TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of April, 1999 by and between PROGRESSIVE
CAPITAL ACCUMULATION TRUST, a Massachusetts business trust having its principal
office and place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx 0, Xxxxxx, XX 00000 (
the "Trust"), and CARDINAL INVESTMENT SERVICES, INC., an Illinois corporation
having its principal office and place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx
0, Xxxxxx, XX 00000 ( the "Company"),
W I T N E S S E T H:
WHEREAS, the Trust desires to appoint the Company as transfer agent,
dividend disbursing agent and agent in connection with certain other activities
and the Company desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Article 1. Terms of Appointment; Duties of the Company
1.01 Subject to the terms and conditions set forth in this Agreement, the
Trust hereby employs and appoints the Company to act as, and the Company agrees
to act as, transfer agent for the Trust's authorized and issued shares of
beneficial interest without part value ("Shares"), dividend disbursing agent in
connection with any accumulation, open-account or similar plans provided to the
shareholders of the Trust ("Shareholders") and set out in the prospectus and
statement of additional information of the Trust corresponding to the date of
this Agreement.
1.02 The Company agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Trust and the Company, the Company shall:
(i) receive for acceptance and processing, order for the purchase of
Shares, and promptly deliver payment and appropriate documentation therefor to
the custodian of the Trust authorized pursuant to the Trust's governing
documents (the "Custodian");
(ii) pursuant to purchase orders or other appropriate instructions,
issue the appropriate number of Shares and hold such Shares in the appropriate
Shareholder account, and, if requested and properly authorized, issue
appropriate certificates therefor;
(iii) receive for acceptance and processing, redemption requests
and redemption directions, and deliver the appropriate documentation therefor
to the Custodian;
(iv) at the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over or cause to be paid
over in the appropriate manner such monies as instructed by the redeeming
Shareholders;
(v) effect transfer of Shares by the registered owners thereof upon
receipt of appropriate documentation;
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(vi) prepare and transmit payments for dividends and distributions
declared by the Trust; and
(vii) maintain records of account for and advise the Trust and
their Shareholders as to the foregoing.
(b) In addition to and not in lieu of the services set forth in paragraph
(a) above, the Company shall perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant, agent in connection with
accumulation, open-account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to: (i) maintaining all Shareholder accounts, (ii) preparing Shareholder
meeting lists, (iii) mailing proxies, (iv) receiving and tabulating proxies, (v)
mailing of additional information to current Shareholders, (vi) withholding
taxes on U.S. residents and non-resident alien accounts where applicable, (vii)
preparing and filing U.S. Treasury Department Forms 1099 and other appropriate
forms required with respect to dividends and distributions by federal
authorities for all registered Shareholders, (viii) preparing and mailing
confirmation forms and statements of account to Shareholders for all purchases
and redemptions of Shares and other confirmable transactions in Shareholder
accounts, (ix) preparing and mailing activity statements for Shareholders, and
(x) providing Shareholder account information. The Trust shall provide the
Company with any information required in connection with the furnishing of the
foregoing services.
(c) Additionally, the Company shall:
(i) Utilize a system to identify all Share transactions which involve
purchase and redemption orders that are processed at a time other than the time
of the computation of net asset value per Share next computed after receipt of
such orders, and shall compute the net effect upon the Trust of such
transactions so identified on a daily and cumulative basis.
(ii) If on any day the cumulative net effect of such transactions
upon the Trust are negative and exceeds a dollar amount equivalent to 1/2 of 1
cent per Share, the Company shall promptly make a payment to the Trust in cash
or through the use of a credit, in the manner described in subparagraph (iv)
below, in such amount as may be necessary to reduce the negative cumulative net
effect to less than 1/2 of 1 cent per Share.
(iii) If on the last business day of any month the cumulative net
effect upon the Trust (adjusted by the amount of all prior payments and credits
by the Company and the Trust) are negative, the Trust shall be entitled to a
reduction in the fee next payable under this Agreement by an equivalent amount,
except as provided in subparagraph (iv) below. If on the last business day in
any month the cumulative net effect upon the Trust (adjusted by the amount of
all prior payments and credits by the Company and the Trust) is positive, the
Company shall be entitled to recover certain past payments and reductions in
fees, and to credit against all future payments and fee reductions that may be
required under subparagraph (iv) below.
(iv) At the end of each month, any positive cumulative net effect
upon the Trust shall be deemed to be a credit to the Company which shall first
be applied to permit the Company to recover any prior cash payments and fee
reductions made by it to the Trust under subparagraphs (ii) and (iii) above
during the calendar year, by increasing the amount of the monthly fee under this
Agreement next payable in an amount equal to prior payments and fee reductions
made by the Company during such calendar year, but not exceeding the sum of that
month's credit and credits arising in prior months during such calendar year to
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the extent such prior credits have not previously been utilized as contemplated
by this subparagraph (iv). Any portion of a credit to the Company not so used by
it shall remain as a credit to be used as payment against the amount of future
negative cumulative net effect that would otherwise require a cash payment or
fee reduction to be made to the Trust pursuant to paragraphs (ii) or (iii) above
(regardless of whether or not the credit or any portion thereof arose in the
same calendar year as that in which the negative cumulative net effects or any
portion thereof arose).
(v) The Company shall supply to the Trust from time to time, as
mutually agreed upon, reports summarizing the transactions identified pursuant
to subparagraph (i) above, and the daily and cumulative net effect of such
transactions, and shall advise the Trust at the end of each month of the net
cumulative effect at such time. The Company shall promptly advise the Trust if
at any time the cumulative net effect exceeds a dollar amount equivalent to 1/2
of 1 cent per Share.
(vi) In the event that this Agreement is terminated for whatever
cause, or this Section 1.02(c) is terminated pursuant to subparagraph (vii)
below, the Trust shall promptly pay to the Company an amount in cash equal to
the amount by which the cumulative net effect upon the Trust is positive or, if
the cumulative net effect upon the Trust is negative, the Company shall promptly
pay to the Trust an amount in cash equal to the amount of such cumulative net
effect.
(vii) This Section 1.02(c) may be terminated by the Company at any
time without cause, effective as of the close of business on the date written
notice (which may be by facsimile) is received by the Trust.
(d) Procedures applicable to the services provided under this Agreement
may be established from time to time by agreement between the Trust and the
Company.
Article 2. Fees and Expenses
2.01 For performance by the Company pursuant to this Agreement, the Trust
agrees to pay the Company monthly a fee at the annual rate of $12,000. Such fees
and out-of-pocket expenses and advances identified under Section 2.02 below may
be changed from time to time subject to mutual written agreement between the
Trust and the Company.
2.02 In addition to the fee paid under Section 2.01 above, the Trust
agrees to reimburse the Company for all out-of-pocket expenses or advances
incurred by the Company in performing its duties as Transfer Agent hereunder. In
addition, any other expenses incurred by the Company at the request or with the
consent of the Trust will be reimbursed by the Trust.
2.03 The Trust agrees to pay all fees and reimbursable expenses promptly.
Postage and cost of materials for mailing of dividends, proxies, Trust reports
and other mailings to all Shareholder accounts shall be advanced to the Company
by the Trust in immediately available funds prior to the mailing date of such
materials.
Article 3. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
3.01 It is a corporation duly organized and existing and in good standing
under the laws of State of Illinois.
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3.02 It is duly qualified to carry on its business in The
Commonwealth of Massachusetts.
3.03 It is empowered under applicable laws and by its charter and bylaws
to enter into and perform this Agreement.
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 access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
Article 4. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
4.01 It is an unincorporated business Trust 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 by its governing documents
to enter into and perform this Agreement.
4.03 All proceedings required by said governing documents have been taken
to authorize it to enter into and perform this Agreement.
4.04 It is an investment company registered under the Investment Company
Act of 1940.
4.05 A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made with respect to all
Shares of the Trust being offered for sale; information to the contrary will
result in immediate notification to the Company.
Article 5. Indemnification
5.01 The Company shall not be responsible for, and the Trust shall
indemnify and hold the Company harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liabilities
arising out of or attributable to:
(a) all actions of the Company or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct;
(b) the Trust's refusal or failure to comply with the terms of this
Agreement, or the Trusts' lack of good faith, negligence or willful misconduct,
or the breach of any representation or warranty of the Trust hereunder;
(c) the reliance on or use by the Company or its agents or subcontractors
of information, records or documents which (i) are received by the Company or
its agents or subcontractors and furnished to it by or on behalf of the Trust,
and (ii) have been prepared and/or maintained by the Trust or any other person
or firm (other than the Company or its agents or subcontractors) on behalf of
the Trust;
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(d) the reliance on, or the carrying out by the Company or its agents or
subcontractors of, any instructions or requests of the Trust's
representatives; or
(e) the offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or regulations of
any state that such Shares be registered in such 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.
5.02 The Company shall indemnify and hold the Trust harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liabilities arising out of or attributable to the Company's refusal
or failure to comply with the terms of this Agreement, or the Company's lack of
good faith, negligence or willful misconduct, or the breach of any
representation or warranty of the Company hereunder.
5.03 At any time the Company may apply to any officer of the Trust for
instructions, and may consult with the Trust's legal counsel with respect to any
matter arising in connection with the services to be performed by the Company
under this Agreement, and the Company and its agents or subcontractors shall not
be liable and shall be indemnified by the Trust for any action taken or omitted
by it in reliance upon such instructions or upon the opinion of such counsel.
The Company, its agents and subcontractors shall be protected and indemnified in
acting upon any papers or documents furnished by or on behalf of the Trust,
reasonably believed to be genuine and to have been signed by the proper person
or persons, or upon any instructions, information, data, records or documents
provided the Company or its agents or subcontractors by telephone, in person, or
by machine readable input, facsimile, CRT data entry or other similar means
authorized by the Trust, and the Company, its agents and subcontractors shall
not be held to have notice of any change of authority of any person until
receipt of written notice thereof from the Trust. The Company, its agents and
subcontractors shall also be protected and indemnified in recognizing Share
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Trust, 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 either party is unable to perform its obligations under
this Agreement because of acts of God, strikes, equipment or transmission
failure or damage reasonably beyond its control, or other causes reasonably
beyond its control, such party shall not be liable to the other for any damages
resulting from such failure to perform or otherwise from such causes.
5.05 Neither party to this Agreement shall be liable to the other 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 either party may
be required to indemnify the other, 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 Trust and the Company
6.01 The Trust shall promptly furnish to the Company the following:
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(a) a certified copy of the resolution of the Board of Trustees of the
Trust authorizing the appointment of the Company and the execution and delivery
of this Agreement.
(b) A copy of the Declaration of Trust and Bylaws of the Trust and all
amendments thereto.
6.02 The Company hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust 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 The Company shall keep records relating to the services to be
performed hereunder in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the rules and regulations promulgated thereunder, the Company agrees that
all such records prepared or maintained by the Company relating to the services
to be performed by the Company hereunder are the property of the Trust and will
be preserved, maintained at the expense of the Trust and made available in
accordance with such section, rules and regulations, and will be surrendered
promptly to the Trust at its request.
6.04 The Company and the Trust 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 the
Shareholder records of the Trust, the Company will endeavor to notify the Trust
and to secure instructions from an authorized officer of the Trust as to such
inspection. The Company reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person, unless
the Trust's indemnify the Company to its reasonable satisfaction against such
liability.
Article 7. Termination of Agreement
7.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
7.02 Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Trust. Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination, but not more than an
amount equivalent to the average of the most recent three (3) months' fees.
Article 8. Assignment
8.01 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other party.
8.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
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Article 9. Amendment
9.01 This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 10 Massachusetts Law to Apply
10.01 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
Article 11 Merger of Agreement
11.01 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written.
Article 12. Limitation of Liability
12.01 A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts and notice is hereby
given that this Agreement is executed on behalf of the Trustees of the Trust as
trustees and not individually and that the obligations of this Agreement are not
binding upon the Trustees or holders of Shares individually but are binding only
upon the assets or property of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
PROGRESSIVE INVESTMENT MANAGEMENT INC.
By:/s/ XXXX X. XXXXXXX
President
CARDINAL INVESTMENT SERVICES, INC.
By:/S/ XXXXXXXXXXX X. XXXXXXXX
President
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