Exhibit 99.B(h)(4)
AGENCY AGREEMENT
THIS AGREEMENT made the 30th day of November, 2000, by and between each
of the following registered investment companies (1) LEXINGTON MONEY MARKET
TRUST, a Massachusetts business trust; (2) PILGRIM EQUITY TRUST, a Massachusetts
business trust, currently consisting of Pilgrim Index Plus Protection Fund and
Pilgrim MidCap Opportunities Fund; (3) PILGRIM GROWTH OPPORTUNITIES FUND, a
Massachusetts business trust; (4) PILGRIM MAYFLOWER TRUST, a Massachusetts
business trust, consisting of Pilgrim Growth + Value Fund, Pilgrim International
Value Fund and Pilgrim Research Enhanced Index Fund; (5) PILGRIM NATURAL
RESOURCES TRUST, a Massachusetts business trust; (6) PILGRIM PRIME RATE TRUST, a
Massachusetts business trust; (7) PILGRIM SMALLCAP OPPORTUNITIES FUND, a
Massachusetts business trust; (8) PILGRIM VARIABLE PRODUCTS TRUST, a
Massachusetts business trust, consisting of Pilgrim VP Convertible Portfolio,
Pilgrim VP Emerging Countries Portfolio, Pilgrim VP Financial Services
Portfolio, Pilgrim VP Growth & Income Portfolio, Pilgrim VP Growth + Value
Portfolio, Pilgrim VP Growth Opportunities Portfolio, Pilgrim VP High Yield Bond
Portfolio, Pilgrim VP International Portfolio, Pilgrim VP International SmallCap
Growth Portfolio, Pilgrim VP International Value Portfolio, Pilgrim VP LargeCap
Growth Portfolio, Pilgrim VP MagnaCap Portfolio, Pilgrim XX XxxXxx Opportunities
Portfolio, Pilgrim VP Research Enhanced Index Portfolio, Pilgrim VP SmallCap
Opportunities Portfolio and Pilgrim VP Worldwide Growth Portfolio; (9) PILGRIM
FUNDS TRUST, a Delaware business trust, consisting of Pilgrim European Equity
Fund, Pilgrim Global Communications Fund, Pilgrim Global Information Technology
Fund, Pilgrim Intermediate Bond Fund, Pilgrim Internet Fund, ING Pilgrim Money
Market Fund, Pilgrim National Tax-Exempt Bond Fund and Pilgrim Tax Efficient
Equity Fund; (10) PILGRIM MUTUAL FUNDS, a
Delaware business trust, consisting of Pilgrim Balanced Fund, Pilgrim
Convertible Fund, Pilgrim Emerging Countries Fund, Pilgrim High Yield Fund II,
Pilgrim International Core Growth Fund, Pilgrim International SmallCap Growth
Fund, Pilgrim LargeCap Growth Fund, Pilgrim MidCap Growth Fund, Pilgrim Money
Market Fund, Pilgrim SmallCap Growth Fund, Pilgrim Strategic Income Fund and
Pilgrim Worldwide Growth Fund; (11) PILGRIM SENIOR INCOME FUND, a Delaware
business trust; (12) PILGRIM ADVISORY FUNDS, INC., a Maryland corporation,
consisting of Pilgrim Asia-Pacific Equity Fund; (13) PILGRIM BANK AND THRIFT
FUND, INC., a Maryland corporation; (14) PILGRIM EMERGNG MARKETS FUND, INC., a
Maryland corporation; (15) PILGRIM GNMA INCOME FUND, INC., a Maryland
corporation; (16) PILGRIM PRECIOUS METALS FUND, INC., a Maryland corporation;
(17) PILGRIM GROWTH AND INCOME FUND, INC., a Maryland corporation; (18) PILGRIM
INVESTMENT FUNDS, INC., a Maryland corporation, consisting of Pilgrim High Yield
Fund and Pilgrim MagnaCap Fund; (19) PILGRIM INTERNATIONAL FUND, INC., a
Maryland corporation, and (20) PILGRIM RUSSIA FUND, INC., a Maryland
corporation, and any other registered investment companies set forth on Exhibit
A, attached hereto, as amended from time to time (each such registered
investment company [1-20] and any investment company added to
Exhibit A in the future) hereinafter jointly and severally referred to as
"Fund") each having its principal place of business at 0000 X. Xxxxxxxxxx Xxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxx, 00000-0000, and DST SYSTEMS, INC., a corporation
organized and 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"):
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WITNESSETH:
WHEREAS, 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 Fund, there will be filed with DST the
following documents:
A. A certified copy of the resolutions of the Board of Directors
or Trustees of Fund 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 Fund;
B. A certified copy of the Articles of Incorporation or
Declaration of Trust of Fund and all amendments thereto;
C. A certified copy of the Bylaws of 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 or Trustees of
Fund, with a certificate of the Secretary of Fund, as to such
approval;
F. Specimens of the signatures of the officers of Fund authorized
to sign stock certificates and individuals authorized to sign
written instructions and requests;
G. An opinion of counsel for Fund with respect to:
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(1) Fund's organization and existence under the laws of
its state of organization,
(2) The status of all shares of stock of Fund covered by
the appointment under the Securities Act of 1933, as
amended, and any other applicable federal or state
statute, and
(3) That all issued shares are, and all unissued shares
will be, when issued, validly issued, fully paid and
nonassessable.
2. CERTAIN REPRESENTATIONS AND WARRANTIES OF DST.
DST represents and warrants to 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.
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.
3. CERTAIN REPRESENTATIONS AND WARRANTIES OF FUND.
Fund represents and warrants to DST that:
A. It is duly organized as heretofore described and existing and
in good standing under the laws of the State/Commonwealth of
organization set forth after its name in the opening paragraph
or, if it does not appear in such opening paragraph, on
Exhibit A.
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B. It is an open-end or closed-end management investment company
registered under the Investment Company Act of 1940, as
amended.
C. A registration statement under the Securities Act of 1933 has
been filed and will be effective with respect to all shares of
Fund being offered for sale.
D. All requisite steps have been and will continue to be taken to
register 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. Fund is empowered under applicable laws and by its charter or
declaration and bylaws to enter into and perform this
Agreement.
4. SCOPE OF APPOINTMENT.
A. Subject to the conditions set forth in this Agreement, Fund
hereby appoints DST as Transfer Agent and Dividend Disbursing
Agent.
B. DST hereby accepts such appointment and agrees that it will
act as Fund's Transfer Agent and Dividend Disbursing Agent.
DST agrees that it will also act as agent in connection with
Fund's periodic withdrawal payment accounts and other open
accounts or similar plans for shareholders, if any.
C. Fund agrees to use its best efforts to deliver to DST in
Kansas City, Missouri, as soon as they are available, all of
its shareholder account records.
D. DST, utilizing DST's computerized data processing systems for
securityholder accounting for open-end funds (the
"TA2000(R) System"), and subject to the provisions of Sections
19, 20 and 21 of this Agreement, will perform the following
services as transfer, dividend disbursing and shareholders'
servicing agent for Fund, and as agent of Fund for shareholder
accounts thereof, in a timely manner: issuing
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(including countersigning), transferring and canceling share
certificates; maintaining all shareholder accounts; providing
transaction journals; preparing shareholder meeting lists (one
annually at no charge, lists for additional meetings will be
charged for), mailing proxies and proxy materials, receiving
and tabulating proxies, certifying the shareholder votes in
Fund (all proxy activities are subject to proxy fees and
reimbursable fees); mailing shareholder reports and
prospectuses supplied to DST by Fund or its agents;
withholding, as required by Federal law and as directed by
Fund, taxes on nonresident alien and foreign corporation
accounts, for pension and deferred income, backup withholding
or other instances agreed upon by Fund and DST; disbursing
income dividends and capital gains distributions to
shareholders, preparing, filing and mailing U.S. Treasury
Department Forms 1099, 1042, 1042S and backup withholding as
required for all shareholders and as directed by Fund;
preparing and mailing confirmation forms to shareholders and
dealers, as instructed, for all purchases and liquidations
(not applicable to closed-end funds except for transfers into
or out of a shareholders' account) of shares of Fund and other
confirmable transactions in shareholders' accounts; recording
reinvestment of dividends and distributions in shares of Fund;
providing or making available on-line daily and monthly
reports as provided by the TA2000 System and as requested by
Fund or its management company; maintaining those records
necessary to carry out DST's duties hereunder, including all
information reasonably required by Fund to account for all
transactions (non-valued in closed-end funds) in Fund shares,
calculating the appropriate sales charge with respect to each
purchase of Fund shares as set forth in the prospectus for
Fund (not applicable to closed-end funds); solely for open-end
funds: determining the portion of each sales charge payable to
the
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dealer participating in a sale in accordance with schedules
delivered to DST by 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 (not applicable to
closed-end funds); mailing copies of shareholder statements to
shareholders and registered representatives of dealers in
accordance with Fund's instructions; and, solely in the case
of open-end funds, processing, generally on the date of
receipt, purchases or redemptions or instructions to settle
any mail or wire order purchase or redemption (or in the case
of closed-end funds, effecting transfer of certificates)
received in proper order as set forth in the prospectus and
DST's Procedures, as hereinafter defined, rejecting promptly
any requests not received in proper order (as defined by Fund
or its agents or DST's Procedures), and, solely in the case of
open-end funds, causing exchanges of shares to be executed in
accordance with Fund's instructions, the applicable
prospectus, DST's Procedures and the general exchange
privilege application.
E. At the request of an Authorized Person (a person identified as
such on Exhibit D, attached hereto and incorporated herein for
reference), DST shall use reasonable efforts to provide the
services set forth in this Agreement in connection with
transactions (i) on behalf of retirement plans and
participants in retirement plans and transactions ordered by
brokers as part of a "no transaction fee" program ("NTF"),
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the processing of which transactions require DST to use
methods and procedures other than those usually employed by
DST to perform shareholder servicing agent services, (ii)
involving the provision of information to DST after the
commencement of the nightly processing cycle of TA2000 System
or (iii) which require more manual intervention by DST, either
in the entry of data or in the modification or amendment of
reports generated by the TA2000 System than is usually
required by non-retirement plan, non-NTF and pre-nightly
transactions (the "Exception Services").
F. 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 and any new series shall be provided
services in accordance with the Fee Schedules then attached to
the existing Agency Agreements between DST and the various
Funds of Pilgrim Capital Corporation, which agreements
pre-date this Agency Agreement. Rates or charges for
additional series shall be as set forth in Exhibit B, as
hereinafter defined, for the remainder of the contract term
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.
G. DST shall use reasonable efforts to provide, reasonably
promptly under the circumstances, the same services with
respect to any new, additional functions or features or any
changes or improvements to existing functions or features as
provided for in Fund's instructions, prospectus or application
as amended from time to time, for Fund provided (i) DST is
advised in advance by Fund of any changes
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therein, (ii) the TA2000 System and the mode of operations
utilized by DST as then constituted support such additional
functions and features, and (iii) any new or increased
services to be provided by DST or commenced to be used by Fund
in addition to those currently used at execution hereof or any
new products or functionality added to the TA2000 System shall
be provided in accordance with the Fee Schedules then attached
to the existing Agency Agreements between DST and the various
Funds of Pilgrim Capital Corporation, which agreements
pre-date this Agency Agreement, or, if not referenced in such
fee schedules, at mutually agreed to fees and charges. 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 Fund requires an enhancement or
modification to the TA2000 System or to operations as
presently conducted by DST, DST shall not be liable therefor
until such modification or enhancement is, if DST agrees to
develop or institute it, developed (at Fund's expense) and
installed on the TA2000 System or a 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 Fund of the amount of such
increase and if 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.
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5. LIMIT OF AUTHORITY.
Unless otherwise expressly limited by the resolution of appointment or
by subsequent action by 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 Fund will file with DST:
A. If the appointment of DST was theretofore expressly limited, a
certified copy of a resolution of Fund's Board of Directors or
Trustees, as applicable, increasing the authority of DST;
B. A certified copy of the amendment to Fund's Articles of
Incorporation or Declaration of Trust, as applicable,
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 Fund stating:
(1) The status of the additional shares of stock of Fund
under the Securities Act of 1933, as amended, and any
other applicable federal or state statute and that
said shares may be legally issued; and
(2) That the additional shares are, or when issued will
be, validly issued, fully paid and nonassessable by
Fund.
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6. COMPENSATION AND EXPENSES.
A. In consideration for its services hereunder as Transfer Agent
and Dividend Disbursing Agent, Fund will pay to DST from time
to time a reasonable compensation for all services rendered as
Agent, and also all its reasonable out-of-pocket expenses,
charges, counsel fees, and other disbursements (Compensation
and Expenses) incurred in connection with the agency. Such
compensation is set forth in a separate schedule to be agreed
to, from time to time, by Fund and DST, the current copy of
which is attached hereto as Exhibit B and incorporated herein
by reference. If Fund has not paid such Compensation and
Expenses to DST within a reasonable time, DST may, after
written notice to Fund, 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. Fund also agrees promptly to reimburse DST for all reasonable
reimbursable 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, telegrams, stationery
supplies, counsel fees, outside printing and mailing firms
(including DST Output SRI, Inc.), magnetic tapes, reels or
cartridges (if sent to a Fund or to third party at 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 Fund's request at Fund's or a third
party's premises, telecommunications equipment, telephone/
telecommunication lines between Fund and its agents, on one
hand, and DST on the
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other, proxy mailing, soliciting, processing and/or tabulating
costs, second-site backup computer facility, transmission of
statement data for remote printing or processing, and NSCC
transaction fees (as well as any other expenses set forth on
Exhibit C, as amended from time to time) to the extent any of
the foregoing are paid or incurred by DST. 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 Fund will be promptly reimbursed by
Fund.
C. Amounts due hereunder shall be due and paid on or before the
thirtieth (30th) calendar day after receipt of the statement
therefor by Fund (the "Due Date"). 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, 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, Fund shall pay a late charge
equal to the rate set forth in the fee schedule times the
amount overdue, times the number of days from the Due Date up
to and including the day on which payment is received by DST
divided by 365. 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 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, Fund shall, on or
before the Due Date, pay all undisputed amounts due hereunder
and notify DST in writing of any
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disputed charges for out-of-pocket expenses that 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 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 day after the Revised
Due Date.
7. OPERATION OF DST SYSTEMS.
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 Fund's records on the
TA2000 System created by DST accurately reflect the orders,
instructions, and other information received by DST from Fund,
Fund's principal manager, underwriter or distributor or Fund's
investment adviser, sponsor, custodian or administrator (each
an "Authorized Person"), broker-dealers and 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 Fund's records on the TA2000 System;
C. The accurate and timely issuance of dividend and distribution
checks in accordance with instructions received from Fund and
the data in Fund's records on the TA2000 System;
D. That redemption transactions and payments with respect to
shares of open-end funds and transfers with respect to
closed-end funds be effected timely, under normal
circumstances on the day of receipt, and accurately in
accordance with instructions received by DST from dealers,
shareholders, or an Authorized Person of Fund
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provided such instructions are in proper order as set forth
elsewhere in this Agreement and are consistent with the data
in Fund's records on the TA2000 System;
E. The deposit daily in Fund's appropriate special bank account
of all checks and payments received by DST from NSCC,
broker-dealers or shareholders for investment in shares of
open-end funds;
F. Notwithstanding anything herein to the contrary, with respect
to "as of" adjustments, DST will not necessarily assume one
hundred percent (100%) responsibility for losses resulting
from "as of's" due to clerical errors or misinterpretations of
shareholder instructions. DST shall not be liable for any
action taken, suffered, or omitted by it or for any error of
judgment made by it with respect to "as of" adjustments in the
absence of bad faith, willful misconduct, knowing violations
of applicable law pertaining to the manner in which transfer
agency services are to be performed by DST, reckless disregard
of the performance of its duties, or negligence on its part.
DST's liability hereunder shall extend only to losses that are
"material", that is, that, on a given, day arise from dilution
or a pricing error that is (i) greater than a negligible
amount per shareholder, (ii) equals or exceeds one ($.01) full
cent per share times the number of shares outstanding with
respect to whether recompense of Fund is required, or (iii)
equals or exceeds the product of one-half of one percent
(1/2%) times Fund's Net Asset Value per share times the number
of shares outstanding with respect to whether recompense at
the shareholder level is required (or such other amounts as
may be adopted by applicable accounting or regulatory
authorities from time to time);
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G. Notwithstanding anything in this Agreement to the contrary,
DST shall perform the services set forth in Section 4.D. of,
and elsewhere in, this Agreement, including but not limited to
the requiring of proper forms of instructions, signatures and
signature guarantees and any necessary documents supporting
the opening of shareholder accounts (where required),
transfers, redemptions and other shareholder account
transactions, 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 with such changes or deviations therefrom as may be
from time to time required or approved by Fund, its investment
adviser or principal underwriter, or their or DST's counsel
(the "Procedures") 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 Fund's
essential records as of the close of business on the prior
business day at a secure separate location, in a form
available and usable forthwith in the event of any breakdown
or disaster disrupting its main operation.
8. INDEMNIFICATION.
A. DST shall at all times use reasonable care, due diligence and
act in good faith in performing its duties under this
Agreement. DST shall provide its services as transfer agent in
accordance with Section 17A of the Exchange Act, and the rules
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and regulations thereunder. In the absence of bad faith,
willful misconduct, knowing violations of applicable law
pertaining to the manner in which transfer agency services are
to be performed by DST (excluding any violations arising
directly or indirectly out of the actions of DST-unaffiliated
third parties), reckless disregard of the performance of its
duties, or negligence on its part, DST shall not be liable for
any action taken, suffered, or omitted by it or for any error
of judgment made by it in the performance of its duties under
this Agreement. For those activities or actions delineated in
the Procedures, DST shall be presumed to have used reasonable
care, due diligence and acted in good faith if it has acted in
accordance with the Procedures, copies of which have been
provided to Fund, as amended from time to time with approval
of counsel, or for any deviation therefrom approved by an
Authorized Person, Fund or Fund's or DST's counsel.
B. DST shall not be responsible for, and Fund shall indemnify and
hold DST harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and
liability which may be asserted against DST or for which DST
may be held to be liable, arising out of or attributable to:
(1) All actions of DST required to be taken by DST
pursuant to this Agreement, provided that DST has
acted in accordance with the standards specified in
Paragraph A;
(2) Fund's refusal or failure to comply with the terms of
this Agreement, Fund's negligence or willful
misconduct, or the breach of any representation or
warranty of Fund hereunder;
(3) The good faith reliance on or the carrying out of any
written or recorded oral instructions or requests of
persons designated by Fund in writing from time
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to time as authorized to give instructions on its
behalf or of representatives of an Authorized Person
or DST's good faith reliance on or use of
information, data, records and documents received
from, or which have been prepared and/or maintained
by or on behalf of, an Authorized Person;
(4) Defaults by dealers or shareowners with respect to
payment for share orders previously entered;
(5) The offer or sale of Fund's shares in violation of
any requirement under federal securities laws or
regulations or the securities laws or regulations of
any state or in violation of any stop order or other
determination or ruling by any federal agency or
state with respect to the offer or sale of such
shares in such state (unless such violation results
from DST's failure to comply with written
instructions of Fund or of any officer of Fund that
no offers or sales be input into Fund's
securityholder records in or to residents of such
state);
(6) Fund's or its agents' and Authorized Persons'
omissions, errors and mistakes: (a) in the use of (i)
the TA2000 System, (ii) the data center, computer and
related equipment used to access the TA2000 System
(the "DST Facilities"), and (iii) control procedures
in the TA2000 System, and (b) in the verification of
output and (c) in the remote input of data;
(7) Errors, inaccuracies and omissions in, or errors,
inaccuracies or omissions of DST arising out of or
resulting from such errors, inaccuracies and
omissions in, Fund's records, shareholder records and
other records, delivered to DST hereunder by Fund or
its prior agent(s) (but not including errors,
inaccuracies or omissions resulting from the
negligence or willful
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misconduct of DST while DST was acting as sub-agent
on behalf of Investors Fiduciary Trust Company,
Fund's prior transfer agent);
(8) Actions or omissions to act by Fund or agents
designated by Fund with respect to duties assumed
thereby as provided for in Section 21 hereof; and
(9) DST's performance of AGREED UPON Exception Services
except where DST acted or omitted to act in bad
faith, with reckless disregard of its obligations or
with gross negligence.
C. Except where DST is entitled to indemnification under Section
8.B. hereof, and subject to the provisions Section 7.F.
hereof, DST shall indemnify and hold Fund harmless from and
against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of DST's
failure to comply with the terms of this Agreement or arising
out of or attributable to DST's negligence or willful
misconduct or material breach of any representation or
warranty of DST hereunder.
D. 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.
E. Promptly after receipt by an indemnified person of notice of
the commencement of any action, such indemnified person will,
if a claim in respect thereto is to be made against an
indemnifying party hereunder, notify the indemnifying party in
writing of
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the commencement thereof; but the failure so to notify the
indemnifying party will not relieve an indemnifying party from
any liability that it may have to any indemnified person for
contribution or otherwise under the indemnity agreement
contained herein except to the extent it is prejudiced as a
proximate result of such failure to timely notify. In case any
such action is brought against any indemnified person and such
indemnified person seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, assume
the defense thereof (in its own name or in the name and on
behalf of any indemnified party or both with counsel
reasonably satisfactory to such indemnified person); provided,
however, if the defendants in any such action include both the
indemnified person and an indemnifying party and the
indemnified person shall have reasonably concluded that there
may be a conflict between the positions of the indemnified
person and an indemnifying party in conducting the defense of
any such action or that there may be legal defenses available
to it and/or other indemnified persons which are inconsistent
with those available to an indemnifying party, the indemnified
person or indemnified persons shall have the right to select
one separate counsel (in addition to counsel provided by the
indemnifying party) to assume such legal defense and to
otherwise participate in the defense of such action on behalf
of such indemnified person or indemnified persons at such
indemnified party's sole expense. Upon receipt of notice from
an indemnifying party to such indemnified person of its
election so to assume the defense of such action and approval
by the indemnified person of counsel, which approval shall not
be unreasonably withheld (and any disapproval shall be
accompanied by a written statement of the reasons therefor),
the indemnifying party
19
will not be liable to such indemnified person hereunder for
any legal or other expenses subsequently incurred by such
indemnified person in connection with the defense thereof. An
indemnifying party will not settle or compromise or consent to
the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder
(whether or not the indemnified persons are actual or
potential parties to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an
unconditional release of each indemnified person from all
liability arising out of such claim, action, suit or
proceeding. An indemnified party will not, without the prior
written consent of the indemnifying party, settle or
compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution
may be sought hereunder. If it does so, it waives its right to
indemnification therefor.
9. CERTAIN COVENANTS OF DST AND FUND.
A. All requisite steps will be taken by Fund from time to time
when and as necessary to register Fund's shares for sale in
all states in which Fund's shares shall at the time be offered
for sale and require registration. If at any time Fund
receives notice of any stop order or other proceeding in any
such state affecting such registration or the sale of Fund's
shares, or of any stop order or other proceeding under the
federal securities laws affecting the sale of Fund's shares,
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
20
acceptable to 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 shareholder- or Fund-related records maintained by DST
relating to the services performed by DST under this Agreement
are the property of Fund and will be preserved, and will, upon
receipt of payment of all sums due to DST in connection with
DST's performance under this Agreement, be surrendered
promptly to Fund on request.
D. DST agrees to furnish Fund semiannual reports of its financial
condition, consisting of a balance sheet, earnings statement
and any other readily and publicly available financial
information reasonably requested by Fund. The annual financial
statements will be certified by DST's certified public
accountants. DST agrees to provide such reports as are
produced by the TA2000 System respecting its services under
this Agreement to Fund's Board as the Fund Board may
reasonably request.
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 Fund and its authorized representatives to
make periodic inspections of its operations as such would
involve Fund upon reasonable prior notice and at reasonable
times during business hours.
G. DST agrees to use its reasonable efforts to provide in Kansas
City at Fund's expense two (2) man weeks of training for
Fund's personnel in connection with use and
21
operation of the TA2000 System. All travel and reimbursable
expenses incurred by Fund's personnel in connection with and
during training at DST's Facility shall be borne by Fund. At
Fund's option and expense, DST also agrees to use its best
efforts to provide an additional two (2) man weeks of training
at Fund's facility for Fund's personnel in connection with the
TA2000 System. Reasonable travel, per diem and reimbursable
expenses incurred by DST personnel in connection with and
during training at Fund's facility or in connection with the
conversion shall be borne by Fund.
10. RECAPITALIZATION OR READJUSTMENT.
In case of any recapitalization, readjustment or other change in the
capital structure of Fund requiring a change in the form of stock
certificates, DST will, upon agreement with Fund as to the charges to
apply thereto, 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 Fund;
B. Certified copy of the amendment to the Articles of
Incorporation or other document effecting the change;
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 or Trustees of Fund, with a certificate of
the Secretary of Fund as to such approval;
E. Opinion of counsel for Fund stating:
22
(1) The status of the shares of stock of 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 by the Fund.
11. STOCK CERTIFICATES.
Fund will furnish DST with a sufficient supply of blank stock
certificates and from time to time will renew such supply upon the
request of DST. Such certificates will be signed manually or by
facsimile signatures of the officers of Fund authorized by law and by
bylaws to sign stock certificates and, if required, will bear the
corporate seal or facsimile thereof.
12. DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER.
Fund will file promptly with DST written notice of any change in the
officers authorized to sign stock certificates, written instructions or
requests, together with two certificates of the Secretary or Clerk
bearing the specimen signature of each newly authorized officer. In
case any officer of Fund who has signed manually or whose facsimile
signature has been affixed to blank stock certificates dies, resigns,
or is removed prior to the issuance of such certificates, DST may issue
or register such stock certificates as the stock certificates of Fund
notwithstanding such death, resignation, or removal, until specifically
directed to the contrary by Fund in writing. In the absence of such
direction, Fund will file promptly with DST such approval, adoption, or
ratification as may be required by law.
13. FUTURE AMENDMENTS OF CHARTER AND BYLAWS.
Fund will promptly file with DST copies of all material amendments to
its Articles of Incorporation or Declaration of Trust, as applicable,
or bylaws made after the date of this Agreement.
23
14. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES.
At any time DST may apply to any person authorized by Fund, including
without limitation the duly authorized representative of any Authorized
Person and any Authorized Personnel set forth on Exhibit D to this
Agreement, to give instructions to DST, and may with the approval of a
Fund officer consult with legal counsel for Fund or its own legal
counsel at the expense of 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. DST will be protected in acting
upon any paper or document reasonably believed by it to be genuine and
to have been signed 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 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 Fund, and
the proper countersignature of any former Transfer Agent or Registrar,
or of a present or former 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 OR SOFTWARE)
OR COMMUNICATION SERVICE; INABILITY TO OBTAIN LABOR, MATERIAL,
EQUIPMENT OR TRANSPORTATION, OR A DELAY IN
24
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, TORNADOS,
ACTS OF GOD OR PUBLIC ENEMY, REVOLUTIONS, OR INSURRECTION; OR
ANY OTHER CAUSE, CONTINGENCY, CIRCUMSTANCE OR DELAY NOT
SUBJECT TO DST'S 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 Fund is paying its pro rata
portion of the charge therefor, DST would, in 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.
C. DST also currently maintains, separate from the area in which
the operations that provide the services to 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
25
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 or Declaration of
Trust of 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 or Declaration of
Trust and amendments are required by law to be also filed with a
county, city or other officer of an 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
or Trustees of Fund, as applicable, will be certified by the Secretary
or Clerk or an Assistant Secretary or Clerk of Fund under 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 Fund, or to where designated by the
Secretary or an Assistant Secretary of Fund, all books, documents, and
records no longer deemed needed for current purposes and all 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 Fund under and in accordance with
the requirements of Section 17Ad-7
26
adopted under the Securities Exchange Act of 1934. Such materials will
not be destroyed by Fund without the consent of DST (which consent will
not be unreasonably withheld), but will be safely stored for possible
future reference and maintained, preserved and made available to DST
and the U.S. Securities and Exchange Commission in accordance with the
requirement of Sections 17Ad-7 under the Securities Exchange Act of
1934 (17 C.F.R. Section 240.17Ad-7).
19. PROVISIONS RELATING TO DST AS TRANSFER AGENT.
A. DST will make original issues of stock certificates upon
written request of an officer of Fund, and upon mutual
agreement as to the charges to apply thereto and being
furnished with a certified copy of a resolution of the Board
of Directors or Trustees authorizing such original issue, an
opinion of counsel as outlined in Section 1.G. of this
Agreement, any documents required by Sections 5. or 10. of
this Agreement, and necessary funds for the payment of any
original issue tax.
B. Before making any original issue of certificates, Fund will
furnish DST with sufficient funds to pay all required taxes on
the original issue of the stock, if any. Fund will furnish DST
such evidence as may be required by DST to show the actual
value of the stock. If no taxes are payable, DST will be
furnished with an opinion of outside counsel to that effect.
C. Shares of stock will be transferred and new certificates
issued in transfer, or, except in the case of closed-end
funds, shares of stock will be accepted for redemption and
funds remitted therefor, or book entry transfer will be
effected, upon surrender of the old certificates in form or
receipt by DST of instructions deemed by DST properly endorsed
for transfer or, except in the case of closed-end funds,
redemption accompanied by such documents as DST may deem
necessary to evidence the
27
authority of the person making the transfer or redemption. DST
reserves the right to refuse to transfer or redeem shares
until it is satisfied that the endorsement or signature on the
certificate or any other document is valid and genuine, and
for that purpose, unless Fund has instructed DST not to
require a signature guarantee, DST may require a guaranty of
signature in accordance with the Procedures. DST shall have
the right to refuse to transfer or redeem shares until it is
satisfied that the requested transfer or redemption is legally
authorized, and it will incur no liability for the refusal in
good faith to make transfers or redemptions that, in its
judgment, are improper or unauthorized. DST may, in effecting
transfers or redemptions, rely upon Simplification Acts,
Uniform Commercial Code, or other statutes that protect it and
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 that may arise by reason
of not having such records.
D. When mail is used for delivery of stock certificates, DST will
forward stock certificates in "nonnegotiable" form by first
class or registered mail and stock certificates in
"negotiable" form by registered mail, all such mail deliveries
to be covered while in transit to the addressee by insurance
arranged for by DST.
E. DST will issue and mail subscription warrants, certificates
representing stock dividends, exchanges or split ups, or act
as Conversion Agent upon receiving written instructions from
any officer of Fund and such other documents as DST deems
necessary upon agreement between DST and Fund as to the
charges to apply thereto.
28
F. DST will issue, transfer, and split up certificates and will
issue certificates of stock representing full shares upon
surrender of scrip certificates aggregating one full share or
more when presented to DST for that purpose upon receiving
written instructions from an officer of Fund and such other
documents as DST may deem necessary.
G. DST may issue new certificates in place of certificates
represented to have been lost, destroyed, stolen or otherwise
wrongfully taken upon receiving instructions from Fund and
indemnity satisfactory to DST and Fund, and may issue new
certificates in exchange for, and upon surrender of, mutilated
certificates. Such instructions from Fund will be in such form
as will be approved by the Board of Directors or Trustees of
Fund and will be in accordance with the provisions of law and
the bylaws of Fund governing such matter.
H. DST will supply a shareholder's list to Fund for its annual
meeting upon receiving a request from an officer of Fund. It
will also supply lists at such other times as may be requested
by an officer of Fund, subject to payment of applicable
charges therefor.
I. Upon receipt of written instructions of an officer of Fund,
DST will address and mail notices to shareholders.
J. In case of any request or demand for the inspection of the
stock books of Fund or any other books or records in the
possession of DST, DST will endeavor to notify 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 or records 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.
29
20. PROVISIONS RELATING TO DIVIDEND DISBURSING AGENCY.
A. DST will, at the expense of Fund, provide a special form of
check containing the imprint of any device or other matter
desired by Fund. Said checks must, however, be of a form and
size convenient for use by DST.
B. If Fund desires to include additional printed matter,
financial statements, ETC., with the dividend checks, the same
will be furnished to DST within a reasonable time prior to the
date of mailing of the dividend checks, at the expense of
Fund.
C. If 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 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 Fund in advance of such
mailing.
D. DST is hereby authorized to open and to maintain at a Bank
acceptable to Fund one or more non-interest bearing deposit
accounts as Agent for Fund, into which the funds for payment
of dividends, distributions, redemptions or other
disbursements provided for hereunder will be deposited, and
against which checks will be drawn.
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.
30
21. ASSUMPTION OF DUTIES BY FUND OR AGENTS DESIGNATED BY FUND.
A. Fund or its designated agents other than DST may assume
certain duties and responsibilities of DST or those services
of Transfer Agent and Dividend Disbursement 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 Fund, said assumption to be embodied in
writing to be signed by both parties.
B. To the extent 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. DST MAY, SUBJECT TO THE WRITTEN CONSENT OF THE FUND, APPOINT
OTHER PARTIES QUALIFIED TO PERFORM TRANSFER AGENCY SERVICES
("SUB-TRANSFER AGENTS") TO CARRY OUT SOME OR ALL OF ITS
RESPONSIBILITIES UNDER THIS AGREEMENT; PROVIDED, HOWEVER, THAT
A SUB-TRANSFER AGENT SHALL BE THE AGENT OF DST AND NOT THE
AGENT OF THE FUND, AND THAT UNLESS THE SUB-TRANSFER AGENT IS
APPOINTED AT THE DIRECTION OF THE FUND, DST SHALL BE FULLY
RESPONSIBLE FOR THE ACTS OF A SUB-TRANSFER AGENT AND SHALL NOT
BE RELIEVED OF ANY OF ITS RESPONSIBILITIES HEREUNDER BY THE
APPOINTMENT OF A SUB-TRANSFER AGENT.
31
D. Initially Fund shall be responsible for the following: (i)
answering and responding to phone calls from shareholders and
broker-dealers, and (ii) scanning items into the AWD(TM)System
as such calls or items are received by Fund, and (iii)
entering and confirming wire order trades.
22. TERMINATION OF AGREEMENT.
A. This Agreement shall be in effect from the date set forth on
the first page (the "Effective Date") through May 31, 2002 and
thereafter shall remain in effect unless terminated by either
party upon receipt of six (6) months written notice from the
other party, provided, however, that the effective date of any
termination shall not occur during the period from December 15
through March 30 of any year to avoid adversely impacting year
end.
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) Any interruption or cessation of operations by the
other party or its assigns that materially interferes
with the business operation of the first party;
(2) The bankruptcy of the other party or its assigns or
the appointment of a receiver for the other party or
its assigns;
(3) 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; and
32
(4) The acquisition of a controlling interest in DST
Systems, Inc. or its assigns, by any broker, dealer,
investment adviser or investment company except as
may presently exist.
C. In the event of any termination, Fund will promptly pay DST
all amounts due to DST hereunder. In addition, if this
Agreement is terminated by Fund for any reason other than
those set forth in Section 22.B. hereof, then Fund shall pay
to DST on the last business day of each of the next three (3)
whole or partial calendar months (commencing with the last day
of the month in which termination actually occurs if
termination does not occur on the last business day of the
month, and with the last business day of the immediately
following month if termination actually occurs on the last
business day of a month) an amount equal to the average
monthly fees, exclusive of the out-of-pocket expenses, paid by
or on behalf of each terminating party under the affected
Agreement during the six (6) calendar months preceding the
month during which the termination notice was received by DST.
D. If the termination date set forth in the original termination
notice is extended by any terminating party (which extension
shall require the agreement of DST), then the fees and charges
payable by the terminating party under this Agreement shall
increase by twenty percent (20%) during the period commencing
with the original termination date set forth in the initial
termination notice and concluding with the day upon which
termination actually occurs. These provisions are in addition
to any other contractual provision or compensation agreements
that may be in existence at the time of an actual transfer.
E. DST shall, upon termination of this Agreement and receipt of
payment of all outstanding bills and invoices, deliver to the
successor so specified or appointed, or
33
to Fund, at DST's office, all records then held by DST
hereunder, all funds and other properties of Fund deposited
with or held by DST hereunder. In the event no written order
designating a successor (which may be Fund) shall have been
delivered to DST on or before the date when such termination
shall become effective, then DST shall deliver the records,
funds and properties of Fund to a bank or trust company at the
selection of DST or if a satisfactory successor cannot be
obtained, DST may deliver the assets to Fund, at DST's offices
or as otherwise agreed to between the parties in any event
upon written notice to Fund. Thereafter Fund or such bank or
trust company shall be the successor under this Agreement and
shall be entitled to reasonable compensation for its services.
Notwithstanding the foregoing requirement as to delivery upon
termination of this Agreement, DST may make any other delivery
of the funds and property of Fund that shall be permitted by
the Investment Company Act of 1940 and Fund's Articles of
Incorporation, Declaration of Trust, and/or Bylaws then in
effect. Except as otherwise provided herein, neither this
Agreement nor any portion thereof may be assigned by DST
without the consent of Fund.
F. In the event of termination, DST shall provide reasonable
assistance to 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 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 such new service or system
provider's system or to improve, enhance, or alter its
current, or to provide any new, functionality or to require
DST to disclose any DST
34
Protected Information, as defined in Section 23 of this
Agreement, or any information which is otherwise confidential
to DST. DST's assistance shall be billed at its then current
rates. DST's present rates, which are subject to annual
increase as DST's labor costs for such personnel increase, are
as is set forth in Exhibit B to this Agreement.
G. Nothing in this Agreement is intended to, nor does it, compel
DST to disclose non-public information concerning its
operations or operating systems, including but not limited to
the TA2000 System, or to provide programming assistance or
information which might tend to improve, enhance, or add
functionality to anyone else's operating systems.
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 relating to
Fund or its shareholders or shareholder accounts in its
possession and will not disclose the same to any person except
at the request or with the consent of Fund.
B. Fund agrees to keep confidential all provisions, terms and
conditions of this Agreement, all financial statements and
other financial records (other than statements and records
relating solely to Fund's business dealings with DST) 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.
35
C. Fund acknowledges that DST has proprietary rights in and to
the computerized data processing recordkeeping system used by
DST to perform services hereunder including but not limited to
the maintenance of shareholder accounts and records,
processing of related information and generation of output,
the TA2000 System, including without limitation any changes or
modifications of the TA2000 System and any other DST programs,
data bases, supporting documentation, or procedures
(collectively "DST Protected Information") which Fund's access
to the TA2000 System or software or DST Facilities may permit
Fund or its employees or agents to become aware of or to
access and that the DST Protected Information constitutes
confidential material and trade secrets of DST. Fund agrees to
maintain the confidentiality of the DST Protected Information.
D. Fund acknowledges that any unauthorized use, misuse,
disclosure or taking of DST Protected 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. Fund will advise all of its employees and agents
who have access to any DST Protected Information or to any
computer equipment capable of accessing DST hardware or
software of the foregoing.
E. 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
36
and nondisclosure, in addition to any other legal remedies
that may be available, and 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
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 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. Fund agrees to
pay DST promptly for modifications and improvements that are
charged for separately at the rate provided for in DST's
standard pricing schedule that 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 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 Fund in using or
employing the TA2000 System or DST Facilities hereunder or the
reports to be generated by such system
37
and facilities hereunder, unless Fund is given thirty (30)
days prior notice to allow Fund to change its procedures and
DST provides Fund with revised operating procedures and
controls.
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, the banks
at which the deposit accounts are maintained, The National Securities
Clearing Corporation, 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 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 Fund
shall be deemed to relate solely to the particular Portfolio
to which such transaction relates. Under 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 or the rights, obligations
or remedies with respect to a particular Fund constitute a
right, obligation or remedy applicable to any other Fund. The
use of this single document to memorialize the separate
agreement of each Portfolio or Fund is understood to be for
clerical
38
convenience only and shall not constitute any basis for
joining the Portfolios or Funds for any reason.
B. Notice is hereby given that a copy of Fund's Articles of
Incorporation or Trust Agreement (as applicable) 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 Fund by the undersigned duly authorized
representative of 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 Fund and shall
not be binding upon any director, trustee, officer or
shareholder of Fund individually.
27. NOTICES.
All notices, consents, requests, instructions, approvals and other
communications provided for herein shall be validly given, made or
served if in writing and delivered personally, sent by mail, registered
or certified, return receipt requested, postage prepaid, by telegram or
by facsimile transmission:
If to Fund:
The ING Pilgrim Family of Funds
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Telephone No.: (000)000-0000
Telecopier No.: (000)000-0000
Attn: Rob Naka, Senior Vice President
And if to DST:
DST Systems, Inc.
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone No.: (000)000-0000
Telecopier No.: (000)000-0000
Attn: Xxxxxxxx Xxxxx, Group Vice President
39
With a copy of non-operational notices to:
DST Systems, Inc.
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone No.: (000)000-0000
Telecopier No.: (000)000-0000
Attn: Legal Department
or to such other address as DST or Fund may from time to time designate
in writing delivered as provided above.
28. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of
Missouri and 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, all indemnifications and
any limitations on liability set forth in this Agreement are
intended to and shall continue after and survive the
expiration, termination or cancellation of this Agreement
until any statute of limitations applicable to the matter at
issues shall have expired.
D. No provisions of this Agreement may be amended or modified in
any manner except by a written agreement properly authorized
and executed 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.
40
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.
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 this Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
H. This Agreement may not be assigned any party hereto without
prior written consent of the other parties. I. Neither the
execution nor performance of this Agreement shall be deemed to
create a partnership or joint venture by and between 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 Fund. This Agreement is between DST and 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,
41
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 appointment of DST
as Agent for the Fund and the provision by DST of transfer
agency services as such Agent between any Fund and DST,
whether oral or written.
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 VP
------------------------------
Date: 11/30/2000
-------------------------------
LEXINGTON MONEY MARKET TRUST
PILGRIM EQUITY TRUST
Pilgrim Index Plus Protection Fund
Pilgrim MidCap Opportunities Fund
PILGRIM GROWTH OPPORTUNITIES FUND
PILGRIM MAYFLOWER TRUST
Pilgrim Growth + Value Fund
Pilgrim International Value Fund
Pilgrim Research Enhanced Index Fund
42
PILGRIM NATURAL RESOURCES TRUST
PILGRIM PRIME RATE TRUST
PILGRIM SMALLCAP OPPORTUNITIES FUND
PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible Portfolio
Pilgrim VP Emerging Countries Portfolio
Pilgrim VP Financial Services Portfolio
Pilgrim VP Growth & Income Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim VP High Yield Bond Portfolio
Pilgrim VP International Portfolio
Pilgrim VP International SmallCap Growth Portfolio
Pilgrim VP International Value Portfolio
Pilgrim VP LargeCap Growth Portfolio
Pilgrim VP MargnaCap Portfolio
Pilgrim XX XxxXxx Opportunities Portfolio
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP Worldwide Growth Portfolio
PILGRIM FUNDS TRUST
Pilgrim European Equity Fund
Pilgrim Global Communications Fund
Pilgrim Global Information Technology Fund
Pilgrim Intermediate Bond Fund
Pilgrim Internet Fund
ING Pilgrim Money Market Fund
Pilgrim National Tax-Exempt Bond Fund
Pilgrim Tax Efficient Equity Fund
PILGRIM MUTUAL FUNDS
Pilgrim Balanced Fund
Pilgrim Convertible Fund
Pilgrim Emerging Countries Fund
Pilgrim High Yield Fund II
Pilgrim International Core Growth Fund
Pilgrim International SmallCap Growth Fund
Pilgrim LargeCap Growth Fund
Pilgrim MidCap Growth Fund
Pilgrim Money Market Fund
Pilgrim SmallCap Growth Fund
Pilgrim Strategic Income Fund
Pilgrim Worldwide Growth Fund
PILGRIM SENIOR INCOME FUND
PILGRIM ADVISORY FUNDS, INC.
Pilgrim Asia-Pacific Equity Fund
PILGRIM BANK AND THRIFT FUND, INC.
43
PILGRIM EMERGING MARKETS FUND, INC.
PILGRIM GNMA INCOME FUND, INC.
PILGRIM PRECIOUS METALS FUND, INC.
PILGRIM GROWTH AND INCOME FUND, INC.
PILGRIM INVESTMENT FUNDS, INC.
Pilgrim High Yield Fund
Pilgrim MagnaCap Fund
PILGRIM INTERNATIONAL FUND, INC.,
PILGRIM RUSSIA FUND, INC.
By: /s/ Xxxxxx X. Naka
----------------------------------
Title: Senior Vice President
-------------------------------
Date: 11/30/2000
--------------------------------
44
EXHIBIT A
OPEN/ STATE OF TAXPAYER
TAXPAYER/FUND NAME TYPE OF ORGANIZATION CLOSED ORGANIZATION I.D. NO.
------------------ -------------------- ------ ------------ --------
LEXINGTON MONEY MARKET TRUST Business Trust Massachusetts 00-0000000
PILGRIM EQUITY TRUST Business Trust Massachusetts N/A
Pilgrim Index Plus Protection Fund 00-0000000
Pilgrim MidCap Opportunities Fund 00-0000000
PILGRIM GROWTH OPPORTUNITIES FUND Business Trust Massachusetts 00-0000000
PILGRIM MAYFLOWER TRUST Business Trust Massachusetts N/A
Pilgrim Growth + Value Fund 00-0000000
Pilgrim International Value Fund 00-0000000
Pilgrim Research Enhanced Index Fund 00-0000000
PILGRIM NATURAL RESOURCES TRUST Business Trust Massachusetts 00-0000000
PILGRIM PRIME RATE TRUST Business Trust Massachusetts 00-0000000
PILGRIM SMALLCAP OPPORTUNITIES FUND Business Trust Massachusetts 00-0000000
PILGRIM VARIABLE PRODUCTS TRUST Business Trust Massachusetts N/A
Pilgrim VP Convertible Portfolio 00-0000000
Pilgrim VP Emerging Countries Portfolio 00-0000000
Pilgrim VP Financial Services Portfolio 00-0000000
Pilgrim VP Growth & Income Portfolio 00-0000000
Pilgrim VP Growth + Value Portfolio 00-0000000
Pilgrim VP Growth Opportunities Portfolio 00-0000000
Pilgrim VP High Yield Bond Portfolio 00-0000000
Pilgrim VP International Portfolio 00-0000000
Pilgrim VP International SmallCap Growth Portfolio 00-0000000
45
OPEN/ STATE OF TAXPAYER
TAXPAYER/FUND NAME TYPE OF ORGANIZATION CLOSED ORGANIZATION I.D. NO.
------------------ -------------------- ------ ------------ --------
Pilgrim VP International Value Portfolio 00-0000000
Pilgrim VP LargeCap Growth Portfolio 00-0000000
Pilgrim VP MargnaCap Portfolio 00-0000000
Pilgrim XX XxxXxx Opportunities Portfolio 00-0000000
Pilgrim VP Research Enhanced Index Portfolio 00-0000000
Pilgrim VP SmallCap Opportunities Portfolio 00-0000000
Pilgrim VP Worldwide Growth Portfolio 00-0000000
Pilgrim Funds Trust Business Trust Delaware
Pilgrim European Equity Fund 00-0000000
Pilgrim Global Communications Fund 00-0000000
Pilgrim Global Information Technology Fund 00-0000000
Pilgrim Intermediate Bond Fund 00-0000000
Pilgrim Internet Fund 00-0000000
ING Pilgrim Money Market Fund 00-0000000
Pilgrim National Tax-Exempt Bond Fund 00-0000000
Pilgrim Tax Efficient Equity Fund 00-0000000
Pilgrim Mutual Funds Business Trust Delaware N/A
Pilgrim Balanced Fund 00-0000000
Pilgrim Convertible Fund 00-0000000
Pilgrim Emerging Countries Fund 00-0000000
Pilgrim High Yield Fund II 00-0000000
Pilgrim International Core Growth Fund 00-0000000
Pilgrim International SmallCap Growth Fund 00-0000000
Pilgrim LargeCap Growth Fund 00-0000000
Pilgrim MidCap Growth Fund 00-0000000
Pilgrim Money Market Fund 00-0000000
Pilgrim SmallCap Growth Fund 00-0000000
Pilgrim Strategic Income Fund 00-0000000
Pilgrim Worldwide Growth Fund 00-0000000
Pilgrim Senior Income Fund Business Trust Delaware 00-0000000
46
OPEN/ STATE OF TAXPAYER
TAXPAYER/FUND NAME TYPE OF ORGANIZATION CLOSED ORGANIZATION I.D. NO.
------------------ -------------------- ------ ------------ --------
PILGRIM ADVISORY FUNDS, INC. Corporation Maryland
Pilgrim Asia-Pacific Equity Fund 00-0000000
PILGRIM BANK AND THRIFT FUND, INC. Corporation Maryland 00-0000000
PILGRIM EMERGING MARKETS FUND, INC. Corporation Maryland 00-0000000
Pilgrim GNMA Income Fund, Inc. Corporation Maryland 00-0000000
Pilgrim Precious Metals Fund, Inc. Corporation Maryland 00-0000000
PILGRIM GROWTH AND INCOME FUND, INC. Corporation Maryland 00-0000000
PILGRIM INVESTMENT FUNDS, INC. Corporation Maryland
Pilgrim High Yield Fund 00-0000000
Pilgrim MagnaCap Fund 00-0000000
PILGRIM INTERNATIONAL FUND, INC., Corporation Maryland 00-0000000
PILGRIM RUSSIA FUND, INC. Corporation Maryland 00-0000000
47
EXHIBIT B, p. 1
DST SYSTEMS, INC.
PILGRIM TRANSFER AGENCY FEE SCHEDULE
EFFECTIVE AUGUST 1, 2000 - MAY 31, 2002
ASSET BASED FEES:
NET ASSETS PER PORTFOLIO:
$0 - $100,000,000 9.0 basis pts per year
$100,000,001- $300,000,000 8.5 basis pts per year
$300,000,001 - $500,000,000 7.5 basis pts per year
Greater than $500,000,000 7.25 basis pts per year
(APPLIES TO ALL LEXINGTON AND PILGRIM CUSIPS, INCLUDING NEW Q SHARE
PORTFOLIO CLASSES ESTABLISHED AS A RESULT OF THE NORTHSTAR CONVERSION)
EXCEPTIONS:
Prime Rate Trust 2.4 basis pts per year
Bank & Thrift 24.2 basis pts per year
Pilgrim Investment Plan $7,200 per year
Northstar Funds Covered under separate
agreement
ING Money Market Portfolio 6.0 basis pts per year
(effective 12/1/01)
BUNDLED PRODUCTS AND SERVICES:
The above asset fees cover a comprehensive bundle of products
and services. The following products and services are not
covered by the asset fees and will continue to be billed
separately using the current rates, subject to current
allowable periodic increases:
* AWD License Fees
* Escheatment
* Programming
* FANMail
* Vision
48
EXHIBIT B, p. 2
Additional products and services not currently utilized would
be priced separately and would be billed in addition to the
asset fees.
*Computer/Technical Personnel (2000 Rates):
Business Analyst/Tester:
Dedicated - $79,040 per year
On Request - $72.80 per hour
COBOL Programmer:
Dedicated - $129,480 per year
On Request - $100.88 per hour
Workstation Programmer:
Dedicated - $157,040 per year
On Request - $128.96 per hour
*Full Service Support (2000 Rates):
Senior Staff Support - $70.00 per hour
Staff Support - $50.00 per hour
Clerical Support - $40.00 per hour
RATE ADJUSTMENT TRIGGERS:
The above asset fees would be adjusted monthly based on the
following triggers:
Should either "Average Assets per Account" or "Average Assets
per CUSIP" decrease 10% in a given month from their baseline
March through May 2000 averages, the basis point fee rates
would be adjusted up using the formula: Previous Rate divided
by .9. When/if a rate adjustment is made, both trigger ratios
would be reset at new levels equal to 10% below their previous
level. Subsequent adjustments to the rates would be triggered
should these ratios decrease in additional 10% increments.
Downward adjustments would be made to the rates using the same
formula should the trigger ratios increase in 10% increments,
but only to the extent that previous upward rate adjustments
have been made. The basis point fee rates could not be
adjusted below the original rates listed above.
TRIGGERS:
AVERAGE ASSETS PER ACCOUNT AVERAGE ASSETS PER CUSIP
-------------------------- ------------------------
Bank & Thrift $ 9,733 $ 184,696,341
Prime Rate $ 113,660 $ 1,259,736,679
All Others $ 29,452 $ 63,379,993
49
EXHIBIT B, p. 3
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 Exhibit C to this
Agreement. Reimbursable expenses are billed separately from service
fees on a monthly basis.
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
through May 31, 2002. All items marked by an "*" are subject to change
with 60 day notice.
50
EXHIBIT B.1, p.1
TA2000 VOICE SYSTEM
FEE SCHEDULE
PER CALL SERVICE FEE
Utilization of DST's TA2000 Voice 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.
51
EXHIBIT B.2, p. 1
NSCC FEES AND OUT-OF-POCKET EXPENSES
DST Fees
DST charges $1,500 per cusip per year for the NSCC platform
Settling Bank Fees
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 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.
52
EXHIBIT C
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/CD ROM
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
Tax Certification Mailings (e.g., W-8 & W-9)
(Postage associated with the return
envelope is included)
N.S.C.C. Communications Charge
(Fund/Serv and Networking)
Record Storage (hardcopy/microfiche/on-call) Currently $.10
Second Site Disaster through 12/31/01,
Backup Fee (per account) subject to annual
adjustment
Transmission of Statement Data for Currently $.035/per
Remote Processing record
Travel, Per Diem and other Billables
Incurred by DST personnel traveling to,
at and from Fund at the request
of Fund
53
EXHIBIT D
AUTHORIZED PERSONNEL
Pursuant to Section 8.A. of the
Agency Agreement between Fund and DST (the
"Agreement"), Fund authorizes the following Fund personnel to provide
instructions to DST, and receive inquiries from DST in connection with the
Agreement:
NAME TITLE
---- -----
----------------------------- --------------------------------
----------------------------- --------------------------------
----------------------------- --------------------------------
----------------------------- --------------------------------
----------------------------- --------------------------------
----------------------------- --------------------------------
----------------------------- --------------------------------
----------------------------- --------------------------------
This Exhibit may be revised by Fund by providing DST with a substitute Exhibit
D. Any such substitute Exhibit B 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.
By: /s/ Xxxxxxxx Xxxxx
---------------------------
Title: Group VP
------------------------
Date: 11/30/2000
-------------------------
54
LEXINGTON MONEY MARKET TRUST
PILGRIM EQUITY TRUST
Pilgrim Index Plus Protection Fund
Pilgrim MidCap Opportunities Fund
PILGRIM GROWTH OPPORTUNITIES FUND
PILGRIM MAYFLOWER TRUST
Pilgrim Growth + Value Fund
Pilgrim International Value Fund
Pilgrim Research Enhanced Index Fund
PILGRIM NATURAL RESOURCES TRUST
PILGRIM PRIME RATE TRUST
PILGRIM SMALLCAP OPPORTUNITIES FUND
PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible Portfolio
Pilgrim VP Emerging Countries Portfolio
Pilgrim VP Financial Services Portfolio
Pilgrim VP Growth & Income Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim VP High Yield Bond Portfolio
Pilgrim VP International Portfolio
Pilgrim VP International SmallCap Growth Portfolio
Pilgrim VP International Value Portfolio
Pilgrim VP LargeCap Growth Portfolio
Pilgrim VP MargnaCap Portfolio
Pilgrim XX XxxXxx Opportunities Portfolio
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP Worldwide Growth Portfolio
PILGRIM FUNDS TRUST
Pilgrim European Equity Fund
Pilgrim Global Communications Fund
Pilgrim Global Information Technology Fund
Pilgrim Intermediate Bond Fund
Pilgrim Internet Fund
ING Pilgrim Money Market Fund
Pilgrim National Tax-Exempt Bond Fund
Pilgrim Tax Efficient Equity Fund
PILGRIM MUTUAL FUNDS
Pilgrim Balanced Fund
Pilgrim Convertible Fund
Pilgrim Emerging Countries Fund
Pilgrim High Yield Fund II
Pilgrim International Core Growth Fund
Pilgrim International SmallCap Growth Fund
Pilgrim LargeCap Growth Fund
Pilgrim MidCap Growth Fund
55
Pilgrim Money Market Fund
Pilgrim SmallCap Growth Fund
Pilgrim Strategic Income Fund
Pilgrim Worldwide Growth Fund
PILGRIM SENIOR INCOME FUND
PILGRIM ADVISORY FUNDS, INC.
Pilgrim Asia-Pacific Equity Fund
PILGRIM BANK AND THRIFT FUND, INC.
PILGRIM EMERGING MARKETS FUND, INC.
PILGRIM GNMA INCOME FUND, INC.
PILGRIM PRECIOUS METALS FUND, INC.
PILGRIM GROWTH AND INCOME FUND, INC.
PILGRIM INVESTMENT FUNDS, INC.
Pilgrim High Yield Fund
Pilgrim MagnaCap Fund
PILGRIM INTERNATIONAL FUND, INC.,
PILGRIM RUSSIA FUND, INC.
By: /s/ Xxxxxx X. Naka
-------------------------------------
Title: Senior Vice President
----------------------------------
Date: 11/30/2000
-----------------------------------
56
