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EXHIBIT (J)(2)
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 19th day of December, 1997 by and between XXX
XXXXXX AMERICAN CAPITAL SENIOR FLOATING RATE FUND, a Massachusetts business
trust, having its principal office and place of business at Oakbrook Terrace,
Illinois (the "Fund"), and ACCESS INVESTOR SERVICES, INC., a Delaware
corporation, having its principal office at Houston, Texas, and its principal
place of business at Kansas City, Missouri ("ACCESS").
R E C I T A L:
WHEREAS, the Fund desires to appoint ACCESS as its transfer agent, dividend
disbursing agent and shareholder service agent and ACCESS desires to accept such
appointments;
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,
the Fund 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
the Fund on the terms and conditions set forth herein.
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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 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 the Fund (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, the Fund agrees to pay ACCESS the fee provided in the fee schedules
agreed upon from time to time by the Fund and ACCESS.
2.02 In addition to the amounts paid under section 2.01 above, the
Fund agrees to reimburse ACCESS promptly for its 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 the Fund. In
addition, any other special out-of-pocket expenses paid by ACCESS at the
specific request of the Fund will be promptly reimbursed by the Fund. Postage
for mailings of dividends,
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proxies, Fund reports and other mailings to all shareholder accounts shall
be advanced to ACCESS by the Fund three business days prior to the mailing date
of such materials.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF ACCESS.
ACCESS represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware.
3.02 It is duly qualified to carry on its business in the states of
Texas and Missouri.
3.03 It is empowered under applicable laws 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 the Fund 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 the 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 the Fund is negative and exceeds an amount equivalent to 1/2 of 1
cent per share of the Fund, ACCESS shall promptly make a payment
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to the 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 the Fund.
If on the last business day of the month the cumulative net effect
(adjusted by the amount of any payments pursuant to the preceding
sentence) upon the Fund is negative, the 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 business day of the month the cumulative net effect (similarly
adjusted) upon the Fund is positive, ACCESS shall be entitled to
recover certain past payments and reductions in fees, and to a credit
against all future payments and fee reductions made under this
paragraph to the Fund, as described in paragraph (c) below.
(c) At the end of each month, any positive cumulative net effect
upon the Fund shall be deemed to be a credit to ACCESS which shall
first be applied to recover any payments and fee reductions made by
ACCESS to the 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 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 that would otherwise require a
payment or fee reduction to the Fund pursuant to paragraph (b) above.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE FUND.
The Fund hereby represents and warrants that:
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4.01 It is duly organized and existing and in good standing under the
laws of the commonwealth of Massachusetts.
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 closed-end, management investment company registered
under the Investment Company Act of 1940, as amended.
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 the Fund shall indemnify
and hold ACCESS harmless from and against any and all losses, damages,
costs, charges, reasonable counsel fees, payments, expenses and liabilities
arising out of or attributable to:
(a) All actions of ACCESS required to be taken by ACCESS for the
benefit of the Fund pursuant to this Agreement, provided 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 the Fund or have been furnished to
ACCESS by or on behalf of the Fund.
(c) The reasonable reliance by ACCESS on, or the carrying out by
ACCESS of, any instructions or requests of the Fund.
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(d) The offer or sale of the 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 the Fund that no offers or sales of the Fund's
shares be made in general or to the residents of a particular state.
(e) The Fund's refusal or failure to comply with the terms of this
Agreement, or the Fund's lack of good faith, negligence or willful
misconduct or the breach of any representation or warranty of the Fund
hereunder.
5.02 ACCESS shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, reasonable counsel fees,
payments, expenses and liability arising out of or attributable to ACCESS'
refusal or failure to comply with the terms of this Agreement, or ACCESS' lack
of good faith, negligence or 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 the
Fund for instructions, and may consult with the Fund's legal counsel, at the
expense of the 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 the 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 and shall not be held to have
notice of any change of authority of any person, until receipt of written
notice thereof from the Fund. ACCESS shall also be protected and
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indemnified in recognizing stock certificates which ACCESS reasonably
believes to bear the proper manual or facsimile signatures of the officers of
the Fund, and the proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
5.04 In the event 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 for damages 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. 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 THE FUND AND ACCESS.
6.01 The Fund 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.
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(b) Certified copies of its Declaration of Trust and by-laws and
all amendments thereto.
6.02 ACCESS hereby agrees to maintain facilities and procedures reasonably
acceptable to the Fund 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 the Fund (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 Fund and shall be
preserved and made available in accordance with the 1940 Act Requirements, and
shall be surrendered promptly to the 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.
6.04 ACCESS and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person, except
as may be required by law.
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6.05 In case of any requests or demands for the inspection of any of the
Fund Records, ACCESS will endeavor to notify the Fund and to secure instructions
from an authorized officer of the Fund 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 the
Fund records to such person.
ARTICLE 7. TERM AND TERMINATION OF AGREEMENT.
7.01 The initial term of this Agreement shall expire June 30, 1999, and
thereafter this Agreement shall automatically be renewed for successive one year
periods to begin on July 1 of each year unless either party provides notice to
the other party at least 30 days in advance of that date that this Agreement is
not to be renewed.
7.02 Notwithstanding the foregoing, either party may terminate this
Agreement for good and reasonable cause at any time by giving written notice to
the other party at least 120 days prior to the date on which such termination is
to be effective.
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 Fund and the successor
transfer 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 Fund, as the case may be; provided, however,
that no consent shall be required for any merger of the Fund with, or any sale
of all or substantially all the assets of the Fund to, another investment
company.
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8.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
8.03 ACCESS may, without further consent on the part of the Fund,
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 the Fund for the acts and omissions
of DST, Inc. or other qualified servicer as it is for its own acts and
omissions.
8.04 ACCESS may, without further consent on the part of the Fund, provide
services to its affiliated companies. Such services may be provided at cost.
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 Fund's
Trustees. This Plan is executed on behalf of the Fund or the Trustees of the
Fund as Trustees and not individually and that the obligations of this Agreement
are not binding upon any of the Trustees, officers or shareholders of the Fund
individually but are binding only upon the assets and property of the Fund. A
Certificate of Trust in respect of the Fund is on file with Massachusetts'
Secretary of State's Office.
8.07 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.
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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.
XXX XXXXXX AMERICAN CAPITAL
SENIOR FLOATING RATE FUND
BY:
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Vice President
ATTEST:
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Assistant Secretary
ACCESS INVESTOR SERVICES, INC.
BY:
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President and Chief Executive Officer
ATTEST:
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Assistant Secretary
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SCHEDULE "A"
PRICING SCHEDULE
PRICE PER ACCOUNT PLUS OUT OF POCKETS
Xxx Xxxxxx American Capital Senior Floating Rate Fund
A flat fee of $15,000 per year plus out-of-pocket expenses until such time as
there are 1,000 shareholder accounts, and a per account fee of $21.34 per
shareholder account per year plus out-of-pocket expenses thereafter.
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