AGENCY AGREEMENT
THIS AGREEMENT made the 1st day of September, 2004, by and between OLD
MUTUAL ADVISOR FUNDS, a Delaware statutory trust currently consisting of (1) the
OM Asset Allocation Conservative Portfolio, (2) the OM Asset Allocation Balanced
Portfolio, (3) the OM Asset Allocation Moderate Portfolio and (4) the OM Asset
Allocation Growth Portfolio, all registered investment companies, and any other
registered investment companies set forth on Exhibit A, attached hereto, as
amended from time to time (each such registered investment company hereinafter
jointly and severally referred to as the "Fund"), each Fund having its principal
place of business at X.X. Xxx 000000, Xxxxxx Xxxx, Xxxxxxxx 00000 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 X. 00xx Xx., 0xx Xx.,
Xxxxxx Xxxx, Xxxxxxxx 00000 ("DST"):
WITNESSETH:
WHEREAS, the Fund desires to appoint DST as Transfer Agent and Dividend
Disbursing Agent, and DST desires to accept such appointment;
WHEREAS, the Fund has entered into a Shareholders Servicing Agreement
with PBHG Fund Services, Inc. ("Fund Services"); and
WHEREAS, Fund Services will assume primary responsibilities for certain
shareholder account activities;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Documents to be Filed with Appointment.
In connection with the appointment of DST as Transfer Agent and
Dividend Disbursing Agent for the Fund, there will be filed with DST
the following documents:
A. A copy of the resolutions of the Board of
Directors of the Fund appointing DST as Transfer Agent and Dividend
Disbursing Agent, approving the form of this Agreement, and
designating certain persons to give written instructions and
requests on behalf of the Fund;
B. A copy of the Articles of Incorporation of the Fund and all
amendments thereto;
C. A copy of the Bylaws of the Fund;
D. Copies of the most recent amendments to the Registration Statements
filed with the Securities and Exchange Commission.
E. Specimens of the signatures of the officers of the Fund or
other individuals authorized to sign written instructions and
requests;
F. An opinion of counsel for the Fund with respect to:
(1) The Fund's organization and existence under the laws of
its state of organization,
(2) That all shares of stock of the Fund covered by the appointment
are duly registered under the Securities Act of 1933 (the "'33
Act"), 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 the Fund that:
A. It is a corporation duly organized and existing and in good
standing under the laws of Delaware.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform the
services contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required
under the Securities Exchange Act of 1934 (the "'34 Act").
E. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
3. Certain Representations and Warranties of the Fund.
The Fund represents and warrants to DST that:
A. It is a corporation duly organized and existing and in good
standing under the laws of the State of Maryland.
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B. It is an open-end management investment company registered
under the Investment Company Act of 1940 (the "'40 Act"), as
amended.
C. A registration statement under the '33 Act has been filed and
will be effective with respect to all shares of the Fund being
offered for sale.
D. All requisite steps have been and will continue to be taken to
register the Fund's shares for sale in all applicable states
and such registration will be effective at all times shares
are offered for sale in such state.
E. The Fund is empowered under applicable laws and by its charter
and Bylaws to enter into and perform this Agreement.
4. Scope of Appointment.
A. Subject to the conditions set forth in this Agreement, the
Fund hereby appoints DST as Transfer Agent and Dividend
Disbursing Agent.
B. DST hereby accepts such appointment and agrees that it will
act as the Fund's Transfer Agent and Dividend Disbursing
Agent. DST agrees that it will also act as agent in connection
with the Fund's periodic withdrawal payment accounts and other
open accounts or similar plans for shareholders, if any.
C. The Fund agrees to use its reasonable efforts to deliver to
DST in Kansas City, Missouri, as soon as they are available,
all of its shareholder account records.
D. DST, utilizing TA2000TM, DST's computerized data processing
system for securityholder accounting (the "TA2000 System"),
will perform the following services as transfer and dividend
disbursing agent for the Fund, and as agent of the Fund for
shareholder accounts thereof, in a timely manner: (i) issuing
(including countersigning), transferring and canceling share
certificates; (ii) maintaining on the TA2000 System
shareholder accounts; (iii) accepting and effectuating the
registration and maintenance of accounts through Networking
and the purchase, redemption, transfer and exchange of shares
in such accounts through Fund/SERV (Networking and Fund/SERV
being programs operated by the National Securities Clearing
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Corporation ("NSCC") on behalf of NSCC's participants,
including the Funds), in accordance with instructions
transmitted to and received by DST by transmission from NSCC
on behalf of broker-dealers and banks which have been
established by, or in accordance with the instructions of, an
Authorized Person, as hereinafter defined, on the Dealer File
maintained by DST; (iv) issuing instructions to the Funds'
banks for the settlement of transactions between the Funds and
NSCC (acting on behalf of its broker-dealer and bank
participants); (v) providing account and transaction
information from each affected Fund's records on TA2000 in
accordance with NSCC's Networking and Fund/SERV rules for
those broker-dealers; (vi) maintaining shareholder accounts on
TA2000 through Networking; (vii) providing transaction
journals; (viii) preparing shareholder meeting lists for use
in connection with a reasonable number of shareholder meetings
and certifying a copy of such list as requested; (ix) mailing
shareholder reports and prospectuses; (x) withholding, as
required by federal law, taxes on shareholder accounts,
preparing, filing and mailing U.S. Treasury Department Forms
1099, 1042, and 1042S and performing and paying backup
withholding as required for all shareholders; (xi) disbursing
income dividends and capital gains distributions to
shareholders and recording reinvestment of dividends and
distributions in shares of the Fund; (xii) preparing and
mailing confirmation forms to shareholders and dealers, as
instructed, for all purchases and liquidations of shares of
the Fund and other confirmable transactions in shareholders'
accounts; (xiii) providing or making available on-line daily
and monthly reports as provided by the TA2000 System and as
requested by the Fund or an Authorized Person; (xiv)
maintaining those records necessary to carry out DST's duties
hereunder and those required by the Securities Exchange Act of
1934 and the Investment Company Act of 1940, including all
information reasonably required by the Fund to account for all
transactions in the Fund shares; (xv) calculating the
appropriate sales charge with respect to each purchase of the
Fund shares as instructed by an Authorized Person, as
hereinafter defined, determining the portion of each sales
charge payable to the dealer participating in a sale in
accordance with schedules and instructions delivered to DST by
the Fund's principal underwriter or distributor (hereinafter
"principal underwriter") or an Authorized Person 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; (xvi) receiving correspondence
pertaining to any former, existing or new shareholder account,
processing such correspondence for proper recordkeeping, and
responding promptly to shareholder correspondence; mailing to
dealers confirmations of wire order trades; mailing copies of
shareholder statements to shareholders and registered
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representatives of dealers in accordance with the instructions
of an Authorized Person; (xvii) processing, normally on the
date of receipt, purchases or redemptions or instructions to
settle any mail or wire order purchases or redemptions
received in proper order as set forth in the prospectus,
rejecting promptly any requests not received in proper order
(as defined by an Authorized Person or the Procedures as
hereinafter defined), and causing exchanges of shares to be
executed in accordance with the instructions of Authorized
Persons, the applicable prospectus and the general exchange
privilege applicable; (xix) providing to the person designated
by an Authorized Person the daily Blue Sky reports generated
by the Blue Sky module of TA2000 with respect to purchases of
shares of the Funds on TA2000; and (xx) providing to the Fund
escheatment reports as requested by an Authorized Person with
respect to the status of accounts and outstanding checks on
TA2000.
E. To the extent that such services are not provided to the
Fund by agents designated by the Fund under Section 20 of this
Agreement, at the request of an Authorized Person, DST shall
use its best reasonable efforts to provide the services set
forth in Section 4.D. 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"), 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 the 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 (including without
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limitation price changes and corrective processing), (the
"Exception Services").
F. DST shall use its best 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 the Fund's instructions, prospectus or
application as amended from time to time, for the Fund
provided (i) DST is advised in advance by the Fund of any
changes therein and (ii) the TA2000 System and the mode of
operations utilized by DST as then constituted supports such
additional functions and features. If any addition to,
improvement of or change in the features and functions
currently provided by the TA2000 System or the operations as
requested by the Fund requires an enhancement or modification
to the TA2000 System or to operations as presently conducted
by DST, DST shall not be liable therefore until such
modification or enhancement is installed on the TA2000 System
or new mode of operation is instituted. If any new, additional
function or feature or change or improvement to existing
functions or features or new service or mode of operation
measurably increases DST's cost of performing the services
required hereunder at the current level of service, DST shall
advise the Fund of the amount of such increase and if the Fund
elects to utilize such function, feature or service, DST shall
be entitled to increase its fees by the amount of the increase
in costs. In no event shall DST be responsible for or liable
to provide any additional function, feature, improvement or
change in method of operation until it has consented thereto
in writing.
G. The Fund shall have the right to add new series to the
TA2000 System upon at least thirty (30) days' prior written
notice to DST provided that the requirements of the new series
are generally consistent with services then being provided by
DST under this Agreement. Rates or charges for additional
series shall be as set forth in Exhibit 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 as may be mutually agreed upon by the parties.
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5. Limit of Authority.
Unless otherwise expressly limited by the resolution of appointment or
by subsequent action by the Fund, the appointment of DST as Transfer
Agent will be construed to cover the full amount of authorized stock of
the class or classes for which DST is appointed as the same will, from
time to time, be constituted, and any subsequent increases in such
authorized amount.
In case of such increase the Fund will file with DST if the appointment
of DST was theretofore expressly limited, a copy of a resolution of the
Board of Directors of the Fund increasing the authority of DST and a
letter of counsel (in-house or outside) opining that such additional
shares of stock of the Fund are duly registered under the Securities
Act of 1933, as amended, and any other applicable federal or state
statute and that such additional shares are, or when issued will be,
validly issued, fully paid and nonassessable.
6. Compensation and Expenses.
A. In consideration for its services hereunder as Transfer
Agent and Dividend Disbursing Agent, the Fund will pay to DST
from time to time compensation as set forth in Exhibit B,
attached hereto for all services rendered as Agent, and also,
all its reasonable billable expenses, charges, counsel fees
(but only such counsel fees as set forth in paragraph 6.B.
below), 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 by the Fund
and DST, a copy of which is attached hereto as Exhibit B. If
the Fund has not paid such Compensation and Expenses to DST
within thirty (30) days, DST may charge against any monies
held under this Agreement, the amount of any Compensation
and/or Expenses for which it shall be entitled to
reimbursement under this Agreement.
B. The Fund also agrees promptly to reimburse DST for all
reasonable billable expenses or disbursements incurred by DST
in connection with the performance of services under this
Agreement including, but not limited to, expenses for postage,
express delivery services, freight charges, envelopes, checks,
drafts, forms (continuous or otherwise), specially requested
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reports and statements, telephone calls, telegraphs,
stationery supplies, counsel fees incurred in connection with
legal questions pertaining to the legality, sufficiency or
adequacy under applicable law of instructions, requests or
documentation submitted by shareholders or persons purporting
or alleging to be authorized to act on behalf of shareholders,
outside printing and mailing firms (including Output
Technology, Inc. and Output Technologies SRI Group, Inc.
(individually and collectively "OTI")), magnetic tapes, reels
or cartridges (if sent to the Fund or to a third party at the
Fund's request) and magnetic tape handling charges, off-site
record storage, media for storage of records (e.g., microfilm,
microfiche, optical platters, computer tapes), computer
equipment installed at the Fund's request at the Fund's or a
third party's premises, telecommunications equipment,
telephone/telecommunication lines between the Fund and its
agents, on one hand, and DST on the other, proxy soliciting,
processing and/or tabulating costs, second-site backup
computer facility, transmission of statement data for remote
printing or processing by a third party other than OTI, and
National Securities Clearing Corporation ("NSCC") transaction
fees to the extent any of the foregoing are paid by DST. The
Fund agrees to pay postage expenses at least one day in
advance if so requested. In addition, any other expenses
incurred by DST at the request or with the consent of the Fund
will be promptly reimbursed by the Fund. The foregoing
reasonable billable expenses or disbursements will be invoiced
by DST to the Fund without markup except for reasonable
allocations to reimburse expenses incurred by DST to lessen
expenses or to add value to third party services (the "Added
Value Expenses"). DST shall (i) provide written notice to the
Fund each time DST invoices a new category of Added Value
Expenses, identifying the amount of and the justification (the
additional expense incurred by DST to lower the overall
expense or to add value to the service being invoiced) for the
markup, and (ii) obtain the Fund's consent to such markup,
which consent shall not be unreasonably delayed or withheld.
Additionally, DST will seek to consult with Fund counsel prior
to incurring reimbursable outside counsel fees.
C. Amounts due hereunder shall be due and paid on or before
the thirtieth (30th) business day after receipt of the
statement therefor by the Fund (the "Due Date"). The Fund is
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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, the Fund shall pay a late
charge of one and one-half percent (1.5%) per month times the
amount overdue, times the number of months or portion of a
month from the Due Date up to and including the day on which
payment is received by DST. The parties hereby agree that such
late charge represents a fair and reasonable computation of
the costs incurred by reason of late payment or payment of
amounts not properly due. Acceptance of such late charge shall
in no event constitute a waiver of the Fund's or DST's default
or prevent the non-defaulting party from exercising any other
rights and remedies available to it.
D. In the event that any charges are disputed, the Fund shall, on
or before the Due Date, pay all undisputed amounts due
hereunder and notify DST in writing of any disputed charges
for billable expenses which it is disputing in good faith.
Payment for such disputed charges shall be due on or before
the close of the fifth (5th) business day after the day on
which DST provides to the Fund documentation which an
objective observer would agree reasonably supports the
disputed charges (the "Revised Due Date"). Late charges shall
not begin to accrue as to charges disputed in good faith until
the first business day after the Revised Due Date.
E. The fees and charges set forth on Exhibit B shall increase or
may be increased as follows:
(1) On the first day of each new term, in accordance with
the "Fee Increases" provision in Exhibit B;
(2) DST may propose an increase in the fees and charges
set forth on Exhibit B upon at least ninety (90) days
prior written notice, if changes in existing laws,
rules or regulations: (i) require substantial system
modifications or (ii) materially increase cost of
performance hereunder;
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(3) DST may propose a charge for additional features of
TA2000 which the Fund proposes to use provided such
features are not consistent with the Fund's current
processing requirements; and
(4) In the event DST, at the Fund's request or direction,
performs Exception Services, DST shall be entitled to
increase the fees and charges for such Exception
Services from those set forth on Exhibit B to the
extent such Exception Services increase DST's cost of
performance. DST shall provide the Fund with
reasonable evidence of such increase in the cost of
performance.
If DST notifies the Fund of an increase in fees or charges
pursuant to subparagraphs (2) of this Section 6.E., the parties shall
confer, diligently and in good faith and agree upon a new fee to cover
the amount necessary, but not more than such amount, to reimburse DST
for the Fund's aliquot portion of the cost of developing the new
software to comply with regulatory charges and for the increased cost
of operation. If DST and the Fund are not able to agree upon such new
fees, then the Fund shall have thirty (30) days upon which to accept
DST's last offer or to announce the Fund's intention to terminate this
Agreement. DST thereupon will have fifteen (15) days to accept the
Fund's position on the proposed fee increase or to accept the
termination of this Agreement. If such notice is accepted, the Fund
shall deconvert from TA2000 within one hundred twenty (120) days of
DST's notice of acceptance of termination.
If DST notifies the Fund of an increase in fees or charges
under subparagraphs (3) or (4) of this Section 6.E., the parties shall
confer, diligently and in good faith, and agree upon a new fee to cover
such new fund feature or Exception Service. In the event that DST and
the Fund are unable to agree upon a new fee, then DST shall not be
obligated to provide such new service and shall not be entitled to such
fee increase.
7. Operation of DST System.
In connection with the performance of its services under this
Agreement, DST is responsible for such items as:
A. That entries in DST's records, and in the Fund's records on
the TA2000 System created by DST, reflect the orders,
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instructions, and other information received by DST from the
Fund, the Fund's distributor, manager or principal
underwriter, the Fund's investment adviser, the Fund's
sponsor, the Fund's custodian, Fund Services, the Fund's
shareholder servicing agent, UAM Shareholder Services
Corporation, Inc. ("UAM SSC"), or the Fund's administrator
(each of the foregoing an "Authorized Person"), broker-dealers
or shareholders;
B. That shareholder lists, shareholder account verifications,
confirmations and other shareholder account information to be
produced from its records or data be available and accurately
reflect the data in the Fund's records on the TA2000 System;
C. The accurate and timely issuance of dividend and distribution
checks in accordance with instructions received from the Fund
and the data in the Fund's records on the TA2000 System;
D. That redemption transactions and payments be effected timely,
under normal circumstances on the day of receipt, and
accurately in accordance with redemption instructions received
by DST from Authorized Persons, broker-dealers or shareholders
and the data in the Fund's records on the TA2000 System;
E. The deposit daily in the Fund's appropriate special bank
account of all checks and payments received by DST from NSCC,
broker-dealers or shareholders for investment in shares;
F. Notwithstanding anything herein to the contrary, with
respect to "as of" adjustments, DST will not assume one
hundred percent (100%) responsibility for losses resulting
from "as ofs" due to non-negligent clerical errors or
non-negligent misinterpretations of shareholder instructions,
but DST will discuss with the Fund DST's accepting liability
for such "as of" on a case-by-case basis and shall accept
financial responsibility for a particular situation involving
negligent clerical errors or negligent misinterpretations of
shareholder instructions resulting in a material (as defined
by the Investment Company Institute) financial loss to the
Fund where DST in its discretion deems that to be appropriate;
G. The requiring of proper forms of instructions, signatures
and signature guarantees and any necessary documents
supporting the opening of shareholder accounts, transfers,
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redemptions and other shareholder account transactions, all in
conformance with DST's present procedures as set forth in its
Legal Manual, Third Party Check Procedures, Checkwriting Draft
Procedures, and Signature Guarantee Procedures (collectively
the "Procedures") with such changes or deviations therefrom as
may be from time to time required or approved by the Fund, the
Fund's investment adviser, or Fund Services 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;
I. The maintenance of a current, duplicate set of the Fund's
essential records at a secure separate location, in a form
available and usable forthwith in the event of any breakdown
or disaster disrupting its main operation; and
J. The records maintained by the TA2000 System will conform to
all recordkeeping requirements applicable to a transfer agent
under the '34 Act and the '40 Act.
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 '34 Act, and the rules and
regulations thereunder. In the absence of bad faith, willful
misconduct, knowing (not including the terms of the '34 Act
and the '40 Act and any rules or regulations adopted under
such Act, which provisions DST is presumed under this
Agreement to know) violations of applicable law pertaining to
the manner in which transfer agency services are performed by
DST (excluding any violations arising directly or indirectly
out of the actions or omissions to act of third parties
unaffiliated with DST), 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. In performance of its duties
hereunder, DST shall be entitled, except where the Fund
expressly waives such requirements:
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(i) To require a signature from the shareholder or the
shareholder's agent in capacity and signature
guaranteed. DST shall be entitled to rely on any
signature guarantee in proper format or signature
medallion which reasonably resembles a proper
signature medallion provided the guarantor reasonably
appears from its name to be an eligible guarantor
institution as provided for in Section 17Ad-15 under
the '34 Act, and DST shall not be required or
responsible to verify the genuineness or validity of
such guarantee or medallion, the eligibility of the
guaranteeing institution to make a guarantee or to
affix a medallion or the authority of the individual
executing the guarantee on behalf of the guarantor
institution;
(ii) In connection with checkwriting drafts, (A) to accept
and effectuate redemption of share in accordance with
the terms of a draft: (I) where the draft is for less
than $5,000 or (II) where the signature of the maker
of the draft reasonably resembles the signature of
the shareholder or authorized signer; and (B) in all
cases, DST shall not be responsible with respect to
the genuineness of any endorsement or the authority
of the endorser to endorse the draft; and
(iii) To accept as genuine any telefax or copy of any
document received from a bank, broker, lawyer,
accountant, doctor or other professional or entity
acting in a professional capacity on or accompanied
by a letter on official letterhead of such submitter
or a copy or telefax of what reasonably appears to be
an official record from a shareholder or shareholder
representative without requiring submission of an
original of the document or of a copy bearing an
original stamp or seal.
Wherever the Fund or an Authorized Person elects to waive a
requirement for any action by DST, which requirement DST would
otherwise have been entitled to demand, DST shall not be
responsible or liable for any Adverse Consequences, as
hereinafter defined, suffered or incurred by the Fund or any
shareholder by reason of the non-existence of any fact or
condition to which the waived requirement would have related
or been relevant.
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B. DST shall not be responsible for, and the Fund shall indemnify
and hold DST harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and
liability ("Adverse Consequences") 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 good faith, with due diligence, reasonable
care and without willful misconduct, knowing
violations of applicable law (not including the terms
of the '34 Act and the '40 Act and any rules or
regulations adopted under such Acts, which provisions
DST is presumed under this Agreement to know)
pertaining to the manner in which transfer agency
services are performed or reckless disregard of the
performance of its duties on DST's part;
(2) The Fund's refusal or failure to comply with the
terms of this Agreement, the Fund's negligence or
willful misconduct, or the breach of any
representation or warranty of the Fund hereunder;
(3) The good faith reliance on, or the carrying out of,
any written or oral instructions or requests of
persons designated by the Fund in writing (see
Exhibit C) from time to time as authorized to give
instructions on its behalf or 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 the Fund, its investment advisor, its
sponsor or its principal underwriter;
(4) Defaults by dealers or shareowners with respect to
payment for share orders previously entered;
(5) The offer or sale of the 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 the Fund or of any officer of the
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Fund that no offers or sales be input into the Fund's
securityholder records in or to residents of such
state);
(6) The Fund's errors and mistakes in the use of the
TA2000 System, the data center, computer and related
equipment used to access the TA2000 System (the "DST
Facilities"), and control procedures relating thereto
in the verification of output and 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, the Fund's records, shareholder and
other records, delivered to DST hereunder by the Fund
or its prior agent(s);
(8) Actions or omissions to act by the Fund or agents
designated by the Fund with respect to duties assumed
by the Fund or such agent under Section 20 hereof;
and
(9) DST's performance of 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 with respect to "as ofs" for which
reimbursement is not required as set forth in Section 7.F.,
DST shall indemnify and hold the Fund harmless from and
against any and all Adverse Consequences 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 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.
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E. DST will indemnify and hold Fund harmless against, and DST
will at its own expense defend any action brought
against Fund to the extent such action is based upon,
a claim that the TA2000 System as used within the
scope of this Agreement infringes any U.S. patent,
copyright or trade secret; provided, that DST is
immediately notified in writing of any such claim
(but any delay or failure by any User to give notice
of such claim to DST shall relieve DST of its
liability hereunder only to the extent that DST is
prejudiced thereby); and provided, further that DST
shall have the exclusive right to control such
defense and settle such claim; provided that in no
event may DST settle any such claim, lawsuit or
proceeding in a manner which binds Fund to liability
without Fund's consent. In no event shall Fund settle
any such claim, lawsuit or proceeding without DST's
prior written approval. In the event of any such
claim, litigation or threat thereof, DST may, in its
sole and absolute discretion either;
(i) Procure for Fund a right to continue to use
the TA2000 System at no additional charge to
Fund; or
(ii) Replace or modify the TA2000 System so as to
be non-infringing without eliminating or
diminishing the services provided hereunder
at no additional charge to Fund; or
(iii) Only if (i) or (ii) cannot be accomplished
on commercially reasonable terms, terminate
this Agreement without any further liability
to Fund.
F. 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 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
16
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 local counsel) 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 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
17
hereunder. If it does so, it waives its right to
indemnification therefor.
9. Certain Covenants of DST and the Fund.
A. All requisite steps will be taken by the Fund from time to
time when and as necessary to register the Fund's shares for
sale in all states in which the Fund's shares shall at the
time be offered for sale and require registration. If at any
time the Fund will receive notice of any stop order or other
proceeding in any such state affecting such registration or
the sale of the Fund's shares, or of any stop order or other
proceeding under the federal securities laws affecting the
sale of the Fund's shares, the Fund will give prompt notice
thereof to DST.
B. DST hereby agrees to perform such transfer agency functions as
are set forth in Sections 4.D. and 4.E. above and establish
and maintain facilities and procedures reasonably acceptable
to the Fund for safekeeping of stock certificates, check
forms, and facsimile signature imprinting devices, if any; and
for the preparation or use, and for keeping account of, such
certificates, forms and devices, and to carry such insurance
as it reasonably considers adequate.
C. To the extent required by Section 31 of the Investment Company
Act of 1940 as amended and Rules thereunder, DST agrees that
all records maintained by DST relating to the services to be
performed by DST under this Agreement are the property of the
Fund and will be preserved and will be surrendered promptly to
the Fund on request.
D. DST agrees to furnish the Fund annual reports of its financial
condition, consisting of a balance sheet, earnings statement
and any other financial information reasonably requested by
the Fund. The annual financial statements will be certified by
DST's certified public accountants.
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.
18
F. DST will permit the Fund and its authorized representatives to
make periodic inspections of its operations as such would
involve the Fund at reasonable times during business hours.
G. DST agrees to use its reasonable efforts to
provide in Kansas City at the Fund's expense two (2)
man weeks of training for the Fund's personnel in
connection with use and operation of the TA2000
System. All travel and reimbursable expenses incurred
by the Fund's personnel in connection with and during
training at DST's Facility shall be borne by the
Fund. At the Fund's option and expense, DST also
agrees to use its reasonable efforts to provide an
additional two (2) man weeks of training at the
Fund's facility for the Fund's personnel in
connection with the conversion to the TA2000 System.
Reasonable travel, per diem and reimbursable expenses
incurred by DST personnel in connection with and
during training at the Fund's facility or in
connection with the conversion shall be borne by the
Fund.
H. Notwithstanding anything in this Agreement to the
contrary, DST's only warranty or covenant with
respect to year 2000 compliance is that the TA2000
System will be year 2000 compliant during the term
set forth in Section 21 of this Agreement. As used in
this Agreement "year 2000 compliant" shall mean that
the TA2000 System will perform in accordance with the
terms of this Agreement regardless of the century
with respect to which date data is encountered by the
TA2000 System; provided, that (i) all date data
received by DST for use by the TA2000 System is
accurate and in formats specified by DST from time to
time, (ii) all date data generated by the TA2000
System is accepted by the recipient in formats
provided by DST from time to time, and (iii) DST
shall not be obligated to provide date data for
interface functions such as screens, reports or data
transmission files in any format other than that
specified by DST from time to time. Notwithstanding
the foregoing, DST makes no representation or
warranty as to the ability of any hardware, firmware,
software, products or services provided to DST by any
other party to manipulate or to process date data, or
as to the functionality of any DST software
(including without limitation the TA2000 System) in
circumstances where data received from any third
party system (including without limitation that of
the Fund and its Authorized Persons, agents or
customers) is invalid, incorrect or otherwise
corrupt. If any vendor provides a year 2000
19
compliance warranty to DST for products or services
which relate to the services provided by DST, DST
will use its best efforts to enforce compliance with
such warranty by such vendor.
10. Recapitalization or Readjustment.
In case of any recapitalization, readjustment or other change in the
capital structure of the Fund, DST will accomplish such
recapitalization or readjustment by book entry upon receiving:
A. Written instructions from an officer of the Fund; and
B. Letter of counsel opining that all required governmental or
regulatory consents have been obtained; all shares of stock of the
Fund in the new form have been duly registered under the Securities
Act of 1933, as amended and any other applicable federal or state
statutes; and all unissued shares will be, when issued, validly
issued, fully paid and nonassessable.
11. Stock Certificates. The Fund will not issue stock certificates.
12. Death, Resignation or Removal of Signing Officer.
The Fund will file promptly with DST written notice of any change in
the officers authorized to sign written instructions or requests,
together with two signature cards bearing the specimen signature of
each newly authorized officer. In the absence of such direction, the
Fund will file promptly with DST such approval, adoption, or
ratification as may be required by law.
13. Future Amendments of Charter and Bylaws.
The Fund will promptly file with DST copies of all material amendments
to its Articles of Incorporation or Bylaws made after the date of this
Agreement.
14. Instructions, Opinion of Counsel and Signatures.
At any time DST may apply to any person authorized by the Fund to give
instructions to DST, and may with the approval of a Fund officer
consult with legal counsel for the Fund, or DST's own outside legal
counsel at the expense of the Fund, with respect to any matter arising
in connection with the agency (not at the expense of the Fund with
20
respect to DST's employing outside counsel, with respect to matters
relating to DST's obligations under the '34 Act or the '40 Act) 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
the Fund. It will also be protected in recognizing stock certificates
which it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund, and the proper countersignature
of any former Transfer Agent or Registrar, or of a co-Transfer Agent or
co-Registrar.
15. Force Majeure and Disaster Recovery Plans.
A. DST shall not be responsible or liable for its reasonable
failure or reasonable 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 provided they were maintained or
updated per manufacturer requirements) or communication
service; inability to obtain labor, material, equipment or
transportation, or a delay in mails; governmental or exchange
action, statute, ordinance, rulings, regulations or
direction; war, strike, riot, emergency, civil disturbance,
terrorism, vandalism, explosions, labor disputes, freezes,
floods, fires, tornadoes, acts of God or public enemy,
revolutions, or insurrection; or any other cause,
contingency, circumstance or delay not subject to DST's
reasonable control which prevents or hinders DST's
performance hereunder.
B. DST currently maintains an agreement with a third party
whereby DST is to be permitted to use on a "shared use" basis
a "hot site" (the "Recovery Facility") maintained by such
party in event of a disaster rendering the DST Facilities
inoperable. DST has developed and is continually revising a
business contingency plan (the "Business Contingency Plan")
detailing which, how, when, and by whom data maintained by
21
DST at the DST Facilities will be installed and operated at
the Recovery Facility. Provided the Fund is paying its pro
rata portion of the charge therefor, DST 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. DST acknowledges that the Fund is paying
its pro rata portion of the charge for the Recovery Facility
and Business Contingency Plan pursuant to the terms of
Exhibit B hereto.
C. DST also currently maintains, separate from the area in which
the operations which provides the services to the Fund
hereunder are located, a Crisis Management Center consisting
of phones, computers and the other equipment necessary to
operate a full service transfer agency business in the event
one of its operations areas is rendered inoperable. The
transfer of DST's operations to other operating areas or to
the Crisis Management Center is also covered in DST's Business
Contingency Plan.
16. Records.
DST will maintain all records required by law 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.
17. Disposition of Books, Records and Canceled Certificates.
DST may send periodically to the Fund, or to where designated by the
Secretary or an Assistant Secretary of the Fund, all books, documents,
and all records no longer deemed needed for current purposes, upon the
understanding that such books, documents, records, and stock
certificates will be maintained by the Fund under and in accordance
with the requirements of Rule 17Ad-7 adopted under the Securities
Exchange Act of 1934, including by way of example and not limitation
Rule 17Ad-7(g) thereof. Such materials will not be destroyed by the
Fund without the consent of DST (which consent will not be unreasonably
withheld), but will be safely stored for possible future reference.
18. Provisions Relating to DST as Transfer Agent.
A. DST will register the ownership of additional shares as it
receives appropriate instructions or payment therefore, it
being the responsibility of the Fund or its designated agents
22
to assure that sufficient numbers of shares have been
registered as required by all applicable laws, rules or
regulations and that all applicable taxes have been paid.
B. Unissued shares of stock will be transferred and
re-registered, or accepted for redemption and funds remitted
therefor, or book entry transfer be effected, upon receipt by
DST of instructions deemed by DST properly endorsed for
transfer or redemption accompanied by such documents as DST
may deem necessary to evidence the 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 it
may require a guaranty of signature in accordance with the
Signature Guarantee Procedures. DST also reserves 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 which, in its
judgment, are improper or unauthorized. DST may, in effecting
transfers or redemptions, rely upon the Procedures,
Simplification Acts, Uniform Commercial Code or other
statutes which protect it and the Fund in not requiring
complete fiduciary documentation. In cases in which DST is
not directed or otherwise required to maintain the
consolidated records of shareholder's accounts, DST will not
be liable for any loss which may arise by reason of not
having such records.
C. DST will act as Conversion Agent for unissued shares upon
receiving written instructions from any officer of the Fund
and such other documents as DST deems necessary.
D. DST will supply a shareholder's list to the Fund for a
reasonable number of shareholder meetings per year upon
receiving a request from an officer of the Fund. It will also,
at the expense of the Fund, supply lists at such other times
as may be requested by an officer of the Fund.
E. Upon receipt of written instructions of an officer of the
Fund, DST will, at the expense of the Fund, address and mail
notices to shareholders.
23
F. In case of any request or demand for the inspection of the
stock books of the Fund or any other books in the possession
of DST, DST will endeavor to notify the Fund and to secure
instructions as to permitting or refusing such inspection. DST
reserves the right, however, to exhibit the stock books or
other books to any person in case it is advised by its counsel
that it may be held responsible for the failure to exhibit the
stock books or other books to such person.
19. Provisions Relating to Dividend Disbursing Agency.
A. DST will, at the expense of the Fund, provide a special form
of check containing the imprint of any device or other matter
desired by the Fund. Said checks must, however, be of a form
and size convenient for use by DST.
B. If the Fund desires to include additional printed matter,
financial statements, etc., with the dividend checks, the same
will be furnished DST within a reasonable time prior to the
date of mailing of the dividend checks, at the expense of the
Fund.
C. If the Fund desires its distributions mailed in any special
form of envelopes, sufficient supply of the same will be
furnished to DST but the size and form of said envelopes will
be subject to the approval of DST. If stamped envelopes are
used, they must be furnished by the Fund; or if postage stamps
are to be affixed to the envelopes, the stamps or the cash
necessary for such stamps must be furnished by the Fund.
D. DST shall establish and maintain on behalf of the Fund one or
more deposit accounts as Agent for the Fund, into which DST
shall deposit the funds DST receives for payment of dividends,
distributions, redemptions or other disbursements provided for
hereunder and to draw checks against such accounts.
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.
20. Assumption of Duties By the Fund or Agents Designated By the Fund.
24
A. The Fund or its designated agents other than DST may assume
certain duties and responsibilities of DST or those services
of Transfer Agent and Dividend Disbursing Agent as those
terms are referred to in Section 4.D. of this Agreement
including but not limited to answering and responding to
telephone inquiries from shareholders and brokers, accepting
shareholder and broker instructions (either or both oral and
written) and transmitting orders based on such instructions
to DST, preparing and mailing confirmations, obtaining
certified TIN numbers, classifying the status of shareholders
and shareholder accounts under applicable tax law,
establishing shareholder accounts on the TA2000 System and
assigning social codes and Taxpayer Identification Number
codes thereof, and disbursing monies of the Fund, said
assumption to be embodied in writing to be signed by both
parties.
B. To the extent the Fund or its agent or affiliate assumes such
duties and responsibilities, DST shall be relieved from all
responsibility and liability therefor and is hereby
indemnified and held harmless against any liability therefrom
and in the same manner and degree as provided for in Section 8
hereof.
C. Initially the Fund or its designees shall be responsible for
the activities set forth in Exhibit D, attached hereto. DST
will use its reasonable efforts to provide reasonable
assistance to Fund Services in performing the services
described therein but DST shall have no responsibility or
liability for any errors, inaccuracies, omissions or
inadequacies of Fund Services or for verifying any of Fund
Services' actions or omissions.
21. Termination of Agreement.
A. This Agreement shall be in effect for an initial period
commencing on September 1, 2004 through December 31, 2007 and
thereafter may be terminated by either party as of the last
day of the then current term by the giving to the other party
of at least one (1) year's prior written notice, 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. If such
25
notice is not given by either party to the other at least one
(1) year prior to the end of the then current term, this
Agreement shall automatically renew upon the expiration of
such term for another term of two years or such other period
as specified in any new, mutually agreed Fee Schedule, such
initial period and any subsequent period each being a "Term".
Notwithstanding anything contained in this Agreement to the
contrary, should a Fund terminate this Agreement and move the
Services provided by DST hereunder to a successor service
provider prior to the expiration of the then current Term, or
should a Fund be liquidated or its assets merged or purchased
or the like with another entity which does not utilize DST to
provide the Services on behalf of such Fund, the payment of
fees to DST as set forth herein shall be accelerated to a
date prior to the conversion or termination of Services and
calculated as if DST had continued to perform Services for
Fund until the expiration of the then current Term and
calculated at the Shareholder account levels on the date
notice of termination was given to DST.
B. Each party, in addition to any other rights and remedies,
shall have the right to terminate this Agreement forthwith
upon the occurrence at any time of any of the following events
with respect to the other party:
(1) The bankruptcy of the other party or its assigns or
the appointment of a receiver for the other party or
its assigns; or
(2) Failure by the other party or its assigns to perform
its duties in accordance with the Agreement, which
failure materially adversely affects the business
operations of the first party and which failure
continues for thirty (30) days after receipt of
written notice from the first party.
C. In the event of termination, the Fund will promptly pay DST
all amounts due to DST hereunder prior to or contemporaneously
with the deconversion of the Fund's records from the TA2000
System.
D. In the event of termination, DST will use its reasonable
efforts to (i) transfer the records of the Fund, (ii)
provide, upon execution of DST's Confidentiality and Limited
Use Agreement, file layouts to the designated successor
transfer agent, (iii) provide reasonable assistance to the
Fund and its designated successor transfer agent, and (iv)
26
provide other information relating to its services provided
hereunder (subject in each case to the recompense of DST at
its standard rates and fees for personnel then in effect at
that time); provided, however, as used herein "reasonable
assistance" and "other information" shall not include
assisting any new service or system provider to modify,
alter, enhance, or improve its system or to improve, enhance,
or alter its current system, or to provide any new,
functionality or to require DST to disclose any DST
Confidential Information, as hereinafter defined, or any
information which is otherwise confidential to DST. The Fund
acknowledges that DST's ability to provide "reasonable
assistance" and "other information" during the period
December 15th through March 30th of any year may be less than
DST's ability at any other time of the year.
22. Confidentiality.
A. DST agrees that, except as provided in the last
sentence of Section 18.F. hereof, or as otherwise
required by law, DST will keep confidential all
records of and information in its possession relating
to the Fund or its shareholders or shareholder
accounts and will not disclose the same to any person
except at the request or with the consent of the
Fund.
B. The Fund agrees to keep confidential all financial
statements and other financial records received from
DST, the terms and provisions of this Agreement, all
accountant's reports relating to 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.
C. (1) The Fund acknowledges that DST has proprietary rights
in and to the TA2000 System used to perform services
hereunder including, but not limited to the
maintenance of shareholder accounts and records,
processing of related information and generation of
output, including, without limitation any changes or
modifications of the TA2000 System and any other DST
programs, data bases, supporting documentation, or
procedures (collectively "DST Confidential
Information") which the Fund's access to the TA2000
System or computer hardware or software may permit
the Fund or its employees or agents to become aware
of or to access and that the DST Confidential
27
Information constitutes confidential material and
trade secrets of DST. The Fund agrees to maintain the
confidentiality of the DST Confidential Information.
(2) The Fund acknowledges that any unauthorized use,
misuse, disclosure or taking of DST Confidential
Information which is confidential as provided by law,
or which is a trade secret, residing or existing
internal or external to a computer, computer system,
or computer network, or the knowing and unauthorized
accessing or causing to be accessed of any computer,
computer system, or computer network, may be subject
to civil liabilities and criminal penalties under
applicable state law. The Fund will advise all of its
employees and agents who have access to any DST
Confidential Information or to any computer equipment
capable of accessing DST or DST hardware or software
of the foregoing.
(3) The Fund acknowledges that disclosure of the DST
Confidential Information may give rise to an
irreparable injury to DST inadequately compensable in
damages. Accordingly, DST may seek (without the
posting of any bond or other security) injunctive
relief against the breach of the foregoing
undertaking of confidentiality and nondisclosure, in
addition to any other legal remedies which may be
available, and the Fund consents to the obtaining of
such injunctive relief. All of the undertakings and
obligations relating to confidentiality and
nondisclosure, whether contained in this Section or
elsewhere in this Agreement shall survive the
termination or expiration of this Agreement for a
period of ten (10) years.
23. Changes and Modifications.
A. During the term of this Agreement DST will use on behalf
of the Fund without additional cost all modifications,
enhancements, or changes which DST may make to the TA2000
System in the normal course of its business and which are
applicable to functions and features offered by the Fund,
unless substantially all DST clients are charged separately
28
for such modifications, enhancements or changes, including,
without limitation, substantial system revisions or
modifications necessitated by changes in existing laws, rules
or regulations, in which case the charges applicable to such
modifications, enhancements or changes shall be determined as
provided for in Section 6.E. of this Agreement.
B. DST shall have the right, at any time and from time to time,
to alter and modify any systems, programs, procedures or
facilities used or employed in performing its duties and
obligations hereunder; provided that the Fund will be
notified as promptly as possible prior to implementation of
such alterations and modifications and that no such
alteration or modification or deletion shall materially
adversely change or affect the operations and procedures of
the Fund in using or employing the TA2000 System or DST
Facilities hereunder or the reports to be generated by such
system and facilities hereunder, unless the Fund is given
thirty (30) days prior notice to allow the Fund to change its
procedures and DST provides the Fund with revised operating
procedures and controls.
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.
24. Subcontractors.
Nothing herein shall impose any duty upon DST in connection with or
make DST liable for the actions or omissions to act of unaffiliated
third parties such as, by way of example and not limitation, Airborne
Services, the U.S. mails and telecommunication companies, provided, if
DST selected such company, DST shall have exercised due care in
selecting the same.
25. Limitations on Liability.
If the Fund is comprised of more than one Portfolio, each Portfolio
shall be regarded for all purposes hereunder as a separate party apart
from each other Portfolio. Unless the context otherwise requires, with
respect to every transaction covered by this Agreement, every reference
herein to the Fund shall be deemed to relate solely to the particular
Portfolio to which such transaction relates. Under no circumstances
shall the rights, obligations or remedies with respect to a particular
Portfolio constitute a right, obligation or remedy applicable to any
other Portfolio. The use of this single document to memorialize the
separate agreement of each Portfolio is understood to be for clerical
29
convenience only and shall not constitute any basis for joining the
Portfolios for any reason.
26. Miscellaneous.
A. This Agreement shall be construed according to, and the rights
and liabilities of the parties hereto shall be governed by,
the laws of the State of Missouri, excluding that body of law
applicable to choice of law.
B. All terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted
assigns.
C. The representations and warranties, and the indemnification
extended hereunder, if any, are intended to and shall continue
after and survive the expiration, termination or cancellation
of this Agreement.
D. No provisions of this Agreement may be amended or modified in
any manner except by a written agreement properly authorized
and executed by each party hereto.
E. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
F. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall be
considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
H. This Agreement may not be assigned by the Fund or DST without
the prior written consent of the other.
I. Neither the execution nor performance of this Agreement shall
be deemed to create a partnership or joint venture by and
30
between the Fund and DST. It is understood and agreed that all
services performed hereunder by DST shall be as an independent
contractor and not as an employee of the Fund. This Agreement
is between DST and the Fund and neither this Agreement nor the
performance of services under it shall create any rights in
any third parties. There are no third party beneficiaries
hereto.
J. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among
the parties hereto and any actions taken or omitted by any
party hereunder shall not affect any rights or obligations of
any other party hereunder.
K. The failure of either party to insist upon the performance of
any terms or conditions of this Agreement or to enforce any
rights resulting from any breach of any of the terms or
conditions of this Agreement, including the payment of
damages, shall not be construed as a continuing or permanent
waiver of any such terms, conditions, rights or privileges,
but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred.
L. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement, draft or
agreement or proposal with respect to the subject matter
hereof, whether oral or written, and this Agreement may not be
modified except by written instrument executed by both
parties.
M. All notices to be given hereunder shall be deemed properly
given if delivered in person or if sent by U.S. mail, first
class, postage prepaid, or if sent by facsimile and thereafter
confirmed by mail as follows:
If to DST:
DST Systems, Inc.
0000 Xxxxxxxx, 0xx Xx.
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Senior Vice President-Full Service
Facsimile No.: 000-000-0000
31
With a copy of non-operational notices to:
DST Systems, Inc.
000 X. 00xx Xx., 0xx Xx.
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Legal Department
Facsimile No.: 000-000-0000
If to the Fund:
PBHG Fund Services, Inc.
0000 Xxxxxxx Xxxxx Xx.
Xxxxx, Xxxxxxxxxxxx 00000-0000
Attn:
Facsimile No.: (000) 000-0000
With copy to:
Pilgrim Xxxxxx & Associates, Ltd.
0000 Xxxxxxx Xxxxx Xx.
Xxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxx Xxxx
Facsimile No.: (000) 000-0000
or to such other address as shall have been specified in
writing by the party to whom such notice is to be given.
N. The representations and warranties contained herein shall
survive the execution of this Agreement. The representations
and warranties contained herein and the provisions of Sections
8 and 22 hereof shall survive the termination of the Agreement
and the performance of services hereunder until any statute of
limitations applicable to the matter at issues shall have
expired.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers, to be effective as of the
day and year first above written.
DST SYSTEMS, INC.
By:
-----------------------------------------
32
Title:
--------------------------------------
OLD MUTUAL ADVISOR FUNDS, OM ASSET
ALLOCATION CONSERVATIVE PORTFOLIO, OM ASSET
ALLOCATION BALANCED PORTFOLIO, OM ASSET
ALLOCATION MODERATE PORTFOLIO and OM ASSET
ALLOCATION GROWTH PORTFOLIO
By:
-----------------------------------------
Title:
--------------------------------------
33
EXHIBIT A
FUNDS
Type of Open/ State of Taxpayer
Fund Name Organization Closed Organization I.D. No.
--------- ------------ ------ ------------ --------
34
EXHIBIT B, P. 1
DST SYSTEMS, INC. AND OM ADVISOR FUNDS
TRANSFER AGENCY FEE SCHEDULE
DST SYSTEMS, INC.
OM ADVISOR FUNDS
TRANSFER AGENCY FEE SCHEDULE
SEPTEMBER 1, 2004 - DECEMBER 31, 2007
A. CUSIP BASE FEE:
**CUSIP BASE FEE $10,000 PER CUSIP PER YEAR
B. ACCOUNT MAINTENANCE:
*NETWORKED XXXXX 0, 1, 2 AND 4 OPEN ACCOUNTS $16.60 PER OPEN ACCOUNT PER YEAR
*NETWORKED LEVEL 3 OPEN ACCOUNTS $8.60 PER OPEN ACCOUNT PER YEAR
*CLOSED ACCOUNTS $2.72 PER CLOSED ACCOUNT PER YEAR
**12B-1 $0.15 PER OPEN AND CLOSED ACCT PER CYCLE
**LOST SHAREHOLDER COMPLIANCE $1.30 PER LOST SHAREHOLDER ACCOUNT PER YEAR + $1.63 PER
DATABASE MATCH
C. VOICE RESPONSE SYSTEM: **
MONTHLY CALL VOLUME PER CALL FEE FOR ALL CALLS
------------------- --------------------------
1 - 40,000 $0.22
40,001 - 120,000 0.17
120,001 - 200,000 0.11
200,001 - 300,000 0.08
OVER 300,000 0.07
SUBJECT TO A MONTHLY MINIMUM OF $110 PER CUSIP PLUS $0.004
PER SHAREHOLDER ACCOUNT.
NOTES TO THE ABOVE FEE SCHEDULE
A. THE ABOVE SCHEDULE DOES NOT INCLUDE OUT OF POCKET EXPENSES INCURRED BY DST
ON THE FUND'S BEHALF. EXAMPLES OF OUT OF POCKET EXPENSES INCLUDE BUT ARE
NOT LIMITED TO FORMS, POSTAGE, MAILING SERVICES, TELEPHONE LINE AND LONG
DISTANCE CHARGES, CLIENT REMOTE HARDWARE, DISASTER RECOVERY (RANGE
$0.08-$0.12 PER ACCT PER YEAR, CURRENTLY $0.10 BASED ON ACTUAL EXPENSE),
35
EXHIBIT B, P. 2
DST SYSTEMS, INC. AND OM ADVISOR FUNDS
TRANSFER AGENCY FEE SCHEDULE
MAGNETIC TAPES, PRINTING, ACH BANK CHARGES, NSCC CHARGES, PROXY PROCESSING,
MICROFILM/MICROFICHE, FREIGHT, T.I.N. CERTIFICATION, OFF-SITE RECORD
STORAGE, SECOND SITE DISASTER RECOVERY, TRANSMISSION OF STATEMENT DATA FOR
REMOTE PROCESSING, ETC. ALL TRAVEL, PER DIEM AND OTHER BILLABLE ITEMS
INCURRED BY DST PERSONNEL TRAVELING TO, AT AND FROM THE FUND AT THE REQUEST
OF THE FUND.
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 INDICATED BY AN "*" ARE GUARANTEED THROUGH DECEMBER 31,
2005, AFTER THAT POINT THEY ARE SUBJECT TO AN INCREASE ON EACH JANUARY 1ST
DURING WHICH THIS AGREEMENT IS IN EFFECT IN AN AMOUNT NOT LESS THAN THE
ANNUAL PERCENTAGE CHANGE IN THE CONSUMER PRICE INDEX FOR ALL URBAN
CONSUMERS ("CPI-U") IN THE KANSAS CITY, MISSOURI-KANSAS STANDARD
METROPOLITAN STATISTICAL AREA, ALL ITEMS, BASE 1982-1984=100, AS LAST
REPORTED BY THE U.S. BUREAU OF LABOR STATISTICS FOR THE 12 CALENDAR MONTHS
IMMEDIATELY PRECEDING SUCH ANNIVERSARY. THE ABOVE FEES INDICATED BY AN "**"
ARE SUBJECT TO A "CPI-U" INCREASE ANNUALLY BEGINNING JANUARY 1, 2006
THROUGH THE TERM OF THE AGREEMENT.
D. THE CUSIP BASE FEE IS DISCOUNTED 50% FOR MONTHS 1-6. IN THE EVENT OF A
CUSIP MERGER, THE CUSIP WOULD REVERT TO FULL FEES AT THE TIME OF THE
MERGER. IF THE CUSIP DISSOLVES OR DECONVERTS DURING THE FIRST YEAR OF
EXISTENCE, ALL WAIVED FEES FOR THAT CUSIP WILL BE DUE DST SYSTEMS, INC.
E. THE MONTHLY FEE FOR AN OPEN ACCOUNT SHALL BE CHARGED IN THE MONTH DURING
WHICH AN ACCOUNT IS OPENED THROUGH THE MONTH IN WHICH SUCH ACCOUNT IS
CLOSED. THE MONTHLY FEE FOR A CLOSED ACCOUNT SHALL BE CHARGED IN THE MONTH
FOLLOWING THE MONTH DURING WHICH SUCH ACCOUNT IS CLOSED AND SHALL CEASE TO
BE CHARGED IN THE MONTH FOLLOWING THE PURGE DATE, AS HEREINAFTER DEFINED.
THE "PURGE DATE" FOR ANY YEAR SHALL BE ANY DAY AFTER JUNE 1ST OF THAT YEAR,
AS SELECTED BY THE FUND, PROVIDED THAT WRITTEN NOTIFICATION IS PRESENTED TO
DST AT LEAST FORTY-FIVE (45) DAYS PRIOR TO THE PURGE DATE.
36
EXHIBIT B, P. 3
DST SYSTEMS, INC. AND OM ADVISOR FUNDS
TRANSFER AGENCY FEE SCHEDULE
REIMBURSABLE EXPENSES
Forms
Postage (to be paid in advance if so requested)
Mailing Services
Computer Hardware and Software - specific to Fund or installed at remote
site at Fund's direction
Telecommunications Equipment and Lines/Long Distance Charges
Magnetic Tapes, Reels or Cartridges
Magnetic Tape Handling Charges
Microfiche/Microfilm
Freight Charges
Printing
Bank Wire and ACH Charges
Proxy Processing - per proxy mailed
not including postage
Includes: Proxy Card
Printing
Outgoing Envelope
Return Envelope
Tabulation and Certification
T.I.N. Certification (W-8 & W-9)
(Postage associated with the return
envelope is included)
N.S.C.C. Communications Charge See Exhibit B.1 (Fund/Serv and Networking)
Off-site Record Storage
Second Site Disaster Currently $.08 per account
Backup Fee (per account) per year
Transmission of Statement Data for Currently $.035 per
Remote Processing, except for transmissions to OTI shareholder record
Travel, Per Diem and other Billables
Incurred by DST personnel traveling to,
at and from the Fund at the request of the Fund.
37
EXHIBIT B.1, P. 1
NSCC OUT-OF-POCKET EXPENSES
SETTLING BANK FEES
The fund may be charged fees by the Settling Bank at which the net
settlement account resides for monthly maintenance of this account.
These are negotiated directly between the Fund and the Settling Bank.
NSCC PARTICIPANT FEES
The NSCC charges $40 per month per management company for CPU
access/shared line costs.
A combined participant base fee of $200 per month is charged for the
following services:
FUND/SERV:
The NSCC charges an activity charge of $.30 per inputted
transaction. Transactions include purchases, redemptions and
exchanges.
NETWORKING: The NSCC charges the following activity fee:
- $.02 per account for funds paying dividends on a monthly
basis
- $.01 per account for funds paying dividends other than
monthly
COMMISSION SETTLEMENT: The NSCC charges the following processing
fee:
- $.30 per hundred records, per month, for one to 500,000
records; there is a $50 per month minimum processing
charge
- $.20 per hundred records, per month, for 500,001 to
1,000,000 records
- $.10 per hundred records, per month, for 1,000,001 records
and above
Note: Participant fees are cumulative when Fund/SERV, Networking and/or
Commission Settlement are used in conjunction with each other.
38
EXHIBIT C
AUTHORIZED PERSONNEL
Pursuant to Section 8.A. of the Agency Agreement between the "Fund" and DST (the
"Agreement"), the Fund authorizes the following Fund personnel to provide
instructions to DST, and receive inquiries from DST in connection with the
Agreement:
Name Title
Xxx X. Xxxxxxxx Chief Financial Officer
-------------------------------------------- --------------------------------------------
Xxxx X. Xxxx Secretary
-------------------------------------------- --------------------------------------------
This Exhibit may be revised by the Fund by providing DST with a substitute
Exhibit C. Any such substitute Exhibit C shall become effective twenty-four (24)
hours after DST's receipt of the document and shall be incorporated into the
Agreement.
ACKNOWLEDGMENT OF RECEIPT:
DST SYSTEMS, INC. OLD MUTUAL ADVISOR FUNDS, OM ASSET ALLOCATION
CONSERVATIVE PORTFOLIO, OM ASSET ALLOCATION
BALANCED PORTFOLIO, OM ASSET ALLOCATION MODERATE
PORTFOLIO and OM ASSET ALLOCATION GROWTH PORTFOLIO
(the "Fund")
By: By:
----------------------------------------- --------------------------------------------------
Title: Title:
-------------------------------------- -----------------------------------------------
Date: Date:
--------------------------------------- ------------------------------------------------
39
EXHIBIT D, P. 1
SERVICES
Fund Services shall be responsible for receiving telephone calls,
faxes, letters and transmissions from shareholders and institutions and
processing transactions generated by such telephone calls, faxes, letters and
transmissions. The general categories of services Fund Services will be
responsible for performing include but are not limited to:
1. Purchase, redemption and exchange of shares
2. Addition or deletion of services for an account
3. Explanation of fund or market conditions and performance
4. Research account inquiries, respond to such inquiries, and make any
required account corrections
5. Change account address or distribution option
6. Correct registration or account error
7. Send additional account statements or other requested materials or
forms
Without limitation of the foregoing, Fund Services shall at a minimum
perform the following specific services:
1. Provide Shareholder Support
2. Process "Phone" Transactions
ACH Buys
ACH Sells
Purchase Orders (Settle by Wire or Check)
Redemption Orders (Settle by Wire or Check)
Account Exchanges
3. Process Account Maintenance
4. Problem Research and Resolution
40
EXHIBIT D, P. 2
SERVICES
5. Prepare Research Documentation for DST
6. All Correspondence Services except for Correspondence
Requiring the Return of Original Documentation received at
DST
7. Institutional Desk Servicing, including but not limited
to:
Dealer Servicing
Account Maintenance
Dealer File Maintenance
Transaction Processing
Order Settlement Support
Adjustment Processing Support
NSCC Networking Support
Fund Info/Data Dissemination
8. Redemption by ACH to bank of record
9. Redemption by check to address of record
10. Redemption by wire to bank of record
11. Exchange between funds
12. ACH purchase from bank of record
13. Process purchase order (a.k.a. confirmed purchase)
14. Request stop/replace redemption checks to address of
record
15. Research/document/request corrective processing
16. Account Maintenance
Non-Signature Guaranteed address change Stop/restart/defer
a Systematic Monthly Investment (SIP) Increase/decrease a
Systematic Monthly Investment (SIP)
Increase/decrease/defer/discontinue a systematic
withdrawal plan (SWP) Add a beneficiary birth date Change
dividend/capital gains distribution method
41
EXHIBIT D, P. 3
SERVICES
Stop dividend mail
Add/change a dividend move
Combine identical accounts within the same funds
Add or delete stop mail from the account
Request stop or replace a redemption check after
fifteen (15) days
Add/change/delete systematic exchanges (SYSEXCH) with the
same registration
Correct minor errors in names on registration if clearly
indicated on the application
Reissue checkwriting drafts on a Cash Reserve account
where the privilege has been established
Link/unlink accounts for the INVESTOR statement product
(managers only)
42
