SHAREHOLDER SERVICE AGREEMENT
This Agreement made on the 29th day of July, 1999 by and between Pilgrim
Advisory Funds, Inc., a Maryland Corporation having its principal place of
business at Two Renaissance Square, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000 (the "Fund"), and Pilgrim Group Inc., a Delaware
corporation having its principal place of business at Two Renaissance Square, 00
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 ("PGI"):
WITNESSETH:
WHEREAS, the Fund is party to a transfer agent agreement with DST
Systems, Inc. ("DST") wherein DST provides all transaction processing and record
keeping for the Fund's shareholders and would provide shareholder services for
the Fund if the Fund so desired, and
WHEREAS, the Fund has determined that PGI is capable of providing
superior shareholder services to the Fund in conjunction with DST as the
Transfer Agent, and
WHEREAS, the Fund desires to appoint PGI as Shareholder Service Agent
and PGI desires to accept such appointment:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
SCOPE OF APPOINTMENT
Fund hereby appoints PGI as Shareholder Service Agent and as such PGI hereby
accepts such appointment and agrees that it will provide the Fund with services
which include but are not limited to the following:
A. Reviewing correspondence pertaining to any former, existing or new
shareholder account, processing such correspondence for proper record
keeping, and responding promptly to correspondence from shareholders and
dealers.
B. Receiving telephone calls pertaining to any former, existing or new
shareholder account, verbally responding to such calls and when required
responding in writing and maintaining prior record keeping regarding such
calls from shareholders and dealers and responses thereto.
C. PGI further agrees that the scope of this appointment does not include any
services required to be provided by a registered broker-dealer or
registered transfer agent.
CERTAIN REPRESENTATIONS AND WARRANTIES OF PGI AND THE FUND
PGI represents and warrants to the Fund that:
A. It is a corporation duly organized and existing and in good standing under
the laws of Delaware.
B. It is duly qualified to carry on its business in the State of Arizona.
C. It has and will continue to have and maintain the necessary facilities,
equipment and personnel to perform its duties and obligations under this
agreement.
D. PGI is empowered under applicable laws and by its charter and bylaws to
enter into this Agreement.
The Fund represents and warrants to PGI that:
A. It is a corporation duly organized and existing and in good standing under
the laws of Maryland.
B. It is an open-end diversified management investment company registered
under the Investment Company Act of 1940, as amended.
C. The Fund is empowered under applicable laws and by its charter and bylaws
to enter into this Agreement.
COMPENSATIONS AND EXPENSES
In consideration for its services here under as Shareholder Service Agent, the
Fund will pay to PGI reasonable compensations for all services rendered as
Agent, and all its reasonable out-of-pocket expenses incurred in connection with
the agency. Such compensation is set forth in a separate schedule to be agreed
to by the Fund and PGI, a copy of which is attached hereto.
The Fund agrees to promptly reimburse PGI for all reasonable out-of-pocket
expenses or disbursements incurred by PGI in connection with the performance of
services under this Agreement including, but not limited to, expenses for
postage, express delivery services, envelopes, forms, telephone communication
expenses and stationary supplies. PGI agrees to furnish to the Fund's Board of
Directors, upon request, reasonable documentation of any expenses for which
reimbursement is sought.
INDEMNIFICATIONS
PGI shall at all times use reasonable care, due diligence and act in good faith
in performing its duties under this Agreement. PGI shall not be responsible for,
and the Fund shall indemnify and hold PGI harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability
which may be asserted against PGI or for which PGI may be held liable, arising
out of or attributable to all actions of PGI required to be taken by PGI
pursuant to this Agreement provided that PGI has acted in good faith and with
due diligence and reasonable care. The Fund shall not be responsible for, and
PGI shall indemnify and hold harmless the Fund from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses, and liability
which any be asserted against the Fund or for which the Fund may be held liable,
arising out of or attributable to all actions of PGI required to be taken by PGI
pursuant to this Agreement in which PGI has not acted in good faith and with due
diligence and reasonable care.
TERMINATION OF AGREEMENT
This Agreement shall be in effect from July 29, 1999 through July 29, 2002 and
thereafter may be terminated by either party upon receipt of 60 days' written
notice.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers, to be effective as of the
day and year first above written.
PILGRIM GROUP, INC.
BY:
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TITLE:
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PILGRIM ADVISORY FUNDS, INC.
(ON BEHALF OF PILGRIM SERIES ASIA-PACIFIC
EQUITY FUND, PILGRIM LARGECAP LEADERS FUND
AND PILGRIM MIDCAP VALUE FUND)
BY:
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TITLE:
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