FORM OF
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of ____________, 1999 by and between PFPC
INC., a Delaware corporation ("PFPC"), and E*TRADE FUNDS, a Delaware business
trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to serve as transfer agent,
registrar and dividend disbursing agent to its investment portfolios listed on
Exhibit A attached hereto and made a part hereof, as such Exhibit A may be
amended from time to time (each a "Portfolio"), and PFPC wishes to furnish such
services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions.
As used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person
duly authorized by the Fund's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and listed
on the Authorized Persons Appendix attached hereto and made a part
hereof or any amendment thereto as may be received by PFPC. An
Authorized Person's scope of authority may be limited by the Fund by
setting forth such limitation in the Authorized Persons Appendix.
(d) "CEA" means the Commodity Exchange Act, as amended.
(e) "Change of Control" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).
(f) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be
an Authorized Person.
(g) "SEC" means the Securities and Exchange Commission.
(h) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(i) "Shares" mean the shares of beneficial interest of any series or class
of the Fund.
(j) "Written Instructions" mean written instructions signed by an
Authorized Person and received by PFPC. The instructions may be
delivered by hand, mail, tested telegram, cable, telex, facsimile
sending device or e-mail.
2. Appointment. The Fund hereby appoints PFPC to serve as transfer agent,
registrar and dividend disbursing agent to the Portfolios in accordance
with the terms set forth in this Agreement. PFPC accepts such appointment
and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) Certified or authenticated copies of the resolutions of the Fund's
Board of Trustees, approving the appointment of PFPC or its affiliates
to provide services to the Fund and approving this Agreement;
(b) A copy of the Fund's most recent effective registration statement;
(c) A copy of the advisory agreement with respect to each Portfolio;
(d) A copy of the distribution agreement with respect to each class of
Shares of the Fund;
(e) A copy of each Portfolio's administration agreements if PFPC is not
providing the Portfolio with such services;
(f) Copies of any shareholder servicing agreements made in respect of the
Fund or a Portfolio; and
(g) Copies (certified or authenticated if requested by PFPC) of any and
all amendments or supplements to the foregoing.
4. Compliance with Rules and Regulations. PFPC undertakes to comply with all
applicable requirements of the Securities Laws and any laws, rules and
regulations of governmental authorities having jurisdiction with respect to
the duties to be performed by PFPC hereunder. Except as specifically set
forth herein, PFPC assumes no responsibility for such compliance by the
Fund or any of the Portfolios.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon
Oral Instructions and Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instructions and Written
Instructions it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to
this Agreement. PFPC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent with the
provisions of organizational documents or this Agreement or of any
vote, resolution or proceeding of the Fund's Board of Trustees or of
the Fund's shareholders, unless and until PFPC receives Written
Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions so that PFPC receives the Written Instructions by
the close of business on the same day that such Oral Instructions are
received. The fact that such confirming Written Instructions are not
received by PFPC shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral
Instructions. Where Oral Instructions or Written Instructions
reasonably appear to have been received from an Authorized Person,
PFPC shall incur no liability to the Fund in acting in good faith upon
such Oral Instructions or Written Instructions provided that PFPC's
actions comply with the other provisions of this Agreement.
6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC is in doubt as to any action it should or
should not take, PFPC may request directions or advice, including Oral
Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question of law
pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing
(who may be counsel for the Fund, the Fund's investment adviser or
PFPC, at the option of PFPC).
(c) Conflicting Advice. In the event of a conflict between directions,
advice or Oral Instructions or Written Instructions PFPC receives from
the Fund, and the advice it receives from counsel, PFPC may rely upon
and follow the advice of counsel. In the event PFPC so relies on the
advice of counsel, PFPC remains liable for any action or omission on
the part of PFPC which constitutes willful misfeasance, bad faith,
gross negligence or reckless disregard by PFPC of any duties,
obligations or responsibilities set forth in this Agreement.
(d) Protection of PFPC. PFPC shall be protected in any action it takes or
does not take in reliance upon directions, advice or Oral Instructions
or Written Instructions it receives from the Fund or from counsel and
which PFPC believes, in good faith, to be consistent with those
directions, advice or Oral Instructions or Written Instructions.
Nothing in this section shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions, advice or Oral
Instructions or Written Instructions, or (ii) to act in accordance
with such directions, advice or Oral Instructions or Written
Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly taking or not
taking such action. Nothing in this subsection shall excuse PFPC when
an action or omission on the part of PFPC constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by PFPC
of any duties, obligations or responsibilities set forth in this
Agreement.
7. Records; Visits. PFPC shall prepare and maintain in complete and accurate
form all books and records ---------------- necessary for it to serve as
transfer agent, registrar and dividend disbursing agent to the Fund,
including (a) all those records required to be prepared and maintained by
the Fund under the Securities Laws, rules and regulations and by state laws
and (b) such books and records as are necessary for PFPC to perform all of
the services it agrees to provide in this Agreement. The books and records
pertaining to the Fund, which are in the possession or under the control of
PFPC, shall be the property of the Fund. The Fund and Authorized Persons
shall have access to such books and records in the possession of PFPC at
all times during PFPC's normal business hours. Upon the reasonable request
of the Fund, copies of any such books and records in the possession of PFPC
shall be provided by PFPC to the Fund or to an Authorized Person, at the
Fund's expense. Upon reasonable notice by the Fund, PFPC shall make
available during regular business hours its facilities and premises
employed in connection with its performance of this Agreement for
reasonable visits by the Fund, any agent or person designated by the Fund
or any regulatory agency having authority over the Fund.
8. Confidentiality. PFPC agrees to keep confidential all records of the Fund
and information relating to the Fund and its shareholders, unless the
release of such records or information is otherwise consented to, in
writing, by the Fund. The Fund agrees that such consent shall not be
unreasonably withheld and may not be withheld where PFPC may be exposed to
civil or criminal contempt proceedings or when required to divulge such
information or records to duly constituted authorities.
9. Cooperation with Accountants. PFPC shall cooperate with the Fund's
independent public accountants and shall take all reasonable actions in the
performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the
expression of their opinion, as required by the Fund.
10. Disaster Recovery. PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures,
PFPC shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC shall have no liability with respect
to the loss of data or service interruptions caused by equipment failure,
provided such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties or obligations under this Agreement.
11. Insurance. PFPC shall maintain insurance of the types and in the amounts
deemed by it to be appropriate. To the extent that policies of insurance
may provide for coverage of claims for liability or indemnity by the
parties set forth in this Agreement, the contracts of insurance shall take
precedence, and no provisions of this Agreement shall be construed to
relieve an insurer of any obligation to pay claims to PFPC or other insured
party which would otherwise be a covered claim in the absence of any
provision of this Agreement.
12. Compensation. As compensation for services rendered by PFPC during the term
of this Agreement, the Fund will pay to PFPC a fee or fees as may be agreed
to from time to time in writing by the Fund and PFPC.
13. Indemnification.
(a) The Fund agrees to indemnify and hold harmless PFPC and its
affiliates, subject to subsection (b) of this Section, from all taxes,
charges, expenses, assessments, claims and liabilities (including,
without limitation, liabilities arising under the Securities Laws and
any state and foreign securities and blue sky laws, and amendments
thereto), and expenses, including (without limitation) attorneys' fees
and disbursements, arising directly or indirectly from (i) any action
or omission to act which PFPC takes (a) at the request or on the
direction of or in reliance on the advice of the Fund or (b) upon Oral
Instructions or Written Instructions or (ii) the acceptance,
processing and/or negotiation of checks or other methods utilized for
the purchase of Shares. Neither PFPC, nor any of its affiliates, shall
be indemnified against any liability (or any expenses incident to such
liability) arising out of PFPC's or its affiliates' own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties and obligations under this Agreement.
(b) The Trustees and Shareholders of the Fund, or any Portfolio thereof,
shall not be liable for any obligations of the Fund, or any such
Portfolio, under this Agreement, and PFPC agrees that in asserting any
rights or claims under this Agreement, it shall look only to the
assets and property of the particular Portfolio in settlement of such
rights or claims and not to such members of the Board or Shareholders.
PFPC further agrees that it will look only to the assets and property
of a particular Portfolio of the Fund, should the Fund have
established separate series, in asserting any rights or claims under
this Agreement with respect to services rendered with respect to that
Portfolio and will not seek to obtain settlement of such rights or
claims from assets of any other Portfolio of the Fund. Notwithstanding
the foregoing, in asserting any rights or claims under this Agreement,
PFPC shall not be prevented from looking to the assets and property of
the Fund sponsor or any other appropriate party(ies) in settlement of
such rights or claims.
14. Security.
(a) PFPC represents and warrants that, to the best of its knowledge, the
various procedures and systems which PFPC has implemented with regard
to the safeguarding from loss or damage attributable to fire, theft or
any other cause (including provision for 24-hour restricted access) of
the Fund's blank checks, certificates, records and other data and
PFPC's equipment, facilities and other property used in the
performance of its obligations hereunder are commercially reasonable,
and that it will make such changes therein from time to time as in its
reasonable judgement are required for the secure performance of its
obligations hereunder. PFPC shall review such systems and procedures
on a periodic basis and the Fund shall have reasonable access to
review these systems and procedures.
(b) Year 2000 Readiness Disclosure. PFPC (i) has reviewed its business and
operations as they relate to the services provided hereunder, (ii) has
remediated or replaced computer applications and systems controlled by
PFPC and which are mission-critical to providing services hereunder
(the "Relevant Systems") and (iii) has implemented a testing plan to
test the remediation or replacement of the Relevant Systems, in each
case, to address on a timely basis the risk that the Relevant Systems
may be unable to process over the January 1, 2000 boundary and on the
leap day of February 29, 2000). PFPC represents and warrants that,
based on assessments and testing to date, processing errors by the
Relevant Systems involving such boundary and leap day are not likely
to occur. PFPC will continue to monitor and test the Relevant Systems
and make adjustments as necessary.
15. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the Fund
except as specifically set forth herein or as may be specifically
agreed to by PFPC in writing. PFPC shall be obligated to exercise care
and diligence in the performance of its duties hereunder, to act in
good faith and to use its best efforts, within reasonable limits, in
performing the services provided for under this Agreement. PFPC shall
be liable for any damages arising out of PFPC's failure to perform its
duties under this Agreement to the extent such damages arise out of
PFPC's willful misfeasance, bad faith, gross negligence or reckless
disregard of such duties.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC shall not be liable for losses
beyond its control, provided that PFPC has acted in accordance with
the standard of care set forth above; and (ii) Subject to Section 10,
PFPC shall not be liable for delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's control, including
acts of civil or military authority, national emergencies, labor
difficulties, fire, flood, catastrophe, acts of God, insurrection,
war, riots or failure of the mails, transportation, communication or
power supply.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC nor its affiliates shall be liable to the Fund for any
consequential, special or indirect losses or damages which the Fund
may incur or suffer by or as a consequence of PFPC's or its
affiliates' performance of the services provided hereunder, whether or
not the likelihood of such losses or damages was known by PFPC or its
affiliates.
16. Description of Services.
(a) Services Provided on an Ongoing Basis, If Applicable.
(i) Calculate 12b-1 payments;
(ii) Maintain proper shareholder registrations;
(iii)Prepare and certify stockholder lists in conjunction with proxy
solicitations;
(iv) Countersign share certificates;
(v) Provide periodic shareholder lists and statistics to the clients;
(vi) Provide detailed data for underwriter/broker confirmations;
(vii)Notify on a timely basis the investment adviser, accounting
agent, and custodian of fund activity;
(viii) Perform other participating broker-dealer shareholder services
as may be agreed upon from time to time; and
(ix) Report abandoned property.
(b) Services Provided by PFPC Under Oral Instructions or Written
Instructions.
(i) Accept and post daily Fund purchases and redemptions;
(ii) Accept, post and perform shareholder transfers and exchanges;
(iii) Pay dividends and other distributions; and
(iv) Issue and cancel certificates (when requested in writing by the
shareholder).
(c) Purchase of Shares. PFPC shall issue and credit an account of an
investor, in the manner described in the Fund's prospectus, once it
receives:
(i) A purchase order;
(ii) Proper information to establish a shareholder account; and
(iii)Confirmation of receipt or crediting of funds for such order to
the Fund's custodian.
(d) Redemption of Shares. PFPC shall redeem Shares only if that function
is properly authorized by the certificate of trust or resolution of
the Fund's Board of Trustees. Shares shall be redeemed and payment
therefor shall be made in accordance with the Fund's prospectus, when
the recordholder tenders Shares in proper form and directs the method
of redemption. If Shares are received in proper form, Shares shall be
redeemed before the funds are provided to PFPC from the Fund's
custodian (the "Custodian"). If the recordholder has not directed that
redemption proceeds be wired, when the Custodian provides PFPC with
funds, the redemption check shall be sent to and made payable to the
recordholder, unless:
(i) the surrendered certificate is drawn to the order of an assignee
or holder and transfer authorization is signed by the
recordholder; or
(ii) Transfer authorizations are signed by the recordholder when
Shares are held in book-entry form.
When a broker-dealer notifies PFPC of a redemption desired by a
customer, and the Custodian provides PFPC with funds, PFPC shall make
the payment to the broker-dealer on behalf of its customer.
(e) Dividends and Distributions. Upon receipt of a resolution of the
Fund's Board of Trustees authorizing the declaration and payment of
dividends and distributions, PFPC shall issue dividends and
distributions declared by the Fund in Shares, or, upon shareholder
election, pay such dividends and distributions in cash, to the
broker-dealer of record for such shareholder.
(f) Shareholder Account Services. PFPC may arrange, in accordance with the
Fund's prospectus, for a shareholder's exchange of Shares for shares
of another fund with which the Fund has exchange privileges.
(g) Records. PFPC shall maintain records of the accounts for each
shareholder showing the following information:
(i) Name, address and United States Tax Identification or Social
Security number;
(ii) Number of class of Shares held and number and class of Shares for
which certificates, if any, have been issued, including
certificate numbers and denominations;
(iii)Historical information regarding the account of each
shareholder, including dividends and distributions paid and the
date and price for all transactions on a shareholder's account;
(iv) Any stop or restraining order placed against a shareholder's
account; and
(v) Any information required in order for the transfer agent to
perform any calculations contemplated or required by this
Agreement.
(h) Lost or Stolen Certificates. PFPC shall place a stop notice against
any certificate reported to be lost or stolen and comply with all
applicable federal regulatory requirements for reporting such loss or
alleged misappropriation. A new certificate shall be registered and
issued only upon:
(i) the shareholder's pledge of a lost instrument bond or such other
appropriate indemnity bond issued by a surety company approved by
PFPC; and
(ii) completion of a release and indemnification agreement signed by
the shareholder to protect PFPC and its affiliates.
(i) Shareholder Inspection of Stock Records. Upon a request from any Fund
shareholder to inspect stock records, PFPC will notify the Fund and
the Fund will issue Oral or Written Instructions granting or denying
each such request. Unless PFPC has acted contrary to the Fund's
instructions, the Fund agrees and does hereby release PFPC from any
liability for refusal of permission for a particular shareholder to
inspect the Fund's stock records.
(j) Withdrawal of Shares and Cancellation of Certificates. Upon receipt of
Written Instructions, PFPC shall cancel outstanding certificates
surrendered by the Fund to reduce the total amount of outstanding
shares by the number of shares surrendered by the Fund.
17. Duration and Termination. This Agreement shall continue until terminated by
the Fund or by PFPC on sixty (60) days' prior written notice to the other
party.
18. Change of Control. Notwithstanding any other provision of this Agreement,
in the event of an agreement to enter into a transaction that would result
in a Change of Control of the Fund's adviser or sponsor, the Fund's ability
to terminate the Agreement will be suspended from the time of such
agreement until two years after the Change of Control, provided that the
Fund may terminate this Agreement if the following have occurred: (i) the
Fund gives PFPC notice that for the preceding thirty (30) days PFPC has
been in material breach of the Agreement (and PFPC has in fact been in such
material breach) and that PFPC has sixty (60) days from receipt of such
notice to cure such material breach; (ii) PFPC fails to cure such material
breach within such sixty (60) day period; and (iii) at the conclusion of
such sixty (60) day period the Fund gives PFPC notice that it is
terminating the Agreement.
19. Registration as a Transfer Agent. PFPC represents that it is currently
registered with the appropriate federal agency for the registration of
transfer agents, or is otherwise permitted to lawfully conduct its
activities without such registration and that it will remain so registered
or able to so conduct such activities for the duration of this Agreement.
PFPC agrees that it will promptly notify the Fund in the event of any
material change in its status as a registered transfer agent. Should PFPC
fail to be registered with the SEC as a transfer agent at any time during
this Agreement and such failure to register does not permit PFPC to
lawfully conduct its activities, the Fund may, on written notice to PFPC,
terminate this Agreement upon five days written notice to PFPC.
20. Notices. All notices and other communications, including Written
Instructions, shall be delivered in writing or by confirming telegram,
cable, telex or facsimile sending device. Notices shall be addressed; (a)
if to PFPC, at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; (b) if to
the Fund, at 0000 Xxxx Xxxx, Xxxx Xxxx, XX 00000, Attn: Xxx Xxx Xxxxxxxx or
(c) if to neither of the foregoing, at such other address as shall have
been given by like notice to the sender of any such notice or other
communication by the other party. If notice is sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been
given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given three days after it has been mailed. If notice is
sent by messenger, it shall be deemed to have been given on the day it is
delivered.
21. Amendments. This Agreement, or any term thereof, may be changed or waived
only by a written amendment which has been mutually consented to by the
parties hereto.
22. Additional Series. In the event that the Fund establishes one or more
investment series in addition to and with respect to which it desires to
have PFPC render services as transfer agent, registrar, dividend disbursing
agent and shareholder servicing agent under the terms set forth in this
Agreement, it shall so notify PFPC in writing, and PFPC shall agree in
writing to provide such services, and such investment series shall become a
Portfolio hereunder, subject to such additional terms, fees and conditions
as are agreed to by the parties.
23. Delegation; Assignment. Except as provided below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party
without the written consent of the other party. PFPC may assign, at its own
expense, its rights and delegate its duties hereunder to any affiliate (as
defined in the 0000 Xxx) or any majority-owned direct or indirect
subsidiary of PFPC or PNC Bank Corp., provided that (i) PFPC gives the Fund
thirty (30) days' prior written notice of such assignment or delegation,
(ii) the assignee or delegate agrees to comply with the relevant provisions
of the 1940 Act, and (iii) PFPC and such assignee or delegate promptly
provide such information as the Fund may reasonably request, and respond to
such questions as the Fund may reasonably ask, relative to the assignment
or delegation (including, without limitation, the capabilities of the
assignee or delegate). The delegation of any of PFPC's duties under this
paragraph shall not relieve PFPC of any of its responsibilities or
liabilities under this Agreement.
24. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
25. Further Actions. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
26. Limitations of Liability of the Trustees and Shareholders. A copy of the
Certificate of Trust of the Fund is on file with the Secretary of State of
the State of Delaware, and notice is hereby given that this instrument is
executed on behalf of the Trustees of the Trust as Trustees, and not
individually, and that the obligations of this instrument are not binding
upon any of the Trustees or shareholders individually but are binding only
upon the assets and property of the Fund.
27. Miscellaneous.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties and Oral and
Written Instructions.
(b) Captions. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(c) Governing Law. This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law, without regard to principles of
conflicts of law.
(d) Partial Invalidity. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(e) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:_____________________________
Title:__________________________
E*TRADE FUNDS
By:_____________________________
Title:__________________________
EXHIBIT A
THIS EXHIBIT A, dated as of ____________, 1999, is Exhibit A to that
certain Transfer Agency Services Agreement dated as of ____________,, 1999
between PFPC Inc. and E*Trade Funds.
PORTFOLIOS
E*TRADE S & P 500 Index Fund
AUTHORIZED PERSONS APPENDIX
Name (Type) Signature
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
_____________________________ _____________________________
