Exhibit No. EX-99.h.2
Confidential and Proprietary
Not for Reproduction or Re-Distribution
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of August 15, 2005 by and between PFPC INC., a
Massachusetts corporation ("PFPC"), and MGI Funds, a Delaware statutory 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, dividend disbursing agent and shareholder servicing 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. An Authorized Person's scope of
authority may be limited by setting forth such limitation in a written
document signed by both parties hereto.
(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. PFPC may, in its sole discretion in each separate
instance, consider and rely upon instructions it receives from an
Authorized Person via electronic mail as Oral Instructions
(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 Portfolio or class
of a Portfolio of the Fund.
(i) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PFPC, or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic transaction
reporting system, access to which requires use of a password or other
authorized identifier. The instructions may be delivered electronically
(with respect to sub-item (ii) above) or by hand, mail, tested telegram,
cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC to serve as 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. Compliance with Rules and Regulations. (a) 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 other entity.
(b) PFPC undertakes to furnish the Fund with properly certified copies of all
compliance policies and procedures of PFPC relating to its transfer agent
responsibilities under this Agreement, or a third-party report (as
contemplated by IC Release No. 26299), which have been prepared in
accordance with Rule 38a-1 under the 1940 Act. and PFPC will cooperate with
the Fund in connection with the review by the Fund's Chief Compliance
Officer of PFPC's transfer agent operations in connection with the
preparation of the yearly written report to the Board of Trustees of the
Trust contemplated by Rule 38a-1(a)(4)(iii) under the 1940 Act. PFPC will
promptly furnish the Fund with copies of all amendments to the foregoing
compliance policies and procedures.
4. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon Oral
Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or Written
Instruction 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 or
differ from the Oral Instructions shall in no way invalidate the
transactions or enforceability of the transactions authorized by the Oral
Instructions or PFPC's ability to rely upon such Oral Instructions.
5. 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 from counsel of its own choosing (who may be counsel for the Fund,
the Fund's investment advisor or PFPC, at the option of PFPC).
(c) Conflicting Advice. In the event of a conflict between directions or 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, negligence or reckless
disregard by PFPC of any duties, obligations or responsibilities set forth
in this Agreement. In any such case, PFPC will use its reasonable efforts
to contact the Fund prior to or promptly after taking any actions
inconsistent with Oral Instructions or Written Instructions previously
received from the Fund.
(d) Protection of PFPC. PFPC shall be protected in any action PFPC takes or
does not take in reliance upon directions or advice or Oral Instructions or
Written Instructions PFPC receives from or on behalf of the Fund or from
counsel and which PFPC believes, in good faith, to be consistent with those
directions or advice or Oral Instructions or Written Instructions. Nothing
in this section shall be construed so as to impose an obligation upon PFPC
to seek such directions or advice or Oral Instructions or Written
Instructions. Nothing in this subparagraph shall excuse PFPC when an action
or omission on the part of PFPC constitutes willful misfeasance, bad faith,
negligence or reckless disregard by PFPC of any duties, obligations or
responsibilities under this Agreement.
6. 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, copies of any such books and records
shall be provided by PFPC to the Fund or to an Authorized Person, at the
Fund's expense.
7. Confidentiality.
(a) Each party shall keep confidential any information relating to the other
party's business ("Confidential Information"). Confidential Information
shall include:
(i) any data or information that is competitively sensitive material, and
not generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finances,
operations, customer relationships, customer profiles, customer lists,
sales estimates, business plans, and internal performance results
relating to the past, present or future business activities of the
Fund or PFPC, their respective subsidiaries and affiliated companies
and the customers, clients and suppliers of any of them;
(ii) any scientific or technical information, design, process, procedure,
formula, or improvement that is commercially valuable and secret in
the sense that its confidentiality affords the Fund or PFPC a
competitive advantage over its competitors;
(iii) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code,
flow charts, databases, inventions, know-how, and trade secrets,
whether or not patentable or copyrightable; and
(iv) anything designated as confidential.
(b) Notwithstanding the foregoing, information shall not be Confidential
Information and shall not be subject to such confidentiality obligations if
it:
(i) is already known to the receiving party at the time it is obtained;
(ii) is or becomes publicly known or available through no wrongful act of
the receiving party;
(iii) is rightfully received from a third party who, to the best of the
receiving party's knowledge, is not under a duty of confidentiality;
(iv) is released by the protected party to a third party without
restriction;
(v) is requested or required to be disclosed by the receiving party
pursuant to a court order, subpoena, governmental or regulatory agency
request or law (provided the receiving party will provide the other
party written notice of the same, to the extent such notice is
permitted);
(vi) is relevant to the defense of any claim or cause of action asserted
against the receiving party;
(vii) is necessary or desirable for PFPC to release such information in
connection with the provision of services under this Agreement; or
(viii) has been or is independently developed or obtained by the receiving
party.
8. 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.
9. PFPC System. PFPC shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by PFPC in connection with
the services provided by PFPC to the Fund. Notwithstanding the foregoing,
the parties acknowledge the Fund shall retain all ownership rights in Fund
data which resides on the PFPC System (including information pertaining to
the transactions of the Fund and its shareholders).
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 be implemented
within a reasonable time following the inability of PFPC to perform its
duties under this Agreement. 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, negligence or reckless disregard of its duties or
obligations under this Agreement.
11. Compensation.
(a) 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. In addition, the Fund agrees
to pay, and will be billed separately in arrears for, reasonable expenses
incurred by PFPC at the request or with the consent of the Funds in the
performance of its duties hereunder, in accordance with the fees agreed
upon between the parties from time to time.
(b) PFPC shall establish certain cash management accounts ("Service Accounts")
required to provide services under this Agreement. The Fund acknowledges
(i) PFPC may receive investment earnings from sweeping the funds in such
Service Accounts into investment accounts including, but not limited,
investment accounts maintained at an affiliate or client of PFPC; (ii)
balance credits earned with respect to the amounts in such Service Accounts
("Balance Credits") will be used to offset the banking service fees imposed
by the cash management service provider (the "Banking Service Fees"); (iii)
PFPC shall retain any excess Balance Credits for its own use; (iv) Balance
Credits will be calculated and applied toward the Fund's Banking Service
Fees regardless of the Service Account balance sweep described in
Sub-Section (i) above; and (v) PFPC may use the services of third-party
vendors in connection with the issuance of redemption and distribution
checks and shall retain any benefits obtained from any arrangements with
such vendors, including any commission or return on float paid to it by any
such vendors.
(c) The undersigned hereby represents and warrants to PFPC that (i) the terms
of this Agreement, (ii) the fees and expenses associated with this
Agreement, and (iii) any benefits accruing to PFPC or to the advisor or
sponsor to the Fund in connection with this Agreement, including but not
limited to any fee waivers, conversion cost reimbursements, up front
payments, signing payments or periodic payments made or to be made by PFPC
to such advisor or sponsor or any affiliate of the Fund relating to the
Agreement have been fully disclosed to the Board of Trustees of the Fund
and that, if required by applicable law, such Board of Trustees has
approved or will approve the terms of this Agreement, any such fees and
expenses, and any such benefits.
12. Indemnification.
(a) The Fund agrees to indemnify, defend and hold harmless PFPC and its
affiliates, including their respective officers, directors and employees,
from all taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements and liabilities arising under the Securities Laws and any
state and foreign securities and blue sky laws) arising directly or
indirectly from any action or omission to act which PFPC takes in reliance
upon Oral or Written Instructions received from the Fund or which PFPC is
required or expressly allowed to take or refrain from taking in accordance
with the provisions of this Agreement. Neither PFPC, nor any of its
affiliates, shall be indemnified against any liability (or any expenses
incident to such liability) caused by PFPC's or its affiliates' own willful
misfeasance, bad faith, negligence or reckless disregard of its duties and
obligations under this Agreement, provided that in the absence of a finding
to the contrary the acceptance, processing and/or negotiation of a
fraudulent payment for the purchase of Shares shall be presumed not to have
been the result of PFPC's or its affiliates own willful misfeasance, bad
faith, negligence or reckless disregard of such duties and obligations
under this Agreement. PFPC shall not make any claim for any amounts payable
by the Fund hereunder except against the relevant Portfolio's assets and
not against the assets of any other investment Portfolio of the Fund.
(b) PFPC agrees to indemnify, defend and hold harmless the Fund, each Portfolio
and their affiliates, including their respective officers,
directors/trustees and employees, from all taxes, charges, expenses,
assessments, claims and liabilities (including, without limitation,
reasonable attorneys' fees and disbursements and liabilities arising under
the Securities Laws and any state and foreign securities and blue sky laws)
arising directly or indirectly from any action or omission to act of PFPC
and its affiliates in contravention of the terms of this Agreement or
caused by PFPC or its affiliate's willful misfeasance, bad faith,
negligence or reckless disregard of its duties and obligations under this
Agreement. Neither the Fund, any Portfolio nor any of its affiliates, shall
be indemnified against any liability (or any expenses incident to such
liability) caused by the Fund's, a Portfolio's or their affiliates' own
willful misfeasance, bad faith, negligence or reckless disregard in the
performance of PFPC's activities under this Agreement.
(c) The provisions of this Section 12 shall survive termination of this
Agreement
13. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action hereunder on behalf of the
Fund except as specifically set forth herein or as may be specifically
agreed to by PFPC and the Fund in a written amendment hereto. PFPC shall be
obligated to exercise care and diligence in the performance of its duties
hereunder and to act in good faith in performing services provided for
under this Agreement. PFPC shall be liable only for any damages arising out
of PFPC and its affiliates' failure to perform its duties under this
Agreement to the extent such damages arise out of PFPC or its affiliates'
willful misfeasance, bad faith, negligence or reckless disregard of such
duties.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC shall
not be liable for losses, delays, failure, errors, interruption or loss of
data occurring directly or indirectly by reason of circumstances beyond its
reasonable control, including without limitation acts of God; action or
inaction of civil or military authority; public enemy; war; terrorism;
riot; fire; flood; sabotage; epidemics; labor disputes not cause by any
action or inaction by PFPC or its affiliates; civil commotion;
interruption, loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party provided PFPC has complied with its
obligation to make reasonable backup arrangements pursuant to Section 10;
and (ii) PFPC shall not be under any duty or obligation to inquire into and
shall not be liable for 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.
(c) Notwithstanding anything in this Agreement to the contrary, neither PFPC
nor its affiliates, nor the Fund, the Portfolios and their affiliates,
shall be liable for any consequential, special or indirect losses or
damages, whether or not the likelihood of such losses or damages was known
by PFPC, its affiliates, the Fund, the Portfolios or their affiliates.
(d) Each party shall have a duty to mitigate damages for which the other party
may become responsible.
(e) The provisions of this Section 13 shall survive termination of this
Agreement.
14. Description of Services.
(a) Services provided on an ongoing basis, if applicable
(i) Calculate 12b-1 payments;
(ii) Maintain 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 shareholder lists in conjunction with proxy
solicitations;
(vi) Countersign share certificates;
(vii) Prepare and mail to shareholders confirmation of activity;
(viii) Provide toll-free lines for direct shareholder use, plus customer
liaison staff for online 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 Fund;
(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 investment advisor, subadvisors,
accounting agent, and custodian of Fund activity;
(xiv) Perform other participating broker-dealer shareholder services as may
be agreed upon from time to time;
(xv) Accept and post daily Share purchases and redemptions;
(xvi) Accept, post and perform shareholder transfers and exchanges; and
(xvii) Issue and cancel certificates (when requested in writing by the
shareholder).
(b) Purchase of Shares. PFPC shall issue and credit an account of an investor,
in the manner described in the Fund's prospectuses, once it receives:
(i) A purchase order in completed proper form;
(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 (the "Custodian").
(c) Redemption of Shares. PFPC shall process requests to redeem Shares as
follows:
(i) All requests to transfer or redeem Shares and payment therefor shall
be made in accordance with the Fund's prospectuses, when the
shareholder tenders Shares in proper form, accompanied by such
documents as PFPC reasonably may deem necessary.
(ii) PFPC reserves the right to refuse to transfer or redeem Shares until
it is satisfied that the endorsement on the instructions is valid and
genuine and that the requested transfer or redemption is legally
authorized, and it shall incur no liability for the refusal, in good
faith, to process transfers or redemptions which PFPC, in its good
judgment, deems improper or unauthorized, or until it is reasonably
satisfied that there is no basis to any claims adverse to such
transfer or redemption.
(iii) When Shares are redeemed, PFPC shall deliver to the Custodian and the
Fund or its designee a notification setting forth the number of Shares
redeemed. Such redeemed Shares shall be reflected on appropriate
accounts maintained by PFPC reflecting outstanding Shares of the
Portfolio and Shares attributed to individual accounts.
(iv) PFPC shall, upon receipt of the monies provided to it by the Custodian
for the redemption of Shares, pay such monies as are received from the
Custodian, all in accordance with the procedures established from time
to time between PFPC and the Fund.
(v) 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, unless
otherwise instructed in writing by the broker-dealer.
(vi) PFPC shall not process or effect any redemption requests with respect
to Shares of the Fund after receipt by PFPC or its agent of
notification of the suspension of the determination of the net asset
value of the Portfolio.
(d) 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, if provided for in the Fund's prospectuses. 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.
(e) Shareholder Account Services.
(i) PFPC may arrange, in accordance with the prospectuses, 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 prospectuses, for a
shareholder's:
- 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
- Redemption of Shares from an account with a check-writing
privilege.
(f) 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; and
(v) Tax form information.
(g) Records. PFPC shall prepare, maintain and preserve records for the accounts
for each shareholder as required by Rule 31a-1 and Rule 31a-2 under the
1940 Act, including 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;
(vi) Information with respect to withholdings;
(vii) Any information required in order for PFPC to perform any
calculations required by this Agreement; and
(viii) A record of each purchase, redemption and exchange with respect to
each shareholder account.
(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 Share Records. Upon a request from any Fund
shareholder to inspect share records, PFPC will notify the Fund and the
Fund will issue instructions granting or denying each such request. Unless
PFPC has acted contrary to the Fund's instructions, the Fund agrees to and
does hereby release PFPC from any liability for refusal of permission for a
particular shareholder to inspect the Fund's share 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.
(k) Lost Shareholders. PFPC shall perform such services as are required in
order to comply with Rule 17Ad-17 of the 1934 Act (the "Lost Shareholder
Rule"), including, but not limited to, those set forth below. PFPC may, in
its sole discretion, use the services of a third party to perform some of
or all such services.
(i) documentation of search policies and procedures;
(ii) execution of required searches;
(iii) tracking results and maintaining data sufficient to comply with the
Lost Shareholder Rules; and
(iv) preparation and submission of data required under the Lost Shareholder
Rules.
Except as set forth above, PFPC shall have no responsibility for any
escheatment services.
(l) Print Mail. To the extent agreed by the parties, the Fund shall engage PFPC
as its print/mail service provider with respect to those items and for such
fees as may be agreed to from time to time in writing by the Fund and PFPC.
15. Privacy. Each party hereto acknowledges and agrees that, subject to the
reuse and re-disclosure provisions of Xxxxxxxxxx X-X, 00 XXX Part 248.11,
it shall not disclose the non-public personal information of investors in
the Fund obtained under this Agreement, except as necessary to carry out
the services set forth in this Agreement or as otherwise permitted by law
or regulation.
16. Anti-Money Laundering. To the extent the other provisions of this Agreement
require PFPC to establish, maintain and monitor accounts of investors in
the Fund consistent with Securities Laws, PFPC shall perform reasonable
actions necessary to help the Fund be in compliance with Section 352 of the
USA PATRIOT Act, as follows: In this regard, PFPC shall: (a) establish and
implement written internal policies, procedures and controls reasonably
designed to help prevent the Fund from being used to launder money or
finance terrorist activities; (b) provide for independent testing, by an
employee who is not responsible for the operation of PFPC's AML program or
by an outside party, for compliance with PFPC's established policies and
procedures; (c) designate a person or persons responsible for implementing
and monitoring the operation and internal controls of PFPC's AML program;
and (d) provide ongoing training of PFPC personnel relating to the
prevention of money-laundering activities. Upon the reasonable request of
the Fund, PFPC shall provide to the Fund: (x) a copy of PFPC's written AML
policies and procedures (it being understood such information is to be
considered confidential and treated as such and afforded all protections
provided to confidential information under this Agreement); (y) a copy of a
written assessment or report prepared by the party performing the
independent testing for compliance, or a summary thereof, or a
certification that the findings of the independent party are satisfactory;
and (z) a summary of the AML training provided for appropriate personnel.
PFPC agrees to permit inspections relating to its AML program by U.S.
Federal departments or regulatory agencies with appropriate jurisdiction
and to make available to examiners from such departments or regulatory
agencies such information and records relating to its AML program as such
examiners shall reasonably request. PFPC expressly agrees to notify the
Fund in the event that PFPC's AML program is determined to be materially
deficient by a law enforcement or regulatory agency; provided that such
notification is permitted by applicable law and the applicable law
enforcement or regulatory agency.
17. Customer Identification Program ("CIP") Services.
(a) To help the Fund comply with its Customer Identification Program, PFPC
agrees to:
(i) Implement procedures required under 31 CFR 103.131 pursuant to which a
new "Account" in the Fund is not established unless PFPC has obtained
the name, date of birth (for natural persons only), address and
government-issued identification number (collectively, the "Data
Elements") for each corresponding Customer .
(ii) Use collected Data Elements to attempt to reasonably verify the
identity of each new Customer promptly before or after opening an
Account for such Customer. Methods may consist of non-documentary
methods (for which PFPC may use unaffiliated information vendors to
assist with such verifications) and documentary methods (as permitted
by 31 CFR 103.131), and may include procedures under which PFPC
personnel perform enhanced due diligence to verify the identities of
Customers the identities of whom were not successfully verified
through the first-level (which will typically be reliance on results
obtained from an information vendor) verification process(es).
(iii) Record the Data Elements and maintain records relating to
verification of new Customers consistent with 31 CFR 103.131(b)(3).
(iv) Maintain a database of Fund shareholders and implement procedures to
regularly monitor such database to ensure that no such shareholder is
a person who appears on a list published by the Office of Foreign
Assets Control or is otherwise a prohibited investor as determined
under the regulations published by the U.S. Department of the
Treasury.
(v) Regularly report to the Fund about measures taken under (i)-(iv)
above.
(vi) If PFPC provides services by which prospective Customers may subscribe
for shares in the Fund via the Internet or telephone, work with the
Fund to notify prospective Customers, consistent with 31 CFR
103.131(b)(5), about the Fund's CIP.
(b) Notwithstanding anything to the contrary, and without expanding the scope
of the express language above, PFPC need not collect the Data Elements for
(or verify) prospective Customer (or Account) beyond the requirements of
relevant regulation (for example, PFPC will not verify customers opening
NSCC Network Level 3, or similar accounts).
(c) Upon the reasonable request of the Fund, PFPC shall provide to the Fund:
(x) a copy of PFPC's written CIP policies and procedures (it being
understood such information is to be considered confidential and treated as
such and afforded all protections provided to Confidential Information
under this Agreement); (y) a copy of a written assessment or report
prepared by the party performing the independent testing for compliance, or
a summary thereof, or a certification that the findings of the independent
party are satisfactory; and (z) a summary of the AML training provided for
appropriate personnel. PFPC agrees to permit inspections relating to its
CIP program by U.S. Federal departments or regulatory agencies with
appropriate jurisdiction and to make available to examiners from such
departments or regulatory agencies such information and records relating to
its CIP program as such examiners shall reasonably request. PFPC expressly
agrees to notify the Fund in the event that PFPC's CIP program is
determined to be materially deficient by a law enforcement or regulatory
agency; provided that such notification is permitted by applicable law and
the applicable law enforcement or regulatory agency.
18. Duration and Termination.
(a) The initial term of the Agreement shall be three years commencing upon the
date hereof (the "Initial Term"), unless earlier terminated as provided
herein. Upon the expiration of the Initial Term and every subsequent term
("Renewal Term"), the term of this Agreement shall automatically extend for
an additional year, unless written notice of non-extension is delivered by
the non-extending party to the other party no later than three months prior
to the expiration of that year. Notwithstanding the foregoing, if, at the
end of each of the first two years of the Initial Term, the total net
assets of the Fund serviced hereunder do not exceed $1 billion, the Initial
Term shall be extended by an additional year.
(b) The Fund shall be entitled to terminate this Agreement during the Initial
Term or any Renewal Term upon sixty days' written notice in the event of
the acquisition or other change in control of PFPC.
(c) In the event the Fund gives notice of termination, all reasonable expenses
associated with movement (or duplication) of records and materials and
conversion thereof to a successor transfer agent(s) or other service
provider will be borne by the Fund. In the event that PFPC gives notice of
termination upon the expiration of the Initial Term or a subsequent Renewal
Term, unless such termination is preceded by the Fund's material breach of
this Agreement, all reasonable expenses associated with movement (or
duplication) of records and materials and conversion thereof required to be
provided to a successor transfer agent(s) (and any other service
provider(s)) in order for such successor(s) to perform transfer agent
services, and all reasonable trailing expenses will be borne by PFPC,
provided, however, the parties hereto understand that the Fund may request
additional conversion assistance and records beyond those necessary for the
successor to perform services, in which case such additional conversion
services shall be at the expense of the Fund.
(d) In the event of termination, PFPC agrees that it will reasonably cooperate
to effect a smooth transition of services and to minimize disruption to the
Fund and its shareholders. If a party hereto is guilty of a material
failure to perform its duties and obligations hereunder (a "Defaulting
Party") the other party (the "Non-Defaulting Party") may give written
notice thereof to the Defaulting Party, and if such material breach shall
not have been remedied within sixty (60) days after such written notice is
given, then the Non-Defaulting Party may terminate this Agreement by giving
sixty (60) days written notice of such termination to the Defaulting Party.
In all cases, termination by the Non-Defaulting Party shall not constitute
a waiver by the Non-Defaulting Party of any other rights it might have
under this Agreement or otherwise against the Defaulting Party.
(e) Notwithstanding anything contained in this Agreement to the contrary,
should a merger, acquisition, change in control, re-structuring,
re-organization or any other decision involving the Fund or any affiliate
(as defined under the 0000 Xxx) of the Fund result in the Fund's desire to
cease to use PFPC as the provider of any of the services set forth
hereunder in favor of another service provider prior to the expiration of
the then current Initial or Renewal Term, PFPC shall make a good faith
effort to facilitate a conversion of services to the Fund's successor
service, provider, however, there can be no guarantee that PFPC will be
able to facilitate such a conversion of services on the conversion date
requested by the Fund. In connection with the foregoing and prior to such
conversion to the successor service provider, the payment of all fees to
PFPC as set forth herein shall be accelerated to a date prior to the
conversion or termination of services and calculated as if the services had
remained with PFPC until the expiration of the then current Initial or
Renewal Term and calculated at the asset and/or Shareholder account levels,
as the case may be, on the date notice of termination was given to PFPC.
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. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President (or such other
address as PFPC may inform the Fund in writing); (b) if to the Fund, at
Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx, 00000, Attention: Chief Operating
Officer, with a copy to Xxxxx X. Xxxxxxxxxx, Esquire, Chief Counsel, Xxxxxx
Global Investments, Inc., 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.
21. 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.
22. Delegation; Assignment. PFPC may assign its rights and delegate its duties
hereunder to any majority-owned direct or indirect subsidiary of PFPC or of
The PNC Financial Services Group, Inc., provided that PFPC gives the Fund
sixty (60) days' prior written notice of such assignment or delegation.
23. 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.
24. Further Actions. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
25. 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.
(b) No Changes that Materially Affect Obligations. Notwithstanding anything in
this Agreement to the contrary, the Fund agrees not to make any
modifications to its registration statement or adopt any policies which
would affect materially the obligations or responsibilities of PFPC
hereunder without the prior written approval of PFPC, which approval shall
not be unreasonably withheld or delayed.
(c) 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.
(d) Information. The Fund will provide such information and documentation as
PFPC may reasonably request in connection with services provided by PFPC to
the Fund.
(e) 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.
(f) 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.
(g) 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.
(h) No Representations or Warranties. Except as expressly provided in this
Agreement, PFPC hereby disclaims all representations and warranties,
express or implied, made to the Fund or any other person, including,
without limitation, any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of trade), of any
services or any goods provided incidental to services provided under this
Agreement. PFPC disclaims any warranty of title or non-infringement except
as otherwise set forth in this Agreement.
(i) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by such
party.
(j) Customer Identification Program Notice. To help the U.S. government fight
the funding of terrorism and money laundering activities, U.S. Federal law
requires each financial institution to obtain, verify, and record certain
information that identifies each person who initially opens an account with
that financial institution on or after October 1, 2003. Certain of PFPC's
affiliates are financial institutions, and PFPC may, as a matter of policy,
request (or may have already requested) the Fund's name, address and
taxpayer identification number or other government-issued identification
number, and, if such party is a natural person, that party's date of birth.
PFPC may also ask (and may have already asked) for additional identifying
information, and PFPC may take steps (and may have already taken steps) to
verify the authenticity and accuracy of these data elements. 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: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Title: Senior Vice President
MGI FUNDS
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Title: Treasurer, MGI Funds
EXHIBIT A
THIS EXHIBIT A, dated as of May 25, 2006, is Exhibit A to that certain
Transfer Agency Services Agreement dated as of August 15, 2005, between PFPC
Inc. and MGI Funds.
PORTFOLIOS
MGI US Large Cap Growth Equity Fund
MGI US Large Cap Value Equity Fund
MGI US Small/Mid Cap Growth Equity Fund
MGI US Small/Mid Cap Value Equity Fund
MGI Non-US Core Equity Fund
MGI High Yield Fixed Income Fund
MGI Core Opportunistic Fixed Income Fund
MGI US Short Maturity Fixed Income Fund
