Exhibit No. EX-99.h.2
Confidential and Proprietary
Not for Reproduction or Re-Distribution
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of ____________ __, 2005 by and between PFPC
INC., a Massachusetts corporation ("PFPC"), and MGI Funds, a Delaware statutory
trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to its
investment portfolios listed on Exhibit A attached hereto and made a part
hereof, as such Exhibit A may be amended from time to time (each a "Portfolio"),
and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement.
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person
duly authorized by the Fund's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund. An
Authorized Person's scope of authority may be limited by setting forth
such limitation in a written document signed by both parties hereto.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be
an Authorized Person. PFPC may, in its sole discretion in each
separate instance, consider and rely upon instructions it receives
from an Authorized Person via electronic mail as Oral Instructions.
(f) "SEC" means the Securities and Exchange Commission.
(g) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(h) "Shares" mean the shares of beneficial interest of any Portfolio or
class of a Portfolio of the Fund.
(i) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PFPC, or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic
transaction reporting system, access to which requires use of a
password or other authorized identifier. The instructions may be
delivered electronically (with respect to sub-item (ii) above) or by
hand, mail, tested telegram, cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to the
Fund in accordance with the terms set forth in this Agreement. PFPC accepts
such appointment and agrees to furnish such services.
3. Compliance with Rules and Regulations.
(a) PFPC undertakes to comply with all applicable requirements of the
Securities Laws and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be
performed by PFPC hereunder. Except as specifically set forth herein,
PFPC assumes no responsibility for such compliance by the Fund or any
other entity.
(b) PFPC undertakes to furnish the Fund with properly certified copies of
all compliance policies and procedures of PFPC relating to its
transfer agent responsibilities under this Agreement, or a third-party
report (as contemplated by IC Release No. 26299), which have been
prepared in accordance with Rule 38a-1 under the 1940 Act, in order to
permit the Board of Trustees of the Trust to meet its obligations
under Rule 38a-1 under the 1940 Act. Furthermore, PFPC will cooperate
with the Fund in connection with the review by the Fund's Chief
Compliance Officer of PFPC's transfer agent operations in connection
with the preparation of the yearly written report to the Board of
Trustees of the Trust contemplated by Rule 38a-1(a)(4)(iii) under the
1940 Act. PFPC will promptly furnish the Fund with copies of all
amendments to the foregoing compliance policies and procedures.
4. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon
Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to
this Agreement. PFPC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent with the
provisions of organizational documents or this Agreement or of any
vote, resolution or proceeding of the Fund's Board of Trustees or of
the Fund's shareholders, unless and until PFPC receives Written
Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions (except where such Oral Instructions are given by
PFPC or its affiliates) so that PFPC receives the Written Instructions
by the close of business on the same day that such Oral Instructions
are received. The fact that such confirming Written Instructions are
not received by PFPC or differ from the Oral Instructions shall in no
way invalidate the transactions or enforceability of the transactions
authorized by the Oral Instructions or PFPC's ability to rely upon
such Oral Instructions.
5. Right to Receive Advice.
(a) Advice of the Fund. If PFPC is in doubt as to any action it should or
should not take, PFPC may request directions or advice, including Oral
Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question of law
pertaining to any action it should or should not take, PFPC may
request advice from counsel of its own choosing (who may be counsel
for the Fund, the Fund's investment advisor or PFPC, at the option of
PFPC).
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC receives from
the Fund, and the advice it receives from counsel, PFPC may rely upon
and follow the advice of counsel. In the event PFPC so relies on the
advice of counsel, PFPC remains liable for any action or omission on
the part of PFPC which constitutes willful misfeasance, bad faith,
negligence or reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement. In any such case, PFPC
will use its reasonable efforts to contact the Fund prior to or
promptly after taking any actions inconsistent with Instructions
previously received from the Fund.
(d) Protection of PFPC. PFPC shall be protected in any action PFPC takes
or does not take in reliance upon directions or advice or Oral
Instructions or Written Instructions PFPC receives from or on behalf
of the Fund or from counsel and which PFPC believes, in good faith, to
be consistent with those directions or advice or Oral Instructions or
Written Instructions. Nothing in this section shall be construed so as
to impose an obligation upon PFPC to seek such directions or advice or
Oral Instructions or Written Instructions. Nothing in this
subparagraph shall excuse PFPC when an action or omission on the part
of PFPC constitutes willful misfeasance, bad faith, negligence or
reckless disregard by PFPC of any duties, obligations or
responsibilities under this Agreement.
6. Records; Visits. The books and records pertaining to the Fund which are in
the possession or under the control of PFPC shall be the property of the
Fund. Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws, rules and
regulations. The Fund and Authorized Persons shall have access to such
books and records at all times during PFPC's normal business hours. Upon
the reasonable request of the Fund, copies of any such books and records
shall be provided by PFPC to the Fund or to an Authorized Person, at the
Fund's expense.
7. Confidentiality.
(a) Each party shall keep confidential any information relating to the
other party's business ("Confidential Information"). Confidential
Information shall include:
(i) any data or information that is competitively sensitive material,
and not generally known to the public, including, but not limited
to, information about product plans, marketing strategies,
finances, operations, customer relationships, customer profiles,
customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future
business activities of the Fund or PFPC, their respective
subsidiaries and affiliated companies and the customers, clients
and suppliers of any of them;
(ii) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable
and secret in the sense that its confidentiality affords the Fund
or PFPC a competitive advantage over its competitors;
(iii)all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code,
object code, flow charts, databases, inventions, know-how, and
trade secrets, whether or not patentable or copyrightable; and
(iv) anything designated as confidential.
(b) Notwithstanding the foregoing, information shall not be Confidential
Information and shall not be subject to such confidentiality
obligations if it:
(i) is already known to the receiving party at the time it is
obtained;
(ii) is or becomes publicly known or available through no wrongful act
of the receiving party;
(iii)is rightfully received from a third party who, to the best of
the receiving party's knowledge, is not under a duty of
confidentiality;
(iv) is released by the protected party to a third party without
restriction;
(v) is requested or required to be disclosed by the receiving party
pursuant to a court order, subpoena, governmental or regulatory
agency request or law (provided the receiving party will provide
the other party written notice of the same, to the extent such
notice is permitted);
(vi) is relevant to the defense of any claim or cause of action
asserted against the receiving party;
(vii)is necessary or desirable for PFPC to release such information
in connection with the provision of services under this
Agreement; or
(viii) has been or is independently developed or obtained by the
receiving party.
8. Cooperation with Accountants. PFPC shall cooperate with the Fund's
independent public accountants and shall take all reasonable actions in the
performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the
expression of their opinion, as required by the Fund.
9. PFPC System. PFPC shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by PFPC in connection with
the services provided by PFPC to the Fund. Notwithstanding the foregoing,
the parties acknowledge the Fund shall retain all ownership rights in Fund
data which resides on the PFPC System (including information pertaining to
the transactions of the Fund and its shareholders).
10. Disaster Recovery. PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment, to be implemented
within a reasonable time following the inability of PFPC to perform its
duties under this agreement. In the event of equipment failures, PFPC
shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC shall have no liability with respect
to the loss of data or service interruptions caused by equipment failure,
provided such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations under this Agreement.
11. Compensation.
(a) As compensation for services rendered by PFPC during the term of this
Agreement, the Fund will pay to PFPC a fee or fees as may be agreed to
from time to time in writing by the Fund and PFPC.
(b) PFPC shall establish certain cash management accounts ("Service
Accounts") required to provide services under this Agreement. The Fund
acknowledges (i) PFPC may receive investment earnings from sweeping
the funds in such Service Accounts into investment accounts including,
but not limited, investment accounts maintained at an affiliate or
client of PFPC; (ii) balance credits earned with respect to the
amounts in such Service Accounts ("Balance Credits") will be used to
offset the banking service fees imposed by the cash management service
provider (the "Banking Service Fees"); (iii) PFPC shall retain any
excess Balance Credits for its own use; and (iv) Balance Credits will
be calculated and applied toward the Fund's Banking Service Fees
regardless of the Service Account balance sweep described in
Sub-Section (i). [We would like to discuss this section further.]
(c) The undersigned hereby represents and warrants to PFPC that (i) the
terms of this Agreement, (ii) the fees and expenses associated with
this Agreement, and (iii) any benefits accruing to PFPC or to the
advisor or sponsor to the Fund in connection with this Agreement,
including but not limited to any fee waivers, conversion cost
reimbursements, up front payments, signing payments or periodic
payments made or to be made by PFPC to such advisor or sponsor or any
affiliate of the Fund relating to the Agreement have been fully
disclosed to the Board of Trustees of the Fund and that, if required
by applicable law, such Board of Trustees has approved or will approve
the terms of this Agreement, any such fees and expenses, and any such
benefits.
12. Indemnification.
(a) The Fund agrees to indemnify, defend and hold harmless PFPC and its
affiliates, including their respective officers, directors, agents and
employees, from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, reasonable attorneys' fees
and disbursements and liabilities arising under the Securities Laws
and any state and foreign securities and blue sky laws) arising
directly or indirectly from any action or omission to act which PFPC
takes in reliance upon Oral or Written Instructions received from the
Fund or which PFPC is required or expressly allowed to take or refrain
from taking in accordance with the provisions of this Agreement.
Neither PFPC, nor any of its affiliates, shall be indemnified against
any liability (or any expenses incident to such liability) caused by
PFPC's or its affiliates' own willful misfeasance, bad faith,
negligence or reckless disregard of its duties and obligations under
this Agreement, provided that in the absence of a finding to the
contrary the acceptance, processing and/or negotiation of a fraudulent
payment for the purchase of Shares shall be presumed not to have been
the result of PFPC's or its affiliates own willful misfeasance, bad
faith, negligence or reckless disregard of such duties and obligations
under this Agreement. PFPC shall not make any claim for any amounts
payable by the Fund hereunder except against the relevant Portfolio's
assets and not against the assets of any other investment Portfolio of
the Fund.
(b) PFPC agrees to indemnify, defend and hold harmless the Fund, each
Portfolio and their affiliates, including their respective officers,
directors/trustees, agents and employees, from all taxes, charges,
expenses, assessments, claims and liabilities (including, without
limitation, reasonable attorneys' fees and disbursements and
liabilities arising under the Securities Laws and any state and
foreign securities and blue sky laws) arising directly or indirectly
from any action or omission to act of PFPC in contravention of the
terms of this Agreement or caused by PFPC's willful misfeasance, bad
faith, negligence or reckless disregard of its duties and obligations
under this Agreement. Neither the Fund, any Portfolio nor any of its
affiliates, shall be indemnified against any liability (or any
expenses incident to such liability) caused by the Fund's, a
Portfolio's or their affiliates' own willful misfeasance, bad faith,
negligence or reckless disregard in the performance of PFPC's
activities under this Agreement.
(c) The provisions of this Section 12 shall survive termination of this
Agreement.
13. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action hereunder on behalf of
the Fund except as specifically set forth herein or as may be
specifically agreed to by PFPC and the Fund in a written amendment
hereto. PFPC shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith in
performing services provided for under this Agreement. PFPC shall be
liable only for any damages arising out of PFPC's failure to perform
its duties under this Agreement to the extent such damages arise out
of PFPC's willful misfeasance, bad faith, negligence or reckless
disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC
shall not be liable for losses, delays, failure, errors, interruption
or loss of data occurring directly or indirectly by reason of
circumstances beyond its reasonable control, including without
limitation acts of God; action or inaction of civil or military
authority; public enemy; war; terrorism; riot; fire; flood; sabotage;
epidemics; labor disputes; civil commotion; interruption, loss or
malfunction of utilities, transportation, computer or communications
capabilities; insurrection; elements of nature; or non-performance by
a third party provided PFPC has complied with its obligation to make
reasonable backup arrangements pursuant to Section 10; and (ii) PFPC
shall not be under any duty or obligation to inquire into and shall
not be liable for the validity or invalidity, or authority or lack
thereof, of any Oral Instruction or Written Instruction, notice or
other instrument which conforms to the applicable requirements of this
Agreement and which PFPC reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC nor its affiliates, nor the Fund, the Portfolios and their
affiliates, shall be liable for any consequential, special or indirect
losses or damages, whether or not the likelihood of such losses or
damages was known by PFPC, its affiliates, the Fund, the Portfolios or
their affiliates.
(d) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(e) The provisions of this Section 13 shall survive termination of this
Agreement.
14. Description of Services.
(a) Services provided on an ongoing basis, if applicable:
(i) Calculate 12b-1 payments;
(ii) Maintain shareholder registrations;
(iii)Review new applications and correspond with shareholders to
complete or correct information;
(iv) Direct payment processing of checks or wires;
(v) Prepare and certify shareholder lists in conjunction with proxy
solicitations;
(vi) Countersign share certificates;
(vii) Prepare and mail to shareholders confirmation of activity;
(viii) Provide toll-free lines for direct shareholder use, plus
customer liaison staff for online inquiry response;
(ix) Mail duplicate confirmations to broker-dealers of their clients'
activity, whether executed through the broker-dealer or directly
with PFPC;
(x) Provide periodic shareholder lists and statistics to the Fund;
(xi) Provide detailed data for underwriter/broker confirmations;
(xii)Prepare periodic mailing of year-end tax and statement
information;
(xiii) Notify on a timely basis the investment advisor, subadvisors,
accounting agent, and custodian of fund activity;
(xiv)Perform other participating broker-dealer shareholder services
as may be agreed upon from time to time;
(xv) Accept and post daily Share purchases and redemptions;
(xvi)Accept, post and perform shareholder transfers and exchanges;
and
(xvii) Issue and cancel certificates (when requested in writing by the
shareholder).
(b) Purchase of Shares. PFPC shall issue and credit an account of an
investor, in the manner described in the Fund's prospectuses, once it
receives:
(i) A purchase order in completed proper form;
(ii) Proper information to establish a shareholder account; and
(iii)Confirmation of receipt or crediting of funds for such order to
the Fund's custodian.
(c) Redemption of Shares. PFPC shall process requests to redeem Shares as
follows:
(i) All requests to transfer or redeem Shares and payment therefor
shall be made in accordance with the Fund's prospectuses, when
the shareholder tenders Shares in proper form, accompanied by
such documents as PFPC reasonably may deem necessary.
(ii) PFPC reserves the right to refuse to transfer or redeem Shares
until it is satisfied that the endorsement on the instructions is
valid and genuine and that the requested transfer or redemption
is legally authorized, and it shall incur no liability for the
refusal, in good faith, to process transfers or redemptions which
PFPC, in its good judgment, deems improper or unauthorized, or
until it is reasonably satisfied that there is no basis to any
claims adverse to such transfer or redemption.
(iii)When Shares are redeemed, PFPC shall deliver to the Fund's
custodian (the "Custodian") and the Fund or its designee a
notification setting forth the number of Shares redeemed. Such
redeemed Shares shall be reflected on appropriate accounts
maintained by PFPC reflecting outstanding Shares of the Fund and
Shares attributed to individual accounts.
(iv) PFPC shall, upon receipt of the monies provided to it by the
Custodian for the redemption of Shares, pay such monies as are
received from the Custodian, all in accordance with the
procedures established from time to time between PFPC and the
Fund.
(v) When a broker-dealer notifies PFPC of a redemption desired by a
customer, and the Custodian provides PFPC with funds, PFPC shall
prepare and send the redemption check to the broker-dealer and
made payable to the broker-dealer on behalf of its customer,
unless otherwise instructed in writing by the broker-dealer.
(vi) PFPC shall not process or effect any redemption requests with
respect to Shares of the Fund after receipt by PFPC or its agent
of notification of the suspension of the determination of the net
asset value of the Fund.
(d) Dividends and Distributions. Upon receipt of a resolution of the
Fund's Board of Trustees authorizing the declaration and payment of
dividends and distributions, PFPC shall issue dividends and
distributions declared by the Fund in Shares, or, upon shareholder
election, pay such dividends and distributions in cash, if provided
for in the Fund's prospectuses. Such issuance or payment, as well as
payments upon redemption as described above, shall be made after
deduction and payment of the required amount of funds to be withheld
in accordance with any applicable tax laws or other laws, rules or
regulations. PFPC shall mail to the Fund's shareholders such tax forms
and other information, or permissible substitute notice, relating to
dividends and distributions paid by the Fund as are required to be
filed and mailed by applicable law, rule or regulation. PFPC shall
prepare, maintain and file with the IRS and other appropriate taxing
authorities reports relating to all dividends above a stipulated
amount paid by the Fund to its shareholders as required by tax or
other law, rule or regulation.
(e) Shareholder Account Services.
(i) PFPC may arrange, in accordance with the prospectuses, for
issuance of Shares obtained through:
- Any pre-authorized check plan; and
- Direct purchases through broker wire orders, checks and
applications.
(ii) PFPC may arrange, in accordance with the prospectuses, for a
shareholder's:
- Exchange of Shares for shares of another fund with which the
Fund has exchange privileges;
- Automatic redemption from an account where that shareholder
participates in a automatic redemption plan; and/or
- Redemption of Shares from an account with a check-writing
privilege.
(f) Communications to Shareholders. Upon timely Written Instructions, PFPC
shall mail all communications by the Fund to its shareholders,
including:
(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of Fund shares;
(iii) Monthly or quarterly statements;
(iv) Dividend and distribution notices; and
(v) Tax form information. [To discuss further]
(g) Records. PFPC shall prepare, maintain and preserve records for the
accounts for each shareholder as required by Rule 31a-1 and Rule 31a-2
under the 1940 Act, including the following information:
(i) Name, address and United States Tax Identification or Social
Security number;
(ii) Number and class of Shares held and number and class of Shares
for which certificates, if any, have been issued, including
certificate numbers and denominations;
(iii)Historical information regarding the account of each
shareholder, including dividends and distributions paid and the
date and price for all transactions on a shareholder's account;
(iv) Any stop or restraining order placed against a shareholder's
account;
(v) Any correspondence relating to the current maintenance of a
shareholder's account;
(vi) Information with respect to withholdings;
(vii)Any information required in order for PFPC to perform any
calculations required by this Agreement; and
(viii) A record of each purchase, redemption and exchange with respect
to each shareholder account.
(h) Lost or Stolen Certificates. PFPC shall place a stop notice against
any certificate reported to be lost or stolen and comply with all
applicable federal regulatory requirements for reporting such loss or
alleged misappropriation. A new certificate shall be registered and
issued only upon:
(i) The shareholder's pledge of a lost instrument bond or such other
appropriate indemnity bond issued by a surety company approved by
PFPC; and
(ii) Completion of a release and indemnification agreement signed by
the shareholder to protect PFPC and its affiliates.
(i) Shareholder Inspection of Share Records. Upon a request from any Fund
shareholder to inspect share records, PFPC will notify the Fund and
the Fund will issue instructions granting or denying each such
request. Unless PFPC has acted contrary to the Fund's instructions,
the Fund agrees to and does hereby release PFPC from any liability for
refusal of permission for a particular shareholder to inspect the
Fund's share records.
(j) Withdrawal of Shares and Cancellation of Certificates. Upon receipt of
Written Instructions, PFPC shall cancel outstanding certificates
surrendered by the Fund to reduce the total amount of outstanding
shares by the number of shares surrendered by the Fund.
(k) Lost Shareholders. PFPC shall perform such services as are required in
order to comply with Rule 17Ad-17 of the 1934 Act (the "Lost
Shareholder Rule"), including, but not limited to, those set forth
below. PFPC may, in its sole discretion, use the services of a third
party to perform some of or all such services.
(i) documentation of search policies and procedures;
(ii) execution of required searches;
(iii)tracking results and maintaining data sufficient to comply with
the Lost Shareholder Rules; and
(iv) preparation and submission of data required under the Lost
Shareholder Rules.
Except as set forth above, PFPC shall have no responsibility for any
escheatment services.
(l) Retirement Plans.
(i) In connection with the individual retirement accounts, simplified
employee pension plans, rollover individual retirement plans,
educational IRA's and XXXX individual retirement accounts ("XXX
Plans"), 403(b) Plans and money purchase and profit sharing plans
("Qualified Plans") (collectively, the "Retirement Plans") within
the meaning of Section 408 of the Internal Revenue Code of 1986,
as amended (the "Code"), sponsored by the Fund for which
contributions of the Fund's shareholders (the "Participants") are
invested solely in Shares of the Fund, PFPC shall provide the
following administrative services:
(A) Establish a record of types and reasons for distributions
(i.e., attainment of age 59 1/2, disability, death, return
of excess contributions, etc.);
(B) Record method of distribution requested and/or made;
(C) Receive and process designation of beneficiary forms
requests;
(D) Examine and process requests for direct transfers between
custodians/trustees, transfer and pay over to the successor
assets in the account and records pertaining thereto as
requested;
(E) Prepare any annual reports or returns required to be
prepared and/or filed by a custodian of a Retirement Plan,
including, but not limited to, an annual fair market value
report, Forms 1099R and 5498; and file same with the IRS and
provide same to Participant/Beneficiary, as applicable; and
(F) Perform applicable federal withholding and send
Participants/Beneficiaries an annual TEFRA notice regarding
required federal tax withholding.
(m) Print Mail. To the extent agreed by the parties, the Fund shall engage
PFPC as its print/mail service provider with respect to those items
and for such fees as may be agreed to from time to time in writing by
the Fund and PFPC.
15. Privacy. Each party hereto acknowledges and agrees that, subject to the
reuse and re-disclosure provisions of Xxxxxxxxxx X-X, 00 XXX Part 248.11,
it shall not disclose the non-public personal information of investors in
the Fund obtained under this Agreement, except as necessary to carry out
the services set forth in this Agreement or as otherwise permitted by law
or regulation.
16. Anti-Money Laundering. To the extent the other provisions of this Agreement
require PFPC to establish, maintain and monitor accounts of investors in
the Fund consistent with securities laws, PFPC shall perform reasonable
actions necessary to help the Fund be in compliance with Section 352 of the
USA PATRIOT Act, as follows: In this regard, PFPC shall: (a) establish and
implement written internal policies, procedures and controls reasonably
designed to help prevent the Fund from being used to launder money or
finance terrorist activities; (b) provide for independent testing, by an
employee who is not responsible for the operation of PFPC's AML program or
by an outside party, for compliance with PFPC's established policies and
procedures; (c) designate a person or persons responsible for implementing
and monitoring the operation and internal controls of PFPC's AML program;
and (d) provide ongoing training of PFPC personnel relating to the
prevention of money-laundering activities. Upon the reasonable request of
the Fund, PFPC shall provide to the Fund: (x) a copy of PFPC's written AML
policies and procedures (it being understood such information is to be
considered confidential and treated as such and afforded all protections
provided to confidential information under this Agreement); (y) a copy of a
written assessment or report prepared by the party performing the
independent testing for compliance, or a summary thereof, or a
certification that the findings of the independent party are satisfactory;
and (z) a summary of the AML training provided for appropriate personnel.
PFPC agrees to permit inspections relating to its AML program by U.S.
Federal departments or regulatory agencies with appropriate jurisdiction
and to make available to examiners from such departments or regulatory
agencies such information and records relating to its AML program as such
examiners shall reasonably request. PFPC expressly agrees to notify the
Fund in the event that PFPC's AML program is determined to be materially
deficient by a law enforcement or regulatory agency.
17. Customer Identification Program ("CIP") Services.
(a) To help the Fund comply with its Customer Identification Program, PFPC
agrees to:
(i) Implement procedures required under 31 CFR 103.131 pursuant to
which an "Account" in the Fund is not established unless PFPC has
obtained the name, date of birth (for natural persons only),
address and government-issued identification number
(collectively, the "Data Elements") for each corresponding
Customer (the terms "Account" and "Customer" as used herein have
the same meaning as defined in 31 CFR 103.131).
(ii) Use collected Data Elements to attempt to reasonably verify the
identity of each Customer promptly before or after opening an
Account for such Customer. Methods may consist of non-documentary
methods (for which PFPC may use unaffiliated information vendors
to assist with such verifications) and documentary methods (as
permitted by 31 CFR 103.131), and may include procedures under
which PFPC personnel perform enhanced due diligence to verify the
identities of Customers the identities of whom were not
successfully verified through the first-level (which will
typically be reliance on results obtained from an information
vendor) verification process(es).
(iii)Record the Data Elements and maintain records relating to
verification of new Customers consistent with 31 CFR
103.131(b)(3).
(iv) Maintain a database of Fund shareholders and implement procedures
to regularly monitor such database to ensure that no such
shareholder is a person who appears on a list published by the
Office of Foreign Assets Control or is otherwise a prohibited
investor as determined under the regulations published by the
U.S. Department of the Treasury.
(v) Regularly report to the Fund about measures taken under (a)-(c)
above.
(vi) If PFPC provides services by which prospective Customers may
subscribe for shares in the Fund via the Internet or telephone,
work with the Fund to notify prospective Customers, consistent
with 31 CFR 103.131(b)(5), about the Fund's CIP.
(vii)Set forth on a separate fee schedule compensation amounts due
for these CIP Services. [We would like to discuss this further.]
(b) Notwithstanding anything to the contrary, and without expanding the
scope of the express language above, PFPC need not collect the Data
Elements for persons who are not deemed to be a "Customer" or who are
not opening an "Account," unless the Fund reasonably requests PFPC to
perform such functions.
(c) Upon the reasonable request of the Fund, PFPC shall provide to the
Fund: (x) a copy of PFPC's written CIP policies and procedures (it
being understood such information is to be considered confidential and
treated as such and afforded all protections provided to Confidential
Information under this Agreement); (y) a copy of a written assessment
or report prepared by the party performing the independent testing for
compliance, or a summary thereof, or a certification that the findings
of the independent party are satisfactory; and (z) a summary of the
AML training provided for appropriate personnel. PFPC agrees to permit
inspections relating to its CIP program by U.S. Federal departments or
regulatory agencies with appropriate jurisdiction and to make
available to examiners from such departments or regulatory agencies
such information and records relating to its CIP program as such
examiners shall reasonably request. PFPC expressly agrees to notify
the Fund in the event that PFPC's CIP program is determined to be
materially deficient by a law enforcement or regulatory agency.
18. Duration and Termination.
(a) The initial term of the Agreement shall be three years commencing upon
the date hereof (the "Initial Term"), unless earlier terminated as
provided herein. Upon the expiration of the Initial Term and every
subsequent term ("Renewal Term"), the term of this Agreement shall
automatically extend for an additional year, unless written notice of
non-extension is delivered by the non-extending party to the other
party no later than three months prior to the expiration of that year.
Notwithstanding the foregoing, if, at the end of each of the first two
years of the Initial Term, the total net assets of the Fund serviced
hereunder do not exceed $1 billion, the Initial Term shall be extended
by an additional year.
(b) The Fund shall be entitled to terminate this Agreement during the
Initial Term or any Renewal Term upon sixty days' written notice in
the event of the acquisition or other change in control of PFPC.
(c) In the event the Fund gives notice of termination, all reasonable
expenses associated with movement (or duplication) of records and
materials and conversion thereof to a successor transfer agent(s) or
other service provider will be borne by the Fund. In the event that
PFPC gives notice of termination, unless such termination is preceded
by the Fund's material breach of this Agreement, all reasonable
expenses associated with movement (or duplication) of records and
materials and conversion thereof to a successor transfer agent(s) (and
any other service provider(s)), and all reasonable trailing expenses
incurred by PFPC, will be borne by PFPC. In the event of termination,
PFPC agrees that it will cooperate to affect a smooth transition of
services and to minimize disruption to the Fund and its shareholders.
(d) If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other
party (the "Non-Defaulting Party") may give written notice thereof to
the Defaulting Party, and if such material breach shall not have been
remedied within sixty (60) days after such written notice is given,
then the Non-Defaulting Party may terminate this Agreement by giving
sixty (60) days written notice of such termination to the Defaulting
Party. In all cases, termination by the Non-Defaulting Party shall not
constitute a waiver by the Non-Defaulting Party of any other rights it
might have under this Agreement or otherwise against the Defaulting
Party.
(e) Notwithstanding anything contained in this Agreement to the contrary,
should a merger, acquisition, change in control, re-structuring,
re-organization or any other decision involving the Fund or any
affiliate (as defined under the 0000 Xxx) of the Fund result in the
Fund's desire to cease to use PFPC as the provider of any of the
services set forth hereunder in favor of another service provider
prior to the expiration of the then current Initial or Renewal Term,
PFPC shall make a good faith effort to facilitate a conversion of
services to the Fund's successor service, provider, however, there can
be no guarantee that PFPC will be able to facilitate such a conversion
of services on the conversion date requested by the Fund. In
connection with the foregoing and prior to such conversion to the
successor service provider, the payment of all fees to PFPC as set
forth herein shall be accelerated to a date prior to the conversion or
termination of services and calculated as if the services had remained
with PFPC until the expiration of the then current Initial or Renewal
Term and calculated at the asset and/or Shareholder account levels, as
the case may be, on the date notice of termination was given to PFPC.
19. Registration as a Transfer Agent. PFPC represents that it is currently
registered with the appropriate federal agency for the registration of
transfer agents, or is otherwise permitted to lawfully conduct its
activities without such registration and that it will remain so registered
or able to so conduct such activities for the duration of this Agreement.
PFPC agrees that it will promptly notify the Fund in the event of any
material change in its status as a registered transfer agent. Should PFPC
fail to be registered with the SEC as a transfer agent at any time during
this Agreement, and such failure to register does not permit PFPC to
lawfully conduct its activities, the Fund may, on written notice to PFPC,
terminate this Agreement upon five days written notice to PFPC.
20. Notices. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President (or such other
address as PFPC may inform the Fund in writing); (b) if to the Fund, at
Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx, 00000, Attention: Chief Operating
Officer, with a copy to Xxxxx X. Xxxxxxxxxx, Esquire, Chief Counsel, Xxxxxx
Global Investments, Inc., at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000; or (c) if to neither of the foregoing, at such other address as
shall have been given by like notice to the sender of any such notice or
other communication by the other party. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed to
have been given immediately. If notice is sent by first-class mail, it
shall be deemed to have been given three days after it has been mailed. If
notice is sent by messenger, it shall be deemed to have been given on the
day it is delivered.
21. Amendments. This Agreement, or any term thereof, may be changed or waived
only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
22. Delegation; Assignment. PFPC may assign its rights and delegate its duties
hereunder to any majority-owned direct or indirect subsidiary of PFPC or of
The PNC Financial Services Group, Inc., provided that PFPC gives the Fund
sixty (60) days' prior written notice of such assignment or delegation.
23. Counterparts. 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.
24. Further Actions. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
25. Miscellaneous.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties.
(b) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees not to
make any modifications to its registration statement or adopt any
policies which would affect materially the obligations or
responsibilities of PFPC hereunder without the prior written approval
of PFPC, which approval shall not be unreasonably withheld or delayed.
(c) Captions. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(d) Information. The Fund will provide such information and documentation
as PFPC may reasonably request in connection with services provided by
PFPC to the Fund.
(e) Governing Law. This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law, without regard to principles of
conflicts of law.
(f) Partial Invalidity. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(g) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(h) No Representations or Warranties. Except as expressly provided in this
Agreement, PFPC hereby disclaims all representations and warranties,
express or implied, made to the Fund or any other person, including,
without limitation, any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of trade), of
any services or any goods provided incidental to services provided
under this Agreement. PFPC disclaims any warranty of title or
non-infringement except as otherwise set forth in this Agreement.
(i) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
(j) Customer Identification Program Notice. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S.
Federal law requires each financial institution to obtain, verify, and
record certain information that identifies each person who initially
opens an account with that financial institution on or after October
1, 2003. Certain of PFPC's affiliates are financial institutions, and
PFPC may, as a matter of policy, request (or may have already
requested) the Fund's name, address and taxpayer identification number
or other government-issued identification number, and, if such party
is a natural person, that party's date of birth. PFPC may also ask
(and may have already asked) for additional identifying information,
and PFPC may take steps (and may have already taken steps) to verify
the authenticity and accuracy of these data elements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:
Title:
MGI FUNDS
By:
Title:
EXHIBIT A
THIS EXHIBIT A, dated as of ____________ __, 2005, is Exhibit A to that
certain Transfer Agency Services Agreement dated as of ____________ __, 2005,
between PFPC Inc. and MGI Funds.
PORTFOLIOS
MGI US Large Cap Growth Equity Fund
MGI US Large Cap Value Equity Fund
MGI US Small/Mid Cap Growth Equity Fund
MGI US Small/Mid Cap Value Equity Fund
MGI Non-US Core Equity Fund
MGI Core Opportunistic Fixed Income Fund
MGI US Short Maturity Fixed Income Fund
