Exhibit 9(a)(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER AGREEMENT
FOR
ADMINISTRATION SERVICES
AGREEMENT made as of July 28,1997 by and between the DEUTSCHE FUNDS,
INC. as may be amended from time to time, having its principal office and
place of business at Federated Investors Tower, Pittsburgh, PA 15222-3779
(the "Investment Company"), on behalf of the portfolios (individually
referred to herein as a "Fund" and collectively as "Funds") of the
Investment Company, and FEDERATED SERVICES COMPANY, a Pennsylvania
corporation, having its principal office and place of business at
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779, on behalf
of itself and its subsidiaries (the "Company").
WHEREAS, the Investment Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), with authorized and issued shares of capital stock or
beneficial interest ("Shares");
WHEREAS, the Fund is a Spoke(R) in a Hub(R) and Spoke(R) investment
structure which requires that the Fund recognize and operate in accordance
with complex operational and regulatory requirements;
WHEREAS, the Investment Company desires that the Company assist the
Fund in addressing these novel, complex issues and hereby desires to
appoint the Company as its agent to perform all of the requisite services
for the administration of the Fund and to compensate the Company for such
services in addition to those out-of-pocket and third party expenses
incurred by the Company. Such services shall include: developmental
support , administrative, and transfer agency, (all herein defined) ;
provided however, that such services shall not include advisory,
shareholder, custody or distribution services; and the Company desires to
accept such appointment.
WHEREAS, from time to time the Investment Company may desire and may
instruct the Company to subcontract for the performance of certain of its
duties and responsibilities hereunder to another agent (the "Agent").
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:
SECTION ONE: DEVELOPMENTAL SUPPORT SERVICES
ARTICLE 1. APPOINTMENT
The Investment Company hereby appoints the Company to provide, or
cause to be provided, to the Fund(s) those developmental support services
that are necessary to establish and operate the Fund within a Hub and
Spoke(R) investment structure. The Company accepts such appointment and
agrees to provide, or cause to be provided those services set forth in
Article 2 of this Agreement in return for the compensation set forth in
Article 12 of this Agreement.
ARTICLE 2. THE COMPANY'S DUTIES
Subject to the supervision and control of the Investment Company's
Board of Directors ("Board"), and in furtherance of the Investment
Company's desire to have the Company assist the Fund in adapting to the
complexities of the Hub and Spoke(R) investment structure, the Company
undertakes and agrees to provide, or cause to be provided, to the Fund(s)
developmental, organizational, administrative, and compliance and allied
services that are unique to the Hub and Spoke(R) investment structure,
such services to be provided within the scope of applicable Federal and
State regulations.
The foregoing, along with any additional services that the Company
shall from time to time agree to provide for the Investment Company under
this Section One shall hereinafter be referred to as "Developmental
Support Services."
SECTION TWO: ADMINISTRATIVE SERVICES.
ARTICLE 3. APPOINTMENT.
The Investment Company hereby appoints the Company as Administrator for
the period and on the terms and conditions set forth in this Agreement.
The Company accepts such appointment and agrees to furnish the services
set forth in Article 4 of this Agreement in return for the compensation
set forth in Article 12 of this Agreement.
ARTICLE 4. THE COMPANY'S DUTIES.
As Administrator, and subject to the supervision and control of the Board,
the Company will provide facilities, equipment, and personnel to carry out the
following administrative services for operation of the business and affairs of
the Investment Company and the Funds and/or their classes:
A. following the organization of the Investment Company, prepare, file,
and maintain the Investment Company's governing documents and any
amendments thereto, including the
"Declaration of Trust" "Articles of Incorporation"
Articles of Incorporation (which have already been prepared and
filed), the By-laws and minutes of meetings of the Board
"Trustees" "Directors" and
Shareholders;
B. following the Investment Company's effectiveness with the Securities
and Exchange Commission, prepare the registration statements for the
Investment Company and the Investment Company's Shares and all
amendments thereto, submit the registration statements to the Hub Fund
for approval, and file the registration statements with the Securities
and Exchange Commission and the appropriate state securities
authorities;
C. prepare and file reports to regulatory authorities and shareholders,
prospectuses, proxy statements, and such other documents all as may be
necessary to enable the Investment Company to make a continuous
offering of its Shares;
D. plan and prepare for meetings of the Investment Company's Board,
including maintaining the Board's agenda, preparing materials for the
Board's review and consideration and disstributing such materials to
the Board in advance of Board meetings;
E. attend in person, and record the minutes of meetings of, the
Investment Company's Board;
F. plan and prepare for meetings of the Investment Company's shareholders
and record the minutes of such meetings;
G. maintain the Investment Company's calendar of reporting and filing
obligations;
H. prepare expense projections for the Funds and provide such projections
to the Fund's portfolio accountant; monitor expenses incurred by the
Funds; forward invoices to the Investment Company's Treasurer for
payment authorization;
I. monitor the declaration and payment of dividends and other
distributions;
J. monitor and supervise the collection of tax reclaims;
K. coordinate the layout and printing of publicly disseminated
prospectuses and reports;
L. perform internal audit examinations;
M. obtain EIN and CUSIP number for each Fund;
N. consult with the Fund and its Board on matters concerning the Fund and
its affairs; and
O. coordinate the activities of all service providers to the Investment
Company. By way of example, the Company will, in conjunction with item
(G) above, communicate to the other service providers to the Investment
Company lists of information and materials needed for filing
obligations, as well as deadlines for the receipt of such materials. The
Company does not take responsibility for the failure of other service
providers to provide such materials to the Investment Company in a
timely fashion or for the performance of functions for which other
service providers are responsible.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Fund under this Section Two, shall hereafter
be referred to as "Administrative Services."
ARTICLE 5. RECORDS.
The Company shall create and maintain all necessary books and records in
accordance with all applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the Investment Company Act of
1940 and the rules thereunder, as the same may be amended from time to time,
pertaining to the Administrative Services performed by it and not otherwise
created and maintained by another party pursuant to contract with the Investment
Company. Where applicable, such records shall be maintained by the Company for
the periods and in the places required by Rule 31a-2 under the 1940 Act. The
books and records pertaining to the Investment Company which are in the
possession of the Company shall be the property of the Investment Company. The
Investment Company, or the Investment Company's authorized representatives,
shall have access to such books and records at all times during the Company `s
normal business hours. Upon the reasonable request of the Investment Company,
copies of any such books and records shall be provided promptly by the Company
to the Investment Company or the Investment Company's authorized
representatives.
ARTICLE 6. DUTIES OF THE FUND.
The Fund assumes full responsibility for the preparation, contents and
distribution of its own offering document and for complying with all applicable
requirements of the 1940 Act, the Internal Revenue Code, and any other laws,
rules and regulations of government authorities having jurisdiction.
ARTICLE 7. RESPONSIBILITY OF ADMINISTRATOR.
A. The Company shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Investment Company in
connection with the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
The Company shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Fund) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant
to such advice. Any person, even though also an officer, director,
trustee, partner, employee or agent of the Company, who may be or
become an officer,
"Trustee" "Director" director, trustee, partner, employee or agent of
the Investment Company, shall be deemed, when rendering services to
the Investment Company or acting on any business of the Investment
Company (other than services or business in connection with the duties
of the Company hereunder) to be rendering such services to or acting
solely for the Investment Company and not as an officer, director,
trustee, partner, employee or agent or one under the control or
direction of the Company even though paid by the Company.
B. The Company shall be kept indemnified by the Investment Company and be
without liability for any action taken or thing done by it in
performing the Administrative Services in accordance with the above
standards. In order that the indemnification provisions contained in
this Article 7 shall apply, however, it is understood that if in any
case the Investment Company may be asked to indemnify or save the
Company harmless, the Investment Company shall be fully and promptly
advised of all pertinent facts concerning the situation in question,
and it is further understood that the Company will use all reasonable
care to identify and notify the Investment Company promptly concerning
any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Investment
Company. The Investment Company shall have the option to defend the
Company against any claim which may be the subject of this
indemnification. In the event that the Investment Company so elects,
it will so notify the Company and thereupon the Investment Company
shall take over complete defense of the claim, and the Company shall
in such situation initiate no further legal or other expenses for
which it shall seek indemnification under this Article. The Company
shall in no case confess any claim or make any compromise in any case
in which the Investment Company will be asked to indemnify the Company
except with the Investment Company's written consent.
SECTION THREE: TRANSFER AGENCY SERVICES.
ARTICLE 8. TERMS OF APPOINTMENT.
The Investment Company hereby appoints the Company to act as transfer
agent and dividend disbursing agent for each Fund's Shares, and agent in
connection with any accumulation, open-account or similar plans provided
to the shareholders of any Fund ("Shareholder(s)"), including without
limitation any periodic investment plan or periodic withdrawal program.
ARTICLE 9. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance with
Proper Instructions (as defined in Article 13) as may be provided from
time to time by the Investment Company as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase of
shares and promptly deliver payment and appropriate documentation
therefor to the custodian of the relevant Fund (the "Custodian").
The Company shall notify the Fund, the Administrator for the Fund
and the Custodian on a daily basis of the total amount of orders
and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of Shares of each Fund and/or Class and hold
such Shares in the appropriate Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder or its
agent requests a certificate, the Company, as Transfer Agent,
shall countersign and mail by first class mail, a certificate to
the Shareholder at its address as set forth on the transfer books
of the Funds, and/or Classes, subject to any Proper Instructions
regarding the delivery of certificates.
(4) In the event that any check or other order for the purchase of
Shares of the Fund and/or Class is returned unpaid for any reason,
the Company shall debit the Share account of the Shareholder by
the number of Shares that had been credited to its account upon
receipt of the check or other order, promptly mail a debit advice
to the Shareholder, and notify the Fund and/or Class of its
action. In the event that the amount paid for such Shares exceeds
proceeds of the redemption of such Shares plus the amount of any
dividends paid with respect to such Shares, the Fund and/the Class
or its distributor will reimburse the Company on the amount of
such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as Dividend
Disbursing Agent for the Funds in accordance with the provisions
of its governing document and the then-current Prospectus of the
Fund. The Company shall prepare and mail or credit income,
capital gain, or any other payments to Shareholders. As the
Dividend Disbursing Agent, the Company shall, on or before the
payment date of any such distribution, notify the Custodian and
the Fund's Administrator of the estimated amount required to pay
any portion of said distribution which is payable in cash and
request the Custodian to make available sufficient funds for the
cash amount to be paid out. The Company shall reconcile the
amounts so requested and the amounts actually received with the
Custodian and the Fund's Administrator on a daily basis. If a
Shareholder is entitled to receive additional Shares by virtue of
any such distribution or dividend, appropriate credits shall be
made to the Shareholder's account, for certificated Funds and/or
Classes, delivered where requested; and
(2) The Company shall maintain records of account for each Fund and
Class and advise the Investment Company, each Fund and Class and
its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set forth
in Proper Instructions, deliver the appropriate instructions
therefor to the Custodian. The Company shall notify the Fund and
the Fund's Administrator on a daily basis of the total amount of
redemption requests processed and monies paid to the Company by
the Custodian for redemptions.
(2) At the appropriate time upon receiving redemption proceeds from
the Custodian with respect to any redemption, the Company shall
pay or cause to be paid the redemption proceeds in the manner
instructed by the redeeming Shareholders, pursuant to procedures
described in the then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other request for
redemption does not comply with the procedures for redemption
approved by the Fund, the Company shall promptly notify the
Shareholder of such fact, together with the reason therefor, and
shall effect such redemption at the price applicable to the date
and time of receipt of documents complying with said procedures.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and uncashed
checks for state escheat requirements on an annual basis
and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund,
and/or Class, and maintain pursuant to applicable rules of the
Securities and Exchange Commission ("SEC") a record of the total
number of Shares of the Fund and/or Class which are authorized,
based upon data provided to it by the Fund, and issued and
outstanding. The Company shall also provide the Fund on a regular
basis or upon reasonable request with the total number of Shares
which are authorized and issued and outstanding, but shall have
no obligation when recording the issuance of Shares, except as
otherwise set forth herein, to monitor the issuance of such
Shares or to take cognizance of any laws relating to the issue or
sale of such Shares, which functions shall be the sole
responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Investment Company or the Fund to include a record for each
Shareholder's account of the following:
(a) name, address and tax identification number (and whether such
number has been certified);
(b) number of Shares held;
(c) historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) any stop or restraining order placed against the account;
(e) information with respect to withholding in the case of a
foreign account or an account for which withholding is
required by the Internal Revenue Code;
(f) any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current
maintenance of the account;
(g) certificate numbers and denominations for any Shareholder
holding certificates; and
(h) any information required in order for the Company to perform
the calculations contemplated or required by this Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such record
retention shall be at the expense of the Company, and such
records may be inspected by the Investment Company the Fund at
reasonable times. The Company may, at its option at any time, and
shall forthwith upon the Fund's demand, turn over to the Fund and
cease to retain in the Company's files, records and documents
created and maintained by the Company pursuant to this Agreement,
which are no longer needed by the Company in performance of its
services or for its protection. If not so turned over to the
Investment Company or the Fund, such records and documents will
be retained by the Company for six years from the year of
creation, during the first two of which such documents will be in
readily accessible form. At the end of the six year period, such
records and documents will either be turned over to the
Investment Company or the Fund or destroyed in accordance with
Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Investment Company or the Fund
periodically the following information:
(a) a copy of the transaction register;
(b) dividend and reinvestment blotters;
(c) the total number of Shares issued and outstanding in each
state for "blue sky" purposes as determined according to
Proper Instructions delivered from time to time by the Fund
to the Company;
(d) Shareholder lists and statistical information;
(e) payments to third parties relating to distribution
agreements, allocations of sales loads, redemption fees, or
other transaction- or sales-related payments; and
(f) such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if
required, mail to Shareholders, such notices for reporting
dividends and distributions paid as are required to be so filed
and mailed and shall withhold such sums as are required to be
withheld under applicable federal and state income tax laws, rules
and regulations.
(3) In addition to and not in lieu of the services set forth above, the
Company shall:
(a) perform all of the customary services of a transfer agent,
dividend disbursing agent 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: maintaining
all Shareholder accounts, mailing Shareholder reports and
Prospectuses to current Shareholders, withholding taxes on
accounts subject to back-up or other withholding (including
non-resident alien accounts), preparing and filing reports on
U.S. Treasury Department Form 1099 and other appropriate forms
required with respect to dividends and distributions by federal
authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for
all purchases and redemptions of Shares and other conformable
transactions in Shareholder accounts, preparing and mailing
activity statements for Shareholders, and providing Shareholder
account information; and
(b) provide a system which will enable the Investment Company to
monitor the total number of Shares of each Fund and/or Class
sold in each state ("blue sky reporting"). The Investment
Company shall by Proper Instructions (i) identify to the
Company those transactions and assets to be treated as
exempt from the blue sky reporting for each state and (ii)
verify the classification of transactions for each state on
the system prior to activation and thereafter monitor the
daily activity for each state. The responsibility of the
Company for each Fund's and/or Class's state blue sky
registration status is limited solely to the recording of
the initial classification of transactions or accounts with
regard to blue sky compliance and the reporting of such
transactions and accounts to the Investment Company as
provided above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders relating
to their Share accounts and such other correspondence as may from
time to time be addressed to the Company.
(2) The Company shall prepare Shareholder meeting lists, mail proxy
cards and other material supplied to it by the Fund in connection
with Shareholder Meetings of each Fund; receive, examine and
tabulate returned proxies, and certify the vote of the
Shareholders.
(3) The Company shall establish and maintain facilities and procedures
for safekeeping of stock 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.
(4) Mail information, such as prospectuses or reports, to prospective
shareholders or third party financial intermediaries.
All of the foregoing as described in this Article 9, along with any
additional services that the Company shall agree in writing to perform for the
Investment Company under this Section Three, shall hereafter be referred to as
"Transfer Agency Services."
ARTICLE 10. DUTIES OF THE INVESTMENT COMPANY.
A. Compliance
The Investment Company or Fund assume full responsibility for the
preparation, contents and distribution of its own and/or its Classes'
Prospectuses and for complying with all applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act and
any laws, rules and regulations of government authorities having
jurisdiction.
B. Share Certificates
If the Investment Company has authorized the issuance of share
certificates, the Investment Company shall supply the Company with a
sufficient supply of blank Share certificates and from time to time
shall renew such supply upon request of the Company. Such blank Share
certificates shall be properly signed, manually or by facsimile, if
authorized by the Investment Company and shall bear the seal of the
Investment Company or facsimile thereof; and notwithstanding the death,
resignation or removal of any officer of the Investment Company
authorized to sign certificates, the Company may continue to countersign
certificates which bear the manual or facsimile signature of such
officer until otherwise directed by the Investment Company
C. Distributions
The Fund shall promptly inform the Company of the declaration of any
dividend or distribution on account of any Fund's shares.
ARTICLE 11. REPRESENTATIONS.
The Company represents and warrants that it has obtained all required
approvals from all government or regulatory authorities necessary to enter
into this arrangement and to provide the services contemplated in Section
Three of this Agreement.
SECTION FOUR: GENERAL PROVISIONS.
ARTICLE 12. COMPENSATION AND EXPENSES.
A. The Funds will compensate the Company for the Developmental Support
Services, Administrative Services, and Transfer Agency Services in
accordance with the fees agreed upon between the parties hereto on the
applicable schedule. Such fees do not include out-of-pocket and other
third party disbursements of the Company for which the Funds shall
reimburse the Company separately. Examples of out-of-pocket expenses
are included as exhibits to this Agreement. The Company shall be
responsible for expenses incurred in providing office space,
equipment, and personnel as may be necessary or convenient to provide
the Administrative Services to the Fund, including the compensation of
the Company employees who serve as officers of the Investment Company.
The Investment Company shall be responsible for all other reasonable
and documented expenses incurred by the Company on behalf of the
Investment Company, including without limitation postage and courier
expenses, printing expenses, travel expenses, registration fees,
filing fees, fees of outside counsel and independent auditors or other
professional services, organizational expenses, insurance premiums,
fees payable to persons who are not the Company employees, trade
association dues, and other expenses properly payable by the Funds
and/or Classes.
B. The fee for the period from the effective date of this Agreement with
respect to a Fund or a Class to the end of the initial month shall be
prorated according to the proportion that such period bears to the full
month period. Upon any termination of this Agreement before the end of
any month, the fee for such period shall be prorated according to the
proportion which such period bears to the full month period.
C. The Company, in its sole discretion, may from time to time subcontract
to, employ or associate with itself such person or persons as the
Company may believe to be particularly suited to assist it in performing
any of the services under this Agreement. Such person or persons may be
affiliates of the Company, third-party service providers, or they may be
officers and employees who are employed by both the Company and the
Investment Company; provided, however, that the Company shall be as
fully responsible to each Fund for the acts and omissions of any such
subcontractor as it is for its own acts and omissions. Except as herein
provided, the compensation of such person or persons shall be paid by
the Company and no obligation shall be incurred on behalf of the
Investment Company, the Funds, or the Classes in such respect.
ARTICLE 13. PROPER INSTRUCTIONS.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the Board
shall have from time to time authorized. Each such writing shall set forth
the specific transaction or type of transaction involved. Oral
instructions will be deemed to be Proper Instructions if (a) the Company
reasonably believes them to have been given by a person previously
authorized in Proper Instructions to give such instructions with respect
to the transaction involved, and (b) the Investment Company, or the Fund,
and the Company promptly cause such oral instructions to be confirmed in
writing. Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the
Investment Company, or the Fund, and the Company are satisfied that such
procedures afford adequate safeguards for the Fund's assets. Proper
Instructions may only be amended in writing.
ARTICLE 14. ASSIGNMENT.
Except as provided below, neither this Agreement nor any of the rights
or obligations under this Agreement may be assigned by either party
without the written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. With regard to Transfer Agency Services, the Company may without further
consent on the part of the Investment Company subcontract for the
performance of Transfer Agency Services with its subsidiary, Federated
Shareholder Service Company, a Delaware business trust, which is duly
registered as a transfer agent pursuant to Section 17A(c)(1) of the
Securities Exchange Act of 1934, as amended, or any succeeding statute
("Section 17A(c)(1)").
The Company shall be as fully responsible to the Investment Company for
the acts and omissions of any subcontractor as it is for its own acts
and omissions.
C. With regard to Administrative Services the Company may without further
consent on the part of the Investment Company subcontract for the
performance of such services with Federated Administrative Services, a
wholly-owned subsidiary of the Company. The Company shall be as fully
responsible to the Investment Company for the acts and omissions of any
subcontractor as it is for its own acts and omissions.
D. The Company shall upon instruction from the Investment Company
subcontract for the performance of services under this Agreement with an
Agent selected by the Investment Company, other than as described in B.
and C. above; provided, however, that the Company shall in no way be
responsible to the Investment Company for the acts and omissions of the
Agent.
ARTICLE 15. DOCUMENTS.
A. In connection with the appointment of the Company under this Agreement,
the Investment Company shall file with the Company the following
documents:
(1) a copy of the Charter and By-Laws of the Investment Company and
all amendments thereto;
(2) a copy of the resolution of its Board authorizing this Agreement;
(3) specimens of all forms of outstanding Share certificates of the
Investment Company or the Funds in the forms approved by the
Board of the Investment Company with a certificate of the
Secretary of the Investment Company as to such approval;
(4) all account application forms and other documents relating to
Shareholders' accounts; and
(5) a copy of the current Prospectus for each Fund.
B. The Investment Company will also furnish from time to time the following
documents:
(1) each resolution of the Board authorizing the original issuance of
each Fund's, and/or Class's Shares;
(2) each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to the
sale of Shares of any Fund, and/or Class;
(3) a certified copy of each amendment to the governing document and
the By-Laws of the Investment Company;
(4) certified copies of each vote of the Board authorizing persons to
give Proper Instructions;
(5) specimens of all new Share certificates representing Shares of
any Fund, accompanied by Board resolutions approving such forms;
(6) such other certificates, documents or opinions which the Company
may, in its discretion, deem necessary or appropriate in the
proper performance of its duties; and
(7) revisions to the Prospectus of each Fund.
ARTICLE 16. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Investment Company that:
(1) it is a corporation duly organized and existing and in good
standing under the laws of the Commonwealth of Pennsylvania;
(2) It is duly qualified to carry on its business in each
jurisdiction where the nature of its business requires such
qualification, and in the Commonwealth of Pennsylvania;
(3) it is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement;
(4) all requisite corporate proceedings, including obtaining
necessary licenses, have been taken to authorize it to enter into
and perform its obligations under this Agreement;
(5) 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
(6) it is in compliance with federal securities law requirements and
in good standing as a transfer agent.
B. Representations and Warranties of the Investment Company
The Investment Company represents and warrants to the Company that:
(1) it is an investment company duly organized and existing and in
good standing under the laws of its state of organization;
(2) it is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform its obligations under this
Agreement;
(3) all corporate proceedings required by said Charter and By-Laws
have been taken to authorize it to enter into and perform its
obligations under this Agreement;
(4) the Investment Company is an open-end investment company
registered under the 1940 Act; and
(5) a registration statement under the 1933 Act will be effective,
and appropriate state securities law filings have been made and
will continue to be made, with respect to all Shares of each Fund
being offered for sale.
ARTICLE 17. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One and Three, the Company shall be held to a
standard of reasonable care in carrying out the provisions of this
Contract. The Company shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Investment Company) on all
matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice, provided that such action is not in
violation of applicable federal or state laws or regulations, and is in
good faith and without negligence.
B. Indemnification by Investment Company
The Company shall not be responsible for and the Investment Company or
Fund shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and affiliates,
harmless against any and all losses, damages, costs, counsel fees, and
liabilities (collectively, "Losses") arising out of or attributable to:
(1) the acts or omissions of any Custodian, Adviser, Sub-adviser or
other party contracted by or approved by the Investment Company
or Fund;
(2) the good faith reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper
form which
(a) are received by the Company or its agents or subcontractors
and furnished to it by or on behalf of the Fund, its
Shareholders or investors regarding the purchase, redemption
or transfer of Shares and Shareholder account information;
(b) are received by the Company from independent pricing services
or sources for use in valuing the assets of the Funds;
(c) are received by the Company or its agents or subcontractors
from Advisers, Sub-advisers or other third parties
contracted by or approved by the Investment Company of Fund
for use in the performance of services under this Agreement;
or
(d) have been prepared and/or maintained by the Fund or its
affiliates or any other person or firm on behalf of the
Investment Company;
(3) the reliance on, or the carrying out by the Company or its agents
or subcontractors of Proper Instructions of the Investment
Company or the Fund; or
(4) the offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws
or regulations of any state that such Shares be registered in such
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.
Provided, however, that the Company shall not be protected by this
Article 17.B from liability for any losses resulting from the Company's
willful misfeasance, bad faith, negligence or reckless disregard of its
duties or failure to meet the standard of care set forth in 17.A above.
C. Reliance
At any time the Company may apply to any officer of the Investment
Company or Fund for instructions, and may consult with legal counsel
with respect to any matter arising in connection with the services to be
performed by the Company under this Agreement, and the Company and its
agents or subcontractors shall not be liable and shall be indemnified by
the Investment Company or the appropriate Fund for any action reasonably
taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel provided such action is not in violation of
applicable federal or state laws or regulations. The Company, its agents
and subcontractors shall be protected and indemnified in recognizing
stock certificates which are reasonably believed to bear the proper
manual or facsimile signatures of the officers of the Investment Company
or the Fund, and the proper countersignature of any former transfer
agent or registrar, or of a co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this Article
19 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, 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 right
to assume 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 18. TERM AND TERMINATION OF AGREEMENT.
The initial term of this Agreement shall commence on the date hereof,
and extend for a period of three years following the date of the
commencement of the public offering of the Fund's shares. Following the
initial term of this Agreement, the Agreement will be terminable on not
less than 90 days' notice by either the Company or the Investment Company,
subject to the payment of all deferred expenses and unamortized expenses.
In the event, however, of willful misfeasance, bad faith, negligence or
reckless disregard of its duties by the Company, the Investment Company
has the right to terminate the Agreement upon 30 days written notice, if
Company has not cured such willful misfeasance, bad faith, negligence or
reckless disregard of its duties within that same 30 days. The termination
date for all original or after-added Investment companies which are, or
become, a party to this Agreement shall be coterminous. Investment
Companies that merge or dissolve during the Term, shall cease to be a
party on the effective date of such merger or dissolution.
Should the Investment Company exercise its right to terminate, all
reasonable out-of-pocket expenses associated with the movement of records
and materials will be borne by the Investment Company or the appropriate
Fund. Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination unless such
termination is caused by the Company's willful misfeasance, bad faith,
negligence or reckless disregard of its duties. The provisions of Articles
7 and 17 shall survive the termination of this Agreement.
ARTICLE 19. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by a written agreement executed by both
parties.
ARTICLE 20. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Investment Company may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement as may
in their joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, PROVIDED that
no such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the
organizational documents. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
ARTICLE 21. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New York.
ARTICLE 22. NOTICES.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Investment Company at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, with a
copy to Deutsche Fund Management, Inc. at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attn: President or to the Company at Federated Investors
Tower, Pittsburgh, Pennsylvania, 15222-3779, or to such other address as
the Investment Company or the Company may hereafter specify, shall be
deemed to have been properly delivered or given hereunder to the
respective address.
ARTICLE 23. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
ARTICLE 24. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
ARTICLE 25. SUCCESSOR AGENT.
If a successor agent for the Investment Company shall be appointed by
the Investment Company, the Company shall upon termination of this
Agreement deliver to such successor agent at the office of the Company all
properties of the Investment Company held by it hereunder. If no such
successor agent shall be appointed, the Company shall at its office upon
receipt of Proper Instructions deliver such properties in accordance with
such instructions.
With regard to Section Two and Three, in the event that no written
order designating a successor agent or Proper Instructions shall have been
delivered to the Company on or before the date when such termination shall
become effective, then the Company shall have the right to deliver to a
bank or trust company, which is a "bank" as defined in the 1940 Act, of
its own selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than
$2,000,000, all properties held by the Company under this Agreement.
Thereafter, such bank or trust company shall be the successor of the
Company under this Agreement.
ARTICLE 26. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder
or any damages resulting therefrom to the Fund as a result of work
stoppage, natural disaster, governmental action, loss or malfunction of
utilities or other impossibility of performance.
ARTICLE 27. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by either party without the prior
written consent of the other party. Such consent may not be unreasonably
withheld. However, either party may assign all of or a substantial portion
of its business to a successor, or to a party controlling, controlled by,
or under common control with such party. Nothing in this Article 27 shall
prevent the Company from delegating its responsibilities to another entity
to the extent provided herein.
ARTICLE 28. SEVERABILITY.
In the event any provision of this Agreement or any interpretive additional
provisions described in Article 20 are held illegal, void or unenforceable, the
balance shall remain in effect.
ARTICLE 29. PROPERTY OF THE INVESTMENT COMPANY AND CONFIDENTIALITY.
The Investment Company's records, including all those maintained hereunder
by the Company, whether in magnetic media, hard copy, film form or other format,
shall be the Investment Company's property for all purposes, and the Company
shall treat confidentially and as proprietary information of the Investment
Company all such records and other information relative to the Investment
Company and its shareholders which is not independently available to the Company
or in the public domain and, in the case of a shareholder list, shall have not
interest therein and shall use such records only in connection with the
performance of its duties hereunder and for no other purpose. In particular, the
Company agrees:
(a) that all information and data so acquired by it or its employees,
agents or contractors under this Agreement, or in contemplation thereof, shall
be and shall remain the Investment Company's exclusive property;
(b) to inform its employees, agents or contractors engaged in handling
such information and data of the confidential nature of such information and
data;
(c) to limit access to such information and data to authorized employees,
agents or contractors of the Company and the Investment Company who have a need
to know and use such information and data in connection with this Agreement and
the services to be supplied herein;
(d) to keep, and have their employees, agents and contractors keep, any
and all such information and data confidential;
(e) not to copy or publish or disclose such information and data to others
or authorize their employees, agents, contractors or anyone else, to copy or
publish or disclose such information and data to others without the other
party's written approval except if required by a State or Federal court or
agency and in such an event prompt written notice of such disclose requirement
shall be provided to the other party if permitted by law; and
(f) that upon termination of this Agreement, all records and other
confidential information of the Investment Company in the possession of the
Company shall be returned to the Investment Company or its designated successor
transfer agent, administrator, or distributor, as provided in Article 27.
The confidentiality provisions noted above will sruvive termination of
this Agreement for a period of 5 years.
ARTICLE 30. RELIEF.
The Company recognizes that the property and proprietary information of the
Investment Company is unique, and that the Investment Company cannot be fully
compensated by money damages and would be irreparably harmed by the disclosure
of its confidential information and data in violation of the provisions of
Article 29. The Company therefore agrees that the Investment Company may seek
immediate relief at equity for any fialure to company with Article 29 of this
Agreement, in addition to any othere remedies the Investment Company may have in
law or in equity.
ARTICLE 31. SERVICE LEVEL STANDARDS.
Subject to the non-occurrence of an event of force majeure and the performance
of the Investment Company's obligations described in this Agreement, the Company
agrees that the services will be provided in accordance with the service level
standards specified in Schedule A. The Company's fees will be adjusted based
upon performance-based reductions as described in Schedule A, aggregated up to a
maximum of 10% of all fees billed for the period indicated. The Company shall
provide in reasonable detail to the Investment Company's fund accountant and to
Deutsche Fund Management, Inc., the calculation of the performance-based fee
reductions and all amounts reduced thereunder. It will be the Company's sole
responsibility to compile the statistical information necessary to monitor the
performance standards enumerated in Schedule A.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and
through their duly authorized officers, as of the day and year first above
written.
DEUTSCHE FUNDS, INC.
By:/S/ XXXXX XXX
President
FEDERATED SERVICES COMPANY
By:/S/ XXXXXX X. XXXX
Senior Vice President
ADMINISTRATIVE OR OPERATIONAL AGENCY SERVICES
OUT-OF-POCKET EXPENSES SCHEDULE
Cost of preparing, printing and mailing stock certificates, prospectuses,
sales literature, proxies, reports and notices. Interest on borrowed money
Taxes and fees payable to Federal, state and other governmental agencies
Fees of Trustees of the Funds Outside auditing and legal expenses Travel
expenses incurred by employees of Federated Services Company and its
affiliates in connection with such employees' attendance at
Fund Board meetings or in performance of Internal Audit Department functions
Insurance premiums Trade association dues Other expenses which may be
properly payable by a Fund, as applicable
TRANSFER AGENCY SERVICES
FEE SCHEDULE
BASE FEE* Annual fee per fund, class or other subdivision. $18,000
ACCOUNT FEE* Annual account charge( includes system access
and funds control and reconcilement)
Daily dividend fund $16.00
Non-daily dividend fund $10.00
Contingent deferred sales charge( monthly and quarterly
funds only) $ 5.00
FULL SERVICE* Annual fee per fund, class or other subdivision. $2,000 This fee
includes the first 400 accounts. Additional accounts are $5.00 per account.
(Full service includes servicing broker/dealers, financial planners, registered
investment advisors, third party intermediaries).
*All fees are annualized and will be prorated on a monthly basis for billing
purposes. Out of pocket expenses are not covered by these fees.
US SPOKES
TRANSFER AGENCY SERVICES
OUT-OF-POCKET EXPENSES SCHEDULE
OUT-OF-POCKET EXPENSES INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING:
POSTAGE (INCLUDING OVERNIGHT COURIER SERVICE)
STATEMENT STOCK
ENVELOPES
TELEPHONES
TELECOMMUNICATION CHARGES (INCLUDING FAX AND DEDICATED LINE CHARGES)
VRU APPLICATION
CLOSED ACCOUNT CHARGES
12B-1 PROCESSING FEES
THIRD PARTY EXPENSES (I.E., NSCC FEES) FIDUCIARY SUBACCOUNTING FEE TRAVEL
(SUBJECT TO PRIOR APPROVAL BY THE FUND) DUPLICATING FORMS SUPPLIES
MICROFICHE COMPUTER ACCESS CHARGES CUSTOMIZED PROGRAMMING AND REPORTING
DISASTER RECOVERY OTHER AS INCURRED
SERVICES AS AGENT FOR
RECORD SHAREHOLDERS
BASE FEE* Annual fee per fund, class or other subdivision. $18,000
ACCOUNT FEE* Annual account charge( includes system access
and funds control and reconcilement)
Daily dividend fund $16.00
Non-daily dividend fund $10.00
Contingent deferred sales charge( monthly and quarterly
funds only) $ 5.00
FULL SERVICE* Annual fee per fund, class or other subdivision. $2,000 This fee
includes the first 400 accounts. Additional accounts are $5.00 per account.
(Full service includes servicing broker/dealers, financial planners, registered
investment advisors, third party intermediaries).
*All fees are annualized and will be prorated on a monthly basis for billing
purposes. Out of pocket expenses are not covered by these fees.
OFFSHORE SPOKES
SERVICES AS AGENT FOR
RECORD SHAREHOLDERS
OUT-OF-POCKET EXPENSES SCHEDULE
OUT-OF-POCKET EXPENSES INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING:
POSTAGE (INCLUDING OVERNIGHT COURIER SERVICE)
STATEMENT STOCK
ENVELOPES
TELEPHONES
TELECOMMUNICATION CHARGES (INCLUDING FAX AND DEDICATED LINE CHARGES)
VRU APPLICATION
CLOSED ACCOUNT CHARGES
12B-1 PROCESSING FEES
THIRD PARTY EXPENSES (I.E., NSCC FEES) FIDUCIARY SUBACCOUNTING FEE TRAVEL
(SUBJECT TO PRIOR APPROVAL BY THE FUND) DUPLICATING FORMS SUPPLIES
MICROFICHE COMPUTER ACCESS CHARGES CUSTOMIZED PROGRAMMING AND REPORTING
DISASTER RECOVERY OTHER AS INCURRED
OFFSHORE SPOKES
ADMINISTRATIVE OR OPERATIONAL AGENCY SERVICES
FEE SCHEDULE
HUB PORTFOLIOS 3.5 basis points per Hub
(minimum fee of $60,000 per Hub)
DOMESTIC SPOKES
First $200 million 6.5 basis points per Spoke
(minimum fee of $75,000 per Spoke)
Assets over $200 million 5.25 basis points per Spoke
(minimum fee of $75,000 per Spoke)
OFFSHORE SPOKES 2.5 basis points per Spoke
(minimum fee of $35,000 per Spoke)
The minimum fee per Hub and Spoke cluster (Hub with two Spokes, two classes of
shares on each domestic Spoke) for the first year of the contract will be
$75,000. The minimum fee per Hub and Spoke cluster in the second year of the
contract will be $125,000. The minimum fee is payable by the Hub with respect to
each Hub and Spoke cluster.
SCHEDULE A
SERVICE LEVEL STANDARDS
The percentages set forth herein relate to all Investment Companies for
which the Company serves or in the future may serve as transfer agent,
administrator, cash management procurement agent and/or distributor, and which
are sponsored, advised, sub-advised or administered by Deutsche Fund Management,
Inc., or any of its affiliates, and do not relate individually to any one
specific Investment Company, except for service level standard numbers 2 and 4.
All fee credits are to be aggregated where there are instances of not meeting
objectives in respect of two or more different service level standards. A
waiver, whether partial, total, or conditional, of any fee credits, or right to
terminate this Agreement in a particular instance, does not constitute a waiver
in any other instance.
A monthly document evidencing the Company's performance with respect to
the service levels set forth below will be delivered to the Investment Company
by the Company, with a copy to Deutsche Fund Management, Inc., by the fifteenth
business day of the following month, or as soon thereafter as is reasonably
practicable. Such document shall be signed by a senior officer of the Company.
For purposes of this Article, the term "business day" shall mean each day
that the Investment Company is open for business as described in its prospectus.
For calculation purposes, a week is considered to be the period beginning on
Monday at 12:00 a.m., Eastern time, and concluding on the following Sunday at
11:59:59 p.m., Eastern time. When a month ends during the week, that entire
week's performance will be applied to the previous month.
SERVICE LEVEL STANDARD 1: MANUAL DATA ENTRY(BY THE COMPANY)
SERVICE DESCRIPTION
In some situations the Company will provide a manual data entry service to the
Investment Company for establishing new investor accounts, or for making file
corrections to existing account records, providing that information is presented
in a clear, standard English format. The Investment Company places great
importance on the accuracy of name, xxxxxx xxxxxxx, xxxx, xxxxx, zip code, and
taxpayer identification number (the "Critical Data"), and all other information
that the Company data enters to its shareholder accounting system. A monthly
report will be prepared by the Company indicating the total number of manual
data entry errors in comparison to the total number of manual data entries.
OBJECTIVE
The Company's objective is to establish new accounts with a Data Accuracy Rate
(as defined below) of 100%, 98% of the time. The standard would apply if the
manual data entry processing exceeded on average 50 items a day.
METHOD OF CALCULATION
The Company will calculate the Data Accuracy Rate for each calendar month by
subtracting from 100% the result of dividing (1) the total account record error
corrections with respect to the Critical Data received during the current month
for data entry errors made during the preceding 90 calendar days, by (b) the
total new accounts established by manual data entry during the preceding 90
calendar days (not including new accounts input in the current calendar month).
The Data Accuracy Rate will be compared to the schedule below to determine the
total percentage credit to total Transfer Agency fees(excluding out of pocket
expenses) billed to all Investment Companies for the month. This credit
information would also be passed to the Investment Company's Fund Accountant for
allocation against fees to be paid hereunder.
FEE CREDITS MANUAL DATA ENTRY ACCURACY RATE
Less Than 98% 97% 96% 95% 94%
Credit to Transfer
Agency Fees 1.0% 2.0% 3.0% 4.0% 5.0%
(excluding out of pocket expenses)
SERVICE LEVEL STANDARD 2: ACCURACY AND TIMELINESS OF STATEMENTS
SERVICE DESCRIPTION
The Company will produce and mail periodic statements to all shareholders of the
Investment Company who are legally required to receive statements. For offshore
funds, "mailing" or "mailed" is defined as packaging and shipping the statements
in bulk to the fund's principal office located offshore or to another offshore
location designated by the fund. The Company will provide the Investment Company
with a mailing report from its mailing operation which will indicate the date on
which all shareholder statements were mailed. Year-end mailings are excluded
from this standard.
OBJECTIVE
The Company's objective is to manage this service so that 99% of all statements
are accurate and are mailed no later than five (5) business days (excluding
weekend days) after statement rendition date.
METHOD OF CALCULATION
Failure to meet this objective will result in a credit to the total cost of the
mailings, excluding postage, billed to the Investment Company affected by the
delay for the period. Using the mailing report, the Company will add the number
of days past the objective. That number would be compared to the schedule below
to determine the total percentage credit to the cost of the mailings, excluding
postage, billed to the Investment Company for that period.
FEE CREDITS
BUSINESS DAYS PAST STATEMENT RENDITION DATE
6 7 8 9
but less but less but less but less 10
THAN 7 THAN 8 THAN 9 THAN 10 OR MORE
------ ------ ------ ------- -----
Credit to the cost
of the mailing, 1% 2% 3% 4% 5%
excluding postage
SERVICE LEVEL STANDARD 3: ACCURACY AND TIMELINESS OF DAILY ADVICES
SERVICE DESCRIPTION
The Company will produce and mail, deliver or distribute an advice to Investment
Company shareholders ,who are legally required to receive advices, whenever a
financial transaction is posted to the shareholder's account, except where
suppressed pursuant to instructions received from the Investment Company. For
offshore funds, "mailing" or "mailed" is defined as packaging and shipping the
advices in bulk to the fund's principal office located offshore or to another
offshore location designated by the fund. The Company will provide the
Investment Company with a mailing report from its mailing operation which will
indicate the date on which all advices were mailed from such operation.
OBJECTIVE
The Company's objective is to manage this service so that 99% of such advices
are accurate and are mailed by the fifth business day following the date of
transaction, except where suppressed pursuant to instructions received from the
Investment Company.
METHOD OF CALCULATION
Should the Company fail to meet this objective, it would result in a credit to
the total cost of the mailing excluding postage billed to the Investment Company
for the month. The Company will calculate each week a weighted average percent
of the total daily advices produced that are mailed or sent late. For purposes
of such calculation the Company shall deem inaccurate advices to have been
mailed on the sixth business day past transaction date, summing the products,
and dividing the result by the total number of advices produced. This percentage
will then be compared to the schedule below to determine the total percentage
credit to the total cost of the mailing excluding postage billed to the
Investment Company for that month. This credit information would also be passed
to the Investment Company's Fund Accountant for allocation against fees to be
paid hereunder.
FEE CREDITS
Weighted Avg. Average Weekly Performance for Each Week Within the Month
OF LATE ADVICES WK. 1 WK. 2 WK. 3 WK. 4 WK. 5
1.01% to 2.00% 1.0% 1.5% 2.0% 2.5% 3.0%
2.01% to 3.00% 1.5% 2.0% 2.5% 3.0% 3.5%
3.01% to 4.00% 2.0% 2.5% 3.0% 3.5% 4.0%
4.01% or more 2.5% 3.0% 3.5% 4.0% 5.0%
SERVICE LEVEL STANDARD 4: TIMELINESS OF DISTRIBUTION CHECKS AND
DIVIDEND MAILINGS
SERVICE DESCRIPTION
Periodically, the Company will create and mail checks to certain Investment
Company's shareholders. For offshore funds, "mailing" or "mailed" is defined as
packaging and shipping the checks and dividend mailings in bulk to the fund's
principal office located offshore or to another offshore location designated by
the fund. The Company will provide the Investment Company with a mailing report
from its mailing operation, indicating the date on which all dividend or
distribution checks were mailed.
OBJECTIVE
The Company's objective is to manage this service so that 99% of all checks are
mailed no more than five (5) business days from the payable date of the check.
METHOD OF CALCULATION
Should the Company fail to meet this objective, it would result in a credit to
total cost of the mailing billed to the Investment Company affected by the
delay. Using the mailing report, the Company will calculate an average number of
business days past payable date for all late checks during the month for the
Investment Company. This average shall be determined by multiplying each late
advice by the number of business days pays payable date, summing those products,
and dividing the result by the total number of late checks. That number will be
compared to the schedule below to determine the percentage credit to the total
cost of the mailing,excluding postage, billed to the Investment Company for the
month. This fee credit information would also be passed to the Investment
Company's Fund Accountant for allocation against the fees to be paid hereunder.
FEE CREDITS
BUSINESS DAYS PAST DATE OF CHECK
6 7 8
but less but less but less
THAN 7 THAN 8 THAN 9 10 OR MORE
------ ------ ------ ----------
Credit to the 1.0% 2.5% 4.0% 5.0%
the total cost of the mailing,
excluding postage
SERVICE LEVEL STANDARD 5: TELEPHONE RESPONSIVENESS
SERVICE DESCRIPTION
The Company will provide a 12-hour telephone answering service for shareholders'
agents or brokers and possibly shareholders of the Investment Company. Telephone
transactions may include, without limitation, exchanges and redemptions,
purchases where authorized, balance inquiries, N.A.V. and yield quotations, and
others. The percentage of calls answered by service representatives to calls
directed to the services representatives for the month represents the Company's
service level.
OBJECTIVE
The Company's objective is to manage this service to a performance level of 98%
calls answered to calls received, and for purposes of the calculation method
below, shall omit any call terminated within 15 seconds.
METHOD OF CALCULATION
Using data from its Automated Call Distribution system ("ACD"), the Company will
prepare a report for the Investment Company calculating the average telephone
responsiveness for each week. Calls directed to the automated voice response
system will not be included in the calculation. Such number will be compared to
the schedule below to determine the total percentage credit to Transfer Agency
fees, excluding out of pocket expenses, billed to the Investment Company for the
month. This credit information would also be passed to the Investment Company's
Fund Accountant for allocation against fees to be paid hereunder.
FEE CREDITS
% of Calls
Answered Average Performance Level for Each Week Within the Period
LESS THAN WK. 1 WK. 2 WK. 3 WK. 4 WK. 5
98% 1.0% 1.5% 2.0% 2.5% 3.0%
97% 1.5% 2.0% 2.5% 3.0% 3.5%
96% 2.0% 2.5% 3.0% 3.5% 4.0%
95% 2.5% 3,0% 3.5% 4.0% 5.0%
