TRANSFER AGENCY AND SERVICES AGREEMENT
THIS AGREEMENT, dated as of this 9th day of November, 1998 (the "Effective
Date") between PIMCO Advisors L.P. (the "Administrator"), a Delaware limited
partnership having its principal place of business at 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxx Xxxxx, XX 00000 and FIRST DATA INVESTOR SERVICES GROUP, INC. ("Investor
Services Group"), a Massachusetts corporation with principal offices at 0000
Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000.
WITNESSETH
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WHEREAS, the Administrator administers all of the operations of the PIMCO
Funds: Multi-Manager Series (the "Fund"), a Massachusetts business trust that is
registered with the Commission as an open-end management investment company,
pursuant to an Administration Agreement between the Fund and the Administrator,
and procures or provides for the procurement on behalf of the Fund, at the
Administrator's expense, certain services, including among others, transfer
agency and recordkeeping services.
WHEREAS, the Fund is authorized to issue Shares in separate series, with
each such series representing interests in a separate portfolio of securities or
other assets.
WHEREAS, the Fund initially intends to offer Shares in those Portfolios
identified in the attached Schedule A, and each such Portfolio, together with
all other Portfolios subsequently established by the Fund shall be subject to
this Agreement in accordance with Article 14;
WHEREAS, the Fund, on behalf of the Portfolios, desires to appoint Investor
Services Group as its transfer agent, dividend disbursing agent and agent in
connection with certain other activities and Investor Services Group desires to
accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and Investor Services Group agree as follows:
Article 1 Definitions.
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1.1 Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of the Fund as the same may be amended from
time to time.
(b) "Authorized Person" shall be deemed to include (i) any
authorized officer of the Fund or the Administrator; or (ii) any person,
whether or not such person is an officer or employee of the Fund, duly
authorized by the Fund or the Administrator to give Oral Instructions or
Written Instructions on behalf of the Fund as indicated in writing to
Investor Services Group from time to time.
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(c) "Board Members" shall mean the Directors or Trustees of the
governing body of the Fund, as the case may be.
(d) "Board of Directors" shall mean the Board of Directors or
Board of Trustees of the Fund, as the case may be.
(e) "Commission" shall mean the Securities and Exchange
Commission.
(f) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Fund may from time to time deposit, or
cause to be deposited or held, under the name or account of such a custodian,
pursuant to a Custodian Agreement.
(g) "1934 Act" shall mean the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder, all as amended from time
to time.
(h) "1940 Act" shall mean the Investment Company Act of 1940 and
the rules and regulations promulgated thereunder, all as amended from time to
time.
(i) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by Investor Services Group from a person
reasonably believed by Investor Services Group to be an Authorized Person;
(j) "Portfolio" shall mean each separate series of shares
offered by the Fund representing interests in a separate portfolio of securities
and other assets;
(k) "Prospectus" shall mean the most recently dated Fund
Prospectus(es) and Statement of Additional Information(s), including any
supplements thereto if any, which has become effective under the Securities Act
of 1933 and the 1940 Act, relating to the Shares.
(l) "Shares" refers collectively to such shares of Class A, B, C
and D capital stock or beneficial interest, as the case may be, of each
respective Portfolio of the Fund as may be issued from time to time.
(m) "Shareholder" shall mean a record owner of Shares of each
respective Portfolio of the Fund.
(n) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by Investor Services Group to be an
Authorized Person and actually received by Investor Services Group. Written
Instructions shall include manually executed originals and authorized electronic
transmissions, including telefacsimile of a manually executed original or other
process.
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Article 2 Appointment of Investor Services Group.
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The Administrator, on behalf of the Fund and the Portfolios, hereby
appoints and constitutes Investor Services Group as its sole and exclusive
transfer agent and dividend disbursing agent for Shares of each respective
Portfolio of the Fund and as shareholder servicing agent for the Shares of the
Portfolios and Investor Services Group hereby accepts such appointments and
agrees to perform the duties hereinafter set forth. Nothing contained herein
shall prevent the Administrator from appointing one or more sub-transfer agents
from time to time.
Article 3 Duties of Investor Services Group.
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3.1 Investor Services Group shall be responsible for:
(a) Administering and/or performing the customary services of a
transfer agent; acting as service agent in connection with dividend and
distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance, transfer
and redemption or repurchase (including coordination with the Custodian) of
Shares of each Portfolio, as more fully described in the written schedule
of Duties of Investor Services Group annexed hereto as Schedule B and
incorporated herein, and in accordance with the terms of the Prospectus of
the Fund on behalf of the applicable Portfolio (including provisions
relating to signature guarantees), applicable law and the procedures
established from time to time between Investor Services Group and the Fund
and, if applicable, the National Securities Clearing Corporation.
(b) Recording the issuance of Shares and maintaining, pursuant to
Rule 17Ad-10(e) of the 1934 Act, a record of the total number of Shares
of each Portfolio which are authorized, based upon data provided to it by
the Fund, and issued and outstanding. Investor Services Group shall provide
the Fund on a regular basis with the total number of Shares of each
Portfolio which are authorized and issued and outstanding and shall have no
obligation, when recording the issuance of Shares, to monitor the issuance
of such Shares or to take cognizance of any laws relating to the legality
of the issue or sale of such Shares, which functions shall be the sole
responsibility of the Administrator.
(c) In addition to providing the foregoing services, the
Administrator hereby engages Investor Services Group as its exclusive
service provider with respect to the Print/Mail Services as set forth in
Schedule C for the fees also identified in Schedule C. Investor Services
Group agrees to perform the services and its obligations subject to the
terms and conditions of this Agreement.
(d) Notwithstanding any of the foregoing provisions of this
Agreement, Investor Services Group shall be under no duty or obligation to
inquire into, and shall not be liable for: (i) the legality of the issuance
or sale of any Shares or the sufficiency of the amount to be received
therefor; (ii) the propriety of the amount to be paid with respect to
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the redemption of any Shares; (iii) the legality of the declaration of any
dividend by the Board of Directors, or the legality of the issuance of any
Shares in payment of any dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares.
3.2 Investor Services Group shall have no responsibility hereunder for the
Fund's compliance with state securities registration laws ("Blue Sky laws")
relating to purchase orders except that Investor Services Group shall maintain
records in a manner that will enable the Fund to monitor the total number of
shares of each Portfolio and of each class sold in each state or other
jurisdiction and Investor Services Group shall report daily to the Administrator
or its designee sales of each class of shares of each Portfolio by state; such
reports to be in such format and transmitted in such manner as shall be
requested by the Administrator.
3.3 Investor Services Group will make available to the Administrator such
records and information as are reasonably necessary with respect to Voice-
Initiated Transactions to demonstrate that the Designated Procedures in the
Fund's and/or the Administrator's insurance policy are being maintained and
followed, providing such procedures have been provided to and accepted by
Investor Services Group. The current procedures for Voice-Initiated Transactions
are attached hereto as Exhibit 2 of Schedule B and shall remain in full force
and effect until the Administrator notifies Investor Services Group of any
changes thereto.
3.4 Investor Services Group has developed a recordkeeping service link
("DCXchange(SM)") between investment companies and benefit plan consultants (the
"Recordkeepers") which administer employee benefit plans, including plans
qualified under Section 401(a) of the Internal Revenue Code (the "Plans"). In
connection therewith, Investor Services Group has entered into agreements with
various Recordkeepers relating to the recordkeeping and related services
performed on behalf of such Plans in connection with daily valuation and
processing of orders for investment and reinvestment of assets of the Plans in
various investment options available to the participants under such Plans (the
"Participants"). The Fund desires to participate in the DCXchanges(SM) Program
and retain Investor Services Group to perform such services with respect to
shares of the Funds held by or on behalf of the Participants as further
described herein. Investor Services Group agrees to perform recordkeeping and
related services for the benefit of the Plan Participants that maintain shares
of the Fund through Plans administered by certain Recordkeepers. Investor
Services Group shall subcontract with Recordkeepers to link the Investor
Services Group recordkeeping system with the Recordkeepers (either manually or
in an automated fashion), in order for the Recordkeepers to maintain Fund shares
positions for each Participant. Fund positions of the Participants shall
constitute open accounts for which the Administrator shall pay to Investor
Services Group the annual fee specified in Schedule C, provided, however, the
Administrator shall have no obligation to pay any fees to any Recordkeeper
pursuant to the DCXchanges(SM) Program. Investor Services Group shall provide
during normal business hours the Administrator and its agents with such access
as the Administrator shall request to the records of Investor Services Group and
the Plans to enable the Administrator to verify to its satisfaction any amount
owing hereunder. Any Plan which is not currently purchasing Shares from the Fund
must invest at least $1 million in the aggregate in the Portfolios to be
entitled to purchase Shares from the Fund at net asset value.
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3.5 In addition to the duties set forth herein, Investor Services Group
shall perform such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing between the Fund
and Investor Services Group.
Article 4 IMPRESSNet Services.
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4.1 In addition to the services rendered by Investor Services Group as
set forth in this Agreement, Investor Services Group agrees to provide the
following services:
(a) in accordance with the written procedures established between
the Fund and Investor Services Group, enable the Fund and its Shareholders
to utilize the Internet in order to access Fund information maintained by
Investor Services Group through the use of the Investor Services Group Web
Transaction Engine and Secure Net Gateway;
(b) allow the Shareholders to perform account inquiries and
transactions through IMPRESSNet; and
(c) maintenance of the Investor Services Group Secure Net Gateway
and the Investor Services Group Web Transaction Engine.
4.2 In connection with the IMPRESSNet services provided by Investor
Services Group hereunder, the Fund shall be responsible for the following:
(a) establishment and maintenance of the Fund Home Page on the
Internet;
(b) services and relationships between the Fund and any third party
on-line service providers to enable the Shareholders to access the Fund
Home Page; and
(c) provide Investor Services Group with access to and information
regarding the Fund Home Page in order to enable Investor Services Group to
provide the services contemplated hereunder.
Article 5 Recordkeeping and Other Information.
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5.1 Investor Services Group shall create and maintain all records required
of it pursuant to its duties hereunder, including records required by Section
31(a) of the 1940 Act and as set forth in Schedule B in accordance with all
applicable laws, rules and regulations. Where applicable, such records shall be
maintained by Investor Services Group for the periods and in the places required
by Rule 31a-2 under the 1940 Act.
5.2 To the extent required by Section 31 of the 1940 Act, Investor
Services Group agrees that all such records prepared or maintained by Investor
Services Group relating to the services to be performed by Investor Services
Group hereunder are the property of the Fund and will be preserved, maintained
and made available in accordance with such section, and will be surrendered
promptly to the Fund on and in accordance with the Fund's request.
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5.3 In case of any requests or demands for the inspection of Shareholder
records of the Fund, Investor Services Group will use its best efforts to notify
the Fund of such request and secure Written Instructions as to the handling of
such request. Investor Services Group reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel (as
contemplated by Section 6.2 hereof) in writing that it may be held liable for
the failure to comply with such request and shall promptly notify the Fund of
any such action and advice.
Article 6 Fund Instructions.
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6.1 Investor Services Group will have no liability when acting upon
Written or Oral Instructions in accordance with the standard of care set forth
in Section 12 and will not be held to have any notice of any change of authority
of any person until receipt of a Written Instruction thereof from the Fund or
the Administrator. Investor Services Group will also have no liability when
processing Share certificates which it reasonably believes to bear the proper
manual or facsimile signatures of the officers of the Fund and the proper
countersignature of Investor Services Group.
6.2 At any time, Investor Services Group may request Written Instructions
from the Fund and may seek advice from legal counsel for the Fund, or its own
legal counsel, with respect to any matter arising in connection with this
Agreement, and shall notify the Administrator when seeking such advice. Investor
Services Group shall not be liable for any action taken or not taken or suffered
by it in good faith in accordance with such Written Instructions or in
accordance with the written opinion of counsel for the Fund or for Investor
Services Group. Written Instructions requested by Investor Services Group will
be provided by the Fund within a reasonable period of time.
6.3 Investor Services Group, its officers, agents or employees, shall
accept Oral Instructions or Written Instructions. The Fund agrees that all Oral
Instructions shall be followed within one business day by confirming Written
Instructions, and that the Fund's failure to so confirm shall not impair in any
respect Investor Services Group's right or obligation to rely on Oral
Instructions.
Article 7 Compensation.
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7.1 The Administrator will compensate Investor Services Group for the
performance of its obligations hereunder in accordance with the fees set forth
in the written Fee Schedule annexed hereto as Schedule C and incorporated
herein.
7.2 In addition to those fees set forth in Section 7.1 above, the
Administrator agrees to pay, and will be billed separately for, out-of-pocket
expenses incurred by Investor Services Group in the performance of its duties
hereunder. Out-of-pocket expenses shall include, but shall not be limited to,
the items specified in the written schedule of out-of-pocket charges annexed
hereto as Schedule D and incorporated herein. Schedule D may be modified by
written
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agreement between the parties. Unspecified out-of-pocket expenses shall be
limited to those out-of-pocket expenses reasonably incurred by Investor Services
Group in the performance of its obligations hereunder.
7.3 The Administrator agrees to pay all fees and out-of-pocket expenses
to Investor Services Group by Federal Funds Wire or check within forty-five (45)
business days following the receipt of the respective invoice. In addition, with
respect to all fees under this Agreement, Investor Services Group may charge a
service fee equal to the lesser of (i) one and one half percent (1 1/2%) per
month or (ii) the highest interest rate legally permitted on any past due
invoiced amounts, provided however, the foregoing service fee shall not apply if
the Administrator in good faith legitimately disputes any invoice amount in
which case the Administrator shall do the following within thirty (30) days of
receipt: (a) pay Investor Services Group the undisputed amount of the invoice;
and (b) provide Investor Services Group a detailed written description of the
disputed amount and the basis for the Administrator's dispute with such amount.
In addition, the Administrator shall cooperate with Investor Services Group in
resolving disputed invoice amounts and then promptly paying such amounts
determined to be due.
7.4 Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule C a revised Fee Schedule executed and dated by the
parties hereto.
Article 8 Documents.
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In connection with the appointment of Investor Services Group, the Fund
shall, on or before the date this Agreement goes into effect, but in any case
within a reasonable period of time for Investor Services Group to prepare to
perform its duties hereunder, deliver or caused to be delivered to Investor
Services Group the documents set forth in the written schedule of Fund Documents
annexed hereto as Schedule E.
Article 9 Transfer Agent System.
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9.1 Investor Services Group shall retain title to and ownership of any
and all computer programs, screen formats, report formats, interactive design
techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights utilized by Investor Services Group in connection
with the services provided by Investor Services Group to the Fund herein (the
"Investor Services Group System").
9.2 Investor Services Group hereby grants to the Administrator and the
Fund a limited license to the Investor Services Group System for the sole and
limited purpose of having Investor Services Group provide the services
contemplated hereunder and nothing contained in this Agreement shall be
construed or interpreted otherwise and such license shall immediately terminate
with the termination of this Agreement.
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9.3 In the event that the Fund, including any affiliate or agent of the
Fund or any third party acting on behalf of the Fund, is provided with direct
access to the Investor Services Group System for either account inquiry or to
transmit transaction information, including but not limited to maintenance,
exchanges, purchases and redemptions, such direct access capability shall be
limited to direct entry to the Investor Services Group System by means of on-
line mainframe terminal entry or PC emulation of such mainframe terminal entry
and any other non-conforming method of transmission of information to the
Investor Services Group System is strictly prohibited without the prior written
consent of Investor Services Group.
Article 10 Representations and Warranties.
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10.1 Investor Services Group represents and warrants to the Administrator
that:
(a) it is a corporation duly organized, existing and in good
standing under the laws of the Commonwealth of Massachusetts;
(b) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(c) all requisite corporate proceedings have been taken to
authorize it to enter into this Agreement;
(d) it is duly registered with its appropriate regulatory agency
as a transfer agent and such registration will remain in effect for the
duration of this Agreement;
(e) it has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement; and
(f) all equipment, services and software provided by Investor
Services Group (or by its third party suppliers) in connection with the
services rendered to the Fund under the terms of this Agreement, as
amended, include or shall include design and performance capabilities so
that prior to, during, and after the calendar year 2000, they will not
malfunction, produce invalid or incorrect results, or abnormally cease to
function due to the year 2000 date change. Such design and performance
capabilities shall include without limitation the ability to recognize the
century and to manage and manipulate data involving dates, including single
century and multi-century formulas and date values, without resulting in
the generation of incorrect values involving such dates or causing an
abnormal ending; date data interfaces with functionalities and data fields
that indicate the century; and date-related functions that indicate the
century and, if any changes are required, Investor Services Group will make
the changes to its equipment, services and software in a commercially
reasonable time frame and will require third party suppliers to do
likewise.
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10.2 The Administrator represents and warrants to Investor Services Group
that:
(a) it is duly formed, validly existing and in good standing under
the laws of the jurisdiction in which it is formed;
(b) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into this Agreement;
(c) all proceedings required by said Articles of Incorporation,
By-Laws and applicable laws have been taken to authorize it to enter into
this Agreement;
(d) a registration statement under the Securities Act of 1933, as
amended, and the 1940 Act on behalf of each of the Portfolios is currently
effective and will remain effective, and all appropriate state securities
law filings have been made and will continue to be made, with respect to
all Shares of the Fund being offered for sale; and
(e) all outstanding Shares are validly issued, fully paid and non-
assessable and when Shares are hereafter issued in accordance with the
terms of the Fund's Articles of Incorporation and its Prospectus with
respect to each Portfolio, such Shares shall be validly issued, fully paid
and non-assessable.
10.3 THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, INVESTOR SERVICES GROUP DISCLAIMS ALL OTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, MADE TO THE ADMINISTRATOR OR ANY OTHER PERSON,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE (IRRESPECTIVE OF
ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) OF ANY SERVICES OR ANY GOODS
PROVIDED INCIDENTAL TO SERVICES PROVIDED UNDER THIS AGREEMENT. INVESTOR SERVICES
GROUP DISCLAIMS ANY WARRANTY OF TITLE OR NON-INFRINGEMENT EXCEPT AS OTHERWISE
SET FORTH IN THIS AGREEMENT.
Article 11 Indemnification.
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11.1 Investor Services Group shall not be responsible for and the
Administrator shall indemnify and hold Investor Services Group harmless from and
against any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against Investor Services Group or for which Investor
Services Group may be held to be liable (a "Claim") arising out of or
attributable to any of the following:
(a) any actions of Investor Services Group required to be taken
pursuant to this Agreement unless such Claim resulted from a negligent act
or omission to act or bad faith by Investor Services Group in the
performance of its duties hereunder;
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(b) Investor Services Group's reasonable reliance on, or
reasonable use of information, data, records and documents (including but
not limited to magnetic tapes, computer printouts, hard copies and
microfilm copies) received by Investor Services Group from the Fund, or any
authorized third party acting on behalf of the Fund, including but not
limited to the prior transfer agent for the Fund, in the performance of
Investor Services Group's duties and obligations hereunder;
(c) the non-negligent reliance on, or the non-negligent
implementation of, any Written or Oral Instructions or any other
instructions or requests of the Fund on behalf of the applicable Portfolio;
(d) the offer or sales of shares in violation of any requirement
under 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 state with respect to the offer or sale of
such shares in such state; and
(e) the Administrator's refusal or failure to comply with the
terms of this Agreement, or any Claim which arises solely out of the
Administrator's negligence or misconduct or the breach of any
representation or warranty of the Administrator made herein.
11.2 The Administrator and the Fund shall not be responsible for and
Investor Services Group shall indemnify and hold the Administrator and the Fund
harmless from and against any and all Claims which result (i) from Investor
Services Group's refusal or failure to comply with the terms of this Agreement;
(ii) solely from the negligence, bad faith or willful misconduct of Investor
Services Group in the performance of its duties hereunder; (iii) solely from the
negligence, bad faith or willful misconduct of any Recordkeeper in connection
with the DCXchange(SM) program; (iv) the breach of any representation or
warranty of Investor Services Group made herein; and/or (v) from the negligence,
bad faith or willful misconduct of Investor Services Group or any third party
retained by Investor Services Group to maintain redemption and disbursement bank
accounts used to provide the services described herein.
11.3 In any case in which either party (the "Indemnifying Party") may be
asked to indemnify or hold the other (the "Indemnified Party") harmless, the
Indemnified Party will notify the Indemnifying Party promptly after identifying
any situation which it believes presents or appears likely to present a claim
for indemnification against the Indemnifying Party although the failure to do so
shall not prevent recovery by the Indemnified Party, except that the failure of
the Indemnified Party to so notify the Indemnifying Party will relieve the
Indemnifying Party of its indemnity obligation with respect to the action to the
extent that such omission results in the forfeiture of substantive rights or
defenses by the Indemnifying Party. In addition, the Indemnified Party shall
keep the Indemnifying Party advised with respect to all developments concerning
such situation. The Indemnifying Party shall have the option to defend the
Indemnified Party against any Claim which may be the subject of this
indemnification, and, in the event that the Indemnifying Party so elects, such
defense shall be conducted by counsel
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chosen by the Indemnifying Party and reasonably satisfactory to the Indemnified
Party, and thereupon the Indemnifying Party shall take over complete defense of
the Claim and the Indemnified Party shall sustain no further legal or other
expenses in respect of such Claim. The Indemnified Party will not confess any
Claim or make any compromise in any case in which the Indemnifying Party will be
asked to provide indemnification, except with the Indemnifying Party's prior
written consent. The obligations of the parties hereto under this Article 11
shall survive the termination of this Agreement.
11.4 Any claim for indemnification under this Agreement must be made prior
to the later of:
(a) one year after the Indemnified Party becomes aware of the event
for which indemnification is claimed; or
(b) one year after the earlier of the termination of this Agreement
or the expiration of the term of this Agreement.
11.5 Except for remedies that cannot be waived as a matter of law (and
injunctive or provisional relief), the provisions of this Article 11 shall be
Investor Services Group's sole and exclusive remedy for claims or other actions
or proceedings to which the Administrator's indemnification obligations pursuant
to this Article 11 may apply.
Article 12 Standard of Care.
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12.1 Investor Services Group shall at all times act in good faith and
agrees to use its best efforts to ensure the accuracy of all services performed
under this Agreement, but assumes no responsibility for loss or damage to the
Administrator and/or the Fund unless said errors are caused by Investor
Services Group's breach of a representation, warranty or covenant or own
negligence, bad faith or willful misconduct or that of its employees or its
agents.
12.2 Notwithstanding any provision in this Agreement to the contrary,
Investor Services Group's cumulative liability (to the Administrator and/or the
Fund) for all losses, claims, suits, controversies, breaches, or damages for any
cause whatsoever (including but not limited to those arising out of or related
to this Agreement) and regardless of the form of action or legal theory shall
not exceed (i) the fees received by Investor Services Group for services
provided under this Agreement during the twelve months immediately prior to the
date of such loss or damage; or (ii) if this Agreement has not been in effect
for twelve months, $2,000,000. The Administrator understands the limitation on
Investor Services Group's damages to be a reasonable allocation of risk and the
Administrator expressly consents with respect to such allocation of risk. In
allocating risk under the Agreement, the parties agree that the damage
limitation set forth above shall apply to any alternative remedy ordered by a
court in the event such court determines that sole and exclusive remedy provided
for in the Agreement fails of its essential purpose.
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12.3 Any costs or losses incurred by the Administrator for the processing
of any purchase, redemption, exchange or other share transactions at a price per
share other than the price per share applicable to the effective date of the
transaction as provided by the Administrator (the foregoing being generally
referred to herein as "as of" transactions) will be handled in the following
manner:
(a) For each calendar year, if all "as of" transactions for the year
that are a result of incorrect processing by Investor Services
Group, taken in the aggregate, result in a net loss to the
Administrator ("net loss"), Investor Services Group will
reimburse the Administrator for such net loss within 30 days
after the end of such calendar year. However, if at any time
during any calendar year, all "as of" transactions, taken in the
aggregate, result in a net loss to the Administrator in excess
of $50,000, Investor Services Group will immediately reimburse
the Administrator for such net loss. In either case, Investor
Services Group's obligation to reimburse the Administrator will
be reduced or eliminated with the application of a "net benefit"
to the Administrator carried over from prior calendar years
pursuant to subparagraph (b) immediately below.
(b) For each calendar year, if all "as of" transactions for the year
that are a result of incorrect processing by Investor Services
Group, taken in the aggregate, result in a net benefit to the
Administrator ("net benefit"), the Administrator shall not
reimburse Investor Services Group for the amount of such net
benefit; however, any "net benefit" for any calendar year may be
used to offset, in whole or in part, any "net loss" suffered by
the Administrator in any future calendar year so as to reduce
the amount by which Investor Services Group shall be required to
reimburse the Administrator for such "net loss" in such year
pursuant to sub-paragraph (a) immediately above.
(c) Any "net loss" for which Investor Services Group reimburses the
Administrator in any calendar year shall not be carried over
into future years so as to offset any "net benefit" in such
future years.
12.4 Each party shall have the duty to mitigate damages for which the
other party may become responsible.
12.5 Investor Services Group shall maintain an insurance policy or surety
bond, in the face amount of $10 million per covered transaction against losses
suffered by Investor Services Group in excess of the policy deductibles arising
from errors or omissions on the part of Investor Services Group in carrying out
its responsibilities under this Agreement. Investor Services Group shall furnish
promptly to the Administrator copies of all insurance policies maintained
pursuant to this Section 12 that have not previously been furnished to the
Administrator. Investor Services Group shall direct its insurers to provide the
Administrator with at least 30 days' written notice of any cancellation of any
policy maintained to satisfy Section 12. In addition, Investor
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Services Group shall promptly provide the Administrator with a copy of any
amendment of any such policy.
Article 13 Consequential Damages.
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NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE TO THE OTHER UNDER ANY THEORY OF
TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST
PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS
OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Article 14 Term and Termination.
--------------------
14.1 This Agreement shall be effective and be binding on the parties
on the date first written above (the "Effective Date"), provided however, the
parties acknowledge that the conversion of all of the transfer agent services
with respect to the Fund to Investor Services Group is scheduled to take place
on or about December 5, 1998. This Agreement shall continue for a period of five
(5) years from December 5, 1998 (the "Initial Term")
14.2 Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of three (3) years ("Renewal Terms")
each, unless the Administrator or Investor Services Group provides written
notice to the other of its intent not to renew. Such notice must be received not
less than ninety (90) days and not more than one-hundred eighty (180) days prior
to the expiration of the Initial Term or the then current Renewal Term.
14.3 In the event a termination notice is given by the Administrator,
all expenses associated with movement of records and materials and conversion
thereof to a successor transfer agent will be borne by the Administrator.
14.4 In the event that Investor Services Group has failed to meet a
specific performance standard category, as set forth in Exhibit 1 of Schedule A,
in four of any rolling six one-month periods, the Administrator may give written
notice thereof to Investor Services Group, and if such failure shall not have
been remedied within thirty (30) days after such written notice is received,
then the Administrator may terminate this Agreement without penalty by giving
thirty (30) days written notice of such termination to Investor Services Group.
Notwithstanding the foregoing, the Administrators' rights under this Section
14.4, shall not become effective until ninety (90) days after the commencement
of the services by Investor Services Group hereunder. In addition. for purposes
of the Administrator's option to terminate this Agreement under this Section
14.4, Investor Services Group's obligation to meet the Performance Standards
shall be measured in the aggregate with respect to all of the PIMCO
-13-
affiliated mutual funds for which Investor Services Group provides transfer
agency services. Unless the Administrator provides Investor Services Group with
notice of the Administrator's intent to exercise this option within 60 days of
the occurrence, the Administrator shall have waived its option to terminate
under this provision. In the event that the Administrator terminates this
Agreement pursuant to this Section 14.4, such termination of this Agreement
shall not constitute a waiver by the Administrator of any other rights it might
have under this Agreement or otherwise against Investor Services Group.
14.5 Except as otherwise provided in Section 14.4, if a party hereto
is guilty of a material failure to perform its duties and obligations hereunder
(a "Defaulting Party"), the other party (the "Non-Defaulting Party") may give
written notice thereof to the Defaulting Party, and if such material breach
shall not have been remedied within thirty (30) days after such written notice
is given, then the Non-Defaulting Party may terminate this Agreement by giving
thirty (30) days written notice of such termination to the Defaulting Party. If
Investor Services Group is the Non-Defaulting Party, its termination of this
Agreement shall not constitute a waiver of any other rights or remedies of
Investor Services Group with respect to services performed prior to such
termination of rights of Investor Services Group to be reimbursed for out-of-
pocket expenses. In all cases, termination by the Non-Defaulting Party shall not
constitute a waiver by the Non-Defaulting Party of any other rights it might
have under this Agreement or otherwise against the Defaulting Party.
14.6 Notwithstanding anything contained in this Agreement to the
contrary, should the Administrator desire to move any of the services provided
by Investor Services Group hereunder to a successor service provider prior to
the expiration of the then current Initial or Renewal Term, or without the
required notice period, Investor Services Group shall make a good faith effort
to facilitate the conversion on such prior date, however, there can be no
guarantee that Investor Services Group will be able to facilitate a conversion
of services on such prior date. In connection with the foregoing and except as
provided in Section 14.7 below, should services be converted to a successor
service provider, or if the Portfolios are liquidated or their assets merged or
purchased or the like with another entity which does not utilize the services of
Investor Services Group, the payment of fees to Investor Services Group as set
forth herein shall be accelerated to a date prior to the conversion or
termination of services and calculated as if the services had remained with
Investor Services Group until the expiration of the then current Initial or
Renewal Term and calculated at the asset and/or Shareholder account levels, as
the case may be, on the date notice of termination was given to Investor
Services Group.
14.7 In addition to the foregoing, after the first anniversary of this
Agreement, the Administrator may pursuant to this Section 14.7 terminate this
Agreement upon twelve (12) months prior written notice to Investor Services
Group if there is an acquisition, change of control (as defined under the 1940
Act), merger, or consolidation involving the Fund. In connection with the
foregoing, the Administrator shall be responsible for all costs associated with
the termination of the Agreement and, if the conversion occurs during the
Initial Term, shall, prior to the conversion to the successor service provider,
pay to Investor Services Group an amount equal to the pro rata portion (based
upon the assets of the Fund involved compared to the total assets of the Fund
and the Other Fund as defined below) of unrecouped capitalized costs
-14-
associated with the conversion expenses incurred by Investor Services Group as
described in Section B.1 of Schedule C. For purposes of such calculation, the
capitalized costs associated with the conversion expenses shall be deemed to be
recouped on a straight line basis over the Initial Term.
14.8 The Fund is part of PIMCO Funds which also includes PIMCO Funds:
Pacific Investment Management Series (the "Other Fund"). The administrator for
the Other Fund has entered into a substantially similar Transfer Agency and
Services Agreement (the "Related Agreement") with Investor Services Group. If
either party to the Related Agreement gives notice of termination thereunder,
such notice shall also constitute notice of termination hereunder on the same
terms and conditions unless the Administrator hereunder gives notice to Investor
Services Group to the contrary.
Article 15 Additional Portfolios
---------------------
In the event that the Fund establishes one or more Portfolios in
addition to those identified in Schedule A, with respect to which the
Administrator desires to have Investor Services Group render services as
transfer agent under the terms hereof, the Administrator shall so notify
Investor Services Group in writing, and if Investor Services Group agrees in
writing to provide such services, Exhibit 1 shall be amended to include such
additional Portfolios.
Article 16 Confidentiality
---------------
16.1 The parties agree that the Proprietary Information (defined
below) and the contents of this Agreement (collectively "Proprietary
Information") are confidential information of the parties and their respective
licensors. The Administrator and Investor Services Group shall exercise at least
the same degree of care, but not less than reasonable care, to safeguard the
confidentiality of the Proprietary Information of the other as it would exercise
to protect its own confidential information of a similar nature. The
Administrator and Investor Services Group shall not duplicate, sell or disclose
to others the Proprietary Information of the other, in whole or in part, without
the prior written permission of the other party. The Administrator and Investor
Services Group may, however, disclose Proprietary Information to their
respective parent corporation, their respective affiliates, their subsidiaries
and affiliated companies and employees, provided that each shall use reasonable
efforts to ensure that the Proprietary Information is not duplicated or
disclosed in breach of this Agreement. The Administrator and Investor Services
Group may also disclose the Proprietary Information to their agents, auditors,
professional advisors and their appropriate regulatory authorities.
Notwithstanding the previous sentence, in no event shall either the
Administrator or Investor Services Group disclose the Proprietary Information to
any competitor of the other or to any Recordkeeper without specific. prior
written consent. Notwithstanding anything else in this Agreement, it is
understood and agreed that, without any further consent of Investor Services
Group, the Administrator will on behalf of the Fund cause a copy of this
Agreement, minus the prices and rates on Schedule C to be filed with the
Commission and such action shall not constitute a violation of this Agreement.
-15-
16.2 Proprietary Information means:
(a) any data or information that is competitively sensitive material,
and not generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finance, operations,
customer relationships, customer profiles, sales estimates, business plans,
and internal performance results relating to the past, present or future
business activities of the Administrator or the Fund or Investor Services
Group, their respective subsidiaries and affiliated companies and the
customers, clients (including, but not limited to information contained in
the Shareholder records maintained by Investor Services Group on behalf of
the Administrator hereunder) and suppliers of any of them;
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and secret
in the sense that its confidentiality affords the Administrator or the Fund
or Investor Services Group a competitive advantage over its competitors;
and
(c) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
16.3 Proprietary Information includes, without limitation, all documents,
inventions, substances, engineering and laboratory notebooks, drawings,
diagrams, specifications, bills of material, equipment, prototypes and models,
and any other tangible manifestation of the foregoing of either party which now
exist or come into the control or possession of the other.
16.4 The obligations of confidentiality and restriction on use herein
shall not apply to any Proprietary Information that a party proves:
(a) Was in the public domain prior to the date of this Agreement or
subsequently came into the public domain through no fault of such party;
or
(b) Was lawfully received by the party from a third party free of any
obligation of confidence to such third party; or
(c) Was already in the possession of the party prior to receipt
thereof, directly or indirectly, from the other party; or
(d) Is required to be disclosed by law or in a judicial or
administrative proceeding after all reasonable legal remedies for
maintaining such information in confidence have been exhausted including,
but not limited to, giving the other party as much advance notice of the
possibility of such disclosure as practical so the other party may attempt
to stop such disclosure or obtain a protective order concerning such
disclosure; or
-16-
(e) is required by any appropriate regulatory authority having
jurisdiction over the disclosing party; or
(f) Is subsequently and independently developed by employees,
consultants or agents of the party without reference to the Confidential
Information disclosed under this Agreement.
Article 17 Force Majeure.
-------------
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default or delay
is caused, directly or indirectly, by (i) fire, flood, elements of nature or
other acts of God; (ii) any outbreak or escalation of hostilities, war, riots or
civil disorders in any country, (iii) any act or omission of the other party or
any governmental authority; or (iv) nonperformance by a third party or any
similar cause beyond the reasonable control of such party, provided that such
third party is not a subcontractor engaged by Investor Services Group as
provided in Article 18 or a third party supplier described in Section 10.1(f).
In any such event, the non-performing party shall be excused from any further
performance and observance of the obligations so affected only for as long as
such circumstances prevail and such party continues to use its best efforts to
recommence performance or observance as soon as practicable.
Article 18 Assignment and Subcontracting.
-----------------------------
This Agreement, its benefits and obligations shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned or otherwise transferred
by either party hereto, without the prior written consent of the other party;
provided, however, that either party may, in its sole discretion, assign all its
right, title and interest in this Agreement to an affiliate, parent or
subsidiary, or to the purchaser of substantially all of its business. Investor
Services Group may, in its sole discretion, engage subcontractors to perform any
of the obligations contained in this Agreement to be performed by Investor
Services Group and Investor Services Group shall be liable for all actions and
in-actions of such subcontractors, including Recordkeepers, as if all services
were performed by Investor Services Group without any substitution.
Article 19 Notice.
------
Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Administrator or Investor Services Group, shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Administrator and/or the Fund:
PIMCO Advisors L.P.
-17-
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Executive Vice President
To Investor Services Group:
First Data Investor Services Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to Investor Services Group's General Counsel
Article 20 Governing Law/Venue.
-------------------
The laws of The Commonwealth of Massachusetts, excluding the laws on
conflicts of laws, shall govern the interpretation, validity, and enforcement of
this Agreement. All actions arising from or related to this Agreement shall be
brought in the state and federal courts sitting in the City of Boston, and
Investor Services Group and the Administrator hereby submit themselves to the
exclusive jurisdiction of those courts.
Article 21 Counterparts.
------------
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
Article 22 Captions.
--------
The captions of this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
Article 23 Publicity.
---------
Neither Investor Services Group nor the Fund shall release or publish
news releases, public announcements, advertising or other publicity relating to
this Agreement, or to the parties to the Agreement, or any of their respective
affiliates, or to the transactions contemplated by it, including the
DCXchange(sm) Program without the prior review and written approval of the other
party; provided, however, that either party may make such disclosures as are
required by legal, accounting or regulatory requirements after making reasonable
efforts in the circumstances to consult in advance with the other party.
Article 24 Relationship of Parties/Non-Solicitation.
----------------------------------------
24.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
-18-
24.2 During the term of this Agreement and for one (1) year afterward,
the Administrator shall not recruit, solicit, employ or engage, for the
Administrator or others, Investor Services Group's employees.
Article 25 Entire Agreement; Severability.
------------------------------
25.1 This Agreement, including Schedules, Addenda, and Exhibits hereto,
constitutes the entire Agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof. No change,
termination, modification, or waiver of any term or condition of the Agreement
shall be valid unless in writing signed by each party. No such writing shall be
effective as against Investor Services Group unless said writing is executed by
a Senior Vice President, Executive Vice President, or President of Investor
Services Group. A party's waiver of a breach of any term or condition in this
Agreement shall not be deemed a waiver of any subsequent breach of the same or
another term or condition.
25.2 The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
Article 26 Miscellaneous.
-------------
The Administrator and Investor Services Group agree that the obligations
of the Administrator and Fund, if any, under the Agreement shall not be binding
upon any of the Board Members, shareholders, partners, nominees, officers,
employees or agents, whether past, present or future, of the Administrator and
the Fund individually, but are binding only upon the assets and property of the
Administrator, as provided in the Articles of Incorporation.
-19-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
PIMCO ADVISORS L.P.
By:
--------------------------
Title:
-----------------------
FIRST DATA INVESTOR SERVICES GROUP, INC.
By:
--------------------------
Title:
-----------------------
-20-
SCHEDULE A
----------
LIST OF PORTFOLIOS
Fund Name
Balanced
Capital Appreciation
Emerging Markets
Equity Income
Growth
Hard Assets
Innovation
International
International Developed
Mid-Cap Growth
Opportunity
Precious Metals
Renaissance
Small-Cap Value
Target
Tax-Efficient Equity
Value
Value 25
Asset Allocation Series 90/10 Portfolio
Asset Allocation Series 60/40 Portfolio
Asset Allocation Series 30/70 Portfolio
-21-
SCHEDULE B
----------
DUTIES OF INVESTOR SERVICES GROUP
1. Shareholder Information. Investor Services Group shall maintain a
-----------------------
record of the number of Shares held by each Shareholder of record which shall
include name, address, taxpayer identification number, dividend and capital gain
distribution choices and which shall indicate whether such Shares are held in
certificates or uncertificated form.
2. Shareholder Services. Investor Services Group shall respond as
--------------------
appropriate to all inquiries and communications from Shareholders relating to
Shareholder accounts with respect to its duties hereunder and as may be from
time to time mutually agreed upon between Investor Services Group and the
Administrator.
3. Share Certificates.
------------------
(a) At the expense of the Administrator, the Administrator shall
supply Investor Services Group with an adequate supply of blank share
certificates to meet Investor Services Group requirements therefor. Such Share
certificates shall be properly signed by facsimile. The Administrator agrees
that, notwithstanding the death, resignation, or removal of any officer of the
Fund whose signature appears on such certificates, Investor Services Group or
its agent may continue to countersign certificates which bear such signatures
until otherwise directed by Written Instructions.
(b) Investor Services Group shall issue replacement Share
certificates in lieu of certificates which have been lost, stolen or destroyed,
upon receipt by Investor Services Group of properly executed affidavits and lost
certificate bonds, in form satisfactory to Investor Services Group, with the
Administrator and Investor Services Group as obligees under the bond.
(c) Investor Services Group shall also maintain a record of each
certificate issued, the number of Shares represented thereby and the Shareholder
of record. With respect to Shares held in open accounts or uncertificated form
(i.e., no certificate being issued with respect thereto) Investor Services Group
shall maintain comparable records of the Shareholders thereof, including their
names, addresses and taxpayer identification. Investor Services Group shall
further maintain a stop transfer record on lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. If requested
-------------------------------------------------------
by the Administrator, Investor Services Group will address and mail to
Shareholders of the Fund, all reports to Shareholders, dividend and distribution
notices and proxy material for the Fund's meetings of Shareholders or, if
requested by the Administrator, deliver a list of the names and addresses of
Shareholders in the form reasonably specified by the Administrator to a third
party which has been engaged by the Administrator to do the mailing. In
connection with meetings of Shareholders, Investor Services Group will prepare
Shareholder lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies voted prior to
meetings, act as inspector of election at meetings and certify Shares voted at
meetings.
-22-
5. Sales of Shares.
---------------
(a) Investor Services Group shall not be required to issue any
Shares of the Fund where it has received a Written Instruction from the
Administrator or the Fund or official notice from any appropriate authority that
the sale of the Shares of the Fund has been suspended or discontinued.
(b) In the event that any check or other order for the payment of
money is returned unpaid for any reason, Investor Services Group will: (i) give
prompt notice of such return to the Administrator or its designee; (ii) place a
stop transfer order against all Shares issued as a result of such check or
order; and (iii) take such actions as Investor Services Group and the
Administrator may from time to time deem appropriate.
6. Transfer and Repurchase.
-----------------------
(a) Investor Services Group shall process all requests to transfer
or redeem Shares in accordance with the transfer or repurchase procedures set
forth in the Fund's Prospectus.
(b) Investor Services Group will transfer or repurchase Shares upon
receipt of Oral or Written Instructions or otherwise pursuant to the Prospectus
and Share certificates, if any, properly endorsed for transfer or redemption,
accompanied by such documents as shall be specified by the Administrator.
(c) Investor Services Group reserves the right to refuse to transfer
or repurchase Shares until it is satisfied that the endorsement on the
instructions is valid and genuine in accordance with the Prospectus. Investor
Services Group also reserves the right to refuse to transfer or repurchase
Shares until it is satisfied that the requested transfer or repurchase is
legally authorized in accordance with the Prospectus, and, if consistent with
the Prospectus, it shall incur no liability for the refusal, in good faith, to
make transfers or repurchases which Investor Services Group, in its good
judgment, deems improper or unauthorized, or until it is reasonably satisfied
that there is no basis to any claims adverse to such transfer or repurchase.
(d) When Shares are redeemed, Investor Services Group shall, upon
receipt of the instructions and documents in proper form, deliver to the
Custodian and the Administrator or its designee a notification setting forth the
number of Shares to be repurchased. Such repurchased shares shall be reflected
on appropriate accounts maintained by Investor Services Group reflecting
outstanding Shares of the Fund and Shares attributed to individual accounts.
(e) Investor Services Group shall upon receipt of the monies
provided to it by the Custodian for the repurchase of Shares, pay such monies as
are received from the Custodian, all in accordance with the procedures described
in the written instruction received by Investor Services Group from the
Administrator.
(f) Investor Services Group shall not process or effect any
repurchase with respect to Shares of a Portfolio after receipt by Investor
Services Group or its agent of notification of the suspension of the
determination of the net asset value of such Portfolio.
-23-
7. Dividends.
---------
(a) Upon the declaration of each dividend and each capital gains
distribution by the Fund with respect to Shares of a Portfolio, the
Administrator shall furnish or cause to be furnished to Investor Services Group
Written Instructions setting forth the date of the declaration of such dividend
or distribution, the ex-dividend date, the date of payment thereof, the record
date as of which Shareholders entitled to payment shall be determined, the
amount payable per Share to the Shareholders of record as of that date, the
total amount payable on the payment date and whether such dividend or
distribution is to be paid in Shares at net asset value.
(b) On or before the payment date specified in such Written
Instructions from the Administrator, the Administrator will provide Investor
Services Group with sufficient cash to make payment to the Shareholders of
record as of such payment date.
(c) If Investor Services Group does not receive sufficient cash from
the Administrator to make total dividend and/or distribution payments to all
Shareholders of the Fund as of the record date, Investor Services Group will,
upon notifying the Administrator, withhold payment to all Shareholders of record
as of the record date until sufficient cash is provided to Investor Services
Group.
8. Retirement Plans. In connection with the individual retirement
----------------
account, simplified employee pension plan, rollover individual retirement plan,
educational XXX and XXXX individual retirement account (each hereinafter
referred to as an "XXX" and, collectively, the "IRAs") within the meaning of
Section 408 of the Internal Revenue Code of 1986, as amended (the "Code")
offered by the Fund for which contributions of the Funds' shareholders (the
"Participants") in the IRA's are invested in shares of the Funds, Investor
Services Group shall provide the following administrative services in addition
to those services described herein:
(a) Establish a record of types and reasons for distributions (i.e.,
attainment of age 59-1/2, disability, death, return of excess contributions,
etc.);
(b) Record method of distribution requested and/or made;
(c) Receive and process designation of the beneficiary forms;
(d) Examine and process requests for direct transfers between
custodians/trustees, transfer and pay over to the successor assets in the
account and records pertaining thereto as requested;
(e) Prepare any annual reports or returns required to be prepared
and/or filed by a custodian of an XXX, including, but not limited to, an annual
fair market value report, Forms 1099R and 5498 and file with the IRS and
provide to Participant/Beneficiary; and
(f) Perform applicable federal withholding and send
Participants/Beneficiaries an annual TEFRA notice regarding required federal tax
withholding.
9. Lost Shareholders.
-----------------
(a) Investor Services Group shall perform such services as are required in
order to comply with Rules 17a-24 and 17Ad-17 of the 34 Act (the "Lost
Shareholder Rules"), including, but not limited to those set forth below.
Investor Services Group may, in its sole discretion, use the services of a third
party to perform the some or all such services.
-24-
(i) documentation of electronic search policies and procedures;
(ii) execution of required searches;
(iii) creation and mailing of confirmation letters;
(iv) taking receipt of returned verification forms;
(v) providing confirmed address corrections in batch via electronic
media;
(vi) tracking results and maintaining data sufficient to comply with the
Lost Shareholder Rules; and
(vii) preparation and submission of data required under the Lost
Shareholder Rules.
10. Miscellaneous. In addition to and neither in lieu nor in
-------------
contravention of the services set forth above, Investor Services Group shall
perform all the customary services of a transfer agent, registrar, dividend
disbursing agent and agent of the dividend reinvestment and cash purchase plan
as described herein consistent with those requirements in effect as at the date
of this Agreement. The detailed definition, frequency, limitations and
associated costs (if any) set out in the attached fee schedule, include but are
not limited to: maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing proxies, tabulating proxies, mailing Shareholder reports
to current Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts where applicable, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders.
-25-
Exhibit 1 of Schedule B
-----------------------
Performance Standards
Investor Services Group will use a statistical sampling as a percentage of
transactions processed through the transaction processing and quality control
units of Investor Services Group providing services to the Administrator and the
Fund and will track and report to the Administrator on the accuracy of the
transaction processed. Examining the sampling against predetermined Investor
Services Group criteria for accuracy, Investor Services Group will provide an
accuracy rate as represented by "percent" measured to the last Friday of each
month from the last Friday of the previous month. The Administrator reserves the
right to inspect, or have a third party inspect, the Quality Assurance
procedures and documentation and all documents reviewed and considered in
determining the accuracy of processing.
I. Transaction Processing
----------------------
Manual Data Entry - Investor Services Group provides a manual data entry
service to the Fund for establishing new Shareholder accounts and
monitoring existing account records.
Investor Services Group's Objective - Investor Services Group's objective
is to establish new accounts with a data accuracy rate of 95%. Investor
Services Group's objective is to process all other financial transactions
with a data accuracy rate of 98%.
Accuracy
Turnaround* Standard
---------- --------
A. New Accounts
-Purchases R 95%
-Exchanges R 98%
-Transfer R+4 98%
B. Purchases
-Directs (Money
Mkt. Funds) R 98%
-Directs (All other
Funds R 98%
-Wire Orders
(Placement) R 98%
-Wire Orders
(Settlement) R 98%
C. Redemptions
-Direct R 98%
-Wire Orders R 98%
-26-
Accuracy
Turnaround* Standard
---------- --------
D. Exchanges R 98%
E. Transfers R+4 98%
F. Maintenance R+4 95%
G. Adjustments
-Priority R+1 98%
-Non-Priority R+4 98%
-OCF Cancel/Rebill R+1 98%
II. Shareholder Services
--------------------
Timeliness of Research Requests - Investor Services Group will provide a
research and problem resolution service to the Shareholders. On a daily
basis, the Administrator will communicate research requests to Investor
Services Group.
Investor Services Group's Objective - Investor Services Group's objective
is to accurately respond to 98% of the research requests within the periods
set forth below.
Financial: Complete within 72 hours
Non-Financials: Complete within 120 hours
With respect to e:mail inquires, Investor Services Group agrees attempt to
complete within 24 hours and to monitor and review volumes for a period of
sixty (60) days, after which the parties shall mutually agree on a specific
performance standard.
Accuracy
Turnaround* Standard
---------- --------
A. Research
-Priority (Financial) R+3 n/a
-Non-Priority(Non- R+5 n/a
Financial)
-Transcripts R+9 n/a
B. Correspondence
-Priority (Financial) R+3 98%
-Non-Priority (Other) R+5 98%
-27-
III. Print/Mail Administration
-------------------------
Accuracy and Timeliness of Shareholder Statements
Service Description - Based on the mail frequency of the Fund, Investor
Services Group will produce and mail periodic statements to Shareholders.
Investor Services Group's Objective - Investor Services Group's objective
is to manage this service so that 98% of all Statements from the Fund are
accurate and are mailed no later than five (5) business days after receipt
of all necessary data from the Fund of the Fund's third party service
provider. Data received prior to 12:00 p.m. shall be deemed to be received
on that business day - data received after 12:00 p.m. shall be deemed
received on the following business day.
Accuracy and Timeliness of Daily Advice Mailings
Service Description - Investor Services Group will produce and send,
deliver or distribute an advice to the Shareholder's account, except where
suppressed pursuant to instructions received from the Administrator.
Investor Services Group's Objectives - Investor Services Group's objective
is to manage this service so that 98% of such advices are accurate and are
mailed no later than two (2) business days following the date of the
transaction.
Timeliness of Distribution Checks and Dividend Mailings
Service Description - Periodically, Investor Services Group will create and
mail checks for Fund's respective Shareholders.
Investor Services Group's Objectives - Investor Services Group's objective
is to manage this service so that 98% of such advices are accurate and are
mailed no later than two (2) business days following the date of the
transaction.
Accuracy
Turnaround* Standard
---------- --------
A. Shareholder Statements
Mailed R+5 98%
B. Duplicate Confirm.
Mailed R+2 98%
-28-
Accuracy
Turnaround* Standard
---------- --------
C. Daily Checks Mailed
(include redemptions
SWP's & replacements) R+l 98%
D. Periodic Checks Mailed R+2 98%
* R= Date of Receipt in good order
IV. Data Center Services
--------------------
A. Response Time - An average of 98% of all inquiries into the Investor
Services Group Mainframe system (CICS entries) on Business Days from
8:00 a.m. to 8:00 p.m. eastern time ("Business Hours") during a
calendar month will have a response time of three (3) seconds or less.
B. On-Line Systems Availability - The On-Line System will be available
for inquiry and data entry at least 96% of the time during Business
Hours, measured on a calendar month basis.
V. Quality Assurance.
-----------------
Investor Services Group will use a statistical sampling of transactions
processed through the transaction processing and the quality control units
of Investor Services Group providing services to the Funds and will track
and report on a weekly and monthly basis to the Funds on the accuracy of
the transactions processed. Examining the sampling against pre-determined
Investor Services Group criteria for accuracy, Investor Services Group will
achieve the preceding quality assurance levels identified in the Accuracy
Standard Column above, measured monthly by their independent Quality
Assurance Department.
-29-
VI. Financial Control
-----------------
Service Description:
Investor Services Group will provide daily fund settlement reports to the
Fund's accounting and custodian service providers. Investor Services Group
will reconcile the Fund's Demand Deposit Accounts on a daily basis,
including investments and disbursements. Acceptable DDA Item Exceptions
beyond five days include:
- Client Originated Item
- Shareholder Reclaim
- Bank (Cash Manager Error)
- Shareholder Fraudulent Activity
- Fed Wire Recall
- Miscellaneous Funding Issues with Shareholder, Cash Manager,
or Custodian
Investor Services Group's Objectives:
Investor Services Group's objective is to reconcile all demand deposit
account ("DDA") transactions within five (5) business days of the
transaction post date. Any exceptions, including items greater than five
(5) business days, will be reported to the Administrator with a general
item description. Any exception must be approved by the Administrator to be
considered within standard.
-30-
Exhibit 2 of Schedule B
-----------------------
Procedures for Voice Initiated Transactions
1. Definitions. The following terms used in this Agreement shall have the
-----------
following meanings:
a. "Voice-initiated Transaction" means any Voice-initiated Redemption,
Voice-initiated Election, or Voice-initiated Exchange.
b. "Voice-initiated Redemption" means any redemption of shares issued by
an Investment Company (as defined in the 40 Act) which is requested by
voice over the telephone.
c. "Voice-initiated Election" means any election concerning dividend
options available to Fund shareholders which is made by voice over the
telephone.
d. "Voice-initiated Exchange" means any exchange of shares in a
registered account of one Portfolio into shares in an identically
registered account of another Portfolio in the same complex pursuant
to exchange privileges of the two Portfolios, which exchange is
requested by voice over the telephone.
e. "Designated procedures" means the following procedures:
(1) Election in Application: No Voice-initiated Redemption shall be
------------------------
executed unless the Shareholder(s) to whose account such a Voice-
initiated redemption relates has previously elected in writing to
permit such Voice-initiated Redemption.
(2) Recordings: All Voice-initiated Transaction requests shall be
-----------
recorded, and the recordings shall be retained for at least six
(6) months.
(a) Information contained on the recordings shall be capable of
being retrieved through the following methods:
A trade ticket is prepared for each call which states an
Index No., the time and the phone line on which the call is
received. For retrieval, the trade ticket is recalled, then
the specific tape and call.
(b) Information contained on the recordings shall be capable of
being retrieved and produced within a reasonable time after
retrieval of specific information is requested, at a success
rate of no less than 85 percent.
-31-
(3) Identity Test: The identity of the caller in any request for a
--------------
Voice-initiated Redemption shall be tested before executing that
Voice-initiated Redemption, using the following test:
Tax ID name and address
(4) Written Confirmation: A written confirmation of any Voice-
---------------------
initiated Transaction and of any change of the record address of
a Fund shareholder made over the telephone shall be mailed to the
shareholder(s) to whose account such Voice-initiated Transaction
or change of address relates, at the original record address
(and, in the case of such change of address, at the changed
record address) by the end of the Insured's next regular
processing cycle, but no later than five (5) business days
following such Voice-initiated Transaction or change of address.
For the purposes hereof, `regular processing cycle' means the 24-
hour period commencing upon receipt of such Voice-initiated
Transaction or change of the record address.
-32-
SCHEDULE C
----------
FEE SCHEDULE
A. FEES
----
1. Annual Per Account Fees:
Networking Accounts (1,2,3,4): $ 5.75 per account
Non-Networking Accounts: $15.00 per account
Closed Accounts $ 2.00 per closed account
2. SALESStars: $100,000 per year to cover the cost of one programming full
time employee ("FTE") for SALEStars server support, subject to an annual 5%
increase after the one year anniversary of the effective date of this
Agreement. Customized enhancements of SALESStars shall be provided at the
rates set forth in Section 10(b) of this Schedule C. Investor Services
Group and the Administrator agree to review the need for programming
support for the SALEStars server on an annual basis.
3. NSCC Fees: No Charge
4. DAZL:
Base Product: $17,000 set-up fee
No charge for transmission of
transaction or price records
DAZL Direct/DAZL Interactive: $1,000 per month
(including Sungard and $.025 per transaction record
transmitted
Xxxxxxx Xxxxxx & Co., $.015 per price record transmitted
Inc. processing)
5. VRU $25,000 set-up fee
$ 6,000 year
Xxxx. * $.23 per minute
Xxxx. * $.l0 per call
6. Cost Basis Forms: No Charge
7. DCXchange(SM) $4.00 per Plan Participant Account
Xxxx. * ISG and the Administrator agree to review these rates annually to
determine whether they should be increased, decreased, or not adjusted
at all.
-33-
8. IMPRESSNet:
Development Fees: $135.00 per hour
Reviewing client network requirements and signing off on the
requirements
Recommending method of linking to the Web Transaction Engine
Installing the network hardware and software
Implementing the network connectivity
Testing the network connectivity and performance
Customized Development
Transaction Fees:
Account Inquiries: $.05 per inquiry less than 50,000 inquiries
per month
$.35 per inquiry more than 50,000 inquires
per month
Financial Transactions: $.50 per trans less than 25,000 trans per
month
$.35 per trans more than 25,000 trans per
month
9. Fiduciary Fees (Retirement Plan account processing): No Charge
10. Lost Shareholder Search/Reporting: $2.75 per account search*
* the per account search fee shall be waived until June 2000 so long
as the Administrator retains Xxxxx Tracers, Inc. ("KTI") to provide
KTI's "In-Depth Research Program" services.
Except as otherwise set forth above, after the one year anniversary of the
effective date of this Agreement, Investor Services Group may adjust the above
fees once per calendar year, upon thirty (30) days prior written notice, in an
amount not to exceed the cumulative percentage increase in the Consumer Price
Index for All Urban Consumers (CPI-U) U.S. City Average, All items (unadjusted)
- (1982-84=100), published by the U.S. Department of Labor since the last such
adjustment in the Administrator's monthly fees (or since the Effective Date in
the case of the first such adjustment).
11. Programming Costs:
(a) Dedicated Team:
Programmer $100,000 per annum
BSA $ 85,000 per annum
Tester $ 65,000 per annum
(b) System Enhancements (Non Dedicated Team):
Programmer $150.00 per hour
The above Programming Costs are subject to an annual 5% increase after the
one year anniversary of the effective date of this Agreement.
-34-
12. Print/Mail Fees.
(a) Standard Services.
Implementation Fee:
-------------------
$ 5000.00
$ 150.00 / hr. Multi-check and Non Standard
Testing Application or Data Requirements:
-----------------------------------------
$3.00 / fax to client or Record Keeper
Work Order:
-----------
$15.00 per work order
Daily Work (Confirms):
---------------------
Hand: $71/K with $75.00 minimum (includes 1 insert)
$0.07/each additional insert
Machine: $42/K with $50.00 minimum (includes 1 insert)
$0.01/each additional insert
Daily Checks:
------------
Hand: $91/K with $100.00 minimum daily (includes 1
insert)
$0.08/each additional insert
Machine: $52/K with $75.00 minimum (includes 1 insert)
$0.01/each additional insert
* There is a $3.00 charge for each 3606 Form sent.
Statements:
-----------
Hand: $78/K with $75.00 minimum (includes 1 insert)
$0.08/each additional insert
$125/K for intelligent inserting
Machine: $52/K with $75.00 minimum (includes 1 insert)
$0.01 each additional insert
$58/K for intelligent inserting
Periodic Checks:
---------------
Hand: $91/K with $100.00 minimum (includes 1 insert)
$0.08/each additional insert
Machine: $52/K with $100.00 minimum (includes 1 insert)
$0.01/each additional insert
12B1/Dealer Commission Checks/Statements:
-----------------------------------------
$0.78/each envelope with $100.00 minimum
-35-
Spac Reports/Group Statements:
-----------------------------
$78/K with $75.00 minimum
Listbills:
---------
$0.78 per envelope with $75.00 minimum
Printing Charges: (price ranges dependent on volumes)
----------------
$0.08/per confirm/statement/page
$0.10/per check
Folding (Machine):
-----------------
$18/K
Folding (Hand):
--------------
$.12 each
Presort Charge:
--------------
$0.277 postage rate
$0.035 per piece
Courier Charge:
--------------
$15.00 for each on call courier trip/or actual cost for
on demand
Overnight Charge:
----------------
$3.50 per package service charge plus Federal
Express/Airborne charge
Inventory Storage:
-----------------
$20.00 for each inventory location as of the 15th of
the month
Inventory Receipt:
-----------------
$20.00 for each SKU / Shipment
Hourly work: special projects, opening envelopes. etc...:
--------------------------------------------------------
$24.00 per hour
Special Pulls:
-------------
$2.50 per account pull
Boxes/Envelopes:
---------------
Shipping boxes $0.85 each
Oversized Envelopes $0.45 each
-36-
Forms Development/Programming Fee:
---------------------------------
$100/hr
Systems Testing:
---------------
$85/hr
Cutting Charges:
---------------
$10.00/K
(b) Special Mailings.
This pricing for special mailings is based on appropriate notification
(standard of 30 day minimum) and scheduling for special mailings.
Scheduling requirements include having collateral arrive at agreed upon
times in advance of deadlines. Mailings which arise with shorter time
frames and turns will be billed at a maximum premium of 50% based on turn
around requirements.
Work Order:
----------
$30.00 per Work order
Daily Work (Confirms):
---------------------
Hand: $135.00 to create an admark tape
$10.00/K to zip +4 data enhance with $125.00
minimum
$80.00/hr for any data manipulation
$6.00/K combo charge
Admark & Machine Insert
-----------------------
#10, #11, 6x9
$62/K to admark envelope and machine insert 1
piece, with
$125.00 minimum
$2.50/K for each additional insert
$38/K to admark only with $75.00 minimum
$25.00/X xxxx sort
9x 12
$100/K to admark envelope and machine insert 1
piece, with $125.00 minimum
$5.00/K for each additional insert
$38/K to admark only with $75.00 minimum
$0.08 for each hand insert
Admark & Hand Insert
--------------------
#10, #11, 6x9
$0.08 for each hand insert
$25.00/X xxxx sort
-37-
9x 12
$0.09 for each hand insert
$25.00/X xxxx sort
Pressure/Sensitive Labels:
-------------------------
$0.32 each to create, affix and hand insert 1 piece,
with a $75.00 minimum
$0.08 for each hand insert
$0.10 to affix labels only
$0.10 to create labels only
Legal Drop:
----------
$150.00/compliant legal drop per job and processing
fees
Presort Fee:
-----------
$0.035 per piece
B. MISCELLANEOUS
-------------
1. Conversion Costs. All reasonable expenses associated with the movement of
records and materials and the conversion thereof from the Fund's current
transfer agent to Investor Services Group shall be borne by Investor Services
Group .
2. Fee Credit. Investor Services Group shall provide a monthly credit of
$35,000 against the total monthly invoiced amount from Investor Services Group
with respect to all of the PIMCO affiliated mutual funds for which Investor
Services Group provides transfer agency services.
3. Cash Management Services. Investor Services Group shall maintain various
demand deposit accounts ("DDA's") with a third party cash management services
provider in order to facilitate the services being provided by Investor Services
Group. Investor Services Group agrees to assume responsibility for all fees
charged by the cash management services provider, provided however, Investor
Services Group shall retain any and all investment income and/or related credits
derived from maintaining such DDA's.
-38-
SCHEDULE D
----------
OUT-OF-POCKET EXPENSES
The Administrator shall reimburse Investor Services Group monthly for
applicable out-of-pocket expenses, including, but not limited to the following
items:
. Microfiche/microfilm production
. Magnetic media tapes and freight
. Printing costs, including certificates, envelopes, checks and stationery
. Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct pass
through to the Administrator
. Due diligence mailings
. Telephone and telecommunication costs, including all lease, maintenance
and line costs
. Ad hoc reports - First 10 reports at no cost, reports in excess of 10
shall be billed at $50 per hour with a $50 minimum per report
. Proxy solicitations, mailings and tabulations
. Daily & Distribution advice mailings
. Shipping, Certified and Overnight mail and insurance
. Year-end form production and mailings
. Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
. Duplicating services, if requested by the Administrator
. Courier services
. Overtime, as approved by the Administrator
. Temporary staff, as approved by the Administrator
. Travel and entertainment, as approved by the Administrator
. Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party recordkeeping vendors
. Third party audit reviews (shared pro rata with other Investor Services
Group clients)
. Ad hoc SQL time, if requested by the Administrator
. Such other miscellaneous out-of-pocket expenses reasonably incurred by
Investor Services Group with the advance approval of the Administrator
in performing its duties and responsibilities under this Agreement.
The Administrator agrees that postage and mailing expenses will be paid on
the day of or prior to mailing as agreed with Investor Services Group. In
addition, the Administrator will promptly reimburse Investor Services Group for
any other unscheduled expenses incurred by Investor Services Group whenever the
Administrator and Investor Services Group mutually agree that such expenses are
not otherwise properly borne by Investor Services Group as part of its duties
and obligations under the Agreement.
-39-
SCHEDULE E
----------
FUND DOCUMENTS
. Certified copy of the Articles of Incorporation of the Administrator, as
amended
. Specimens of the certificates for Shares of the Fund, if applicable, in
the form approved by the Board of Directors of the Fund, with a
certificate of the Secretary of the Fund as to such approval
. All account application forms and other documents relating to Shareholder
accounts or to any plan, program or service offered by the Fund
. Certified list of Shareholders of the Fund with the name, address and
taxpayer identification number of each Shareholder, and the number of
Shares of the Fund held by each, certificate numbers and denominations
(if any certificates have been issued), lists of any accounts against
which stop transfer orders have been placed, together with the reasons
therefor, and the number of Shares redeemed by the Fund
. All notices issued by the Fund with respect to the Shares in accordance
with and pursuant to the Articles of Incorporation or By-laws of the Fund
or as required by law and shall perform such other specific duties as are
set forth in the Articles of Incorporation including the giving of notice
of any special or annual meetings of shareholders and any other notices
required thereby.
-40-
