AGENCY AGREEMENT
THIS AGREEMENT made the 27th day of February, 1998, by and between OAK
ASSOCIATES FUNDS, a business trust existing under the laws of the Commonwealth
of Massachusetts, having its principal place of business at Xxx Xxxxxxx Xxxxxx
Xxxx, Xxxx, Xxxxxxxxxxxx 00000 (the "Fund"), and DST SYSTEMS, INC., a
corporation existing under the laws of the State of Delaware, having its
principal place of business at 000 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000 ("DST"):
WITNESSETH:
WHEREAS, the Fund desires to appoint DST as Transfer Agent and Dividend
Disbursing Agent, and DST desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. DOCUMENTS TO BE FILED WITH APPOINTMENT.
In connection with the appointment of DST as Transfer Agent and Dividend
Disbursing Agent for the Fund, there will be filed with DST the
following documents:
A. A certified copy of the resolutions of the Board of Directors of
the Fund (which term when used herein shall include any Board of
Trustees, or other governing body of the Fund, however styled)
appointing DST as Transfer Agent and Dividend Disbursing Agent,
approving the form of this Agreement, and designating certain
persons to sign stock certificates, if any, and give written
instructions and requests on behalf of the Fund;
B. A certified copy of the Articles of Incorporation (which term as
used herein shall include, where relevant, the Declaration of
Trust, or other basic instrument establishing the existence and
nature of the Fund) of the Fund and all amendments thereto;
C. A certified copy of the Bylaws of the Fund;
D. Copies of Registration Statements and amendments thereto, filed
with the Securities and Exchange Commission.
E. Specimens of all forms of outstanding stock certificates, in the
forms approved by the Board of Directors of the Fund, with a
certificate of the Secretary of the Fund, as to such approval;
F. Specimens of the signatures of the officers of the Fund authorized
to sign stock certificates and individuals authorized to sign
written instructions and requests;
G. An opinion of counsel for the Fund, as such opinion(s) have been
filed with the Fund's Registration Statement or notices required
under Rule 24f-2 under the Investment Company Act of 1940 (the
"1940 Act"), with respect to:
(1) The Fund's organization and existence under the laws of its
state of organization, and
(2) That all issued shares are validly issued, fully paid and
nonassessable.
2. CERTAIN REPRESENTATIONS AND WARRANTIES OF DST.
DST represents and warrants to the Fund that:
A. It is a corporation duly organized and existing and in good
standing under the laws of Delaware.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform the services
contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required under
the Securities Exchange Act of 1934 (the "1934 Act").
E. All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
G. It is in compliance with Securities and Exchange Commission ("SEC")
regulations and is not subject to restrictions under Rule 17Ad.
H. Copies of DST's Rule 17Ad-13 reports will be provided to the Fund
annually as and to the extent required under Rule 17Ad-13 under the
1934 Act.
I. Its fidelity bonding and minimum capital meet the transfer agency
requirements of the New York Stock Exchange and the American Stock
Exchange.
3. CERTAIN REPRESENTATIONS AND WARRANTIES OF THE FUND.
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The Fund represents and warrants to DST that:
A. It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
B. It is an open-end management investment company registered under
the 1940 Act, as amended, the portfolios of which may be
diversified or non-diversified.
C. A registration statement under the Securities Act of 1933 has been
filed and will be effective with respect to all shares of the Fund
being offered for sale.
D. All requisite steps have been and will continue to be taken to
register the Fund's shares for sale in all applicable states and
such registration will be effective at all times shares are offered
for sale in such state.
E. The Fund is empowered under applicable laws and by its charter and
Bylaws to enter into and perform this Agreement.
4. SCOPE OF APPOINTMENT.
A. Subject to the conditions set forth in this Agreement, the Fund
hereby appoints DST as Transfer Agent and Dividend Disbursing Agent.
B. DST hereby accepts such appointment and agrees that it will act as
the Fund's Transfer Agent and Dividend Disbursing Agent. DST
agrees that it will also act as agent in connection with the Fund's
periodic withdrawal payment accounts and other open accounts or
similar plans for shareholders, if any.
C. The Fund agrees to use its reasonable efforts to deliver to DST in
Kansas City, Missouri, as soon as they are available, all of its
shareholder account records.
D. DST, utilizing TA2000-Registered Trademark-, DST's computerized
data processing system for securityholder accounting (the
"TA2000-Registered Trademark- System"), will perform the following
services as transfer and dividend disbursing agent for the Fund,
and as agent of the Fund for shareholder accounts thereof, in a
timely manner: issuing (including countersigning), transferring
and canceling share certificates, if any; maintaining all
shareholder accounts; providing transaction journals; as requested
by the Fund and subject to payment by the Fund of an additional
fee, preparing shareholder meeting lists for use in connection with
any annual or special meeting and arrange for an affiliate to
print, mail and receive back proxies and to certify the shareholder
votes of the Fund of any portfolios thereof; mailing shareholder
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reports and prospectuses; withholding, as required by federal law,
taxes on shareholder accounts, disbursing income dividends and
capital gains distributions to shareholders, preparing, filing and
mailing U.S. Treasury Department Forms 1099, 1042, and 1042S and
performing and paying backup withholding as required for all
shareholders; preparing and mailing confirmation forms to
shareholders and dealers, as instructed, for all purchases and
liquidations of shares of the Fund and other confirmable
transactions in shareholders' accounts; recording reinvestment of
dividends and distributions in shares of the Fund; providing or
making available on-line daily and monthly reports as provided by
the TA2000 System and as requested by the Fund or its management
company; maintaining those records necessary to carry out DST's
duties hereunder, including all information reasonably required by
the Fund to account for all transactions in the Fund shares,
calculating the appropriate sales charge with respect to each
purchase of the Fund shares as set forth in the prospectus for the
Fund, determining the portion of each sales charge payable to the
dealer participating in a sale in accordance with schedules
delivered to DST by the Fund's principal underwriter or distributor
(hereinafter "principal underwriter") from time to time, disbursing
dealer commissions collected to such dealers, determining the
portion of each sales charge payable to such principal underwriter
and disbursing such commissions to the principal underwriter;
receiving correspondence pertaining to any former, existing or new
shareholder account, processing such correspondence for proper
recordkeeping, and responding promptly to shareholder
correspondence; mailing to dealers confirmations of wire order
trades; mailing copies of shareholder statements to shareholders
and registered representatives of dealers in accordance with the
Fund's instructions; interfacing with, accepting and effectuating
order for transactions and registration and maintenance
information, all on an automated basis, from, and providing advices
to the Fund's custodian bank and to the Fund's settlement bank in
connection with the settling of such transactions, with, the
National Securities Clearing Corporation ("NSCC") pertaining to
NSCC's Fund/SERV and Networking programs; and processing, generally
on the date of receipt, purchases
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or redemptions or instructions to settle any mail or wire order
purchases or redemptions received in proper order as set forth in
the prospectus, rejecting promptly any requests not received in
proper order (as defined by the Fund or its agents), and causing
exchanges of shares to be executed in accordance with the Fund's
instructions and prospectus and the general exchange privilege
applicable.
E. DST shall use reasonable efforts to provide, reasonably promptly
under the circumstances, the same transfer agent services with
respect to any new, additional functions or features or any changes
or improvements to existing functions or features as provided for
in the Fund's instructions, prospectus or application as amended
from time to time, for the Fund provided (i) DST is advised in
advance by the Fund of any changes therein and (ii) the TA2000
System and the mode of operations utilized by DST as then
constituted supports such additional functions and features. If
any addition to, improvement of or change in the features and
functions currently provided by the TA2000 System or the operations
as requested by the Fund requires an enhancement or modification to
the TA2000 System or to operations as then conducted by DST, DST
shall not be liable therefore until such modification or
enhancement is installed on the TA2000 System or new mode of
operation is instituted. If any new, additional function or
feature or change or improvement to existing functions or features
or new service or mode of operation measurably increases DST's cost
of performing the services required hereunder at the current level
of service, DST shall advise the Fund of the amount of such
increase and if the Fund elects to utilize such function, feature
or service, DST shall be entitled to increase its fees by the
amount of the increase in costs. In no event shall DST be
responsible for or liable to provide any additional function,
feature, improvement or change in method of operation until it has
consented thereto in writing.
F. The Fund shall have the right to add new series to the TA2000
System upon at least thirty (30) days' prior written notice to DST
provided that the requirements of the new series are generally
consistent with services then being provided by DST under this
Agreement. Rates or charges for additional series shall be as set
forth in Exhibit A, as hereinafter defined, for the remainder of
the contract term
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except as such series use functions, features or
characteristics for which DST has imposed an additional charge as
part of its standard pricing schedule. In the latter event, rates
and charges shall be in accordance with DST's then-standard pricing
schedule.
5. LIMIT OF AUTHORITY.
Unless otherwise expressly limited by the resolution of appointment or
by subsequent action by the Fund, the appointment of DST as Transfer
Agent will be construed to cover the full amount of authorized stock of
the class or classes for which DST is appointed as the same will, from
time to time, be constituted, and any subsequent increases in such
authorized amount.
In case of such increase the Fund will file with DST:
A. If the appointment of DST was theretofore expressly limited, a
certified copy of a resolution of the Board of Directors of the
Fund increasing the authority of DST;
B. A certified copy of the amendment to the Articles of Incorporation
of the Fund authorizing the increase of stock;
C. A certified copy of the order or consent of each governmental or
regulatory authority required by law to consent to the issuance of
the increased stock, and an opinion of counsel that the order or
consent of no other governmental or regulatory authority is
required;
D. Opinion of counsel for the Fund, as such opinion(s) have been filed
with the Fund's Registration Statement or notices required under
Rule 24f-2 under the 1940 Act, stating:
(1) The status of the additional shares of stock of the Fund under
the Securities Act of 1933, as amended, and any other
applicable federal or state statute; and
(2) That the additional shares are validly issued, fully paid and
nonassessable.
6. COMPENSATION AND EXPENSES.
A. In consideration for its services hereunder as Transfer Agent and
Dividend Disbursing Agent, the Fund will pay to DST from time to
time a reasonable compensation for all services rendered as Agent,
and also, all its reasonable billable expenses, charges, counsel
fees, and other disbursements ("Compensation
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and Expenses") incurred in connection with the agency. Such
compensation is set forth in a separate schedule to be agreed to
by the Fund and DST, a copy of which is attached hereto as Exhibit
A. If the Fund has not paid such Compensation and Expenses to DST
within a reasonable time, DST may charge against any monies held
under this Agreement, the amount of any Compensation and/or
Expenses for which it shall be entitled to reimbursement under
this Agreement.
B. The Fund also agrees promptly to reimburse DST for all reasonable
billable expenses or disbursements incurred by DST in connection
with the performance of services under this Agreement including,
but not limited to, expenses for postage, express delivery
services, freight charges, envelopes, checks, drafts, forms
(continuous or otherwise), specially requested reports and
statements, telephone calls, telegraphs, stationery supplies,
counsel fees, outside printing and mailing firms (including Output
Technology, Inc. and Support Resources, Inc.), magnetic tapes,
reels or cartridges (if sent to the Fund or to a third party at the
Fund's request) and magnetic tape handling charges, off-site record
storage, media for storage of records (e.g., microfilm, microfiche,
optical platters, computer tapes), computer equipment installed at
the Fund's request at the Fund's or a third party's premises,
telecommunications equipment, telephone/telecommunication lines
between the Fund and its agents, on one hand, and DST on the other,
proxy soliciting, processing and/or tabulating costs, second-site
backup computer facility, transmission of statement data for remote
printing or processing, and National Securities Clearing
Corporation ("NSCC") transaction fees to the extent any of the
foregoing are paid by DST. The Fund agrees to pay postage expenses
at least one day in advance if so requested. In addition, any
other expenses incurred by DST at the request or with the consent
of the Fund will be promptly reimbursed by the Fund.
C. Amounts due hereunder shall be due and paid on or before the
thirtieth (30th) business day after receipt of the statement
therefor by the Fund (the "Due Date"). The Fund is aware that its
failure to pay all amounts in a timely fashion so that they will be
received by DST on or before the Due Date will give rise to costs
to DST not contemplated by this Agreement, including but not
limited to carrying,
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processing and accounting charges. Accordingly, subject to Section
6.D. hereof, in the event that any amounts due hereunder are not
received by DST by the Due Date, the Fund shall pay a late charge
equal to the lesser of the maximum amount permitted by applicable
law or the product of one and one-half percent (1 1/2 %) times the
amount overdue, times the number of whole or partial months
between the Due Date and the day on which payment is received by
DST. The parties hereby agree that such late charge represents a
fair and reasonable computation of the costs incurred by reason of
late payment or payment of amounts not properly due. Acceptance
of such late charge shall in no event constitute a waiver of the
Fund's or DST's default or prevent the non-defaulting party from
exercising any other rights and remedies available to it.
D. In the event that any charges are disputed, the Fund shall, on or
before the Due Date, pay all undisputed amounts due hereunder and
notify DST in writing of any disputed charges for billable expenses
which it is disputing in good faith. Payment for such disputed
charges shall be due on or before the close of the fifth (5th)
business day after the day on which DST provides to the Fund
documentation which an objective observer would agree reasonably
supports the disputed charges (the "Revised Due Date"). Late
charges shall not begin to accrue as to charges disputed in good
faith until the first business day after the Revised Due Date.
E. The fees and charges set forth on Exhibit A shall increase or may
be increased as follows:
(1) On the first day of each new term, but only in accordance with
the "Fee Increases" provision in Exhibit A;
(2) DST may increase the fees and charges set forth on Exhibit A
upon at least ninety (90) days prior written notice, if
changes in existing laws, rules or regulations: (i) require
substantial system modifications or (ii) materially increase
cost of performance hereunder; and
(3) Upon at least ninety (90) days prior written notice, DST may
impose a reasonable charge for additional features of TA2000
used by the Fund which features are not consistent with the
Fund's current processing requirements.
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If DST notifies the Fund of an increase in fees or charges pursuant
to subparagraph (2) of this Section 6.E., the parties shall confer,
diligently and in good faith and agree upon a new fee to cover the amount
necessary, but not more than such amount, to reimburse DST for the Fund's
aliquot portion of the cost of developing the new software to comply with
regulatory charges and for the increased cost of operation.
If DST notifies the Fund of an increase in fees or charges under
subparagraph (3) of this Section 6.E., the parties shall confer,
diligently and in good faith, and agree upon a new fee to cover such new
fund feature.
7. OPERATION OF DST SYSTEM.
In connection with the performance of its services under this Agreement,
DST is responsible for such items as:
A. That entries in DST's records, and in the Fund's records on the
TA2000 System created by DST, accurately reflect the orders,
instructions, and other information received by DST from the Fund,
the Fund's distributor, manager or principal underwriter, the
Fund's investment adviser, or the Fund's administrator (each an
"Authorized Person"), broker-dealers and/or shareholders;
B. That shareholder lists, shareholder account verifications,
confirmations and other shareholder account information to be
produced from its records or data be available and accurately
reflect the data in the Fund's records on the TA2000 System;
C. The accurate and timely issuance of dividend and distribution
checks in accordance with instructions received from the Fund and
the data in the Fund's records on the TA2000 System;
D. That redemption transactions and payments be effected timely, under
normal circumstances on the day of receipt, and accurately in
accordance with redemption instructions received by DST from
Authorized Persons, broker-dealers or shareholders and the data in
the Fund's records on the TA2000 System;
E. The deposit daily in the Fund's appropriate bank account of all
checks and payments received by DST from NSCC, broker-dealers or
shareholders for investment in shares;
9
F. Notwithstanding anything herein to the contrary, with respect to
"as of" adjustments, DST will not assume one hundred percent (100%)
responsibility for losses resulting from "as ofs" due to clerical
errors or misinterpretations of shareholder instructions, but DST
will discuss with the Fund DST's accepting liability for an "as of"
on a case-by-case basis and may accept financial responsibility for
a particular situation resulting in a financial loss to the Fund
where DST in its discretion deems that to be appropriate;
G. The requiring of proper forms of instructions, signatures and
signature guarantees(1) and any necessary documents supporting the
opening of shareholder accounts, transfers, redemptions and other
shareholder account transactions, all in conformance with DST's
present procedures as set forth in its Legal Manual, Third Party
Check Procedures, Checkwriting Draft Procedures, and Signature
Guarantee Procedures (collectively the "Procedures") with such
changes or deviations therefrom as may be from time to time
required or approved by the Fund, its investment adviser or
principal underwriter, or its or DST's counsel and the rejection
of orders or instructions not in good order in accordance with the
applicable prospectus or the Procedures;
H. The maintenance of customary records in connection with its agency,
and particularly those records required to be maintained pursuant
to subparagraph (2)(iv) of paragraph (b) of Rule 31a-1 under the
Investment Company Act of 1940, if any; and
I. The maintenance of a current, duplicate set of the Fund's essential
records at a secure separate location, in a form available and
usable forthwith in the event of any breakdown or disaster
disrupting its main operation.
---------------------------
(1) DST shall ascertain that what reasonably purports to be an
appropriate signature guarantee is present if a signature
guarantee is required, but DST shall have no responsibility for
verifying the authenticity thereof or the authority of the person
executing the signature guarantee.
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8. INDEMNIFICATION.
A. DST shall not be responsible for, and the Fund shall on behalf of
the applicable Portfolio indemnify and hold DST harmless from and
against, any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability ("Adverse Consequences") arising
out of or attributable to:
(1) All actions of DST or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without negligence or
willful misconduct.
(2) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation
or warranty of the Fund hereunder.
(3) The reliance on or use by DST or its agents or subcontractors
of information, records, documents or services which (i) are
received by DST or its agents or subcontractors, and (ii) have
been prepared, maintained or performed by the Fund or any
other person or firm on behalf of the Fund including but not
limited to any previous transfer agent or registrar.
(4) The reliance on, or the carrying out by DST or its agents or
subcontractors of any instructions or requests of the Fund on
behalf of the applicable Portfolio.
(5) The offer or sale of shares of the Fund or any applicable
Portfolio in violation of any requirement under the federal
securities laws or regulations or the securities laws or
regulations of any state relating to the registration, the
sale, or the manner of sale of such shares or in violation of
any stop order or other determination or ruling by any federal
agency or any state with respect to the offer, the sale or the
manner of sale of such shares in such state.
(6) The negotiation and processing by DST and the applicable bank
on which such check or draft is drawn of checks not made
payable to the order of DST, the Fund, the Fund's management
company, transfer agent or distributor or the retirement
account custodian or trustee for a
11
plan account investing in shares, which checks are tendered
to DST for the purchase of shares (i.e., checks made payable
to prospective or existing Shareholders, such checks are
commonly known as "third party checks").
B. At any time DST may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to
any matter arising in connection with the services to be performed
by DST under this Agreement, and DST and its agents or
subcontractors shall not be liable and shall be indemnified by the
Fund on behalf of the applicable Portfolio for any action taken or
omitted by it in reliance upon such instructions or upon the
opinion of such counsel. DST, its agents and subcontractors shall
be protected and indemnified in acting upon any paper or document
furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons, or
upon any instruction, information, data, records or documents
provided DST or its agents or subcontractors by machine readable
input, telex, CRT data entry or other similar means authorized by
the Fund, and shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof
from the Fund. DST, its agents and subcontractors shall also 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 Fund, and the proper
countersignature of any former transfer agent or former registrar,
or of a co-transfer agent or co-registrar.
C. In order that the indemnification provisions contained in this
Section 8 shall apply, upon the assertion of a claim for which the
Fund may be required to indemnify DST, DST shall promptly notify
the Fund of such assertion, and shall keep the Fund advised with
respect to all developments concerning such claim. The Fund shall
have the option to participate with DST in the defense of such
claim or to defend against said claim in its own name or in the
name of DST. DST shall in no case confess any claim or make any
compromise in any case in which the Fund may be required to
indemnify DST except with the Fund's prior written consent.
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D. Standard of Care: DST shall at all times act in good faith and
agrees to use its best efforts within reasonable limits to insure
the accuracy of all services performed under this Agreement, but
assumes no responsibility and shall not be liable for loss or
damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct or that of its
employees.
E. EXCEPT FOR VIOLATIONS OF SECTION 23, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO
ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR
CONSEQUENTIAL DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER ANY
PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY
THEREOF.
9. CERTAIN COVENANTS OF DST AND THE FUND.
A. All requisite steps will be taken by the Fund from time to time
when and as necessary to register the Fund's shares for sale in all
states in which the Fund's shares shall at the time be offered for
sale and require registration. If at any time the Fund receives
notice of any stop order or other proceeding in any such state
affecting such registration or the sale of the Fund's shares, or of
any stop order or other proceeding under the federal securities
laws affecting the sale of the Fund's shares, the Fund will give
prompt notice thereof to DST.
B. DST hereby agrees to perform such transfer agency functions as are
set forth in Section 4.D. above and establish and maintain
facilities and procedures reasonably acceptable to the Fund 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, and to carry such insurance as it considers adequate and
reasonably available.
C. To the extent required by Section 31 of the Investment Company Act
of 1940 as amended and Rules thereunder, DST agrees that all
records maintained by DST relating to the services to be performed
by DST under this Agreement are the property of the Fund and will
be preserved and will be surrendered promptly to the Fund on
request.
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D. DST agrees to furnish the Fund annual reports of its financial
condition, consisting of a balance sheet, earnings statement and
any other publicly available financial information reasonably
requested by the Fund and a copy of the report issued by its
certified public accountants pursuant to Rule 17Ad-13 under the
1934 Act as filed with the SEC. The annual financial statements
will be certified by DST's certified public accountants and may be
included in DST's publicly distributed Annual Report.
E. DST represents and agrees that it will use its reasonable efforts
to keep current on the trends of the investment company industry
relating to shareholder services and will use its reasonable
efforts to continue to modernize and improve.
F. DST will permit the Fund and its authorized representatives to make
periodic inspections of its operations as such would involve the
Fund at reasonable times during business hours.
G. DST will provide in Kansas City at the Fund's request and expense
training for the Fund's personnel in connection with use and
operation of the TA2000 System. All travel and reimbursable
expenses incurred by the Fund's personnel in connection with and
during training at DST's Facility shall be borne by the Fund. At
the Fund's option and expense, DST also agrees to use its
reasonable efforts to provide two (2) man weeks of training at the
Fund's facility for the Fund's personnel in connection with the
continued operation of the TA2000 System. Reasonable travel, per
diem and reimbursable expenses incurred by DST personnel in
connection with and during training at the Fund's facility or in
connection with the conversion shall be borne by the Fund.
10. RECAPITALIZATION OR READJUSTMENT.
In case of any recapitalization, readjustment or other change in the
capital structure of the Fund requiring a change in the form of stock
certificates, DST will issue or register certificates in the new form in
exchange for, or in transfer of, the outstanding certificates in the old
form, upon receiving:
A. Written instructions from an officer of the Fund;
B. Certified copy of the amendment to the Articles of Incorporation or
other document effecting the change;
14
C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the stock
in the new form, and an opinion of counsel that the order or
consent of no other government or regulatory authority is required;
D. Specimens of the new certificates 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;
E. Opinion of counsel for the Fund stating:
(1) The status of the shares of stock of the Fund in the new form
under the Securities Act of 1933, as amended and any other
applicable federal or state statute; and
(2) That the issued shares in the new form are, and all unissued
shares will be, when issued, validly issued, fully paid and
nonassessable.
11. RESERVED.
12. DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER.
The Fund will file promptly with DST written notice of any change in the
officers authorized to sign written requests or instructions to give
requests or instructions, together with two signature cards bearing the
specimen signature of each newly authorized officer.
13. FUTURE AMENDMENTS OF CHARTER AND BYLAWS.
The Fund will promptly file with DST copies of all material amendments
to its Articles of Incorporation or Bylaws made after the date of this
Agreement.
14. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES.
At any time DST may apply to any person authorized by the Fund to give
instructions to DST, and may with the approval of a Fund officer and at
the expense of the Fund, either consult with legal counsel for the Fund
or consult with counsel chosen by DST and acceptable to the Fund, with
respect to any matter arising in connection with the agency and it will
not be liable for any action taken or omitted by it in good faith in
reliance upon such instructions or upon the opinion of such counsel. For
purposes hereof, DST's internal counsel and attorneys employed by
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, DST's primary outside counsel, are
acceptable to the Fund. DST will be protected in acting upon any paper
or document reasonably believed by it to be genuine and to have been
signed
15
by the proper person or persons and will not be held to have
notice of any change of authority of any person, until receipt of
written notice thereof from the Fund. It will also be protected in
recognizing stock certificates which it reasonably believes to bear the
proper manual or facsimile signatures of the officers of the Fund, and
the proper countersignature of any former Transfer Agent or Registrar,
or of a co-Transfer Agent or co-Registrar.
15. FORCE MAJEURE AND DISASTER RECOVERY PLANS.
A. DST shall not be responsible or liable for its failure or delay in
performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation: any
interruption, loss or malfunction or any utility, transportation,
computer hardware, provided such equipment has been reasonably
maintained, or third party software or communication service;
inability to obtain labor, material, equipment or transportation,
or a delay in mails; governmental or exchange action, statute,
ordinance, rulings, regulations or direction; war, strike, riot,
emergency, civil disturbance, terrorism, vandalism, explosions,
labor disputes, freezes, floods, fires, tornadoes, acts of God or
public enemy, revolutions, or insurrection; or any other cause,
contingency, circumstance or delay not subject to DST's reasonable
control which prevents or hinders DST's performance hereunder.
B. DST currently maintains an agreement with a third party whereby DST
is to be permitted to use on a "shared use" basis a "hot site" (the
"Recovery Facility") maintained by such party in event of a
disaster rendering the DST Facilities inoperable. DST has
developed and is continually revising a business contingency plan
(the "Business Contingency Plan") detailing which, how, when, and
by whom data maintained by DST at the DST Facilities will be
installed and operated at the Recovery Facility. Provided the Fund
is paying its pro rata portion of the charge therefor, DST will, in
the event of a disaster rendering the DST Facilities inoperable,
use reasonable efforts to convert the TA2000 System containing the
designated Fund data to the computers at the Recovery Facility in
accordance with the then current Business Contingency Plan.
16
C. DST also currently maintains, separate from the area in which the
operations which provides the services to the Fund hereunder are
located, a Crisis Management Center consisting of phones, computers
and the other equipment necessary to operate a full service
transfer agency business in the event one of its operations areas
is rendered inoperable. The transfer of operations to other
operating areas or to the Crisis Management Center is also covered
in DST's Business Contingency Plan.
16. CERTIFICATION OF DOCUMENTS.
The required copy of the Articles of Incorporation of the Fund and
copies of all amendments thereto will be certified by the Secretary of
State (or other appropriate official) of the State of Incorporation, and
if such Articles of Incorporation and amendments are required by law to
be also filed with a county, city or other officer of official body, a
certificate of such filing will appear on the certified copy submitted
to DST. A copy of the order or consent of each governmental or
regulatory authority required by law to the issuance of the stock will
be certified by the Secretary or Clerk of such governmental or
regulatory authority, under proper seal of such authority. The copy of
the Bylaws and copies of all amendments thereto, and copies of
resolutions of the Board of Directors of the Fund, will be certified by
the Secretary or an Assistant Secretary of the Fund under the Fund's
seal.
17. RECORDS.
DST will maintain customary records in connection with its agency, and
particularly will maintain those records required to be maintained
pursuant to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 under
the Investment Company Act of 1940, if any.
18. DISPOSITION OF BOOKS, RECORDS AND CANCELED CERTIFICATES.
DST may send periodically to the Fund, or to where designated by the
Secretary or an Assistant Secretary of the Fund, all books, documents,
and all records no longer deemed needed for current purposes and stock
certificates which have been canceled in transfer or in exchange, upon
the understanding that such books, documents, records, and stock
certificates will be maintained by the Fund under and in accordance with
the requirements of Section 17Ad-7 adopted under the Securities Exchange
Act of 1934. Such materials
17
will not be destroyed by the Fund without the consent of DST (which
consent will not be unreasonably withheld), but will be safely stored
for possible future reference.
19. PROVISIONS RELATING TO DST AS TRANSFER AGENT.
A. Instructions for the transfer, exchange or redemption of shares of
the Fund will be accepted, the registration, redemption or transfer
of the shares be effected and, where applicable, funds remitted
therefor. Upon surrender of the old certificates in form or receipt
by DST of instructions deemed by DST properly endorsed for
transfer, exchange or redemption, accompanied by such documents as
DST may deem necessary to evidence the authority of the person
making the transfer, exchange or redemption, the transfer, exchange
or redemption of the shares reflected by such certificates be
effected and any sums due in connection therewith be remitted, in
accordance with the instructions contained herein. DST reserves
the right to refuse to transfer or redeem shares until it is
satisfied that the endorsement or signature on the instruction or
any other document is valid and genuine, and for that purpose it
may require a guaranty of signature in accordance with the
Signature Guarantee Procedures. DST also reserves the right to
refuse to transfer, exchange or redeem shares until it is satisfied
that the requested transfer, exchange or redemption is legally
authorized, and DST will incur no liability for the refusal in good
faith to make transfers or redemptions which, in its judgment, are
improper or unauthorized. DST may, in effecting transfers,
exchanges or redemptions, rely upon DST's Procedures and
Simplification Acts, UNIFORM COMMERCIAL CODE or other statutes
which protect it and the Fund in not requiring complete fiduciary
documentation. In cases in which DST is not directed or otherwise
required to maintain the consolidated records of shareholder's
accounts, DST will not be liable for any loss which may arise by
reason of not having such records.
B. DST will, at the expense of the Fund, issue and mail subscription
warrants, effectuate stock dividends, exchanges or split ups, or
act as Conversion Agent upon receiving written instructions from
any officer of the Fund and such other documents as DST deems
necessary.
18
C. DST will, at the expense of the Fund, supply a shareholder's list
to the Fund for its annual meeting upon receiving a request from an
officer of the Fund. It will also, at the expense of the Fund,
supply lists at such other times as may be requested by an officer
of the Fund.
D. Upon receipt of written instructions of an officer of the Fund, DST
will, at the expense of the Fund, address and mail notices to
shareholders.
E. In case of any request or demand for the inspection of the stock
books of the Fund or any other books in the possession of DST, DST
will endeavor to notify the Fund and to secure instructions as to
permitting or refusing such inspection. DST reserves the right,
however, to exhibit the stock books or other books to any person in
case it is advised by its counsel that it may be held responsible
for the failure to exhibit the stock books or other books to such
person.
20. PROVISIONS RELATING TO DIVIDEND DISBURSING AGENCY.
A. DST will, at the expense of the Fund, provide a special form of
check containing the imprint of any device or other matter desired
by the Fund. Said checks must, however, be of a form and size
convenient for use by DST.
B. If the Fund desires to include additional printed matter, financial
statements, etc., with the dividend checks, the same will be
furnished DST within a reasonable time prior to the date of mailing
of the dividend checks, at the expense of the Fund.
C. If the Fund desires its distributions mailed in any special form of
envelopes, sufficient supply of the same will be furnished to DST
but the size and form of said envelopes will be subject to the
approval of DST. If stamped envelopes are used, they must be
furnished by the Fund; or if postage stamps are to be affixed to
the envelopes, the stamps or the cash necessary for such stamps
must be furnished by the Fund.
D. DST shall establish and maintain on behalf of the Fund one or more
deposit accounts as Agent for the Fund, into which DST shall
deposit the funds DST receives for payment of dividends,
distributions, redemptions or other disbursements provided for
hereunder and to draw checks against such accounts.
19
E. DST is authorized and directed to stop payment of checks
theretofore issued hereunder, but not presented for payment, when
the payees thereof allege either that they have not received the
checks or that such checks have been mislaid, lost, stolen,
destroyed or through no fault of theirs, are otherwise beyond their
control, and cannot be produced by them for presentation and
collection, and, to issue and deliver duplicate checks in
replacement thereof.
21. ASSUMPTION OF DUTIES BY THE FUND OR AGENTS DESIGNATED BY THE FUND.
A. The Fund or its designated agents other than DST may assume certain
duties and responsibilities of DST or those services of Transfer
Agent and Dividend Disbursing Agent as those terms are referred to
in Section 4.D. of this Agreement including but not limited to
answering and responding to telephone inquiries from shareholders
and brokers, accepting shareholder and broker instructions (either
or both oral and written) and transmitting orders based on such
instructions to DST, preparing and mailing confirmations, obtaining
certified TIN numbers, classifying the status of shareholders and
shareholder accounts under applicable tax law, establishing
shareholder accounts on the TA2000 System and assigning social
codes and Taxpayer Identification Number codes thereof, and
disbursing monies of the Fund, said assumption to be embodied in
writing to be signed by both parties.
B. To the extent the Fund or its agent or affiliate assumes such
duties and responsibilities, DST shall be relieved from all
responsibility and liability therefor and is hereby indemnified
and held harmless against any liability therefrom and in the same
manner and degree as provided for in Section 8 hereof.
C. Initially the Fund or its designees shall be responsible for the
following: (i) answering and responding to phone calls from
shareholders and broker-dealers, (ii) faxing information to DST as
such calls or items are received by the Fund, and (iii) monitoring
and following up upon wire order trades which failed to settle
timely, and (iv) notifying and instructing DST as to the
establishment of and maintenance of information pertaining to
broker-dealers on the Broker-Dealer File.
20
22. TERMINATION OF AGREEMENT.
A. This Agreement shall be in effect for an initial period of two (2)
years and six (6) months (through August 31, 2000) and, thereafter,
shall automatically extend for additional, successive twelve (12)
month terms upon the expiration of any term hereof unless
terminated as hereinafter provided.
B. Each party, in addition to any other rights and remedies, shall
have the right to terminate this Agreement forthwith upon the
occurrence at any time of any of the following events with respect
to the other party:
(1) The bankruptcy of the other party or its assigns or the
appointment of a receiver for the other party or its assigns;
or
(2) Failure by the other party or its assigns to perform its
duties in accordance with the Agreement, which failure
materially adversely affects the business operations of the
first party and which failure continues for thirty (30) days
after receipt of written notice from the first party.
C. Either party may terminate this Agreement at any time by delivery
to the other party of six (6) months prior written notice of such
termination.
D. In the event of any termination of this Agreement:
(1) The Fund will continue to pay to DST as invoiced all sums due
for DST's services until completion of the Deconversion and
will pay to DST, no later than contemporaneously with the
dispatch by DST of the Fund's records, all amounts payable to
DST.
(2) If, for any reason, the Fund desires to convert from the
TA2000 System ("Deconvert") other than on the first day after
six (6) months from the receipt by DST of the termination
notice (such first day after the expiration of six (6) months
being hereinafter referred to as the "Termination Date"), and
DST is able, through reasonable efforts, to accomplish such
earlier conversion of the Fund's data and records off the
TA2000 System (the "Deconversion"), the Fund shall pay to DST
on the day of or before the Deconversion the fees which DST
would have earned had the Fund not Deconverted, and had DST
remained the transfer/shareholder servicing agent, until the
Termination Date. The amount of such fees shall be
21
calculated by: (a) dividing the aggregate fees charged to
the Fund with respect to the six (6) whole months immediately
preceding receipt by DST of the six (6) month termination
notice by (b) twenty-six (26) (the number of weeks in such
six (6) month period) to determine the average weekly fee and
(c) multiplying the average weekly fee times the number of
whole or partial weeks between the date on which Deconversion
actually occurs and the Termination Date.
(3) Subsequent to any Deconversion:
(a) The Fund shall continue to pay to DST, subject to and in
accordance with the terms and conditions set forth in
Sections 6.A., 6.B., 6.C. and 6.D. of this Agreement,
for all expenses incurred on the Fund's behalf and the
post-Deconversion fees set forth in Exhibit B to this
Agreement until (i) the Fund accounts are purged from
the TA2000 System (no longer being required for Year
End Reporting) with respect to closed account fees and
(ii) so long as DST's services are utilized with
respect to all fees other than those for closed accounts
by the Fund, its new transfer agent and its
shareholders, former shareholders, broker-dealers or
other entities with whom the Fund does business and
persons claiming through or on behalf of any of the
foregoing; and
(b) To the extent applicable regulations of the Internal
Revenue Service and tax laws permit, the Fund shall
require its new transfer agent to perform and dispatch
or file all required year end reporting (tax or
otherwise and federal and state) to shareholders,
broker-dealers, beneficial owners, federal and state
agencies and any other recipients thereof and DST shall
have no, and the Fund hereby indemnifies DST and holds
DST harmless against any, liability or Adverse
Consequences whatsoever with respect thereto, including
by way of example and not limitation, reports or returns
on Forms 1099, 5498, 945, 1042 and 1042S, annual account
valuations for retirement accounts and year end
statements for all accounts and
22
any other reports required to be made by state
governments or the federal government or regulatory or
self-regulatory agencies (the "Returns");
(c) If the Fund is unable to obtain a commitment from the new
transfer agent that the new transfer agent will perform
year end reporting (tax or otherwise) for the entire
year and mailing or filing all Returns, (i) DST shall
perform year end reporting as instructed by the Fund
for the portion of the year DST served as transfer
agent and (ii) DST shall be paid therefore a monthly per
CUSIP fee through the end of the last month during
which the last Return or form is filed. The Fund will
cause the new transfer agent to timely advise DST of all
changes to the shareholder records effecting such
reporting until all DST reporting obligations cease;
and DST shall have no, and the Fund hereby indemnifies
DST and holds DST harmless against any, liability or
any Adverse Consequences arising out of or resulting
from the failure of the new transfer agent to timely
advise DST thereof or which could have been avoided if
the new transfer agent had timely advised DST thereof.
All amendments to, or delivery of duplicate, Returns
after their initial dispatch or filing will be
effectuated and filed or dispatched by the new transfer
agent regardless of who filed or dispatched the
original Return; and
(d) All of the records belonging to the Fund on the TA2000
System may be purged by DST without liability to the Fund
or its agents, shareholders, and parties with whom the
Fund has done or will do business, at any time on or
after the forty-fifth (45th) day after the Termination
Date (in which case DST shall not be able to perform any
year end reporting or the mailing and filing of any
Returns for any portion of the year in which such
destruction occurs). The Fund shall and hereby agrees
to indemnify and hold DST harmless against any Adverse
Consequences directly or indirectly arising out
23
of or resulting from any inability to produce such
purged records. The Fund will, and will cause the new
transfer agent to, maintain and preserve the records
converted from the TA2000 System or any hard copy
records transferred by DST to the Fund or the new
transfer agent in accordance with the requirements of
all applicable law, including without limitation 17
C.F.R. Sections 240.17Ad-6, -7, -10, -11 and -15
(including without limitation to make copies thereof
available timely and at no charge to appropriate
regulatory agencies and, as reasonably necessary, DST).
Notwithstanding the foregoing, upon the request and at
the expense of the Fund, DST shall not purge, but shall
retain as closed accounts on the TA2000 System, the
records belonging to the Fund.
E. In addition, in the event of any termination, DST will, provided
the Fund contemporaneously pays all outstanding charges and fees,
promptly transfer all of the records of the Fund to the designated
successor transfer agent. DST shall also provide reasonable
assistance to the Fund and its designated successor transfer agent
and other information relating to its services provided hereunder
(subject to the recompense of DST for such assistance and
information at its standard rates and fees for personnel then in
effect at that time); provided, however, as used herein "reasonable
assistance" and "other information" shall not include assisting any
new service or system provider to modify, alter, enhance, or
improve its system or to improve, enhance, or alter its current
system, or to provide any new, functionality or to require DST to
disclose any DST Confidential Information, as hereinafter defined,
or any information which is otherwise confidential to DST. The
Fund acknowledges and agrees that DST customarily prohibits
Deconversion during the period from November 15 through March 15
(the "Blackout Period") and that that prohibition is being deleted
at the demand of the Fund and on condition that no assistance other
than the provision of tapes in standard conversion format with a
written identification of the fields therein is to be required of
DST with respect to Deconversion during the Blackout Period. Any
additional assistance during such Blackout Period shall be at DST's
discretion and,
24
if rendered, shall be rendered on a "reasonable
efforts basis" and may be limited in scope and timeliness (without
any liability on the part of DST) compared to the assistance
usually rendered by DST at other times during the year.
23. CONFIDENTIALITY.
A. DST agrees that, except as provided in the last sentence of Section
19.J. hereof, or as otherwise required by law, DST will keep
confidential all records of and information in its possession
relating to the Fund or its shareholders or shareholder accounts
and will not disclose the same to any person except at the request
or with the consent of the Fund.
B. The Fund owns all of the data supplied by or on behalf of the Fund
to DST. The Fund has proprietary rights to all such data, records
and reports containing such data, but not including the software
programs upon which such data is installed, and all records
containing such data will be transferred in accordance with Section
22.D above in the event of termination.
C. The Fund agrees to keep confidential all non-public financial
statements and other financial records of DST received hereunder,
all accountants' reports relating to DST, the terms and provisions
of this Agreement, including all exhibits and schedules now or in
the future attached hereto and all manuals, systems and other
technical information and data, not publicly disclosed, relating to
DST's operations and programs furnished to it by DST pursuant to
this Agreement and will not disclose the same to any person except
at the request or with the consent of DST.
D. (1) The Fund acknowledges that DST has proprietary rights in and
to the TA2000 System used to perform services hereunder
including, but not limited to the maintenance of shareholder
accounts and records, processing of related information and
generation of output, including, without limitation any
changes or modifications of the TA2000 System and any other
DST programs, data bases, supporting documentation, or
procedures (collectively "DST Confidential Information") which
the Fund's access to the TA2000 System or computer hardware or
software may permit the Fund or its employees or agents to
become aware of or to access and that
25
the DST Confidential Information constitutes confidential
material and trade secrets of DST. The Fund agrees to
maintain the confidentiality of the DST Confidential
Information.
(2) The Fund acknowledges that any unauthorized use, misuse,
disclosure or taking of DST Confidential Information which is
confidential as provided by law, or which is a trade secret,
residing or existing internal or external to a computer,
computer system, or computer network, or the knowing and
unauthorized accessing or causing to be accessed of any
computer, computer system, or computer network, may be subject
to civil liabilities and criminal penalties under applicable
state law. The Fund will advise all of its employees and
agents who have access to any DST Confidential Information or
to any computer equipment capable of accessing DST or DST
hardware or software of the foregoing.
(3) The Fund acknowledges that disclosure of the DST Confidential
Information may give rise to an irreparable injury to DST
inadequately compensable in damages. Accordingly, DST may
seek (without the posting of any bond or other security)
injunctive relief against the breach of the foregoing
undertaking of confidentiality and nondisclosure, in addition
to any other legal remedies which may be available, and the
Fund consents to the obtaining of such injunctive relief. All
of the undertakings and obligations relating to
confidentiality and nondisclosure, whether contained in this
Section or elsewhere in this Agreement shall survive the
termination or expiration of this Agreement for a period of
ten (10) years.
24. CHANGES AND MODIFICATIONS.
A. During the term of this Agreement DST will use on behalf of the
Fund without additional cost all modifications, enhancements, or
changes which DST may make to the TA2000 System in the normal
course of its business and which are applicable to functions and
features offered by the Fund, unless substantially all DST clients
are charged separately for such modifications, enhancements or
changes, including, without limitation, substantial system
revisions or modifications necessitated by changes in existing
laws, rules or regulations. The
26
Fund agrees to pay DST promptly for modifications and improvements
which are charged for separately at the rate provided for in DST's
standard pricing schedule which shall be identical for
substantially all clients, if a standard pricing schedule shall
exist. If there is no standard pricing schedule, the parties
shall mutually agree upon the rates to be charged.
B. DST shall have the right, at any time and from time to time, to
alter and modify any systems, programs, procedures or facilities
used or employed in performing its duties and obligations
hereunder; provided that the Fund will be notified as promptly as
possible prior to implementation of such alterations and
modifications and that no such alteration or modification or
deletion shall materially adversely change or affect the operations
and procedures of the Fund in using or employing the TA2000 System
or DST Facilities hereunder or the reports to be generated by such
system and facilities hereunder, unless the Fund is given thirty
(30) days prior notice to allow the Fund to change its procedures
and DST provides the Fund with revised operating procedures and
controls at the time such notice is delivered to the Fund.
C. All enhancements, improvements, changes, modifications or new
features added to the TA2000 System however developed or paid for
shall be, and shall remain, the confidential and exclusive property
of, and proprietary to, DST.
25. SUBCONTRACTORS.
Nothing herein shall impose any duty upon DST in connection with or make
DST liable for the actions or omissions to act of unaffiliated third
parties such as, by way of example and not limitation, Airborne
Services, the U.S. mails and telecommunication companies, provided, if
DST selected such company, DST shall have exercised due care in
selecting the same.
26. LIMITATIONS ON LIABILITY.
A. If the Fund is comprised of more than one Portfolio, each Portfolio
shall be regarded for all purposes hereunder as a separate party
apart from each other Portfolio. Unless the context otherwise
requires, with respect to every transaction covered by this
Agreement, every reference herein to the Fund shall be deemed to
relate solely to the particular Portfolio to which such transaction
relates. Under
27
no circumstances shall the rights, obligations or remedies with
respect to a particular Portfolio constitute a right, obligation
or remedy applicable to any other Portfolio. The use of this
single document to memorialize the separate agreement of each
Portfolio is understood to be for clerical convenience only and
shall not constitute any basis for joining the Portfolios for any
reason.
B. Notice is hereby given that a copy of the Fund's Trust Agreement
and all amendments thereto is on file with the Secretary of State
of the state of its organization; that this Agreement has been
executed on behalf of the Fund by the undersigned duly authorized
representative of the Fund in his/her capacity as such and not
individually; and that the obligations of this Agreement shall only
be binding upon the assets and property of the Fund and shall not
be binding upon any trustee, officer or shareholder of the Fund
individually.
27. MISCELLANEOUS.
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of
the State of Missouri, excluding that body of law applicable to
choice of law.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto
and their respective successors and permitted assigns.
C. The representations and warranties, and the indemnification
extended hereunder, if any, are intended to and shall continue
after and survive the expiration, termination or cancellation of
this Agreement.
D. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and
executed by each party hereto.
E. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
F. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
28
G. If any part, term or provision of this Agreement is by the courts
held to be illegal, in conflict with any law or otherwise invalid,
the remaining portion or portions shall be considered severable and
not be affected, and the rights and obligations of the parties
shall be construed and enforced as if the Agreement did not contain
the particular part, term or provision held to be illegal or
invalid.
H. This Agreement may not be assigned by the Fund or DST without the
prior written consent of the other.
I. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between the
Fund and DST. It is understood and agreed that all services
performed hereunder by DST shall be as an independent contractor
and not as an employee of the Fund. This Agreement is between DST
and the Fund and neither this Agreement nor the performance of
services under it shall create any rights in any third parties.
There are no third party beneficiaries hereto.
J. Except as specifically provided herein, this Agreement does not in
any way affect any other agreements entered into among the parties
hereto and any actions taken or omitted by any party hereunder
shall not affect any rights or obligations of any other party
hereunder.
K. The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights
resulting from any breach of any of the terms or conditions of this
Agreement, including the payment of damages, shall not be construed
as a continuing or permanent waiver of any such terms, conditions,
rights or privileges, but the same shall continue and remain in
full force and effect as if no such forbearance or waiver had
occurred.
L. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement, draft or agreement or
proposal with respect to the subject matter hereof, whether oral or
written, and this Agreement may not be modified except by written
instrument executed by both parties.
M. All notices to be given hereunder shall be deemed properly given if
delivered in person or if sent by U.S. mail, first class, postage
prepaid, or if sent by facsimile
29
and thereafter, in the case of
non-operational notices only, confirmed by mail as follows:
If to DST:
DST Systems, Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Senior Vice President-Full Service
Facsimile No.: 000-000-0000
With a copy of non-operational notices to:
DST Systems, Inc.
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Legal Department
Facsimile No.: 000-000-0000
If to the Fund:
SEI Investments, Inc.
Attn.: Legal Department
Xxx Xxxxxxx Xxxxxx Xxxx
Xxxx, Xxxxxxxxxxxx 00000
Attn:
Facsimile No.: 000-000-0000
With a copy of non-operational notices to:
SEI Investments, Inc.
Attn.: Xxxxx Xxxx.
Xxx Xxxxxxx Xxxxxx Xxxx
Xxxx, Xxxxxxxxxxxx 00000
Attn: Legal Department
Facsimile No.: 000-000-0000
or to such other address as shall have been specified in writing by
the party to whom such notice is to be given.
N. The representations and warranties contained herein shall survive
the execution of this Agreement. The representations and
warranties contained herein and the provisions of Section 8 hereof
shall survive the termination of the Agreement and
30
the performance of services hereunder until any statute of
limitations applicable to the matter at issues shall have expired.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers, to be effective
as of the day and year first above written.
DST SYSTEMS, INC.
By: /s/ Xxxxxxxx Xxxxx
--------------------------------------
Title: Group Vice-President
-----------------------------------
OAK ASSOCIATES FUNDS
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Title: Assistant Secretary
-----------------------------------
31
EXHIBIT A, P. 1
FULL SERVICE FEE SCHEDULE
EFFECTIVE 09/1/98 - 08/31/00
A. MINIMUM FEE
Minimum Fee Per Cusip $16,000 per cusip per year
Minimum fee per cusip is compared to those fees in section B of this
schedule. Minimum fee applies to new cusips only.
B. ACCOUNT MAINTENANCE AND PROCESSING FEES
Open Accounts in the range of:
1 - 50,000 $18.00 per account per year
50,001 - 100,000 $16.00 per account per year
> 100,000 $14.00 per account per year
C. SHAREOWNER CHARGES
Fiduciary Trustee Fees - $15.00 per account per year
D. OPTIONAL SERVICES
12b-1 Processing $.15/open & closed account/cycle
CDSC/Sharelot Accounting $1.90 per account per year
Ad-Hoc Reporting
Multi File Reports $400 per report
Single File Reports $250 per report
Voice Response System - See Exhibit A.1
NSCC - See Exhibit A.2
Escheatment Costs - as incurred
Conversion/Acquisition Costs - Out of Pocket expenses including but
not limited to travel and accommodations, programming, training,
equipment installation, etc.
*Computer/Technical Personnel:
Business Analyst/Tester:
Dedicated $90,000 per year
On Request $80 per hour
COBOL Programmer:
Dedicated $150,000 per year
On Request $120 per hour
32
EXHIBIT A, P. 2
FULL SERVICE FEE SCHEDULE
EFFECTIVE 09/1/98 - 08/31/00
Workstation Programmer:
Dedicated $175,000 per year
On Request $140 per hour
Senior Staff Support $65 per hour
Staff Support $45 per hour
Clerical Support $35 per hour
NOTES TO THE ABOVE FEE SCHEDULE
A. The above schedule does not include reimbursable expenses that are
incurred on the Fund's behalf. Examples of reimbursable expenses
include but are not limited to those set forth on page 34 of this
Agreement. Reimbursable expenses are billed separately from service
fees on a monthly basis. Postage will be paid in advance if so
requested.
B. Any fees or reimbursable expenses not paid within 30 days of the date of
the original invoice will be charged a late payment fee of 1.5% per
month until payment is received.
C. The above fees, except for those indicated by an "*", are guaranteed for
the agreed upon term, subject to an increase on each anniversary of the
agreement in an amount not less than the annual percentage change in the
Consumer Price Index in the Kansas City, Missouri-Kansas Standard
Metropolitan Statistical Area, All Items, Base 1982-1984=100, as last
reported by the U.S. Bureau of Labor Statistics for the 12 calendar
months immediately preceding such anniversary.
D. The monthly fee for an open account shall be charged in the month during
which an account is opened through the month in which such account is
closed. The monthly fee for a closed account shall be charged in the
month following the month during which such account is closed and shall
cease to be charged in the month following the Purge Date, as
hereinafter defined. The "Purge Date" for any year shall be any day
after June 1st of that year, as selected by the Fund, provided that
written notification is presented to DST at least forty-five (45) days
prior to the Purge Date.
E. The charges for the services of Computer/Technical Personnel will
increase annually as of each January 1st as the salaries or costs paid
by DST therefor increase.
33
EXHIBIT A, P. 3
FULL SERVICE FEE SCHEDULE
EFFECTIVE 09/1/98 - 08/31/00
REIMBURSABLE EXPENSES
Forms
Postage (to be paid in advance if so requested)
Mailing Services
Computer Hardware and Software - specific to Fund or installed at remote
site at Fund's direction
Telecommunications Equipment and Lines/Long Distance Charges
Magnetic Tapes, Reels or Cartridges
Magnetic Tape Handling Charges
Microfiche/Microfilm
Freight Charges
Printing
Bank Wire and ACH Charges
Proxy Processing - per proxy mailed
not including postage
Includes: Proxy Card
Printing
Outgoing Envelope
Return Envelope
Tabulation and Certification
T.I.N. Certification (W-8 & W-9)
(Postage associated with the return
envelope is included)
Off-site Record Storage
Second Site Disaster
Backup Fee $0.08 per account per year
Transmission of Statement Data for Currently $.035/per record
Remote Processing (External)
Travel, Per Diem and other Billables
Incurred by DST personnel traveling to,
at and from the Fund at the request
of the Fund
34
EXHIBIT A.1
TA2000 VOICEO SYSTEM
PER CALL SERVICE FEE
Utilization of DST's TA2000 VoiceO System is based on a service fee of $.20 PER
CALL. Each call has a maximum duration of seven (7) minutes. This charge is a
flat rate regardless of the number or type of transactions that a shareholder
processes during the call. A given call could result in inquiries and/or
transactions being processed for various funds in the complex. Therefore, on a
monthly basis, DST will report the number of inquiries and/or transactions
processed by fund. A percentage of the total will be derived and reported for
each fund. As a result of this process, DST will allocate the charges among
the individual funds.
MULTIPLE CALL FLOWS
An additional fee of $500 per month will be charged for each additional call
flow that requires different flows, functions, vocabulary, processing, rules or
access method. An additional fee of $200 per month will be charged for each
additional call flow that is identical in flows, functions, vocabulary,
processing rules or access method.
MINIMUM MONTHLY CHARGE
DST's commitment to the reliability and continued enhancement of the TA2000
Voice System necessitates a minimum monthly charge for the service. The
minimum monthly charge will only be assessed when it is greater than the
monthly service fees. The minimum monthly charge will be implemented on a
graduated basis based on the number of cusips and shareholders in a fund
complex and is the sum of the cusip and account charges. The schedule for
this charge is as follows:
YEARS CHARGE PER CHARGE PER
OF CUSIP AUTHORIZED SHAREHOLDER
SERVICE FOR SERVICE* ACCOUNT**
1 $ 50 $.002
2 $ 75 $.003
3 $100 $.004
* CUSIPS ADDED TO THE SERVICE will be subject to the same minimums
being charged to the other cusips in the complex at the time the
cusips are added.
** THE PER ACCOUNT CHARGE is based on the total number of shareholder
accounts in authorized cusips at the end of each month.
OUT OF POCKET COSTS
Each fund complex will require a unique WATS number for their shareholders to
call. Each WATS number will require a specific number of trunks to service a
given volume of shareholder calls. All installation and monthly usage charges
associated with these will be billed through monthly out-of-pocket invoices.
35
EXHIBIT A.2
NSCC FEES AND
OUT-OF-POCKET EXPENSES
DST FEES
DST charges $1,500 per cusip per year for the NSCC platform
SETTLING BANK FEES
The fund may be charged fees by the Settling Bank at which the net
settlement account resides for monthly maintenance of this account.
These are negotiated directly between the Fund and the Settling Bank.
NSCC PARTICIPANT FEES
The NSCC charges $40 per month per management company for CPU
access/shared line costs.
A combined participant base fee of $200 per month is charged for the
following services:
FUND/SERV:
The NSCC charges an activity charge of $.30 per inputted transaction.
Transactions include purchases, redemptions and exchanges.
NETWORKING: The NSCC charges the following activity fee:
- $.02 per account for funds paying dividends on a monthly basis
- $.01 per account for funds paying dividends other than monthly
COMMISSION SETTLEMENT: The NSCC charges the following processing fee:
- $.30 per hundred records, per month, for one to 500,000 records;
there is a $50 per month minimum processing charge
- $.20 per hundred records, per month, for 500,001 to 1,000,000
records
- $.10 per hundred records, per month, for 1,000,001 records and
above
Note: Participant fees are cumulative when Fund/SERV, Networking and/or
Commission Settlement are used in conjunction with each other.
36
EXHIBIT B
POST DECONVERSION FEE SCHEDULE
ALL FEES EFFECTIVE AS OF DECONVERSION:
ACCOUNT MAINTENANCE
Closed Accounts $.20/month/acct
Transaction/Maintenance Processing $2.50/item
Telephone Calls $4.00/call
Research Requests $40/hour (1 hr min)
PROGRAMMING
As required at DST's then current standard rates
REIMBURSABLE EXPENSES
This schedule does not include reimbursable expenses that are incurred on the
Fund's behalf. Examples of reimbursable expenses include but are not limited
to forms, postage, mailing services, telephone line/long distance charges,
transmission of statement data for remote print/mail operations, remote
client hardware, document storage, tax certification mailings, magnetic
tapes, printing, microfiche, Fed wire bank charges, ACH bank charges, NSCC
charges, as required or incurred, etc. Reimbursable expenses are billed
separately from Account Maintenance and Programming fees on a monthly basis
and late payments are subject to late charges in accordance with Section 6.C.
of this Agreement.
37
EXHIBIT C
AUTHORIZED PERSONNEL
Pursuant to the Agency Agreement between OAK ASSOCIATES FUNDS (the "Fund")
and DST (the "Agreement"), the Fund authorizes the following personnel of the
Fund or its agents to provide instructions to DST, and receive inquiries from
DST in connection with the Agreement:
NAME TITLE
Xxxxxxx X. Xxxxx Vice President and Assistant Secretary
------------------------------- --------------------------------------
Xxxxxx X. Xxxxxxxxxx Controller and Chief Financial Officer
------------------------------- --------------------------------------
Xxxxxx XxXxxx SEI Funds Accounting Manager
------------------------------- --------------------------------------
Xxxxxxx Xxxxxxxx SEI Account Director
------------------------------- --------------------------------------
Xxxxxx X. X'Xxxxxxx Vice President and Assistant Secretary
------------------------------- --------------------------------------
Xxxxxx X. Xxxxxx SEI Mutual Fund Manager
------------------------------- --------------------------------------
This Exhibit may be revised by the Fund by providing DST with a substitute
Exhibit C. Any such substitute Exhibit C shall become effective twenty-four
(24) hours after DST's receipt of the document and shall be incorporated into
the Agreement.
ACKNOWLEDGMENT OF RECEIPT:
DST SYSTEMS, INC. OAK ASSOCIATES FUNDS
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------- --------------------------------------
Title: General Vice President Title: Assistant Secretary
------------------------------- --------------------------------------
Date: 2/27/98 Date: 2/27/98
------------------------------- --------------------------------------
38
