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EXHIBIT (J(2))
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 10th day of July, 1995 by and between VAN
XXXXXX XXXXXXX PRIME RATE INCOME TRUST which is organized under the laws of the
Commonwealth of Massachusetts and has its principal office and place of
business at Oakbrook Terrace, Illinois (the "Fund"), and ACCESS INVESTOR
SERVICES, INC., a Delaware corporation, having its principal office at Houston,
Texas, and its principal place of business at Kansas City, Missouri ("ACCESS").
R E C I T A L:
WHEREAS, the Fund desires to appoint ACCESS as its transfer agent,
dividend disbursing agent and shareholder service agent, and ACCESS desires to
accept such appointments;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1. TERMS OF APPOINTMENT; DUTIES OF ACCESS.
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints ACCESS as its transfer agent,
dividend disbursing agent and shareholder service agent.
1.02 ACCESS hereby accepts such employment and appointments and
agrees that on and after the effective date of this Agreement it will act as
the transfer agent, dividend disbursing agent and shareholder service agent for
the Fund on the terms and conditions set forth herein.
1.03 ACCESS agrees that its duties and obligations hereunder
will be performed in a competent, efficient and workmanlike manner with due
diligence in accordance with reasonable industry practice, and that the
necessary facilities, equipment and personnel for such performance will be
provided.
1.04 In order to assure compliance with section 1.03 and to
implement a cooperative effort to improve the quality of transfer agency and
shareholder services received by the Fund and its shareholders, ACCESS agrees
to provide and maintain quantitative performance objectives, including maximum
target
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turn-around times and maximum target error rates, for the various services
provided hereunder. ACCESS also agrees to provide a reporting system designed
to provide the Board of Trustees of the Fund (the "Board") on a quarterly basis
with quantitative data comparing actual performance for the period with the
performance objectives. The foregoing procedures are designed to provide a
basis for continuing monitoring by the Board of the quality of services
rendered hereunder.
ARTICLE 2. FEES AND EXPENSES.
2.01 For the services to be performed by ACCESS pursuant to this
Agreement, the Fund agrees to pay ACCESS the fees provided in the fee schedules
agreed upon from time to time by the Fund and ACCESS.
2.02 In addition to the amounts paid under section 2.01 above,
the Fund agrees to reimburse ACCESS promptly for the Fund's reasonable
out-of-pocket expenses or advances paid on its behalf by ACCESS in connection
with its performance under this Agreement for postage, freight, envelopes,
checks, drafts, continuous forms, reports and statements, telephone, telegraph,
costs of outside mailing firms, necessary outside record storage costs, media
for storage of records (e.g., microfilm, microfiche and computer tapes) and
printing costs incurred due to special requirements of the Fund. In addition,
any other special out-of-pocket expenses paid by ACCESS at the specific request
of the Fund will be promptly reimbursed by the Fund. Postage for mailings of
dividends, proxies, Fund reports and other mailings to all shareholder accounts
shall be advanced to ACCESS by the Fund three business days prior to the
mailing date of such materials.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF ACCESS.
ACCESS represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware.
3.02 It is duly qualified to carry on its business in the states
of Texas and Missouri.
3.03 It is empowered under applicable laws and by its charter
and bylaws to enter into and perform this Agreement.
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3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have during the term of this
Agreement access to the necessary facilities, equipment and personnel to
perform its duties and obligations hereunder.
3.06 It will maintain a system regarding "as of" transactions as
follows:
(a) Each "as of" transaction effected at a price other
than that in effect on the day of processing for which an estimate has
not been given to the Fund and which is necessitated by ACCESS' error,
or delay for which ACCESS is responsible or which could have been
avoided through the exercise of reasonable care, will be identified,
and the net effect of such transactions determined, on a daily basis
for the Fund.
(b) The cumulative net effect of the transactions
included in paragraph (a) above will be determined each day throughout
each month. If, on any day during the month, the cumulative net
effect upon the Fund is negative and exceeds an amount equivalent to
1/2 of 1 cent per share of the Fund, ACCESS shall promptly make a
payment to the Fund (in cash or through use of a credit as described
in paragraph (c) below) in such amount as necessary to reduce the
negative cumulative net effect to less than 1/2 of 1 cent per share of
the Fund. If on the last business day of the month the cumulative net
effect (adjusted by the amount of any payments pursuant to the
preceding sentence) upon the Fund is negative, the Fund shall be
entitled to a reduction in the monthly transfer agency fee next
payable by an equivalent amount, except as provided in paragraph (c)
below. If on the last business day of the month the cumulative net
effect (similarly adjusted) upon the Fund is positive, ACCESS shall be
entitled to recover certain past payments and reductions in fees, and
to a credit against all future payments and fee reductions made under
this paragraph to the Fund, as described in paragraph (c) below.
(c) At the end of each month, any positive cumulative
net effect upon the Fund shall be deemed to be a credit to ACCESS
which shall first be applied to recover any payments and fee
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reductions made by ACCESS to the Fund under paragraph (b) above during
the calendar year by increasing the amount of the monthly transfer
agency fee next payable in an amount equal to prior payments and fee
reductions made during such year, but not exceeding the sum of that
month's credit and credits arising in prior months during such year to
the extent such prior credits have not previously been utilized as
contemplated by this paragraph (c). Any portion of a credit to ACCESS
not so used shall remain as a credit to be used as payment against the
amount of any future negative cumulative net effects that would
otherwise require a payment or fee reduction to the Fund pursuant to
paragraph (b) above.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE FUND.
The Fund hereby represents and warrants that:
4.01 It is duly organized and existing and in good standing under
the laws of the Commonwealth of Massachusetts.
4.02 It is empowered under applicable laws and regulations and by
its Declaration of Trust and by-laws to enter into and perform this Agreement.
4.03 All requisite proceedings have been taken by its Board to
authorize it to enter into and perform this Agreement.
4.04 It is an closed-end, non-diversified, management investment
company registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933,
as amended, is currently effective and will remain effective, and appropriate
state securities laws filings have been made and will continue to be made, with
respect to all of its shares being offered for sale.
ARTICLE 5. INDEMNIFICATION.
5.01 ACCESS shall not be responsible for and the Fund shall
indemnify and hold ACCESS harmless from and against any and all losses,
damages, costs, charges, reasonable counsel fees, payments, expenses and
liabilities arising out of or attributable to:
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(a) All actions of ACCESS required to be taken by
ACCESS for the benefit of the Fund pursuant to this Agreement,
provided ACCESS has acted in good faith with due diligence and without
negligence or willful misconduct.
(b) The reasonable reliance by ACCESS on, or
reasonable use by ACCESS of, information, records and documents which
have been prepared or maintained by or on behalf of the Fund have been
furnished to ACCESS by or on behalf of the Fund.
(c) The reasonable reliance by ACCESS on, or the
carrying out by ACCESS of, any instructions or requests of the Fund.
(d) The offer or sale of the Fund's shares in
violation of any requirement under the federal securities laws or
regulations or the securities laws or regulations of any state or in
violation of any stop order or other determination or ruling by any
federal agency or any state with respect to the offer or sale of such
shares in such state unless such violation results from any failure by
ACCESS to comply with written instructions of the Fund that no offers
or sales of the Fund's shares be made in general or to the residents
of a particular state.
(e) The Fund's refusal or failure to comply with the
terms of this Agreement, or the Fund's lack of good faith, negligence
or willful misconduct or the breach of any representation or warranty
of the Fund hereunder.
5.02 ACCESS shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, reasonable counsel fees,
payments, expenses and liability arising out of or attributable to ACCESS'
refusal or failure to comply with the terms of this Agreement, or ACCESS' lack
of good faith, negligence or willful misconduct, or the breach of any
representation or warranty of ACCESS hereunder.
5.03 At any time ACCESS may apply to any authorized officer of
the Fund for instructions, and may consult with the Fund's legal counsel, at
the expense of the Fund, with respect to any matter arising in connection with
the services to be performed by ACCESS under this Agreement, and ACCESS shall
not be liable and shall be indemnified by the Fund for any action taken or
omitted by it in good faith in reasonable reliance upon such instructions or
upon the opinion of such counsel. ACCESS shall be protected and indemnified in
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acting upon any paper or document reasonably believed by ACCESS to be genuine
and to have been signed by the proper person or persons and shall not be held
to have notice of any change of authority of any person, until receipt of
written notice thereof from the Fund. ACCESS shall also be protected and
indemnified in recognizing stock certificates which ACCESS reasonably believes
to bear the proper manual or facsimile signatures of the officers of the Fund,
and the proper countersignature of any former transfer agent or registrar, or
of a co-transfer agent or co-registrar.
5.04 In the event any party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage, or other causes reasonably beyond its control,
such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes.
5.05 In no event and under no circumstances shall any party to
this Agreement be liable to another party for consequential damages under any
provision of this Agreement or for any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in
this Article 5 shall apply, upon the assertion of a claim for which one party
may be required to indemnify another, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
ARTICLE 6. COVENANTS OF THE FUND AND ACCESS.
6.01 The Fund shall promptly furnish to ACCESS the following:
(a) Certified copies of the resolution of its Board
authorizing the appointment of ACCESS and the execution and delivery
of this Agreement.
(b) Certified copies of its Declaration of Trust and
by-laws and all amendments thereto.
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6.02 ACCESS hereby agrees to maintain facilities and procedures
reasonably acceptable to the Fund for safekeeping of share certificates, check
forms and facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of, such certificates, forms and
devices.
6.03 ACCESS shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable; provided,
however, that all accounts, books and other records of the Fund (hereinafter
referred to as "Fund Records") prepared or maintained by ACCESS hereunder shall
be maintained and kept current in compliance with Section 31 of the Investment
Company Act of 1940 and the Rules thereunder (such Section and Rules being
hereinafter referred to as the "1940 Act Requirements"). To the extent
required by the 1940 Act Requirements, ACCESS agrees that all Fund Records
prepared or maintained by ACCESS hereunder are the property of the Fund and
shall be preserved and made available in accordance with the 1940 Act
Requirements, and shall be surrendered promptly to the Fund on its request.
ACCESS agrees at such reasonable times as may be requested by the Board and at
least quarterly to provide (i) written confirmation to the Board that all Fund
Records are maintained and kept current in accordance with the 1940 Act
Requirements, and (ii) such other reports regarding its performance hereunder
as may be reasonably requested by the Board.
6.04 ACCESS and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
6.05 In case of any requests or demands for the inspection of
any of the Fund Records, ACCESS will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such inspection.
ACCESS reserves the right, however, to exhibit such Fund Records to any person
whenever it is advised by its counsel that it may be held liable for the
failure to exhibit such Fund Records to such person.
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ARTICLE 7. TERM AND TERMINATION OF AGREEMENT.
7.01 This Agreement shall remain in effect from the date hereof
through July 9, 1996; provided, however, that this Agreement may be terminated
by any party with respect to that party for good and reasonable cause at any
time by giving written notice to the other party at least 120 days prior to the
date on which such termination is to be effective. Any unpaid fees or
reimbursable expenses payable to ACCESS shall be due on any such termination
date. ACCESS agrees to use its best efforts to cooperate with the Fund and the
successor transfer agent or agents in accomplishing an orderly transition.
7.02 Subject to the prior approval of the Board, this Agreement
shall be renewed and extended for periods of not more than one year each,
unless and until this Agreement is terminated in accordance with section 7.01
above.
ARTICLE 8. MISCELLANEOUS.
8.01 Except as provided in section 8.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by any party
without the written consent of ACCESS or the Fund, as the case may be;
provided, however, that no consent shall be required for any merger of the Fund
with, or any sale of all or substantially all the assets of the Fund to,
another investment company.
8.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
8.03 ACCESS may, without further consent on the part of the
Fund, subcontract with DST, Inc., a Missouri corporation, or any other
qualified servicer, for the performance of data processing activities;
provided, however, that ACCESS shall be as fully responsible to the Fund for
the acts and omissions of DST, Inc., or other qualified servicer, as it is for
its own acts and omissions.
8.04 ACCESS may, without further consent on the part of the
Fund, provide services to its affiliated companies. Such services may be
provided at cost.
8.05 This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, and supersedes any
prior agreement with respect thereto, whether oral or written, and this
Agreement may not be modified except by written instrument executed by the
affected parties.
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8.06 The Declaration of Trust establishing the Fund as a
Massachusetts Business Trust (the "Trust"), copies of which, together with all
amendments thereto (the "Declaration") is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name of the
Fund refers to the Trustees under each of the Declarations collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal
liability, nor shall resort be had to their respective private property for the
satisfaction of any obligation or claim or otherwise in connection with the
affairs of the Trust, but that the Trust's Estate only shall be liable.
8.07 In the event of a change in the business or regulatory
environment affecting all or any portion of this Agreement, the parties hereto
agree to renegotiate such affected portions in good faith.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf and through their duly
authorized officers, as of the date first above written.
VAN XXXXXX XXXXXXX PRIME RATE
INCOME TRUST
BY:/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Assistant Secretary
ATTEST:
/s/ Xxxxx X. Xxxx
ACCESS INVESTOR SERVICES, INC.
BY:/s/ Xxxx X. Xxxxxxxxxx
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Xxxx X. Xxxxxxxxxx, President and
Chief Executive Officer
ATTEST:
/s/ Xxxxx X. Xxxx
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PRICING SCHEDULE
PRICE PER ACCOUNT PLUS OUT OF POCKETS
Prime Rate Income Trust $24.23* Plus Out of Pockets
*Add $1.00 for Class B or Class C Surcharge
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