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EXHIBIT (g)(2)
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 31st day of May, 1997 by and between each of the
XXX XXXXXX AMERICAN CAPITAL OPEN END FUNDS set forth on Schedule "A" hereto,
which are organized under the laws of the state and as the entities set forth in
Schedule "A" hereto (collectively, the "Funds"), and ACCESS INVESTOR SERVICES,
INC., a Delaware corporation ("ACCESS").
R E C I T A L:
WHEREAS, each of the Funds desires to appoint ACCESS as its transfer
agent, dividend disbursing agent and shareholder service agent and ACCESS
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 ACCESS.
1.01 Subject to the terms and conditions set forth in this Agreement, each
of the Funds 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 each of the
Funds 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 For a period of one year commencing on the effective date of this
Agreement, ACCESS and each of the Funds agree that the retention of (i) the
chief executive officer, president, chief financial officer, chief operating
officer and secretary of ACCESS and (ii) each director, officer and employee of
ACCESS or any of its Affiliates (as defined in the Investment Company Act of
1940, as amended (the "1940 Act")) who serves as an officer of the Funds (each
person referred to in (i) or (ii) hereinafter being referred to as an
"Essential Person"), in his or her current capacities, is in the best interest
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of the Funds and the Funds' shareholders. In connection with ACCESS's
acceptance of employment hereunder, ACCESS hereby agrees and covenants for
itself and on behalf of its Affiliates that neither ACCESS nor any of its
Affiliates shall make any material or significant personnel changes or replace
or seek to replace any Essential Person or cause to be replaced any Essential
Person, in each case without first informing the Board of Trustees of the Funds
in a timely manner. In addition, neither ACCESS nor any Affiliate of ACCESS
shall change or seek to change or cause to be changed, in any material respect,
the duties and responsibilities of any Essential Person, in each case without
first informing the Board of Trustees of the Funds in a timely manner.
1.05 In order to assure compliance with section 1.03 and to implement a
cooperative effort to improve and maintain the quality of transfer agency,
dividend disbursing and shareholder services received by each of the Funds and
their shareholders, ACCESS agrees to provide and maintain quantitative
performance objectives, including maximum target 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 each of the Funds (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, each of the Funds agrees to pay ACCESS the fees provided in the fee
schedules agreed upon from time to time by each of the Funds and ACCESS.
2.02 In addition to the amounts paid under section 2.01 above, each of the
Funds agrees to reimburse ACCESS promptly for such 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 such Fund. In addition,
any other special out-of-pocket expenses paid by ACCESS at the specific request
of any of the Funds will be promptly reimbursed by the requesting Fund.
Postage for mailings of dividends, proxies, Fund reports and other mailings
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to all shareholder accounts shall be advanced to ACCESS by the concerned Fund
three business days prior to the mailing date of such materials.
Article 3. Representations and Warranties of Access.
ACCESS represents and warrants to each of the Funds 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 each jurisdiction in
which the nature of its business requires it to be so qualified.
3.03 It is empowered under applicable laws and regulations 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 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 any of the affected Funds 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 each such
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 any Fund
is negative and exceeds an amount equivalent to 1/2 of 1 cent per share of
such Fund, ACCESS shall promptly make a payment to such 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 such Fund. If on the last business day of
the month the cumulative net effect (adjusted by the amount of any
payments or credits used pursuant to the preceding sentence) upon any Fund
is negative, such 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
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business day of the month the cumulative net effect (similarly adjusted)
upon any Fund is positive, ACCESS shall be entitled to recover certain
past payments, credits used and reductions in fees, and to a credit
against all future payments and fee reductions made under this paragraph
to such Fund, as described in paragraph (c) below.
(c) At the end of each month, any positive cumulative net effect upon
any Fund shall be deemed to be a credit to ACCESS which shall first be
applied to recover any payments, credits used and fee reductions made by
ACCESS to such 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, credits used 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 which would otherwise require a payment,
use of a credit or fee reduction to such Fund pursuant to paragraph (b)
above.
Article 4. Representations and Warranties of the Funds.
Each of the Funds hereby represents and warrants on behalf of itself
only and not on behalf of any other Funds which are a party to this Agreement
that:
4.01 It is duly organized and existing and in good standing under the laws
of the commonwealth or state set forth in Schedule "A" hereto.
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 open-end, management investment company registered under the
Investment Company Act of 1940, as amended.
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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 each of the Funds shall
indemnify and hold ACCESS harmless from and against any and all losses,
damages, costs, charges, reasonable counsel fees, payments, expenses and
liabilities (collectively, "Losses") arising out of or attributable to:
(a) All actions of ACCESS required to be taken by ACCESS for the
benefit of such Fund pursuant to this Agreement, provided that 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 such Fund or have been furnished to ACCESS
by or on behalf of such Fund.
(c) The reasonable reliance by ACCESS on, or the carrying out by
ACCESS of, any instructions or requests of such Fund.
(d) The offer or sale of such 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 such Fund that no offers or sales of such Fund's shares be
made in general or to the residents of a particular state.
(e) Such Fund's refusal or failure to comply with the terms of this
Agreement, or such Fund's lack of good faith, negligence or willful
misconduct or the breach of any representation or warranty of such Fund
hereunder. Notwithstanding the foregoing, no Fund shall be required to
indemnify or hold ACCESS harmless from and against any Losses arising out
of or attributable to any action or failure to take action, or any
information, records or
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documents prepared or maintained, on behalf of the Fund by the Fund's
investment adviser or distributor, or any person providing fund accounting
or legal services to the Fund that is also an officer or employee of Xxx
Xxxxxx American Capital, Inc. or its subsidiaries unless such person or
entity is otherwise entitled to indemnification from the Fund.
5.02 ACCESS shall indemnify and hold harmless each of the Funds from and
against any and all Losses arising out of or attributable to ACCESS' refusal or
failure to comply with the terms of this Agreement, or ACCESS' lack of good
faith, or its negligence of 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 any of the
Funds for instructions, and may consult with any of the Funds' legal counsel,
at the expense of such concerned 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 such concerned 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 acting upon any paper or document reasonably
believed by ACCESS to be genuine and to have been signed by the proper person
or persons, until receipt of written notice thereof from the concerned 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 concerned 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 that 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 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.
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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 Each of the Funds and ACCESS.
6.01 Each of the Funds 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 or Articles of
Incorporation and by-laws and all amendments thereto.
6.02 ACCESS hereby agrees to maintain facilities and procedures reasonably
acceptable to each of the Funds 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 each of the Funds (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 concerned
Fund and shall be preserved and made available in accordance with the 1940 Act
Requirements, and shall be surrendered promptly to the concerned 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.
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6.04 ACCESS and each of the Funds 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 each of the concerned Funds and to
secure instructions from an authorized officer of each of the concerned Funds
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.
Article 7. Term and Termination of Agreement.
7.01 The initial term of this Agreement shall expire May 31, 1999, and
thereafter this Agreement shall automatically be renewed for successive one
year periods to begin on June 1 of each year unless any party provides notice
to the other party at least 120 days in advance of that date that this
Agreement is not to be renewed.
7.02 Notwithstanding the foregoing, any party may terminate this Agreement
for good and reasonable cause at any time by giving written notice to the other
party at least 60 days prior to the date on which such termination is to be
effective or such shorter period as may be required by law.
7.03 Any unpaid fees or reimbursable expenses payable to ACCESS at the
termination date of this Agreement shall be due on that termination date.
ACCESS agrees to use its best efforts to cooperate with the Funds and the
successor transfer, dividend disbursement, or shareholder servicing agent or
agents in accomplishing an orderly transition.
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 concerned Fund, as the case may be; provided,
however, that no consent shall be required for any merger of any of the Funds
with, or any sale of all or substantially all the assets of any of the Funds
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.
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8.03 ACCESS may, without further consent on the part of any of the Funds,
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 each of the Funds for the acts and
omissions of DST, Inc. or other qualified servicer as it is for its own acts
and omissions.
8.04 Without the prior approval of the Boards of Trustees of the Funds,
ACCESS shall not, directly or indirectly, provide services, including services
such as transfer agent, dividend disbursing agent or shareholder service agent,
to any investment companies.
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.
8.06 The execution of this Agreement has been authorized by the Funds'
Trustees. This Plan is executed on behalf of the Funds or the Trustees of the
Funds as Trustees and not individually and the obligations of this Agreement
are not binding upon any of the Trustees, officers or shareholders of the Funds
individually but are binding only upon the assets and property of the Funds. A
Certificate of Trust in respect of each of the Funds is on file with the
appropriate state agency.
8.07 For each of those Funds which have one or more portfolios as set
forth in Schedule "A" hereto, all obligations of those Funds under this
Agreement shall apply only on a portfolio-by-portfolio basis and the assets of
one portfolio shall not be liable for the obligations of any other.
8.08 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.
8.09 All questions concerning the validity, meaning and effect of this
Agreement shall be determined in accordance with the laws (without giving effect
to the conflict-of-law principles thereof) of the State of Delaware applicable
to contracts made and to be performed in that state.
8.10 (a) Any dispute, controversy, or claim arising out of or relating to
this Agreement, or the breach, termination or validity thereof, shall be
finally settled by arbitration in accordance with the Expedited Procedures
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of the commercial arbitration Rules of the American Arbitration Association
(the "AAA") then in effect (the "Rules"). The arbitration shall be held in
Chicago, Illinois.
(b) There shall be one arbitrator who shall be selected jointly by the
parties. If the parties are unable to agree on an arbitrator within 15 days
after a demand for arbitration is made by a party, the arbitrator shall be
appointed by the AAA in accordance with the Rules. The hearing shall be
held within 90 days of the appointment of the arbitrator. Notwithstanding
the Expedited procedures of the Rules, the arbitrator, at his discretion,
may schedule additional days of hearings.
(c) Either party may, without inconsistency with this Agreement, seek from
a court any interim or provisional relief in aid of arbitration, pending
the establishment of the arbitral tribunal. The parties hereby submit to
the exclusive jurisdiction of the federal and state courts located in the
norther district of the state of Illinois for any such relief in aid of
arbitration, or for any relief relating to arbitration, except for the
enforcement of an arbitral award which may be enforced in any court having
jurisdiction.
(d) any arbitration proceedings or award rendered hereunder and the
validity, effect and interpretation of Section 8.10 shall be governed by
the Federal Arbitration Act (9 U.S.C. Sections 1 et seq.) The award shall
be final and binding upon the parties. Judgment upon any award may be
entered in any court having jurisdiction.
(e) This Agreement and the rights and obligations of the Parties shall
remain in full force and effect pending the award in any arbitration
proceeding hereunder.
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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.
EACH OF THE XXX XXXXXX AMERICAN CAPITAL
OPEN END FUNDS LISTED ON SCHEDULE "A"
HERETO
BY: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Vice President
ATTEST:
/s/ Xxxxxxxx Xxxxxxx
------------------------------
Assistant Secretary
ACCESS INVESTOR SERVICES, INC.
BY: /s/ Xxxx X. Xxxxxxxxxx
------------------------------------
President and Chief Executive Officer
ATTEST:
/s/ Xxxx X. Xxxxxxx
------------------------------
Assistant Secretary
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SCHEDULE "A"
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XXX XXXXXX OPEN-END FUNDS
Organization Type
Fund Name State of [Business Trust "T"]
(including Portfolios) Organization [Limited Partnership "LP"]
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxx Xxxxxx Xxxxxxxx Xxxx XX T
Xxx Xxxxxx Corporate Bond Fund DE T
Xxx Xxxxxx Emerging Growth Fund DE T
Xxx Xxxxxx Enterprise Fund DE T
Xxx Xxxxxx Equity Income Fund DE T
Xxx Xxxxxx Equity Trust DE T
Xxx Xxxxxx Aggressive Growth Fund
Xxx Xxxxxx Great American Companies Fund
Xxx Xxxxxx Growth Fund
Xxx Xxxxxx Mid Cap Value Fund
Xxx Xxxxxx Prospector Fund
Xxx Xxxxxx Small Cap Value Fund
Xxx Xxxxxx Utility Fund
Xxx Xxxxxx Equity Trust II DE T
Xxx Xxxxxx Technology Fund
Xxx Xxxxxx Exchange Fund CA LP
Explorer Institutional Trust MA T
Limited Duration
Active Core Fund
Xxx Xxxxxx Global Managed Assets Fund DE T
Xxx Xxxxxx Government Securities Fund DE T
Xxx Xxxxxx Growth and Income Fund DE T
Xxx Xxxxxx Harbor Fund DE T
Xxx Xxxxxx High Income Corporate Bond Fund DE T
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Fund Name State of Organization Type
(including Portfolios) Organization [Business Trust "T"]
==============================================================================================================
Xxx Xxxxxx Life Investment Trust DE T
Asset Allocation Portfolio
Xxxxxxxx Portfolio
Domestic Income Portfolio
Emerging Growth Portfolio
Enterprise Portfolio
Global Equity Portfolio
Government Portfolio
Growth and Income Portfolio
Money Market Portfolio
Xxxxxx Xxxxxxx Real Estate Securities Portfolio
Strategic Stock Portfolio
Xxx Xxxxxx Limited Maturity Government Fund DE T
Xxx Xxxxxx Xxxx Fund DE T
Xxx Xxxxxx Pennsylvania Tax Free Income Fund PA T
Xxx Xxxxxx Real Estate Securities Fund DE T
Xxx Xxxxxx Reserve Fund DE T
Xxx Xxxxxx Tax-Exempt Trust DE T
Xxx Xxxxxx High Yield Municipal Fund
Xxx Xxxxxx Tax Free Money Fund DE T
Xxx Xxxxxx Tax Free Trust DE T
Xxx Xxxxxx California Insured Tax Free Fund
Xxx Xxxxxx Florida Insured Tax Free Fund
Xxx Xxxxxx Insured Tax Free Income Fund
Xxx Xxxxxx Intermediate Term Municipal Income Fund
Xxx Xxxxxx Municipal Income Fund
Xxx Xxxxxx New York Tax Free Income Fund
Xxx Xxxxxx Tax Free High Income Fund
Xxx Xxxxxx Trust DE T
Xxx Xxxxxx High Yield Fund
Xxx Xxxxxx Short Term Global Fund
Xxx Xxxxxx Strategic Income Fund
Xxx Xxxxxx U.S. Government Trust DE T
Xxx Xxxxxx U.S. Government Fund
Xxx Xxxxxx U.S. Government Trust for Income DE T
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Fund Name State of Organization Type
(including Portfolios) Organization [Business Trust "T"]
===============================================================================================
Xxx Xxxxxx World Portfolio Series Trust DE T
Xxx Xxxxxx Global Government Securities Fund
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