EXHIBIT (h)(16)
SUB-TRANSFER AGENCY AND SERVICES AGREEMENT
THIS AGREEMENT, dated as of this 8th day of February, 2000 between THE
NORTHERN TRUST COMPANY (the "Transfer Agent"), an Illinois banking corporation
having its principal place of business at Fifty Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000 and PFPC INC., ("PFPC"), a Massachusetts corporation with
principal offices at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000.
WITNESSETH
WHEREAS, the Transfer Agent has been appointed transfer agent for the
those open-end registered investment companies identified on the attached
Schedule A, including each separate portfolio thereof (individually the "Fund"
and collectively the "Funds");
WHEREAS, the Transfer Agent has entered into a Transfer Agent Agreement
(the "Transfer Agency Agreement(s)") with each of the Funds;
WHEREAS, the Transfer Agent is authorized by the Funds to subcontract
for the performance of certain of the Transfer Agent's duties under the Transfer
Agent Agreements; and
WHEREAS, the Transfer Agent desires to subcontract to and appoint PFPC
as its agent to perform certain administrative and ministerial duties and
obligations that the Transfer Agent has to the Funds relating to maintaining
accounts and processing transactions through the National Securities Clearing
Corporation ("NSCC") and PFPC desires to accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Transfer Agent and PFPC agree as follows:
Article 1 DEFINITIONS.
1.1 Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of each Fund as the same may be amended
from time to time.
(b) "Assign" and "Assignment" shall have the same meaning
herein as the term "assignment" has in the 1940 Act.
(c) "Authorized Person" shall be (i) any authorized officer of
the Transfer Agent; or (ii) any person, whether or not such person is
an officer or employee of the Transfer Agent, duly authorized to give
Oral Instructions or Written Instructions on behalf of the Transfer
Agent as indicated in writing to PFPC from time to time, but in no
event shall include a person who is an
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officer, director, employee or agent of PFPC, whether or not such
person is an officer or trustee of the Funds.
(d) "Board Members" shall mean the Directors or Trustees of
the governing body of each Fund, as the case may be.
(e) "Board of Directors" shall mean the Board of Directors or
Board of Trustees of each Fund, as the case may be.
(f) "Commission" shall mean the Securities and Exchange
Commission.
(g) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Funds may from time to time
deposit, or cause to be deposited or held under the name or account of
such a custodian pursuant to a Custodian Agreement.
(h) "Networking" shall mean the system created by the NSCC for
the maintenance of non-trade related activity and settlement
responsibilities between a mutual fund/transfer agent and financial
intermediaries selling the mutual fund's shares.
(i) "NSCC" shall mean the National Securities Clearing
Corporation.
(j) "1934 Act" shall mean the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder, all as amended
from time to time.
(k) "1940 Act" shall mean the Investment Company Act of 1940
and the rules and regulations promulgated thereunder, all as amended
from time to time.
(l) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by PFPC from a person
reasonably believed by PFPC to be an Authorized Person;
(m) "Portfolio" shall mean each separate series of shares
offered by the Fund representing interests in a separate portfolio of
securities and other assets;
(n) "Prospectus" shall mean the most recently dated Fund
Prospectus and Statement of Additional Information of each Fund,
including any supplements thereto if any, which has become effective
under the Securities Act of 1933 and the 0000 Xxx.
(o) "Shares" refers collectively to such shares of capital
stock or beneficial interest, as the case may be, or class thereof, of
each Fund as may be issued from time to time which are traded by
financial intermediaries through the NSCC Fund/Serv or for which PFPC
provides Networking services pursuant to the rules and regulations of
the NSCC.
(p) "Shareholder" shall mean a record owner of Shares of each
Fund.
(q) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by PFPC to be an Authorized
Person and actually received by PFPC. Written Instructions shall
include manually executed originals and authorized electronic
transmissions, including telefacsimile of a manually executed original
or other process.
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Article 2 APPOINTMENT OF PFPC.
The Transfer Agent hereby appoints and constitutes PFPC as its
subcontractor and agent to perform certain administrative and ministerial duties
on its behalf with respect to the Funds relating to maintaining accounts and
processing transactions through the NSCC and PFPC hereby accepts such
appointments and agrees to perform the duties hereinafter set forth.
Article 3 DUTIES OF PFPC.
3.1 PFPC shall be responsible for the following duties to the
extent required to provide NSCC level services:
(a) Administering and/or performing the customary services of
a transfer agent; acting as service agent in connection with dividend
and distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance,
transfer and redemption or repurchase (including coordination with the
Custodian) of Shares of the Funds, as more fully described in the
written schedule of Duties of PFPC annexed hereto as Schedule B and
incorporated herein, and in accordance with the terms of the Prospectus
of the Funds, applicable law and the procedures established from time
to time between PFPC and the Transfer Agent.
(b) Recording the issuance of Shares and the total number of
Shares issued and outstanding on the PFPC System for NSCC accounts.
PFPC shall provide the Transfer Agent on a daily basis with the total
number of Shares which are authorized and issued and outstanding on the
PFPC System for NSCC accounts.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, PFPC shall be under no duty or obligation to inquire into,
and shall not be liable for: (i) the legality of the issuance or sale
of any Shares or the sufficiency of the amount to be received therefor;
(ii) the legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor; (iii) the legality of the declaration
of any dividend by the Board of Directors, or the legality of the
issuance of any Shares in payment of any dividend; or (iv) the legality
of any recapitalization or readjustment of the Shares.
(d) Establishing procedures for Networking and Fund/Serv
pursuant to the rules and regulations of the NSCC.
3.2 In addition to the duties set forth herein, PFPC shall perform
such other duties and functions, and shall be paid such amounts therefor, as may
from time to time be agreed upon in writing between the Transfer Agent and PFPC.
Without limiting the foregoing, PFPC shall use its best efforts to ensure that
provisions that protect the Transfer Agent and the Funds from liability for the
acts and omissions of shareholders and financial intermediaries that trade the
Funds' shares through NSCC are included in agreements with such shareholders and
financial intermediaries to the same extent that the provisions of such
agreements protect PFPC from such acts and omissions.
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Article 4 RECORDKEEPING, REPORTS AND INSPECTIONS.
4.1 PFPC shall create and maintain all records required of it
pursuant to its duties hereunder and as set forth in Schedule B in accordance
with all applicable laws, rules and regulations, including records required by
Section 31(a) of the 1940 Act. Where applicable, such records shall be
maintained by PFPC for the periods and in the places required by Rule 31a-2
under the 1940 Act.
4.2 To the extent required by Section 31 of the 1940 Act, PFPC
agrees that all such records prepared or maintained by PFPC relating to the
services to be performed by PFPC hereunder are the property of the Funds and
will be preserved, maintained and made available in accordance with such
section, and will be surrendered promptly to the Transfer Agent and the Funds on
and in accordance with the Transfer Agent and the Funds' request.
4.3 In case of any requests or demands for the inspection of
Shareholder records of the Funds, PFPC will endeavor to notify the Transfer
Agent of such request and secure Written Instructions as to the handling of such
request. PFPC reserves the right, however, to exhibit the Shareholder records to
any person whenever it is advised by its counsel that it may be held liable for
the failure to comply with such request.
4.4 PFPC shall cooperate with the Transfer Agent, the Funds and
the Funds' independent public accountants in connection with (a) the preparation
of reports to the Unitholders, to the Commission (including all required
periodic and other reports), to state securities and commissioners and to
others, (b) annual and other audits of the books and records of the Funds, and
(c) other matters of a like nature. PFPC shall make available during regular
business hours all records and other data created and maintained pursuant to
this Agreement for reasonable audit, inspection and copying by the Transfer
Agent and the Funds, the Funds' independent public accountants, or any other
person retained by the Transfer Agent or the Funds, or by agents of the
Commission. Upon reasonable notice by the Transfer Agent or the Funds, PFPC
shall make available during regular business hours its facilities and premises
employed in connection with its performance of this Agreement for reasonable
visitation by any of the persons referred to in the preceding sentence.
4.5 PFPC shall provide the Transfer Agent or the Funds, at such
times as the Transfer Agent or the Funds may reasonably require, with reports by
independent public accountants on the accounting system and internal accounting
controls relating to the services provided by PFPC under this Agreement. Such
reports shall be of sufficient scope and in sufficient detail, as may reasonably
be required by the Transfer Agent, the Funds, or the Fund's independent public
accountants, to provide reasonable assurance that any material weaknesses with
respect to such accounting system and such internal accounting controls would be
disclosed by such examination, and, if there are no such weaknesses, shall so
state.
Article 5 TRANSFER AGENT INSTRUCTIONS.
5.1 PFPC will have no liability when acting upon Written or Oral
Instructions reasonably believed to have been executed or orally communicated by
an Authorized Person and will not be held to have any notice of any change of
authority of any person until receipt of a Written Instruction thereof from the
Transfer Agent.
5.2 At any time, PFPC may request Written Instructions from the
Transfer Agent and may seek advice from legal counsel for the Transfer Agent, or
its own legal counsel, with respect to any
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matter arising in connection with this Agreement, and it shall not be liable for
any action taken or not taken or suffered by it in good faith in accordance with
such Written Instructions or in accordance with the opinion of counsel for the
Transfer Agent or for PFPC. Written Instructions requested by PFPC will be
provided by the Transfer Agent within a reasonable period of time.
5.3 PFPC, its officers, agents or employees, shall accept Oral
Instructions or Written Instructions given to them by any person representing or
acting on behalf of the Transfer Agent only if said representative is an
Authorized Person. The Transfer Agent agrees that all Oral Instructions shall be
followed within one business day by confirming Written Instructions, and that
the Transfer Agent's failure to so confirm shall not impair in any respect
PFPC's right to rely on Oral Instructions.
Article 6 COMPENSATION.
6.1 The Transfer Agent will compensate PFPC for the performance of
its obligations hereunder in accordance with the fees set forth in the written
Fee Schedule annexed hereto as Schedule C and incorporated herein.
6.2 In addition to those fees set forth in Section 6.1 above, the
Transfer Agent agrees to pay, and will be billed separately for, out-of-pocket
expenses incurred by PFPC in the performance of its duties hereunder.
Out-of-pocket expenses shall include those items specified in the written
schedule of out-of-pocket charges annexed hereto as Schedule D and incorporated
herein. Schedule D may be modified by written agreement between the parties. Any
unspecified out-of-pocket expenses shall be limited to those out-of-pocket
expenses reasonably incurred by PFPC in the performance of its obligations
hereunder.
6.3 The Transfer Agent agrees to pay to PFPC all fees and
out-of-pocket expenses invoiced by Federal Funds Wire within fifteen (15)
business days following the receipt of the respective invoice. In addition, with
respect to all fees under this Agreement, PFPC may charge a service fee equal to
the lessor of (iI) one and one half percent (1 1/2%) per month or (ii) the
highest interest rate legally permitted on any past due invoiced amount,
provided however, the foregoing service fee shall not apply if the Transfer
Agent in good faith legitimately disputes any invoice amount, in which case the
Transfer Agent shall do the following within thirty (30) days of the postmark
date: (a) pay PFPC the undisputed amount of the invoice; and (b) provide PFPC a
detailed written description of the disputed amount and the basis for the
Transfer Agent's dispute with such amount. In addition, the Fund shall cooperate
with PFPC in resolving disputed invoice amounts and then promptly pay such
amounts determined to be due.
6.4 Any compensation agreed to hereunder may be adjusted from time
to time by attaching to Schedule C a revised Fee Schedule executed and dated by
the parties hereto.
6.5 The Transfer Agent acknowledges that the fees that PFPC
charges the Transfer Agent under this Agreement reflect the allocation of risk
between the parties, including the disclaimer of warranties in Section 9.3 and
the limitations on liability and exclusion of remedies in Section 11.2 and
Article 12. Modifying the allocation of risk from what is stated here would
affect the fees that PFPC charges, and in consideration of those fees, the
Transfer Agent agrees to the stated allocation of risk.
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Article 7 DOCUMENTS.
PFPC acknowledges that it has received copies of the documents set
forth in the written schedule of Fund Documents annexed hereto as Schedule E.
Article 8 PFPC SYSTEM.
8.1 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 Transfer Agent herein (the "PFPC System").
8.2 PFPC hereby grants to the Transfer Agent a limited license to
the PFPC System for the sole and limited purpose of having PFPC provide the
services contemplated hereunder and nothing contained in this Agreement shall be
construed or interpreted otherwise and such license shall immediately terminate
with the termination of this Agreement.
8.3 In the event that the Transfer Agent, including any affiliate
or agent of the Transfer Agent or any third party acting on behalf of the
Transfer Agent is provided with direct access to the PFPC System for either
account inquiry or to transmit transaction information, including but not
limited to maintenance, exchanges, purchases and redemptions, such direct access
capability shall be limited to direct entry to the PFPC System by means of
on-line mainframe terminal entry or PC emulation of such mainframe terminal
entry and any other non-conforming method of transmission of information to the
PFPC System is strictly prohibited without the prior written consent of PFPC.
Article 9 REPRESENTATIONS AND WARRANTIES.
9.1 PFPC represents and warrants to the Transfer Agent that:
(a) it is a corporation duly organized, existing and in good
standing under the laws of the Commonwealth of Massachusetts;
(b) it is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement;
(c) all requisite corporate proceedings have been taken to
authorize it to enter into this Agreement;
(d) it is duly registered with its appropriate regulatory
agency as a transfer agent and such registration will remain in effect
for the duration of this Agreement;
(e) 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
(f) PFPC warrants that all equipment and software used or
delivered in connection herewith or with the services rendered
hereunder include or shall include, at no additional cost to the
Transfer Agent, design and performance capabilities so that prior to,
during, and after the calendar year 2000, they will not malfunction,
produce invalid or incorrect results, or
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abnormally cease to function because of the year 2000 date change. Such
design and performance capabilities shall include without limitation
the ability to recognize the century and to manage and manipulate data
involving dates, including single century and multi-century formulas
and date values, without resulting in the generation of incorrect
values involving such dates or causing an abnormal ending; date data
interfaces with functionalities and data fields that indicate the
century; and date-related functions that indicate the century. In
connection with the foregoing, PFPC agrees to provide the Transfer
Agent with periodic quarterly updates with respect to PFPC's compliance
with this provision.
(g) PFPC represents and warrants that the various procedures
and systems which it has implemented with regard to safeguarding from
loss or damage attributable to fire, theft or any other cause the
records, data, equipment, facilities and other property used in the
performance of its obligations hereunder are adequate and that it will
make such changes therein from time to time as in its judgment are
required for the secure performance of its obligations hereunder.
9.2 The Transfer Agent represents and warrants to PFPC that:
(a) it is duly organized, existing and in good standing under
the laws of the jurisdiction in which it is organized;
(b) it is empowered under applicable laws and by its Article
of Incorporation and By-Laws to enter into this Agreement;
(c) all corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken to authorize
it to enter into this Agreement;
(d) a registration statement under the Securities Act of 1933,
as amended, and the 1940 Act on behalf of each Fund is currently
effective and will remain effective; and
9.3 THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT, PFPC DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, MADE TO THE TRANSFER AGENT 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.
Article 10 INDEMNIFICATION.
10.1 The Transfer Agent shall indemnify and hold PFPC harmless from
and against any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind (a
"Claim") which may be asserted against PFPC or for which PFPC may be held liable
in connection with this Agreement or its performance hereunder unless such Claim
resulted from: (a) the willful misfeasance, bad faith or negligence of PFPC in
the performance of its
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duties hereunder, or by reason of its reckless disregard thereof; or (b) the
breach of any representation, warranty or covenant made by PFPC herein.
10.2 PFPC shall indemnify and hold the Transfer Agent harmless from
and against any and all Claims which may be asserted against the Transfer Agent
or for which the Transfer Agent may be held liable in connection with this
Agreement or its performance hereunder, provided that such Claim resulted from:
(a) the willful misfeasance, bad faith or negligence of PFPC in the performance
of its duties hereunder, or by reason of PFPC's reckless disregard thereof; or
(b) the breach of any representation, warranty or covenant made by PFPC herein.
10.3 In any case in which the either party (the "Indemnifying
Party") may be asked to indemnify or hold the other (the "Indemnified Party")
harmless, the Indemnified Party will notify the Indemnifying Party promptly
after identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Indemnifying Party although the
failure to do so shall not prevent recovery by the Indemnified Party and shall
keep the Indemnifying Party advised with respect to all developments concerning
such situation. The Indemnifying Party shall have the option to defend the
Indemnified Party against any Claim which may be the subject of this
indemnification, and, in the event that the Indemnifying Party so elects, such
defense shall be conducted by counsel chosen by the Indemnifying Party and
satisfactory to the Indemnified Party, and thereupon the Indemnifying Party
shall take over complete defense of the Claim and the Indemnified Party shall
sustain no further legal or other expenses in respect of such Claim. The
Indemnified Party will not confess any Claim or make any compromise in any case
in which the Indemnifying Party will be asked to provide indemnification, except
with the Indemnifying Party's prior written consent. The obligations of the
parties hereto under this Article 10 shall survive the termination of this
Agreement.
10.4 Except for remedies that cannot be waived as a matter of law
(and injunctive or provisional relief), the provisions of this Article 10 shall
be a party's sole and exclusive remedy for claims or other actions or
proceedings to which such party's indemnification obligations pursuant to this
Article 10 may apply.
Article 11 STANDARD OF CARE.
11.1 PFPC shall at all times act in good faith and agrees to use
its best efforts within commercially reasonable limits to ensure the accuracy of
all services performed under this Agreement, but assumes no responsibility for
loss or damage to the Transfer Agent or the Funds unless said errors are caused
by PFPC's willful misfeasance, bad faith or negligence in the performance of its
duties hereunder or by reason of its reckless disregard thereof, or that of its
employees.
11.2 Each party shall have the duty to mitigate damages for which
the other party may become responsible.
Article 12 CONSEQUENTIAL DAMAGES.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL PFPC, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE UNDER ANY THEORY OF TORT,
CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS,
EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES,
EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT
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OF THE PARTIES REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER
EITHER PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Article 13 TERM AND TERMINATION.
13.1 This Agreement shall be effective on the date first written
above and shall continue until April 30, 2001 with respect to the Northern
Institutional Funds and until March 31, 2001 with respect to the Northern Funds
(the "Initial Term").
13.2 Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year (each a "Renewal Term")
with respect to each Fund
13.3 Either party may terminate this Agreement at any time after
the Initial Term, with or without cause, and without penalty, on at least sixty
(60) days' written notice to the other party.
13.4 This Agreement shall automatically terminate with respect to
any Fund upon termination by the Fund of the Transfer Agent Agreement.
13.5 In the event the Transfer Agent terminates this Agreement for
any reason other than pursuant to Section 13.6 or Section 13.8, all reasonable
expenses associated with the movement of records and materials and conversion
thereof to a successor transfer agent will be borne by the Transfer Agent,
provided, however, that such expenses shall not exceed $50, 000 in the event
that such termination occurs upon or after the expiration of the Initial Term.
Should such termination occur prior to the expiration of the Initial Term, all
reasonable expenses associated with conversion to a successor service provider
shall be borne by the Transfer Agent.
13.6 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 thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) 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.
13.7 Unless this Agreement is terminated pursuant to Sections 13.4,
13.6 or 13.8 hereof, should the Transfer Agent move any of the services provided
by PFPC hereunder to a successor service provider prior to the expiration of the
Initial Term, or, if prior to the expiration of the Initial Term, any Fund is
liquidated or its assets merged or purchased or the like with another entity
which does not utilize the services of PFPC, the payment of fees to PFPC as set
forth herein with respect to such Fund 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 Initial Term and calculated at
the asset and/or Shareholder account levels, as the case may be, on the date of
such movement, merger or purchase. Investor Services shall make a good faith
effort to facilitate any such conversion.
13.8 The Transfer Agent may terminate this Agreement upon its
assignment by PFPC unless the conditions to assignment as set forth in Article
17 hereof have been satisfied.
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Article 14 ADDITIONAL FUNDS
14.1 PFPC shall render all services contemplated hereunder to the
open-end registered investment companies identified on Schedule A hereto and all
existing and future separate portfolios thereof for which the Transfer Agent is
appointed to provide transfer agency services, unless the Transfer Agent
instructs PFPC to the contrary.
Article 15 CONFIDENTIALITY.
15.1 The parties agree that the Proprietary Information (defined
below) and the contents of this Agreement (collectively "Confidential
Information") are confidential information of the parties and their respective
licensors. The Transfer Agent and PFPC shall exercise at least the same degree
of care, but not less than reasonable care, to safeguard the confidentiality of
the Confidential Information of the other as it would exercise to protect its
own confidential information of a similar nature. The Transfer Agent and PFPC
may use the Confidential Information only to exercise its rights under this
Agreement. The Transfer Agent and PFPC shall not duplicate, sell or disclose to
others the Confidential Information of the other, in whole or in part, without
the prior written permission of the other party. The Transfer Agent and PFPC
may, however, disclose Confidential Information to its employees who have a need
to know the Confidential Information to perform work for the other, provided
that each shall use reasonable efforts to ensure that the Confidential
Information is not duplicated or disclosed by its employees in breach of this
Agreement. The Transfer Agent and PFPC may also disclose the Confidential
Information to independent contractors, auditors, and professional advisors,
provided they first agree in writing to be bound by the confidentiality
obligations substantially similar to this Section 15.1. Notwithstanding the
previous sentence, in no event shall either the Transfer Agent or PFPC disclose
the Confidential Information to any competitor of the other without specific,
prior written consent.
15.2 Proprietary Information means:
(a) 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,
finance, operations, customer relationships, customer profiles, sales
estimates, business plans, and internal performance results relating to
the past, present or future business activities of the Transfer Agent
or PFPC, their respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of them;
(b) 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 Transfer Agent
or PFPC a competitive advantage over its competitors; and
(c) all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code, object
code, flow charts, databases, inventions, know-how, show-how and trade
secrets, whether or not patentable or copyrightable.
15.3 Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment, prototypes and
models, and any other tangible manifestation of the foregoing of either party
which now exist or come into the control or possession of the other. With
respect to the Transfer
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Agent, Confidential Information shall also include all records and other
information relative to the Funds and their prior, present or potential
shareholders (and clients of such shareholders).
15.4 The obligations of confidentiality and restriction on use
herein shall not apply to any Confidential Information that a party proves:
(a) Was in the public domain prior to the date of this
Agreement or subsequently came into the public domain through no fault
of such party; or
(b) Was lawfully received by the party from a third party free
of any obligation of confidence to such third party; or
(c) Was already in the possession of the party prior to
receipt thereof, directly or indirectly, from the other party; or
(d) Is required to be disclosed in a judicial or
administrative proceeding after all reasonable legal remedies for
maintaining such information in confidence have been exhausted
including, but not limited to, giving the other party as much advance
notice of the possibility of such disclosure as practical so the other
party may attempt to stop such disclosure or obtain a protective order
concerning such disclosure; or
(e) Is subsequently and independently developed by employees,
consultants or agents of the party without reference to the
Confidential Information disclosed under this Agreement.
15.5 The obligations of the parties under this Article 15 shall
survive the termination of this Agreement.
Article 16 FORCE MAJEURE.
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default or delay
is caused, directly or indirectly, by (a) fire, flood, elements of nature or
other acts of God; (b) any outbreak or escalation of hostilities, war, riots or
civil disorders in any country, (c) any act or omission of the other party or
any governmental authority; (d) any labor disputes (whether or not the
employees' demands are reasonable or within the party's power to satisfy); or
(e) nonperformance by a third party or any similar cause beyond the reasonable
control of such party, including without limitation, failures or fluctuations in
telecommunications or other equipment. In any such event, the non-performing
party shall be excused from any further performance and observance of the
obligations so affected only for as long as such circumstances prevail and such
party continues to use commercially reasonable efforts to recommence performance
or observance as soon as practicable.
Article 17 ASSIGNMENT AND SUBCONTRACTING.
This Agreement, its benefits and obligations shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be Assigned or otherwise transferred
by either party hereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that either
party may, in its sole discretion, Assign all its right, title and interest in
this Agreement to an affiliate, parent or
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subsidiary, or to the purchaser of substantially all of its business, provided
that, in the reasonable judgment of the non-assigning party: (i) the financial
capacity of the assignee is not materially less than that of the assignor; (ii)
the nature and quality of the services to be provided hereunder are not
materially adversely affected by such Assignment; and (iii) the quality and
capability of the personnel and facilities of the assignee are not materially
less than those of the assignor. Each party may, in its sole discretion, engage
subcontractors to perform any of the obligations contained in this Agreement to
be performed by such party, provided however, that such party shall be
responsible for all compensation payable to such subcontractor and shall remain
responsible for the acts or omissions of any such sub-contractors to the same
extent as such party hereunder.
Article 18 NOTICE.
Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Transfer Agent or PFPC, shall be sufficiently
given if addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate in writing.
To the Transfer Agent:
The Northern Trust Company
00 Xxxxx XxXxxxx Xxxxxx - X-0
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
To PFPC:
PFPC, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to PFPC's General Counsel
Article 19 GOVERNING LAW/VENUE.
The laws of the Commonwealth of Massachusetts, excluding the laws on
conflicts of laws, shall govern the interpretation, validity, and enforcement of
this agreement.
Article 20 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
Article 21 CAPTIONS.
The captions of this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
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Article 22 PUBLICITY.
Neither PFPC nor the Transfer Agent shall release or publish news
releases, public announcements, advertising or other publicity relating to this
Agreement or to the transactions contemplated by it without the prior review and
written approval of the other party; provided, however, that either party may
make such disclosures as are required by legal, accounting or regulatory
requirements after making reasonable efforts in the circumstances to consult in
advance with the other party.
Article 23 RELATIONSHIP OF PARTIES/NON-SOLICITATION.
23.1 The parties agree that they are independent contractors and
not partners or co-venturers and nothing contained herein shall be interpreted
or construed otherwise.
23.2 During the term of this Agreement and for one (1) year
afterward, the Transfer Agent shall not recruit, solicit or engage, for the
Transfer Agent or others, PFPC's employees.
Article 24 ENTIRE AGREEMENT; SEVERABILITY.
24.1 This Agreement, including Schedules, Addenda, and Exhibits
hereto, constitutes the entire Agreement between the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof. No change,
termination, modification, or waiver of any term or condition of the Agreement
shall be valid unless in writing signed by each party. No such writing shall be
effective as against PFPC unless said writing is executed by a Senior Vice
President, Executive Vice President, or President of PFPC. A party's waiver of a
breach of any term or condition in the Agreement shall not be deemed a waiver of
any subsequent breach of the same or another term or condition.
24.2 The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
THE NORTHERN TRUST COMPANY
By: /s/XXXXXXX X. XXXXXX
---------------------------------------
XXXXXXX X. XXXXXX
Title: Vice President
----------------------
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PFPC, INC.
By: /s/XXXXX X. XXX
---------------------------------------
XXXXX X. XXX
Title: Vice Chairman
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SCHEDULE A
LIST OF FUNDS
Northern Funds
Northern Institutional Funds
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SCHEDULE B
DUTIES OF PFPC
Transfer Agent is subcontracting certain administrative and ministerial duties
to PFPC Group relating to opening, maintaining and processing transactions for
shareholders or financial intermediaries that trade the Funds shares through the
NSCC. The following list of duties of PFPC is limited to activity surrounding
the servicing to these NSCC accounts.
1. SHAREHOLDER INFORMATION. PFPC shall maintain a record of the
number of Shares held by each Shareholder of record which shall include name,
address and taxpayer identification.
2. SALES OF SHARES.
(a) PFPC shall process all purchases received by the NSCC and
make all corrections as necessary.
(b) PFPC shall not be required to issue any Shares of any Fund
where the sale of the Shares of such Fund has been suspended or discontinued.
(c) In the event that any check or other order for the payment
of money is returned unpaid for any reason, PFPC will endeavor to: (i) give
prompt notice of such return to the Fund or its designee; (ii) place a stop
transfer order against all Shares issued as a result of such check or order; and
(iii) take such actions as PFPC may from time to time deem appropriate.
(d) Notify the Transfer Agent on a daily basis of the number
of Shares of each Fund purchased, redeemed or exchanged.
3. TRANSFER AND REPURCHASE.
(a) PFPC shall process all requests to transfer or redeem
Shares in accordance with the transfer or repurchase procedures set forth in the
Funds' Prospectus and in accordance with the rules and regulations of the NSCC.
(b) PFPC reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the request is in accordance with
the rules and regulations of the NSCC. PFPC also reserves the right to refuse to
transfer or repurchase Shares until it is satisfied that the requested transfer
or repurchase is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or repurchases 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 repurchase.
(c) When Shares are redeemed, PFPC shall, upon receipt of the
instructions and documents in proper form, deliver to the Custodian and the
Transfer Agent or its designee a notification setting forth the number of Shares
to be repurchased. Such repurchased shares shall be reflected on appropriate
accounts maintained by PFPC reflecting outstanding Shares of such Fund and
Shares attributed to individual accounts.
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(d) PFPC shall, upon receipt of the monies paid to it by the
Custodian for the repurchase of Shares, pay such monies as are received from the
Custodian, all in accordance with the procedures described in the Written
Instruction received by PFPC from the Transfer Agent.
(e) PFPC shall not process or effect any repurchase with
respect to Shares of any Fund after receipt by PFPC or its agent of notification
of the suspension of the determination of the net asset value of such Fund.
4. DIVIDENDS.
(a) Upon the declaration of each dividend and each capital
gains distribution by the Board of Directors of any Fund with respect to Shares
of such Fund, the Transfer Agent shall furnish or cause to be furnished to PFPC
Written Instructions setting forth the date of the declaration of such dividend
or distribution, the ex-dividend date, the date of payment thereof, the record
date as of which Shareholders entitled to payment shall be determined, the
amount payable per Share to the Shareholders of record as of that date, the
total amount payable on the payment date and whether such dividend or
distribution is to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution
of the Board of Directors, the Fund will pay to PFPC sufficient cash to make
payment to the Shareholders of record as of such payment date.
(c) If PFPC does not receive sufficient cash from the Fund to
make total dividend and/or distribution payments to all Shareholders of the Fund
as of the record date, PFPC will, upon notifying the Transfer Agent, withhold
payment to all Shareholders of record as of the record date until sufficient
cash is provided to PFPC.
(d) PFPC shall distribute to shareholders dividends and
distributions either in cash or reinvestment and will record such dividends and
distributions pursuant to NSCC Rules and Regulations.
5. MISCELLANEOUS
In addition to and neither in lieu nor in contravention of the services
set forth above and to the extent not performed by a financial intermediary
pursuant to the Networking rules of the NSCC, PFPC shall: (i) perform all the
customary services of a transfer agent, registrar, dividend disbursing agent and
agent of the dividend reinvestment and cash purchase plan as described herein
consistent with those requirements in effect as at the date of this Agreement.
The detailed definition, frequency, limitations and associated costs (if any)
set out in the attached fee schedule, include but are not limited to:
maintaining all Shareholder accounts, preparing Shareholder meeting lists,
mailing proxies, tabulating proxies, mailing Shareholder reports to current
Shareholders, withholding taxes on U.S. resident and non-resident alien accounts
where applicable, preparing and filing U.S. Treasury Department Forms 1099 and
other appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders.
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SCHEDULE C
FEE SCHEDULE
1. Standard Fees. $40,000 per month beginning October 1, 2000
$30,000 set up fee
2. Fee Adjustments. After the one year anniversary of the effective date
of this Agreement, PFPC may adjust the fees described in the above sections once
per calendar year, upon thirty (30) days prior written notice in an amount not
to exceed the cumulative percentage increase in the Consumer Price Index for All
Urban Consumers (CPI-U) U.S. City Average, All items (unadjusted) -
(1982-84=100), published by the U.S. Department of Labor since the last such
adjustment in the Client's monthly fees (or the Effective Date absent a prior
such adjustment).
3. Programming Costs. The following programming rates are subject to an
annual 5% increase after the one year anniversary of the effective date of this
Agreement.
(a) Dedicated Team: Programmer: $100,000 per annum
BSA: $ 85,000 per annum
TESTER: $ 65,000 PER ANNUM
(b) System Enhancements (Non Dedicated Team): $150.00 per/hr per
programmer
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SCHEDULE D
OUT-OF-POCKET EXPENSES
The Transfer Agent shall reimburse PFPC monthly for applicable
out-of-pocket expenses, including, but not limited to the following items:
- Shipping, Certified and Overnight mail and insurance
- Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
- Duplicating services
- Courier services
- Overtime, as approved by the Transfer Agent
- Temporary staff, as approved by the Transfer Agent
- Travel and entertainment, as approved by the Transfer Agent
- Record retention, retrieval and destruction costs, including, but
not limited to exit fees charged by third party record keeping
vendors
- Third party audit reviews
- Insurance
- NSCC pass through charges
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SCHEDULE E
FUND DOCUMENTS
- Certified copy of the Articles of Incorporation of the Fund, as amended
- Certified copy of the By-laws of the Fund, as amended,
- Specimens of the certificates for Shares of the Fund, if applicable, in the
form approved by the Board of Directors of the Fund, with a certificate of
the Secretary of the Fund as to such approval
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