Exhibit 13(e)
SUPPORT SERVICES AGREEMENT
THIS AGREEMENT, dated October 31, 1996 by and between XXX XXXXXX AMERICAN
CAPITAL MUNICIPAL INCOME TRUST, XXX XXXXXX AMERICAN CAPITAL CALIFORNIA MUNICIPAL
TRUST, XXX XXXXXX AMERICAN CAPITAL HIGH INCOME TRUST, XXX XXXXXX AMERICAN
CAPITAL HIGH INCOME TRUST II, XXX XXXXXX AMERICAN CAPITAL PRIME RATE INCOME
TRUST, and XXX XXXXXX AMERICAN CAPITAL INVESTMENT GRADE MUNICIPAL TRUST, each
being a business trust organized under the laws of the Commonwealth of
Massachusetts (herinafter collectively referred to as the "Funds"), and XXX
XXXXXX AMERICAN CAPITAL DISTRIBUTORS, INC. a Delaware Corporation, (hereinafter
referred to as "VKAC").
WITNESSETH
WHEREAS, each of the Funds is registered as a closed-end investment
company under the Investment Company Act of 1940, as amended (the "1940 Act);
and
WHEREAS, VKAC has the capability of providing certain shareholder and
broker communication support services ("Communication Support Services") to the
Funds, including but not limited to telephonic and written correspondence with
shareholders and brokers; and
WHEREAS, each Fund desires to utilize VKAC in the provision of such
Communication Support Services; and
WHEREAS, VKAC has agreed to provide, as of October 31, 1996, and the Funds
have agreed to receive from VKAC such Communication Support Services pursuant to
this Agreement.
NOW THEREFORE, in consideration of the promises and mutual covenants
spelled out herein, it is agreed:
1. Appointment of VKAC, As agent, VKAC shall provide each of the Funds the
Communication Support Services as set forth in Paragraph 2 of this Agreement.
VKAC accepts such appointment and agrees to furnish the Communications Support
Services in return for the compensation provided in Paragraph 3 of this
Agreement.
2. Services to be Provided, VKAC will provide the Funds the Communication
Support Services set forth below:
A. VKAC shall maintain a Shareholder Communications Broker Support
Group (the "Service Staff") to timely respond to all telephonic,
written and in person inquires and problems from brokers and their
customers which are directed to the Funds' Houston, Texas office.
B. VKAC shall hire persons for the Services Staff in numbers as it
deems reasonably necessary to fulfill the terms of this Agreement.
3. Expenses and Reimbursement.
A. Each Fund shall reimburse VKAC for such Communications Support
Service expenses as follows:
(1) All salary and other wages, bonuses, group insurance, taxes,
travel and other actual expenses paid to or on behalf of the
personnel in the Service Staff;
(2) All general overhead expenses attributable to the Service
Staff including, but not limited to rent, furnishings and
utilities;
(3) All other out of pocket expenses, including but not limited to
the following:
a) postage;
b) the cost of the following equipment (including
maintenance thereof) and services used for communicating
with the shareholders of the Funds, the Funds' transfer
agent (and its agents) or other agents of either the
Funds or VKAC: printed forms, letters or other written
materials; long distance telephone calls (both incoming
and outgoing), data and other telephone lines; data
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circuit interface equipment; printing services and
computer line printers;
c) the cost of equipment (including maintenance thereof)
used to microfilm, record, index, display and retrieve
documents;
d) the cost of computers (including maintenance thereof);
e) the cost of equipment used to record and play back
telephone conversations; and
f) the cost of third-party vendors contracted by VKAC to
provide the equipment (and maintenance thereof) and
services listed above.
B. The Communications Support Services shall be allocated between the Funds
on a pro-rata basis, to be determined by data developed from the number of
telephone calls and correspondence from and returned to shareholders and
brokers relating to each respective Fund during each month, and will be
paid by VKAC and reimbursed by the Funds monthly. VKAC will tender to each
month which shall certify the total Support Services expenses expended,
and the portion to be reimbursed to VKAC by such Fund.
C. Except as provided in this Section 3, VKAC will receive no other
compensation in connection with Communication Support Services rendered in
accordance with this Agreement and VKAC will be responsible for all other
expenses relating to the providing of the Communication Support Services.
4. Maintenance of Records. All records maintained by VKAC in connection with the
performance of its duties under this Agreement will remain the property of each
respective Fund and will be preserved by VKAC for the periods prescribed in
Section 31 of the 1940 Act and the
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rules thereunder or such applicable rules that may be adopted from time to time
under the 1940 Act. In the event of termination of the Agreement, such records
will be promptly delivered to each respective Fund. Such records may be
inspected by each respective Fund at reasonable times.
5. Liability of VKAC. VKAC shall not be liable to any Fund for any action taken
or anything done by it or its agents or contractors on behalf of such fund in
carrying out the terms and provisions of the Agreement if done in good faith and
without gross negligence or misconduct on the part of VKAC, its agents or
contracts.
6. Indemnification By Funds. Each Fund will indemnify and hold VKAC harmless
from all loss, cost, damage and expense, including reasonable expenses for legal
counsel, incurred by VKAC resulting from: (A) any claim, demand, action or suit
in connection with VKAC's acceptance of this Agreement; (B) any action or
omission by VKAC in the performance of its duties hereunder; (C) VKAC's acting
upon instructions believed by it to have been executed by a duly authorized
officer of the Fund; or (D) VKAC's acting upon information provided by the Fund
in form and under policies agreed to by VKAC and the Fund. VKAC shall not be
entitled to such indemnification in respect of actions or omissions constituting
gross negligence or willful misconduct of VKAC or its actions or contractors.
Prior to confessing any claims against it which may be subject to this
indemnification, VKAC shall give the Fund reasonable opportunity to defend
against said claim in its own name or in the name of VKAC.
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7. Indemnification by VKAC. VKAC will indemnify and hold harmless each Fund from
all loss, cost, damage and expense, including reasonable expenses for legal
counsel, incurred by VKAC resulting from any claim, demand, action or suit
arising out of VKAC's failure to comply with the terms of this Agreement or
which arises out of the gross negligence or willful misconduct of VKAC or its
agents or contractors. The Fund shall not be entitled to such indemnification in
respect of actions or omissions constituting gross negligence or misconduct of
such Fund or its agents or contractors; provided, that such gross negligence or
misconduct is not attributable to VKAC, its agents or contractors. Prior to
confessing any claim against it which may be subject to this indemnification,
the Fund shall give VKAC reasonable opportunity to defend against said claim in
its own name or in the name of such Fund.
8. Further Assurances. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
9. Dual Interest. It is understood that some person or persons may be directors,
trustees, officers, or shareholders of both the Funds and VKAC (including VKAC's
affiliates), and that the existence of any such dual interest shall not affect
the validity hereof or of any transactions hereunder except as otherwise
provided by a specific provision of applicable law.
10. Execution, Amendment and Termination. The term of this Agreement shall begin
as of July 18, 1996, and unless sooner terminated as herein provided, this
Agreement shall remain in effect through July 31, 1997, and thereafter from year
to year if such continuation is specifically approved at least annually by the
Board of Trustees of each Fund, including a majority of the
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independent Trustees of each Fund. This Agreement may be modified or amended
from time to time by mutual agreement between the parties hereto and may be
terminated after July 31, 1998, by at least sixty (60) days' written notice
given by one party to the others. Upon termination hereof, each Fund shall pay
to VKAC such compensation as may be due as of the date of such termination and
shall likewise reimburse VKAC for its costs, expenses and disbursements payable
under this Agreement to such date. This Agreement may be amended in the future
to include as additional parties to the Agreement other investment companies for
which VKAC, any subsidiary or affiliate serves as investment advisor or
distributor.
11. Assignment. Any interest of VKAC under this Agreement shall not be assigned
or transferred, either voluntarily or involuntarily by operation of law or
otherwise, without the prior written consent of the Funds. This Agreement shall
automatically and immediately terminate in the event of its assignment without
the prior written consent of the Funds.
12. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or sent by registered or certified mail, postage prepaid, to the other
parties at such address as such other parties may designate for the receipt of
such notices. Until further notice to the other parties, it is agreed that for
this purpose the address of each Fund is Xxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx.
13. Interpretive Provisions. In connection with the operation of the Agreement,
VKAC and the Funds may agree from time to time on such provisions interpretative
of or in addition to the
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provisions of this Agreement as may in their joint opinion be consistent with
the general tenor of this Agreement.
14. State Law. This Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of Illinois.
15. Captions. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
16. Disclaimer. As provided for in Article V, Section 5.5 of each respective
Fund's Declaration of Trust, as amended, under which each respective Fund is
organized as an unincorporated business trust under the laws of the Commonwealth
of Massachusetts, the shareholders, trustees, officers, employees, and other
agents of each respective Fund shall not personally be found liable for the
matters set forth hereunder, nor shall resort be had to their private property
for the satisfaction of any obligation or claim hereunder.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first written above.
XXX XXXXXX AMERICAN CAPITAL DISTRIBUTORS, INC.
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxx
President
XXX XXXXXX AMERICAN CAPITAL MUNICIPAL INCOME TRUST
/s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Xxxxxx X. XxXxxxxxx
President
XXX XXXXXX AMERICAN CAPITAL CALIFORNIA MUNICIPAL TRUST
/s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Xxxxxx X. XxXxxxxxx
President
XXX XXXXXX AMERICAN CAPITAL LIMITED TERM HIGH INCOME TRUST
/s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Xxxxxx X. XxXxxxxxx
President
XXX XXXXXX AMERICAN CAPITAL INTERMEDIATE TERM HIGH INCOME TRUST
/s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Xxxxxx X. XxXxxxxxx
President
XXX XXXXXX AMERICAN CAPITAL PRIME RATE INCOME TRUST
/s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Xxxxxx X. XxXxxxxxx
President
XXX XXXXXX AMERICAN CAPITAL INVESTMENT GRADE MUNICIPAL TRUST
/s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Xxxxxx X. XxXxxxxxx
President
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