TRANSFER AGENCY AND SERVICE AGREEMENT
between
PHILADELPHIA FUND, INC.
and
AMERICAN DATA SERVICES, INC.
TABLE OF CONTENTS
-----------------
Article 1. TERMS OF APPOINTMENT; DUTIES OF ADS................ 3
Article 2. FEES AND EXPENSES.................................. 6
Article 3. REPRESENTATIONS AND WARRANTIES OF ADS.............. 7
Article 4. REPRESENTATIONS AND WARRANTIES OF THE FUND......... 8
Article 5. INDEMNIFICATION.................................... 8
Article 6. COVENANTS OF THE FUND AND ADS......................11
Article 7. TERMINATION OF AGREEMENT...........................13
Article 8. ASSIGNMENT.........................................13
Article 9. AMENDMENT..........................................13
Article 10. NEW YORK LAWS TO APPLY.............................14
Article 11. MERGER OF AGREEMENT................................14
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made the 1 day of February, 1995, by and between Philadelphia
Fund, Inc. a Maryland corporation, having its principal office and place of
business at 0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000
(the "Fund"), and American Data Services, Inc., a New York corporation having
its principal office and place of business at 00 Xxxx Xxxxxx Xxxxxx.,
Xxxxxxxxxx, Xxx Xxxx 00000 ("ADS").
WHEREAS, the Fund desires to appoint ADS as its transfer agent, dividend
disbursing agent and agent in connection with certain other activities, and
ADS 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 ADS
-----------------------------------
1.01 Subject to the terms and conditions set forth in this
agreement, the Fund hereby employs and appoints ADS to act as, and ADS agrees
to act as its transfer agent for the Fund's authorized and issued shares of
its common stock, $1.00 par value, ("Shares"), dividend disbursing agent and
agent in connection with any accumulation, open-account or similar plans
provided to the shareholders of the fund ("Shareholders") set out in the
currently effective prospectus and statement of additional information
("prospectus") of the Fund, including without limitation any periodic
investment plan or periodic withdrawal program.
1.02 ADS agrees that it will perform the following services:
(a) In accordance with procedures established from time to
time by agreement between the Fund and ADS, ADS shall:
(i) Receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation
therefore to the Custodian of the Fund authorized by the
Board of Directors of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account;
(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation
therefore 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 transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(vii) Maintain records of account for and advise the
Fund and its Shareholders as to the foregoing; and
(viii) Record the issuance of shares of the Fund and maintain
pursuant to SEC Rule 17Ad-10(e) a record of the total number
of shares of the Fund which are authorized, based upon data
provided to it by the Fund, and issued and outstanding. ADS
shall also provide the Fund on a regular basis with the
total number of shares which are authorized and issued and
outstanding and shall have no obligation, when recording the
issuance of shares, to monitor the issuance of such shares
or to take cognizance of any laws relating to the issue or
sale of such shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in
the above paragraph (a), ADS shall: (i) Perform all of the customary services
of a transfer agent, dividend disbursing agent and, relevant agent in
connection with accumulation, open-account or similar plans (including without
limitation any periodic investment plan or period withdrawal program),
including but not limited to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies, receiving and tabulating proxies,
mailing Shareholder reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts, 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 Shareholders,
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and mailing activity
statements for Shareholders, and providing Shareholder account information and
(ii) provide a system and reports which will enable the Fund to monitor the
total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to ADS in writing
those transactions and shares to be treated as exempt from blue sky reporting
for each State and (ii) verify the establishment of such transactions for each
state on the system prior to activation and thereafter monitor the daily
activity for each State as provided by ADS. The responsibility of ADS for the
Fund's blue sky State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by the Fund and
the reporting of such transactions to the Fund as provided above.
Procedures applicable to certain of these services may be established from
time to time by agreement between the Fund and ADS.
Article 2. FEES AND EXPENSES
-----------------
2.01 For performance by ADS pursuant to this Agreement, the Fund
agrees to pay ADS an annual maintenance fee for each Shareholder account as
set forth in the initial fee schedule attached hereto. 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
Fund and ADS.
2.02 In addition to the fee paid under Section 2.01 above, the
Fund agrees to reimburse ADS for out-of-pocket expenses or advances incurred
by ADS for the items set out in the fee schedule attached hereto. In
addition, any other expenses incurred by ADS at the request or with the
consent of the Fund, will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses
within five days following the receipt of the respective billing notice.
Postage for mailing of dividends, proxies, Fund reports and other mailings to
all shareholder accounts shall be advanced to ADS by the Fund at least seven
(7) days prior to the mailing date of such materials.
Article 3. REPRESENTATIONS AND WARRANTIES OF ADS
-------------------------------------
ADS 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 New York.
3.02 It is duly qualified to carry on its business in The State of
New York.
3.03 It is empowered under applicable laws and by its charter and
by-laws 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.
3.06 ADS is duly registered as a transfer agent under
the Securities Act of 1934 and shall continue to be registered throughout the
remainder of this Agreement.
Article 4. REPRESENTATIONS AND WARRANTIES OF THE FUND
------------------------------------------
The Fund represents and warrants to ADS that;
4.01 It is a corporation duly organized and existing and in good
standing under the laws of Maryland.
4.02 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Articles of
Incorporation and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4.04 It is an open-end and diversified management investment
company registered under the Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933 is
currently or will become effective and will remain effective, and appropriate
state securities law filings as required, have been or will be made and will
continue to be made, with respect to all Shares of the Fund being offered for
sale.
Article 5. INDEMNIFICATION
---------------
5.01 ADS shall not be responsible for, and the Fund shall
indemnify and hold ADS harmless from and against, any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability arising out of
or attributable to:
(a) All actions of ADS 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 Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by ADS or its agents or subcontractors
of information, records and documents which (i) are received by ADS or its
agents or subcontractors and furnished to it by or on behalf of the Fund, and
(ii) have been prepared and/or maintained by the Fund or any other person or
firm on behalf of the Fund.
(d) The reliance on, or the carrying out by ADS or its agents or
subcontractors of any instructions or requests of the Fund.
(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 ADS shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to any action or failure
or omission to
act by ADS as a result of ADS's lack of good faith, negligence or willful
misconduct.
5.03 At any time ADS may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by ADS under this
Agreement, and ADS and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. ADS, its
agents and subcontractors shall be protected and indemnified in acting upon
any paper or document furnished by or on behalf of the Fund, reasonably
believed to be genuine and to have been signed by the proper person or
persons, or upon any instruction, information, data, records or documents
provided ADS or its agents or subcontractors by machine readable input, telex,
CRT data entry or other similar means authorized by the Fund, 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. ADS, its agents and subcontractors
shall also be protected and indemnified in recognizing stock certificates
which are reasonably believed 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 either 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
reasonably beyond its control, 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 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 of 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 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 ADS
-----------------------------
6.01 The Fund Shall promptly furnish to ADS the Following:
(a) a certified copy of the resolution of the Board of Directors
of the Fund authorizing the appointment of ADS and the execution and delivery
of this Agreement.
(b) a copy of the Articles of Incorporation and By-Laws of the
Fund and all amendments thereto.
6.02 ADS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
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 ADS 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 thereunder, ADS agrees that all such records prepared
or maintained by ADS relating to the services to be performed by ADS hereunder
are the property of the Fund and will be preserved, maintained and made
available in accordance with such Section and Rules, and will be surrendered
promptly to the Fund on and in accordance with its request.
6.04 ADS 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 the
Shareholder records of the Fund, ADS will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. ADS 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, and shall
promptly notify the Fund of any unusual request to inspect or copy the
shareholder records of the Fund or the receipt of any other unusual request to
inspect, copy or produce the records of the Fund.
Article 7. TERMINATION OF AGREEMENT
------------------------
7.01 This Agreement may be terminated by either party, upon ninety
(90) days prior written notice to the other.
7.02 Should the Fund exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and material will be
borne by the Fund. Additionally, ADS reserves the right to charge for any
other reasonable expenses associated with such termination.
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.
Article 9. AMENDMENT
---------
9.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution
of the Board of Directors of the Fund.
Article 10. NEW YORK LAWS TO APPLY
----------------------
10.01 This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of New
York.
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
matter hereof whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on behalf under their seals by and through their
duly authorized officers, as of the day and year first above written.
PHILADELPHIA FUND, INC.
BY:/s/Xxxxxx X. Xxxxxx
--------------------
TITLE: President
-----------------
ATTEST:
/s/Xxxxx X. Xxxxxxx
------------------------
AMERICAN DATA SERVICES, INC.
BY:/s/Xxxxxxx Xxxxx
--------------------
TITLE: President
ATTEST:
/s/Xxxxxxxx XxXxxxx
------------------------
FEE SCHEDULE
--- --------
(a) SHAREHOLDER SERVICE FEE:
For the services rendered by ADS in its capacity as transfer agent, the Fund
shall pay ADS, within ten (10) days after receipt of an invoice from ADS at
the beginning of each month, a fee equal to the greater of:
(1) $600.00/month;
OR,
(2) Based upon the total of all open accounts in the Fund upon the following
annual rates (billed monthly) **
Equity Fund...................................$8.00 per account
** All accounts closed during a calendar year will be considered as open
accounts for billing purposes until the end of that calendar year.
(b) TRANSACTION FEES:
Trade Entry (purchase/liquidation) and
maintenance transactions.....................$ .80 each
New account set-up............................$2.50 each
Customer service calls........................$1.25 each
Correspondence................................$1.50 each
Check preparation.............................$ .50 each
Liquidations paid by wire transfer............$3.00 each
Omnibus accounts..............................$1.25 per *
transaction
ACH charge....................................$ .30 each
SWP...........................................$1.25 each *
Other Fees:
Closed accounts - per account.................$2.00/year ***
* Not included as a Trade Entry
*** Closed accounts will remain in the shareholder files until all 1099's and
5498's have been sent to shareholders and reported (via mag media) to the IRS.
(c) XXX PLAN FEES:
The following fees will be charged directly to the shareholder
account.
Annual maintenance fee......................$15.00 / account *
Incoming transfer from prior custodian......$12.00
Distribution to a participant...............$15.00
Refund of excess contribution...............$15.00
Transfer to successor custodian.............$15.00
Automatic periodic distributions............$15.00 / year per
account
* Includes Star Bank, N.A. $8.00 Custody Fee.
(d) EXPENSES:
The Fund shall reimburse ADS for any out-of-pocket expenses, exclusive of
salaries, advanced by ADS in connection with but not limited to the printing
of confirmation forms and statements, proxy expenses, travel requested by the
Fund, telephone, facsimile transmissions, stationery and supplies (related to
the Fund records), record storage, postage (plus a $0.15 service charge for
all mailings), pro-rata portion of annual 17AD-13 audit letter, telex, and
courier charges incurred in connection with the performance of its duties
hereunder. ADS shall provide the Fund with a monthly invoice of such expenses
and the Fund shall reimburse ADS within fifteen (15) days after receipt
thereof.
(e) SPECIAL REPORTS
All reports and/or analyses requested by the Fund that are not included in
the fee schedule, shall be subject to an additional charge, agreed upon in
advance, based upon the following rates:
Labor:
Senior Staff - $100.00/hr.
Junior Staff - $ 50.00/hr.
Computer time - $45.00/hr.
(f) SECURITY DEPOSITS:
The Fund will remit to ADS upon the execution of this Agreement a security
deposit of equal to one (1) month's shareholder service fee. The security
deposit computation will be based either on
the total number of shareholder accounts (open and closed) of the Fund or the
minimum fee, whichever is greater on the date above written. The Fund will
have the option to have the security deposit applied to the last month's
service fee, or applied to any new contract between the Fund and ADS.
(g) CONVERSION CHARGE:
The Fund will remit to ADS upon successful completion of the conversion of
the Fund shareholder records onto the system utilized by ADS to perform stock
transfer services, the sum of $2,400.00. This amount is exclusive of any
charge, if any, incurred by the Fund's previous service agent into an
electronic format readable by ADS' computer system.
