Exhibit 99.h.2
FORM OF AGREEMENT
TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of October,
2004, by and between PRIMECAP Odyssey Funds, a Delaware statutory trust (the
"Trust") and U.S. Bancorp Fund Services, LLC, a Wisconsin limited liability
company ("USBFS").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and is authorized to issue shares of beneficial interest in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, USBFS is, among other things, in the business of administering
transfer and dividend disbursing agent functions for the benefit of its
customers; and
WHEREAS, the Trust desires to retain USBFS to provide transfer and
dividend disbursing agent services to each series of the Trust listed on Exhibit
A hereto (as amended from time to time) (each a "Fund", collectively the
"Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. Appointment of USBFS as Transfer Agent
The Trust hereby appoints USBFS as transfer agent of the Trust on the
terms and conditions set forth in this Agreement, and USBFS hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement.
2. Services and Duties of USBFS
USBFS shall perform all of the customary services of a transfer agent
and dividend disbursing agent for the Funds, and as relevant, agent in
connection with accumulation, open account or similar plans (including
without limitation any periodic investment plan or periodic withdrawal
program), including but not limited to:
A. Receive and process all orders for the purchase, exchange, and/or
redemption of shares in accordance with Rule 22c-1 of the
Investment Company Act of 1940 ("the 1940 Act").
B. Process purchase orders with prompt delivery, where appropriate,
of payment and supporting documentation to the Trust's custodian,
and issue the appropriate number of uncertificated shares with
such uncertificated shares being held in the appropriate
shareholder account.
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FORM OF AGREEMENT
C. Arrange for issuance of shares obtained through transfers of
funds from Fund shareholders' accounts at financial institutions
and arrange for the exchange of shares for shares of other
eligible investment companies, when permitted by the Fund's
current prospectus ("Prospectus").
D. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Trust's
custodian.
E. Pay monies upon receipt from the Trust's custodian, where
relevant, in accordance with the instructions of redeeming
shareholders.
F. Process transfers of shares in accordance with the shareholder's
instructions.
G. Process exchanges between Funds and/or classes of shares of Funds
both within the same family of funds and with a First American
Money Market Fund, if applicable.
H. Prepare and transmit payments for dividends and distributions
declared by the Trust with respect to the Fund, after deducting
any amount required to be withheld by any applicable laws, rules
and regulations and in accordance with shareholder instructions.
I. Make changes to shareholder records, including, but not limited
to, address changes in plans (e.g., systematic withdrawal,
automatic investment, dividend reinvestment).
J. Record the issuance of shares of the Fund and maintain, pursuant
to Rule 17Ad-10(e) promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), a record of the total
number of shares of the Fund which are authorized, issued and
outstanding.
K. Prepare shareholder meeting lists and, if applicable, mail,
receive and tabulate proxies.
L. Mail shareholder reports and Prospectuses to current
shareholders.
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to
dividends and distributions for all shareholders.
N. Provide shareholder account information upon request and prepare
and mail confirmations and statements of account to shareholders
for all purchases, redemptions and other confirmable transactions
as agreed upon with the Trust.
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O. Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate federal
authorities any taxes to be withheld on dividends and
distributions paid by the Trust, all as required by applicable
federal tax laws and regulations.
P. Provide a Blue Sky system that will enable the Trust to monitor
the total number of shares of the Fund sold in each state. In
addition, the Trust or its agent, including USBFS, shall identify
to USBFS in writing those transactions and assets to be treated
as exempt from the Blue Sky reporting for each state. The
responsibility of USBFS for the Trust's Blue Sky state
registration status is solely limited to the initial compliance
by the Trust and the reporting of such transactions to the Trust
or its agent.
Q. Answer correspondence from shareholders, securities brokers and
others relating to USBFS's duties hereunder and such other
correspondence as may from time to time be mutually agreed upon
between USBFS and the Trust.
R. Reimburse the Fund each month for all material losses resulting
from "as of" processing errors for which USBFS is responsible in
accordance with the "as of" processing guidelines set forth on
Exhibit C hereto.
3. Representations of USBFS
USBFS represents and warrants to the Trust that:
A. It is a limited liability corporation duly organized, existing
and in good standing under the laws of Wisconsin;
B. It is a registered transfer agent under the Exchange Act.
C. It is duly qualified to carry on its business in the State of
Wisconsin;
D. It is empowered under applicable laws and by its charter and
bylaws to enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to authorize
it to enter and perform this Agreement;
F. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement; and
G. It will comply with all applicable requirements of the Securities
Act of 1933, as amended, and the Exchange Act, the 1940 Act, and
any laws, rules, and regulations of governmental authorities
having jurisdiction.
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FORM OF AGREEMENT
4. Representations of the Trust
The Trust represents and warrants to USBFS that:
A. The Trust is an open-end investment company under the 1940 Act;
B. The Trust is a business trust organized, existing, and in good
standing under the laws of _________________;
C. The Trust is empowered under applicable laws and by its
Declaration of Trust and Bylaws to enter into and perform this
Agreement;
D. All necessary proceedings required by the Declaration of Trust
have been taken to authorize it to enter into and perform this
Agreement;
E. The Trust will comply with all applicable requirements of the
Securities Act, the Exchange Act, the 1940 Act, and any laws,
rules and regulations of governmental authorities having
jurisdiction; and
F. A registration statement under the Securities Act will be made
effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be
made, with respect to all shares of the Trust being offered for
sale.
5. Compensation
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit B
hereto (as amended from time to time). The Trust shall pay all fees and
reimbursable expenses within thirty (30) calendar days following receipt
of the billing notice, except for any fee or expense subject to a good
faith dispute. The Trust shall notify USBFS in writing within thirty
(30) calendar days following receipt of each invoice if the Trust is
disputing any amounts in good faith. The Trust shall settle such
disputed amounts within ten (10) calendar days of the day on which the
parties agree to the amount to be paid. With the exception of any fee or
expense the Trust is disputing in good faith as set forth above, unpaid
invoices shall accrue a finance charge of one and one-half percent (1
1/2%) per month, after the due date. Notwithstanding anything to the
contrary, amounts owed by the Trust to USBFS shall only be paid out of
assets and property of the particular Fund involved.
6. Indemnification; Limitation of Liability
A. USBFS shall exercise reasonable care in the performance of its
duties under this Agreement. USBFS shall not be liable for any
error of judgment or mistake of
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law or for any loss suffered by the Trust in connection with
matters to which this Agreement relates, including losses
resulting from mechanical breakdowns or the failure of
communication or power supplies beyond USBFS's control, except a
loss arising out of or relating to USBFS's refusal or failure to
comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance
of its duties under this Agreement. Notwithstanding any other
provision of this Agreement, if USBFS has exercised reasonable
care in the performance of its duties under this Agreement, the
Trust shall indemnify and hold harmless USBFS from and against
any and all claims, demands, losses, expenses, and liabilities of
any and every nature (including reasonable attorneys' fees) which
USBFS may sustain or incur or which may be asserted against USBFS
by any person arising out of any action taken or omitted to be
taken by it in performing the services hereunder, except for any
and all claims, demands, losses, expenses, and liabilities
arising out of or relating to USBFS's refusal or failure to
comply with the terms of this Agreement or from bad faith,
negligence or from willful misconduct on its part in performance
of its duties under this Agreement, (i) in accordance with the
foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to USBFS by any duly authorized officer of
the Trust, such duly authorized officer to be included in a list
of authorized officers furnished to USBFS and as amended from
time to time in writing by resolution of the Board of Trustees of
the Trust (the "Board of Trustees" or "Trustees").
USBFS shall indemnify and hold the Trust harmless from and
against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable
attorneys' fees) that the Trust may sustain or incur or that may
be asserted against the Trust by any person arising out of any
action taken or omitted to be taken by USBFS as a result of
USBFS's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, USBFS shall
take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond USBFS's
control. USBFS will make every reasonable effort to restore any
lost or damaged data and correct any errors resulting from such a
breakdown at the expense of USBFS. USBFS agrees that it shall, at
all times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be
entitled to inspect USBFS's premises and operating capabilities
at any time during regular business hours of USBFS, upon
reasonable notice to USBFS.
Notwithstanding the above, USBFS reserves the right to reprocess
and correct administrative errors at its own expense.
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B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it
is further understood that the indemnitee will use all reasonable
care to notify the indemnitor promptly concerning any situation
that presents or appears likely to present the probability of a
claim for indemnification. The indemnitor shall have the option
to defend the indemnitee against any claim that may be the
subject of this indemnification. In the event that the indemnitor
so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the
indemnitee shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this
section. The indemnitee shall in no case confess any claim or
make any compromise in any case in which the indemnitor will be
asked to indemnify the indemnitee except with the indemnitor's
prior written consent.
7. Proprietary and Confidential Information
USBFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and prior,
present, or potential shareholders (and clients of said shareholders)
and not to use such records and information for any purpose other than
the performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not be withheld
where USBFS may be exposed to civil or criminal contempt proceedings for
failure to comply after being requested to divulge such information by
duly constituted authorities, or when so requested by the Trust.
Further, USBFS will adhere to the privacy policies adopted by the Trust
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified
from time to time (the "Act"). Notwithstanding the foregoing, USBFS will
not share any nonpublic personal information concerning any of the
Trust's shareholders with any third party unless specifically directed
by the Trust or allowed under one of the exceptions noted under the Act.
8. Anti-Money Laundering Program
The Trust acknowledges that it has had an opportunity to review,
consider and comment upon the procedures provided by USBFS describing
various tools designed to promote the detection and reporting of
potential money laundering activity by monitoring certain aspects of
shareholder activity (the "Monitoring Procedures") as well as written
procedures for verifying a customer's identity (the "Customer
Identification Procedures"), together referred to as the "Procedures,"
and the Trust has determined that the Procedures, as part of the Trust's
overall anti-money laundering program, are reasonably designed to
prevent the Fund from being used for money laundering or the financing
of terrorist activities and to achieve compliance with the applicable
provision of the Bank
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Secrecy Act and the implementing regulations thereunder.
Based on this determination, the Trust hereby instructs and directs
USBFS to implement the Procedures on the Trust's behalf, as such may be
amended or revised from time to time.
It is contemplated that these Procedures will be amended from time to
time by the parties as additional regulations are adopted and/or
regulatory guidance is provided relating to the Trust's anti-money
laundering responsibilities.
USBFS agrees to provide to the Trust:
(a)Prompt written notification of any transaction or combination of
transactions that USBFS believes, based on the Procedures, evidence
money laundering activity in connection with the Trust or any
shareholder of the Fund;
(b)Prompt written notification of any customer(s) that USBFS reasonably
believes, based upon the Procedures, to be engaged in money
laundering activity, provided that the Trust agrees not to
communicate this information to the customer;
(c)Any reports received by USBFS from any government agency or
applicable industry self-regulatory organization pertaining to
USBFS's anti-money laundering monitoring on behalf of the Trust;
(d)Prompt written notification of any action taken in response to
anti-money laundering violations as described in (a), (b) or (c); and
(e)A certified annual report of its monitoring and customer
identification activities on behalf of the Trust. USBFS shall provide
such other reports on the monitoring and customer identification
activities conducted at the direction of the Trust as may be agreed
to from time to time by USBFS and the Trust.
The Trust hereby directs, and USBFS acknowledges, that USBFS shall (i)
permit federal regulators access to such information and records
maintained by USBFS and relating to USBFS's implementation of the
Procedures on behalf of the Trust, as they may request, and (ii) permit
such federal regulators to inspect USBFS's implementation of the
Procedures on behalf of the Trust.
9. Term of Agreement; Amendment
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of three years. Subsequent to
the initial three-year term, this Agreement may be terminated by either
party upon giving ninety (90) days prior written notice to the other
party or such shorter period as is mutually agreed upon by the parties.
However, this Agreement may be amended by mutual written consent of the
parties.
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10. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the Trust
by written notice to USBFS, USBFS will promptly, upon such termination
and at the expense of the Trust, transfer to such successor all relevant
books, records, correspondence, and other data established or maintained
by USBFS under this Agreement in a form reasonably acceptable to the
Trust (if such form differs from the form in which USBFS has maintained,
the Trust shall pay any expenses associated with transferring the data
to such form), and will cooperate in the transfer of such duties and
responsibilities, including provision for assistance from USBFS's
personnel in the establishment of books, records, and other data by such
successor.
11. Records
USBFS shall keep records relating to the services to be performed
hereunder in the form and manner, and for such period, as it may deem
advisable and is agreeable to the Trust, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. USBFS
agrees that all such records prepared or maintained by USBFS relating to
the services to be performed by USBFS hereunder are the property of the
Trust and will be preserved, maintained, and made available in
accordance with such applicable sections and rules of the 1940 Act and
will be promptly surrendered to the Trust on and in accordance with its
request. Further, federal examiners shall have access to information and
records relating to anti-money laundering activities performed by USBFS
hereunder and USBFS consents to any inspection authorized by law or
regulation in connection thereof.
12. Governing Law
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin, without regard to conflicts of law principles. To
the extent that the applicable laws of the State of Wisconsin, or any of
the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control, and nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any rule or
order of the Securities and Exchange Commission thereunder.
13. Data Necessary to Perform Services
The Trust or its agent, which may be USBFS, shall furnish to USBFS the
data necessary to perform the services described herein at such times
and in such form as mutually agreed upon. If USBFS is also acting in
another capacity for the Trust, nothing herein shall be deemed to
relieve USBFS of any of its obligations in such capacity.
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14. Assignment
This Agreement may not be assigned by either party without the prior
written consent of the other party.
15. Notices
Any notice required or permitted to be given by either party to the
other shall be in writing and shall be deemed to have been given on the
date delivered personally or by courier service, or three (3) days after
sent by registered or certified mail, postage prepaid, return receipt
requested, or on the date sent and confirmed received by facsimile
transmission to the other party's address set forth below: Notice to
USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Trust shall be sent to:
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
PRIMECAP ODDYSSEY FUNDS U.S. BANCORP FUND SERVICES, LLC
By: ______________________________ By: ________________________________
Title: __________________________ Title: _____________________________
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FORM OF AGREEMENT
Exhibit A
to the
Transfer Agent Servicing Agreement
Fund Names
Separate Series of PRIMECAP Odyssey Funds
Name of Series Date Added
PRIMECAP Odyssey Growth Fund 10/1/04
PRIMECAP Odyssey Aggressive Growth Fund 10/1/04
PRIMECAP Odyssey Stock Fund 10/1/04
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Exhibit B
to the
Transfer Agent Servicing Agreement
Fee Schedule
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Exhibit C
to the
Transfer Agent Servicing Agreement
As Of Processing Policy
USBFS will reimburse each Fund for any net material loss that may exist
on the Fund's books and for which USBFS is responsible, at the end of each
calendar month. "Net Material Loss" shall be defined as any remaining loss,
after netting losses against any gains, which impacts a Fund's net asset value
per share by more than 1/2 cent. Gains and losses will be reflected on the
Fund's daily share sheet, and the Fund will be reimbursed for any net material
loss on a monthly basis. USBFS will reset the as of ledger each calendar month
so that any losses which do not exceed the materiality threshold of 1/2 cent
will not be carried forward to the next succeeding month. USBFS will notify the
advisor to the Fund on the daily share sheet of any losses for which the advisor
may be held accountable.
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