RECORDKEEPING AGREEMENT
THIS AGREEMENT made as of this _____ day of _____________, 1997, by and
between PILGRIM AMERICA INVESTMENT FUNDS, INC., (the "Fund") a Maryland
corporation, on behalf of Pilgrim America MagnaCap Fund and Pilgrim America High
Yield Fund, both a series of the Fund (the "Portfolios") having its principal
place of business at Two Renaissance Square, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxx 00000 ("Fund"), and INVESTORS FIDUCIARY TRUST COMPANY, a
state chartered trust company organized and existing under the laws of the State
of Missouri, having its principal place of business at 000 Xxxx 00xx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx, 00000 ("IFTC"):
WITNESSETH:
In consideration of the mutual promises herein contained, the parties
hereto, intending to be legally bound, mutually covenant and agree as follows:
1. Appointment of Recordkeeping Agent. Fund hereby constitutes and
appoints IFTC as Recordkeeping Agent for all existing and any future series of
the Fund (the "Portfolios") to perform certain accounting and recordkeeping
functions related to portfolio transactions required of Fund as a registered
investment company in compliance with Rule 31a of the Investment Company Act of
1940 ("1940 Act") and to calculate daily each Portfolio's net asset value.
2. Representations and Warranties of Fund
A. Fund represents and warrants that it is a corporation duly
organized as heretofore described and existing and in good
standing under the laws of Maryland.
B. Fund represents and warrants that it has the power and
authority under applicable laws, its articles of incorporation
and bylaws, and has taken all action necessary, to enter into
and perform this Agreement.
C. Fund represents and warrants that it has determined that the
computerized recordkeeping system to be used by IFTC in
maintaining accounting records of Fund hereunder (the
"System") is appropriate and suitable for Fund's needs.
D. Fund shall preserve the confidentiality of the System and the
tapes, books, reference manuals, instructions, records,
programs, documentation and information of, and other
materials relevant to, the Portfolio Accounting System and the
business of IFTC ("Confidential Information"). Fund shall not
voluntarily disclose such Confidential Information to any
other person other than its own employees who reasonably have
a need to know such information pursuant to this Agreement.
Fund shall return all such Confidential Information to IFTC
upon termination or expiration of this Agreement.
E. Fund has been informed that the System is licensed for use by
IFTC from a third party ("Licensor"), and Fund acknowledges
that IFTC and Licensor have
proprietary rights in and to the System 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 Licensor. Fund shall 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 shall so inform employees
and agents who have access to the Protected Information or to
any computer equipment capable of accessing the same. Licensor
is intended to be and shall be a third party beneficiary of
the Fund's obligations and undertakings contained in this
paragraph.
F. If IFTC shall provide Fund direct access to the System or if
IFTC and Fund shall agree to utilize any electronic system of
communication, Fund shall be fully responsible for any and all
consequences of the use or misuse of the terminal device,
passwords, access instructions and other means of access to
such system(s) which are utilized by, assigned to or otherwise
made available to the Fund. Fund agrees to implement and
enforce appropriate security policies and procedures to
prevent unauthorized or improper access to or use of such
system(s). IFTC shall be fully protected in acting hereunder
upon any instructions, communications, data or other
information received by IFTC by such means as fully and to the
same effect as if delivered to IFTC by written instrument
signed by the requisite authorized representative(s) of the
Fund. Fund shall indemnify and hold IFTC harmless from and
against any and all costs, expenses, losses, liabilities,
damages, charges and counsel fees which may be asserted
against or incurred by IFTC as a consequence of the use or
misuse, whether authorized or unauthorized, of the System or
other computerized recordkeeping and reporting system to which
IFTC provides Fund direct access hereunder or of any other
electronic system of communication used hereunder by Fund or
by any person who acquires access to such system(s) through
the terminal device, passwords, access instructions or other
means of access to such system(s) which are utilized by,
assigned to or otherwise made available to the Fund, except to
the extent attributable to any negligence or willful
misconduct by IFTC.
3. Representation and Warranties of IFTC
A. It is a trust company duly organized and existing and in good
standing under the laws of the State of Missouri.
B. It has the requisite power and authority under applicable
laws, by its charter and bylaws, and by agreement to enter
into this Agreement and has taken all action
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necessary to enter into and perform the services contemplated
herein and this Agreement has been duly executed and delivered
by IFTC and constitutes a legal, valid and binding obligation
of IFTC, enforceable in accordance with its terms.
4. Duties and Responsibilities of IFTC
A. Fund shall turn over to IFTC all of Fund's accounts and
records previously maintained. IFTC shall be entitled to rely
conclusively on the completeness and correctness of the
accounts and records turned over to it by Fund and Fund shall
indemnify and hold IFTC harmless of and from any and all
expenses, damages and losses whatsoever arising out of or in
connection with any error, omission, inaccuracy or other
deficiency of such accounts and records or in the failure of
Fund to provide any portion of such or to provide in a timely
manner any other information needed by IFTC to perform its
function hereunder.
B. Accounts and Records
1. IFTC, with the direction and as interpreted by the
Fund or Fund's accountants and/or other advisors,
will prepare and maintain in complete, accurate, and
current form all accounts and records needed to be
maintained as a basis for calculation of each
Portfolio's net asset value and as further agreed
upon by the parties in writing, and will preserve
such records in the manner and for the periods
required by the 1940 Act or such longer period as the
parties may agree upon in writing.
2. Unless the information necessary to perform the above
functions is furnished in writing or its electronic
or digital equivalent to IFTC prior to the next close
of the New York Stock Exchange and calculation of the
Portfolio's net asset values, IFTC shall incur no
liability and the Fund shall indemnify and hold IFTC
harmless from and against any liability in connection
therewith.
3. It shall be the responsibility of Fund to furnish
IFTC with the declaration, record and payment dates
and amounts of any dividends or income and any other
special actions required concerning the securities in
the portfolio when such information is not readily
available from generally accepted securities industry
services or publications.
4. The accounts and records maintained and preserved by
IFTC shall be the property of the Fund and shall be
made available to the Fund for inspection or
reproduction within a reasonable time, upon demand.
5. IFTC shall assist Fund's independent accountants, or
upon approval of Fund or upon demand, any regulatory
body, in any requested review of Fund's accounts and
records maintained by IFTC but shall be reimbursed by
Fund for all expenses and employee time invested in
any such review
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outside of routine and normal periodic reviews.
6. Upon receipt from Fund of any necessary information,
IFTC shall provide information from the books and
records it maintains for Fund that Fund needs for tax
returns, questionnaires, or periodic reports to
shareholders and such other reports and information
requests as Fund and IFTC shall agree upon from time
to time.
7. IFTC and Fund may from time to time adopt procedures
as they agree upon, and IFTC may conclusively assume
that any procedure approved by Fund, or directed by
Fund, does not conflict with or violate any
requirements of Fund's prospectus, declaration of
trust, bylaws, or any rule or regulation of any
applicable regulatory body or governmental agency.
Fund shall be responsible to notify IFTC of any
changes in statutes, rules, requirements, or policies
which may necessitate changes in IFTC's
responsibilities or procedures.
8. IFTC will calculate each Portfolio's net asset value
in accordance with the Fund's prospectus once daily.
IFTC will price the securities and foreign currency
holdings of the Portfolios for which market
quotations are available by the use of outside
services designated by Fund which are normally used
and contracted with for this purpose; all other
securities and foreign currency holdings will be
priced in accordance with Fund's instructions.
5. Limitation of Liability of IFTC
A. IFTC shall not be responsible or liable for, and Fund
shall indemnify and hold IFTC harmless from and against, any
loss or liability arising out of IFTC's action or omission to
act pursuant hereto, except for any loss or damage arising
from any negligent act or willful misconduct of IFTC. IFTC
shall indemnify and hold harmless Fund from and against any
loss or liability arising from such negligence or willful
misconduct. The Fund agrees to minimize any potential monetary
loss(es) by reprocessing shareholder transactions or employing
any other customary procedures to reduce such monetary
loss(es). Neither party shall be liable to the other for
consequential, special, or punitive damages. IFTC may request
and obtain the advice and opinion of counsel for Fund or its
own counsel at the expense of Fund with respect to questions
or matters of law, and it shall be without liability to Fund
for any action taken or omitted by it in good faith, in
conformity with such advice or opinion.
B. IFTC may rely upon the advice and statements of Fund, its
distributor, its management company and its accountants,
officers and other authorized individuals (as provided by
corporate resolution to IFTC) and others believed by it in
good faith to be expert in matters upon which they are
consulted. Actions or inaction taken in reliance on such
advice and statements shall not be considered
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"negligent" and IFTC shall not be liable for any actions taken
in good faith upon such advice and statements.
C. If Fund requests IFTC in any capacity to take any action which
involves the payment of money by it, or which in IFTC's
opinion might make it liable for payment of money or in any
other way, IFTC shall be and be kept indemnified by Fund in an
amount and form satisfactory to IFTC against any liability on
account of such action; provided, however that IFTC shall not
be obligated to expend its own moneys or to take any such
action except in IFTC's sole discretion.
D. IFTC shall be entitled to receive and Fund agrees to pay to
IFTC, on demand, reimbursement for such cash disbursements,
costs and expenses as may be agreed upon in writing from time
to time by IFTC and Fund.
E. IFTC shall be protected in acting hereunder upon any
instructions, advice, notice, request, consent, certificate or
other instrument or paper appearing to it to be genuine and to
have been properly executed and shall, unless otherwise
specifically provided herein, be entitled to receive as
conclusive proof of any fact or matter required to be
ascertained from Fund as determined by IFTC, instructions or a
certificate signed by Fund's President or other officer of
Fund as requested by IFTC.
F. Without limiting the generality of the foregoing, IFTC shall
be under no duty or obligation to inquire into, and shall not
be liable for:
1. The validity of the issue of any securities purchased
by or for Fund, or the legality of the purchase
thereof;
2. The legality of the sale of any securities by or for
Fund, or the propriety of the amount for which the
same are sold;
3. The legality of the issue or sale of any shares of
Fund, or the sufficiency of the amount to be received
therefore;
4. The legality of the purchase of any shares of Fund,
or the propriety of the amount to be paid therefore;
or
5. The legality of the declaration of any dividend by
Fund, or the legality of the issue of any shares of
Fund in payment of any dividend.
G. IFTC shall not be liable for, or considered to be the
custodian of, any money represented by any check, draft, wire
transfer, clearing house funds, uncollected funds, or
instrument for the payment of money received by it on behalf
of Fund, until IFTC actually receives such money, provided
only that it shall advise Fund promptly if it fails to receive
any such moneys in the ordinary course of business, and use
reasonable efforts and cooperate with Fund toward the end that
such
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money shall be received.
H. Notwithstanding anything herein to the contrary, it is
expressly understood and agreed that IFTC shall have no
responsibility to Fund, the Fund's shareowners or any other
person or entity for moneys or securities of Fund held by
banks or trust companies as custodians in the absence of
negligence or willful misconduct of IFTC.
I. IFTC shall not use any information made available to it under
the terms of this Agreement for any purpose other than
complying with its duties and responsibilities under this
Agreement or as specifically authorized by Fund in writing to
IFTC.
6. Force Majeure. IFTC shall not be responsible or liable for any failure
or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including without limitation any interruption, loss
or malfunction of any utility, transportation, computer (hardware or
software) or communication service; or inability to obtain labor,
material, equipment or transportation; nor shall any such failure or
delay give Fund any additional right to terminate this Agreement.
7. Additional Funds. IFTC shall act as recordkeeper for additional
Portfolios of Fund upon 30 days notice to IFTC provided IFTC consents
to such arrangement. Rates or charges for such additional Portfolios
shall be as agreed by IFTC and Fund in writing.
8. Compensation. Fund shall pay to IFTC such compensation at such time as
may from time to time be agreed upon in writing by IFTC and Fund. Fund
shall also reimburse IFTC for all out-of-pocket expenses incurred by
IFTC in connection with services performed pursuant to this Agreement.
9. Procedures. IFTC and Fund may from time to time adopt procedures as
they agree upon, and IFTC may conclusively assume that any procedure
approved or directed by Fund or its accountants or other advisors does
not conflict with or violate any requirements of Fund's prospectus,
articles of incorporation, bylaws, any applicable law, rule or
regulation, or any order, decree or agreement by which the Fund may be
bound.
10. Termination. This Agreement shall continue in effect until terminated
by either party by notice in writing received by the other party not
less than ninety (90) days prior to the date upon which such
termination shall take effect. Upon termination of this Agreement:
A. Fund shall pay to IFTC its fees and compensation due hereunder
and its reimbursable disbursements, costs and expenses paid or
incurred to such date.
B. Fund shall designate a successor (which may be Fund) by notice
in writing to IFTC on or before the termination date.
C. IFTC shall deliver to the successor, or if none has been
designated, to Fund, at
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IFTC's office, all records, funds and other properties of Fund
deposited with or held by IFTC hereunder. In the event that
neither a successor nor Fund takes delivery of all records,
funds and other properties of Fund by the termination date,
IFTC's sole obligation with respect thereto from the
termination date until delivery to a successor or Fund shall
be to exercise reasonable care to hold the same in custody in
its form and condition as of the termination date, and IFTC
shall be entitled to reasonable compensation therefor,
including but not limited to all of its out-of-pocket costs
and expenses incurred in connection therewith.
11. Notices. Notices, requests, instructions and other writings received by
Fund at Two Renaissance Square, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, or at such address as Fund may have designated
to IFTC in writing, shall be deemed to have been properly given to Fund
hereunder; and notices, requests, instructions and other writings
received by IFTC at its offices at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx,
XX 00000, or to such other address as it may have designated to Fund in
writing, shall be deemed to have been properly given to IFTC hereunder.
12. Miscellaneous.
A. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
B. All terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted
assigns.
C. No provisions of the Agreement may be amended or modified in
any manner except by a written agreement properly authorized
and executed by both parties hereto.
D. The captions in the Agreement 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
effort.
E. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
F. If any part, term or provision of this Agreement is determined
to be illegal, in conflict with any law or otherwise invalid,
the remaining portion or portions shall be considered
severable and not be affected, and the rights and obligations
of the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
G. This Agreement may not be assigned by either party without
prior written consent in writing of the other party.
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H. The representations and warranties, the indemnification
extended hereunder, and the provisions of Section 2.D. and
2.E. are intended to and shall continue after and survive the
expiration, termination or cancellation of this Agreement.
I. The Recordkeeping Agreement between IFTC and the Fund,
formerly known separately as Pilgrim High Yield Trust and
Pilgrim Magnacap Fund, Inc., dated as of June 1, 1985, is
hereby cancelled and superseded effective as of the date
hereof, except that all rights, duties and liabilities which
may have arisen under such Custody Agreement prior to the
effectiveness hereof shall continue and survive. Otherwise,
this Agreement does not in any way affect any other agreements
entered into between the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective and duly authorized corporate or trust officers.
INVESTORS FIDUCIARY TRUST COMPANY
By: _________________________________
Title: _____________________________
PILGRIM AMERICA INVESTMENT FUNDS, INC.
By: ________________________________
Title: _____________________________
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