FORM OF
SUB-TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of July 2, 1997 between XXX XXXXXX AMERICAN
CAPITAL INVESTMENT ADVISORY CORP., a Delaware corporation ("VKAC") and PFPC
INC., a Delaware corporation ("PFPC").
W I T N E S S E T H:
WHEREAS, Xxxxxx Xxxxxxx Fund, Inc., a Maryland corporation (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, VKAC, pursuant to the Assignment and Assumption Agreement by and
between VKAC and Xxxxxx Xxxxxxx Asset Management Inc, dated as of July 2, 1997,
is party to the Administration Agreement, dated September 26, 1996, which
provides for transfer agency services (the "Transfer Agency Agreement"),
concerning the provision of services as transfer agent, registrar, dividend
disbursing agent and shareholder servicing agent to its investment portfolios;
WHEREAS, VKAC wishes to retain PFPC to serve as sub-transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent with
respect to Shares that are owned by Prime Resources Account holders of the
Fund's 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 Directors 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 Commodities Exchange Act, as amended.
(e) "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.
(f) "SEC" means the Securities and Exchange Commission.
(g) "SECURITIES LAWS'' mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(h) "SHARES" mean the shares of beneficial interest of any series or
class of the Fund.
(i) "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 or facsimile sending device.
2
2. APPOINTMENT. VKAC hereby appoints PFPC to serve as sub-transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to the Fund
in accordance with the terms set forth in this Agreement. PFPC accepts such
appointment and agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. With respect to the Portfolios, the Fund or
VKAC 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 Directors, 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
investment Portfolio of the Fund (each, a Portfolio);
(d) A copy of the distribution agreement with respect to each
class of Shares of the Fund;
(e) A copy of each Portfolios 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 where applicable) 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
its investment portfolios.
3
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 Directors or of the Fund's shareholders,
unless and until PFPC receives Written Instructions to the contrary.
(c) The Fund or VKAC, as the case may be, 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 or
VKAC in acting upon such Oral Instructions or Written Instructions provided that
PFPC's actions comply with the other provisions of this Agreement.
4
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 or VKAC.
(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 or VKAC, 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 or VKAC, 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, VKAC 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 another provision of this Agreement, the
same is a condition of PFPC's properly taking or not taking such action.
Nothing in this
5
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. 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. Such books and records shall be prepared and maintained as required by
the 1940 Act and other applicable securities laws, rules and regulations. The
Fund and Authorized Persons shall have access to such books and records at all
times during PFPC's normal business hours. Upon the reasonable request of the
Fund or VKAC, copies of any such books and records shall be provided by PFPC to
the Fund or VKAC or to an Authorized Person, at the Fund's expense.
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 or VKAC. The Fund and VKAC agree 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
6
electronic data processing equipment. In the event of equipment failures,
PFPC shall, at no additional expense to the Fund or VKAC, exercise its best
efforts in good faith to minimize service interruptions. The foregoing
obligation shall not extend to computer terminals located outside of premises
maintained by PFPC. 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. COMPENSATION. As compensation for services rendered by PFPC during
the term of this Agreement, VKAC will pay to PFPC a fee or fees as may be agreed
to from time to time in writing by VKAC and PFPC.
12. INDEMNIFICATION. VKAC agrees to indemnify and hold harmless PFPC
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 reasonable attorneys' fees and disbursements, arising
directly or indirectly from any action or omission to act which PFPC takes (i)
at the request or on the direction of or in reliance on the advice of the Fund
or VKAC or (ii) upon Oral Instructions or Written Instructions. PFPC shall not,
however, 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.
13. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the
Fund or VKAC except as specifically set forth herein or as may be specifically
agreed to by PFPC in writing.
7
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 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) PFPC shall not be under any duty or obligation to
inquire into and shall not be liable for (A) the validity or invalidity or
authority or lack thereof of any Oral Instruction or Written Instruction, notice
or other instrument which conforms to the applicable requirements of this
Agreement, and which PFPC reasonably believes to be genuine; or (B) subject to
Section 10, 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 or VKAC for any
consequential, special or indirect losses or damages which the Fund or VKAC may
incur or suffer by or as a consequence of PFPC's performance of the services
provided hereunder, whether or not the likelihood of such losses or damages was
known by PFPC or its affiliates.
14. DESCRIPTION OF SERVICES.
(a) SERVICES PROVIDED ON AN ONGOING BASIS, IF APPLICABLE.
8
(i) Calculate 12b-1 payments;
(ii) Maintain proper shareholder registrations;
(iii) Review new applications and correspond with
shareholders to complete or correct information;
(iv) Direct payment processing of checks or wires;
(v) Prepare and certify stockholder lists in conjunction
with proxy solicitations;
(vi) Countersign share certificates;
(vii) Prepare and mail to shareholders confirmation activity;
(viii) Provide toll-free lines for direct shareholder use,
plus customer liaison staff for on-line inquiry
response;
(ix) Mail duplicate confirmations to broker-dealers of their
clients' activity, whether executed through the
broker-dealer or directly with PFPC;
(x) Provide periodic shareholder lists and statistics to
the clients;
(xi) Provide detailed data for underwriter/broker
confirmations;
(xii) Prepare periodic mailing of year-end tax and statement
information;
(xiii) Notify on a timely basis the administrator, investment
adviser, accounting agent, and custodian of fund
activity; and
(xiv) Perform other participating broker-dealer shareholder
services as may be agreed upon from time to time.
(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;
9
(iv) Solicit and tabulate proxies; and
(v) Issue and cancel certificates in accordance with the
Fund's policy as stated in the prospectus (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 incorporation or
resolution of the Fund's Board of Directors. 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 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 prepare and send the
redemption check to the broker-dealer and made payable to the broker-dealer on
behalf of its customer.
10
(e) DIVIDENDS AND DISTRIBUTIONS. Upon receipt of a resolution of the
Fund's Board of Directors 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, if provided for in the Fund's prospectus. Such issuance
or payment, as well as payments upon redemption as described above, shall be
made after deduction and payment of the required amount of funds to be withheld
in accordance with any applicable tax laws or other laws, rules or regulations.
PFPC shall mail to the Fund's shareholders such tax forms and other information,
or permissible substitute notice, relating to dividends and distributions paid
by the Fund as are required to be filed and mailed by applicable law, rule or
regulation. PFPC shall prepare, maintain and file with the IRS and other
appropriate taxing authorities reports relating to all dividends above a
stipulated amount paid by the Fund to its shareholders as required by tax or
other law, rule or regulation.
(f) SHAREHOLDER ACCOUNT SERVICES.
(i) PFPC may arrange, in accordance with the prospectus,
for issuance of Shares obtained through;
- Any pre-authorized check plan; and
- Direct purchases through broker wire orders, checks and
applications.
(ii) PFPC may, arrange, in accordance with the prospectus,
for a shareholders:
- Exchange of Shares for shares of another fund with
which the Fund has exchange privileges;
- Automatic redemption from an account where that
shareholder participates in a automatic redemption
plan; and/or
11
- Redemption of Shares from an account with a check
writing privilege.
(g) COMMUNICATIONS TO SHAREHOLDERS. Upon timely Written Instructions,
PFPC shall mail all communications by the Fund to its shareholders, including:
(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of Fund shares;
(iii) Monthly or quarterly statements;
(iv) Dividend and distribution notices;
(v) Proxy material; and
(vi) Tax form information.
In addition, PFPC will receive and tabulate the proxy cards for the
meetings of the Fund's shareholders.
(h) 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 and 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;
(v) Any correspondence relating to the current maintenance
of a shareholder's account;
12
(vi) Information with respect to withholdings; and
(vii) Any information required in order for the transfer
agent to perform any calculations contemplated or
required by this Agreement.
(i) 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.
(j) SHAREHOLDER INSPECTION OF STOCK RECORDS. Upon a request from any
Fund shareholder to inspect stock records, PFPC will notify VKAC and VKAC will
issue instructions granting or denying each such request. Unless PFPC has acted
contrary to VKAC's instructions, VKAC agrees to and does hereby, release PFPC
from any liability for refusal of permission for a particular shareholder to
inspect the Fund's stock records.
(k) 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.
15. DURATION AND TERMINATION. This Agreement shall continue until
terminated by VKAC or by PFPC or sixty (60) days' prior written notice to the
party.
13
16. NOTICES. All notices and other communications, including Written
Instructions, shall be 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 VKAC, at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; 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.
17. AMENDMENTS. This Agreement, or any term thereof, may be changed or
waived only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. DELEGATION; ASSIGNMENT. PFPC may assign its rights and delegate its
duties hereunder to any wholly-owned direct or indirect subsidiary of PNC Bank,
National Association or PNC Bank Corp., provided that (i) PFPC gives the Fund
and VKAC thirty (30) days' prior written notice; (ii) the delegate (or assignee)
agrees with PFPC and VKAC to comply with all relevant provisions of the 1940
Act; and (iii) PFPC and such delegate (or assignee) promptly provide such
information as the Fund or VKAC may request, and respond to such questions as
the Fund or VKAC may ask, relative to the delegation (or assignment), including
(without limitation) the capabilities of the delegate (or assignee).
14
19. 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.
20. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. 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 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.
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
XXX XXXXXX AMERICAN CAPITAL INVESTMENT
ADVISORY CORP.
By:
--------------------------------
Title:
-----------------------------
PFPC INC.
By:
--------------------------------
Title:
-----------------------------
16
EXHIBIT A
PORTFOLIOS
Xxxxxx Xxxxxxx Money Market Fund
Xxxxxx Xxxxxxx Tax-Free Money Market Fund
Xxxxxx Xxxxxxx Government Obligations Money Market Fund
17
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
------------------------------ ------------------------------
