activities on behalf of the Fund. USBFS shall provide such other
reports on the monitoring and customer identification activities
conducted at the direction of the Fund as may be agreed to from time
to time by USBFS and the Fund.
The Fund hereby directs, and USBFS acknowledges, that USBFS shall (i)
permit federal regulators access to such information and records maintained
by USBFS and relating to USBFS's implementation of the Procedures on behalf
of the Fund, as they may request, and (ii) permit such federal regulators
to inspect USBFS's implementation of the Procedures on behalf of the Fund.
7. Term of Agreement; Amendment
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of one year. Subsequent to the
initial one-year term, this Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or
such shorter period as is mutually agreed upon by the parties. However,
this Agreement may be amended by mutual written consent of the parties.
8. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the Fund by
written notice to USBFS, USBFS will promptly, upon such termination and at
the expense of the Fund, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by USBFS
under this Agreement in a form reasonably acceptable to the Fund (if such
form differs from the form in which USBFS has maintained, the Fund shall
pay any expenses associated with transferring the data to such form), and
will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from USBFS's personnel in the
establishment of books, records, and other data by such successor.
9. Records
USBFS shall keep records relating to the services to be performed hereunder
in the form and manner, and for such period, as it may deem advisable and
is agreeable to the Fund, but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section
31 of the 1940 Act and the rules thereunder. USBFS agrees that all such
records prepared or maintained by USBFS relating to the services to be
performed by USBFS hereunder are the property of the Fund and will be
preserved, maintained, and made available in accordance with such
applicable sections and rules of the 1940 Act and will be promptly
surrendered to the Fund on and in accordance with its request. Further,
federal examiners shall have access to information and records relating to
anti-money laundering activities performed by USBFS hereunder and USBFS
consents to any inspection authorized by law or regulation in connection
thereof.
10. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Wisconsin, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control, and nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or order of the Securities and
Exchange Commission thereunder.
11. Severability
If any part, term or provision of this Agreement is determined by the
courts or any regulatory authority having jurisdiction over the issue 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.
12. Data Necessary to Perform Services
The Fund or its agent, which may be USBFS, shall furnish to USBFS the data
necessary to perform the services described herein at such times and in
such form as mutually agreed upon. If USBFS is also acting in another
capacity for the Fund, nothing herein shall be deemed to relieve USBFS of
any of its obligations in such capacity.
13. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party.
14. Counterparts
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.
15. Non-Exclusivity; Other Agreements
The services of USBFS hereunder are not deemed exclusive and USBFS shall be
free to render similar and other services to others. Except as specifically
provided herein, this Agreement does not in any way affect any other
agreements entered into among the parties hereto and any actions taken or
omitted by any party hereunder shall not affect act rights or obligations
of any other party hereunder.
16. Notices
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given on the date
delivered personally or by courier service, or three (3) days after sent by
registered or certified mail, postage prepaid, return receipt requested, or
on the date sent and confirmed received by facsimile transmission to the
other party's address set forth below: Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn.: Xxx Xxxxx
Facsimile No.: 000-000-0000
and notice to the Fund shall be sent to:
The Merger Fund VL
000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer on one or more counterparts as of the date first
above written.
The Merger Fund VL U.S. BANCORP FUND SERVICES, LLC
By: /s/ Xxxxxxxxx X. Xxxxx By: /s/ Xxx X. Xxxxxxx
-------------------------- ---------------------
Xxxxxxxxx X. Xxxxx Xxx X. Xxxxxxx
Title: President Title: President
----------------------- ------------------
Exhibit C
to the
Transfer Agent Servicing Agreement
As Of Processing Policy
USBFS will reimburse each Fund for any net material loss that may exist on
the Fund's books and for which USBFS is responsible, at the end of each calendar
month. "Net Material Loss" shall be defined as any remaining loss, after netting
losses against any gains, which impacts a Fund's net asset value per share by
more than 1/2 cent. Gains and losses will be reflected on the Fund's daily share
sheet, and the Fund will be reimbursed for any net material loss on a monthly
basis. USBFS will reset the as of ledger each calendar month so that any losses
which do not exceed the materiality threshold of 1/2 cent will not be carried
forward to the next succeeding month. USBFS will notify the Advisor to the Fund
on the daily share sheet of any losses for which the Advisor may be held
accountable.
