RECORDKEEPING AGREEMENT
THIS AGREEMENT is made effective the 24th day of May, 1999, by and
between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the
laws of the state of Missouri, having its principal office and place of business
at 000 Xxxxxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("IFTC"), and PILGRIM MUTUAL
FUNDS, a Delaware trust, having its principal office and place of business at
Two Renaissnce Square, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx
00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint IFTC as its agent to perform certain
investment accounting and recordkeeping functions for the assets of the Fund's
investment portfolio or portfolios (each a "Portfolio", and collectively the
"Portfolios"); and
WHEREAS, IFTC is willing to accept such appointment on the terms and
conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF AGENT. Fund hereby constitutes and appoints IFTC as its
agent to perform certain accounting and recordkeeping functions relating to
portfolio transactions required of a duly registered investment company
under Rule 31a of the Investment Company Act of 1940, as amended (the "1940
Act") and to calculate the net asset value of the Portfolios.
2. REPRESENTATIONS AND WARRANTIES.
A. Fund hereby represents, warrants and acknowledges to IFTC:
1. That it is a trust duly organized and existing and in good
standing under the laws of its state of organization, and that it
is registered under the 1940 Act; and
2. That it has the requisite power and authority under applicable
law and its declaration of trust to enter into this Agreement; it
has taken all requisite action necessary to appoint IFTC as
investment accounting and recordkeeping agent; this Agreement has
been duly executed and delivered by Fund; and this Agreement
constitutes a legal, valid and binding obligation of Fund,
enforceable in accordance with its terms.
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B. IFTC hereby represents, warrants and acknowledges to Fund:
1. That it is a trust company duly organized and existing and in
good standing under the laws of the State of Missouri; and
2. That it has the requisite power and authority under applicable
law, its charter and its bylaws to enter into and perform this
Agreement; this Agreement has been duly executed and delivered by
IFTC; and this Agreement constitutes a legal, valid and binding
obligation of IFTC, enforceable in accordance with its terms.
3. DUTIES AND RESPONSIBILITIES OF THE PARTIES.
A. Delivery of Accounts and Records. Fund will turn over or cause to be
turned over to IFTC all accounts and records needed by IFTC to perform
its duties and responsibilities hereunder fully and properly. IFTC may
rely conclusively on the completeness and correctness of such accounts
and records.
B. Accounts and Records. IFTC will prepare and maintain, under the
direction of and as interpreted by Fund, Fund's or Portfolio's
accountants and/or other advisors, in complete, accurate and current
form such accounts and records: (1) required to be maintained by Fund
with respect to portfolio transactions under Section 31(a) of the 1940
Act and the rules and regulations from time to time adopted
thereunder; (2) required as a basis for calculation of each
Portfolio's net asset value; and (3) as otherwise agreed upon by the
parties. Fund will advise IFTC in writing of all applicable record
retention requirements, other than those set forth in the 1940 Act.
IFTC will preserve such accounts and records in the manner and for the
periods prescribed in the 1940 Act or for such longer period as is
agreed upon by the parties. Fund will furnish, in writing or its
electronic or digital equivalent, accurate and timely information
needed by IFTC to complete such accounts and records when such
information is not readily available from generally accepted
securities industry services or publications.
C. Accounts and Records Property of Fund. IFTC acknowledges that all of
the accounts and records maintained by IFTC pursuant hereto are the
property of Fund, and will be made available to Fund for inspection or
reproduction within a reasonable period of time, upon demand. IFTC
will assist Fund's independent auditors, or upon the prior written
approval of Fund, or upon demand, any regulatory body, in any
requested review of Fund's accounts and records but Fund will
reimburse IFTC for all expenses and employee time invested in any such
review outside of routine and normal periodic reviews. Upon receipt
from Fund of the necessary information or instructions, IFTC will
supply information from the books and records it maintains for Fund
that Fund may reasonably request for tax returns, questionnaires,
periodic reports to shareholders and such other reports and
information requests as Fund and IFTC may agree upon from time to
time.
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D. Adoption of Procedures. IFTC and Fund may from time to time adopt such
procedures as they agree upon, and IFTC may conclusively assume that
no procedure approved or directed by Fund, Fund's or Portfolio's
accountants or other advisors conflicts with or violates any
requirements of the prospectus, declaration of trust, any applicable
law, rule or regulation, or any order, decree or agreement by which
Fund may be bound. Fund will be responsible for notifying IFTC of any
changes in statutes, regulations, rules, requirements or policies
which may impact IFTC's responsibilities or procedures under this
Agreement.
E. Valuation of Assets. IFTC will value the Assets in accordance with
Fund's Instructions utilizing the pricing sources designated by Fund
("Pricing Sources"). In the event that Fund specifies Reuters America,
Inc., it will enter into the Agreement attached hereto as Exhibit A.
IFTC will calculate each Portfolio's net asset value in accordance
with the Portfolio's prospectus.
4. INSTRUCTIONS.
A. The term "Instructions", as used herein, means written (including
telecopied, telexed, or electronically transmitted) or oral
instructions which IFTC reasonably believes were given by a designated
representative of Fund. Fund will deliver to IFTC, prior to delivery
of any Assets to IFTC and thereafter from time to time as changes
therein are necessary, written Instructions naming one or more
designated representatives to give Instructions in the name and on
behalf of Fund, which Instructions may be received and accepted by
IFTC as conclusive evidence of the authority of any designated
representative to act for Fund and may be considered to be in full
force and effect until receipt by IFTC of notice to the contrary.
Unless such written Instructions delegating authority to any person to
give Instructions specifically limit such authority to specific
matters or require that the approval of anyone else will first have
been obtained, IFTC will be under no obligation to inquire into the
right of such person, acting alone, to give any Instructions
whatsoever. If Fund fails to provide IFTC any such Instructions naming
designated representatives, any Instructions received by IFTC from a
person reasonably believed to be an appropriate representative of Fund
will constitute valid and proper Instructions hereunder. The term
"designated representative" may include Fund's or a Portfolio's
employees and agents, including investment managers and their
employees.
B. No later than the next business day immediately following each oral
Instruction, Fund will send IFTC written confirmation of such oral
Instruction. At IFTC's sole discretion, IFTC may record on tape, or
otherwise, any oral Instruction whether given in person or via
telephone, each such recording identifying the date and the time of
the beginning and ending of such oral Instruction.
C. Fund will provide upon IFTC's request a certificate signed by an
officer or designated representative of Fund, as conclusive proof of
any fact or matter required to be ascertained from Fund hereunder.
Fund will also provide IFTC Instructions with respect to any matter
concerning this Agreement requested by IFTC. If IFTC reasonably
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believes that it could not prudently act according to the
Instructions, or the instruction or advice of Fund's or a Portfolio's
accountants or counsel, it may in its discretion, with notice to Fund,
not act according to such Instructions.
5. LIMITATION OF LIABILITY OF IFTC. IFTC is not responsible or liable for, and
Fund will indemnify and hold IFTC harmless from and against, any and all
costs, expenses, losses, damages, charges, counsel fees (including, without
limitation, disbursements and the allocable cost of in-house counsel),
payments and liabilities which may be asserted against or incurred by IFTC
or for which IFTC may be held to be liable, arising out of or attributable
to:
A. IFTC's action or failure to act pursuant hereto; provided that IFTC
has acted in good faith and with reasonable care; and provided
further, that in no event is IFTC liable for consequential, special,
or punitive damages;
B. IFTC's payment of money as requested by Fund, or the taking of any
action which might make it or its nominee liable for payment of monies
or in any other way; provided, however, that nothing herein obligates
IFTC to take any such action or expend its own monies except in its
sole discretion;
C. IFTC's action or failure to act hereunder upon any Instruction,
advice, notice, request, consent, certificate or other instrument or
paper appearing to it to be genuine and to have been properly
executed, including any Instructions, communications, data or other
information received by IFTC by means of the Systems, as hereinafter
defined, or any electronic system of communication;
D. IFTC's action or failure to act in good faith reliance on the advice
or opinion of counsel for Fund or of its own counsel with respect to
questions or matters of law, which advice or opinion may be obtained
by IFTC at the expense of Fund, or on the Instruction, advice or
statements of any officer or employee of Fund, or Fund's accountants
or other authorized individuals, and other persons believed by it in
good faith to be expert in matters upon which they are consulted;
E. Any error, omission, inaccuracy or other deficiency in any Portfolio's
accounts and records or other information provided to IFTC by or on
behalf of a Portfolio, including the accuracy of the prices quoted by
the Pricing Sources or for the information supplied by Fund to value
the Assets, or the failure of Fund to provide, or provide in a timely
manner, any accounts, records, or information needed by IFTC to
perform its duties hereunder;
F. Fund's refusal or failure to comply with the terms hereof (including
without limitation Fund's failure to pay or reimburse IFTC under
Section 5 hereof), Fund's negligence or willful misconduct, or the
failure of any representation or warranty of Fund hereunder to be and
remain true and correct in all respects at all times;
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G. The use or misuse, whether authorized or unauthorized, of the Systems
or any electronic system of communication used hereunder, by Fund or
by any person who acquires access to the Systems or such other systems
through the terminal device, passwords, access instructions or other
means of access to such Systems or such other system which are
utilized by, assigned to or otherwise made available to Fund, except
to the extent attributable to any negligence or willful misconduct by
IFTC;
H. Loss occasioned by the acts, omissions, defaults or insolvency of any
broker, bank, trust company, securities system or any other person
with whom IFTC may deal; and
I. The failure or delay in performance of its obligations hereunder, or
those of any entity for which it is responsible hereunder, arising out
of or caused, directly or indirectly, by circumstances beyond the
affected entity's reasonable control, including, without limitation:
any interruption, loss or malfunction of any utility, transportation,
computer (hardware or software) or communication service; inability to
obtain labor, material, equipment or transportation, or a delay in
mails; governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornadoes, acts of God or public enemy,
revolutions, or insurrection.
6. COMPENSATION. In consideration for its services hereunder, Fund will pay to
IFTC the compensation set forth in a separate fee schedule, incorporated
herein by reference, to be agreed to by Fund and IFTC from time to time,
and, upon demand, reimbursement for IFTC's cash disbursements and
reasonable out-of-pocket costs and expenses, including attorney's fees and
disbursements, incurred by IFTC in connection with the performance of
services hereunder.
7. TERM AND TERMINATION. The initial term of this Agreement is for a period of
one (1) year. Thereafter, either Fund or IFTC may terminate this Agreement
by notice in writing, delivered or mailed, postage prepaid, to the other
party and received not less than ninety (90) days prior to the date upon
which such termination will take effect. Upon termination hereof:
A. Fund will pay IFTC its fees and compensation due hereunder and its
reimbursable disbursements, costs and expenses paid or incurred to
such date;
B. Fund will designate a successor (which may be Fund) by Instruction to
IFTC; and
C. IFTC will, upon payment of all sums due to IFTC from Fund hereunder or
otherwise, deliver all accounts and records and other properties of
Fund to the successor, or, if none, to Fund, at IFTC's office.
In the event that accounts, records or other properties remain in the
possession of IFTC after the date of termination hereof for any reason
other than IFTC's failure to deliver the same, IFTC is entitled to
compensation as provided in the then-current fee schedule for its services
during such period, and the provisions hereof relating to the duties and
obligations of IFTC will remain in full force and effect.
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8. NOTICES. Notices, requests, instructions and other writings addressed to
Fund at the address set forth above, or at such other address as Fund may
have designated to IFTC in writing, will be deemed to have been properly
given to Fund hereunder. Notices, requests, Instructions and other writings
addressed to IFTC at the address set forth above, Attention: Investment
Accounting Department, or to such other address as it may have designated
to Fund in writing, will be deemed to have been properly given to IFTC
hereunder.
9. THE SYSTEMS; CONFIDENTIALITY.
A. If IFTC provides Fund direct access to the computerized investment
portfolio recordkeeping and accounting systems used by IFTC
("Systems") or if IFTC and Fund agree to utilize any electronic system
of communication, Fund agrees to implement and enforce appropriate
security policies and procedures to prevent unauthorized or improper
access to or use of the Systems or such other system.
B. Fund will preserve the confidentiality of the Systems and the tapes,
books, reference manuals, instructions, records, programs,
documentation and information of, and other materials relevant to, the
Systems and the business of IFTC or its affiliates ("Confidential
Information"). Fund agrees that it will not voluntarily disclose any
such Confidential Information to any other person other than its own
employees who reasonably have a need to know such information pursuant
hereto. Fund will return all such Confidential Information to IFTC
upon termination or expiration hereof.
C. Fund has been informed that the Systems are licensed for use by IFTC
and its affiliates from one or more third parties ("Licensors"), and
Fund acknowledges that IFTC and Licensors have proprietary rights in
and to the Systems and all other IFTC or Licensor programs, code,
techniques, know-how, data bases, supporting documentation, data
formats, and procedures, including without limitation any changes or
modifications made at the request or expense or both of Fund
(collectively, the "Protected Information"). Fund acknowledges that
the Protected Information constitutes confidential material and trade
secrets of IFTC and Licensors. Fund will preserve the confidentiality
of the Protected Information, and Fund hereby acknowledges that any
unauthorized use, misuse, disclosure or taking of Protected
Information, residing or existing internal or external to a computer,
computer system, or computer network, or the knowing and unauthorized
accessing or causing to be accessed of any computer, computer system,
or computer network, may be subject to civil liabilities and criminal
penalties under applicable law. Fund will so inform employees and
agents who have access to the Protected Information or to any computer
equipment capable of accessing the same. Licensors are intended to be
and are third party beneficiaries of Fund's obligations and
undertakings contained in this Section.
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D. Fund hereby represents and warrants to IFTC that it has determined to
its satisfaction that the Systems are appropriate and suitable for its
use. THE SYSTEMS ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. IFTC
EXPRESSLY DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, EXCEPT THOSE WARRANTIES EXPRESSLY STATED HEREIN.
E. State Street will take reasonable steps to ensure that its products
(and those of its third-party suppliers) reflect the available state
of the art technology to offer products that are Year 2000 compliant,
including, but not limited to, century recognition of dates,
calculations that correctly compute same century and multi century
formulas and date values, and interface values that reflect the date
issues arising between now and the next one-hundred years, and if any
changes are required, State Street will make the changes to its
products at no cost to the Fund and in a commercially reasonable time
frame and will require third-party suppliers to do likewise.
Similarly, Fund will take reasonable steps to ensure that its
electronic systems reflect the available state of the art technology
and are Year 2000 compliant, including, but not limited to, century
recognition of dates, calculations that correctly compute same century
and multi century formulas and date values, and interface values that
reflect the date issues arising between now and the next one-hundred
years, and if any changes are required, Fund will make the changes to
its systems at no cost to State Street and in a commercially
reasonable time frame.
10. MULTIPLE PORTFOLIOS. If Fund is comprised of more than one Portfolio, the
following provisions apply:
A. Each Portfolio will be regarded for all purposes hereunder as a
separate party apart from each other Portfolio. Unless the context
otherwise requires, with respect to every transaction covered hereby,
every reference herein to Fund is deemed to relate solely to the
particular Portfolio to which such transaction relates. Under no
circumstances will the rights, obligations or remedies with respect to
a particular Portfolio constitute a right, obligation or remedy
applicable to any other Portfolio. The use of this single document to
memorialize the separate agreement as to each Portfolio is understood
to be for clerical convenience only and will not constitute any basis
for joining the Portfolios for any reason.
B. Fund may appoint IFTC as its investment accounting and recordkeeping
agent for additional Portfolios from time to time by written notice,
provided that IFTC consents to such addition. Rates or charges for
each additional Portfolio will be as agreed upon by IFTC and Fund in
writing.
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11. MISCELLANEOUS.
A. This Agreement will be construed according to, and the rights and
liabilities of the parties hereto will be governed by, the laws of the
State of Missouri, without reference to the choice of laws principles
thereof.
B. All terms and provisions hereof will be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
C. The representations and warranties, the indemnifications extended
hereunder, and the provisions of Section 9 hereof are intended to and
will continue after and survive the expiration, termination or
cancellation hereof.
D. No provisions hereof may be amended or modified in any manner except
by a written agreement properly authorized and executed by each party
hereto.
E. The failure of either party to insist upon the performance of any
terms or conditions hereof or to enforce any rights resulting from any
breach of any of the terms or conditions hereof, including the payment
of damages, will not be construed as a continuing or permanent waiver
of any such terms, conditions, rights or privileges, but the same will
continue and remain in full force and effect as if no such forbearance
or waiver had occurred. No waiver, release or discharge of any party's
rights hereunder will be effective unless contained in a written
instrument signed by the party sought to be charged.
F. The captions herein 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.
G. This Agreement may be executed in two or more counterparts, each of
which is deemed an original but all of which together constitute one
and the same instrument.
H. If any provision hereof is determined to be invalid, illegal, in
conflict with any law or otherwise unenforceable, the remaining
provisions hereof will be considered severable and will not be
affected thereby, and every remaining provision hereof will remain in
full force and effect and will remain enforceable to the fullest
extent permitted by applicable law.
I. The benefits of this Agreement may not be assigned by either party nor
may either party delegate all or a portion of its duties hereunder
without the prior written consent of the other party. Notwithstanding
the foregoing, Fund agrees that IFTC may delegate all or a portion of
its duties to an affiliate of IFTC, provided that such delegation will
not reduce the obligations of IFTC under this Agreement.
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J. Neither the execution nor performance hereof will be deemed to create
a partnership or joint venture by and between IFTC and Fund or any
Portfolio.
K. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto
and any actions taken or omitted by either party hereunder will not
affect any rights or obligations of the other party hereunder.
L. Notice is hereby given that a copy of Fund's Trust Agreement and all
amendments thereto is on file with the Secretary of State of the state
of its organization; that this Agreement has been executed on behalf
of Fund by the undersigned duly authorized representative of Fund in
his/her capacity as such and not individually; and that the
obligations of this Agreement are binding only upon the assets and
property of Fund and not upon any trustee, officer of shareholder of
Fund individually.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST PILGRIM MUTUAL FUNDS
COMPANY
By: By:
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Title: Title:
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EXHIBIT A--REUTERS DATA SERVICE AGREEMENT
The undersigned acknowledges and agrees that some of the data being provided in
the service by IFTC to Fund contains information supplied to IFTC by Reuters
America Inc. ("Reuters") (the "Data"). Fund agrees that:
(i) although Reuters makes every effort to ensure the accuracy and
reliability of the Data, Fund acknowledges that Reuters, its
employees, agents, contractors, subcontractors, contributors and
third party providers will not be liable for any loss, cost or
damage suffered or incurred by Fund arising out of any fault,
interruption or delays in the Data or out of any inaccuracies,
errors or omissions in the Data however such faults,
interruptions, delays, inaccuracies, errors or omissions arise,
unless due to the gross negligence or willful misconduct of
Reuters;
(ii) it will not transfer, transmit, recirculate by digital or
analogue means, republish or resell all or part of the Data; and
(iii) certain parts of the Data are proprietary and unique to Reuters.
The undersigned further agrees that the benefit of this clause will inure to the
benefit of Reuters.
PILGRIM MUTUAL FUNDS
By:
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Title:
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Date:
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