TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
ARK FUNDS
AND
ALLFIRST TRUST COMPANY N.A.
TABLE OF CONTENTS
PAGE
1. Terms of Appointment and Duties.......................................1
2. Third Party Administrators for Defined Contribution Plans.............3
3. Fees and Expenses.....................................................4
4. Representations and Warranties of the Trust...........................5
5. Representations and Warranties of the Transfer Agent..................5
6. Wire Transfer Operating Guidelines....................................6
7. Data Access and Proprietary Information...............................7
8. Indemnification.......................................................9
9. Standard of Care.....................................................10
10. Confidentiality......................................................10
11. Covenants of the Trust and the Transfer Agent........................11
12. Termination of Agreement.............................................11
13. Assignment and Third Party Beneficiaries.............................12
14. Subcontractors.......................................................13
15. Miscellaneous........................................................13
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1ST day of January, 2002, by and between ARK FUNDS, a
Massachusetts business trust, having offices at 000 Xxxx Xxxxx Xxxxxx, 15th
Floor, MC 104-410, Xxxxxxxxx, Xxxxxxxx 00000 (the "Trust"), and ALLFIRST TRUST
COMPANY N.A., a national banking association organized under the laws of the
United States, having offices at 00 Xxxxx Xxxxxxx Xxxxxx, M/C 101-621,
Xxxxxxxxx, Xxxxxxxx 00000 (the "Transfer Agent").
WHEREAS, the Trust is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets;
WHEREAS, the Trust currently offers shares in the 29 series named in the
attached Schedule A which may be amended by the parties from time to time (each
such series, together with all other series subsequently established by the
Trust and made subject to this Agreement in accordance with SECTION 16, being
herein referred to as a "Fund," and collectively as the "Funds"); and
WHEREAS, the Trust on behalf of the Funds desires to appoint the Transfer Agent
as its transfer agent, dividend disbursing agent, custodian of certain
retirement plans and agent in connection with certain other activities, and the
Transfer Agent desires to accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES
1.1 TRANSFER AGENCY SERVICES. Subject to the terms and conditions set forth
in this Agreement, the Trust hereby employs and appoints the Transfer
Agent to act as, and the Transfer Agent agrees to act as, the Transfer
Agent in the provision of services as transfer agent and dividend
disbursing agent and related capacities with respect to the authorized
and issued shares of beneficial interest ("Shares") of the Funds and,
as relevant, as agent in connection with any accumulation,
open-account, retirement plans or similar plan provided to the
shareholders of each Fund ("Shareholders") and set out in the currently
effective prospectus and statement of additional information
("Prospectus") of each such Fund, including without limitation any
periodic investment plan or periodic withdrawal program. As used
herein, the term "Shares" means the authorized and issued shares of
beneficial interest for each of the Funds (including each class
thereof) enumerated in Schedule A. In accordance with procedures
established from time to time by agreement between the Trust on behalf
of each of the Funds and the Transfer agent, the Transfer Agent agrees
that it will perform the following services:
(a) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof to the
custodian of the Trust authorized pursuant to the declaration of trust
of the Trust (the "Custodian");
(b) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
(c) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation thereof to the
Custodian;
(d) In respect to the transactions in items (a), (b) and (c) above,
the Transfer Agent shall execute transactions directly with
broker-dealers and other person or entities authorized by the Trust;
(e) At the appropriate time as and when it receives monies paid to it
by the Custodian with respect to any redemption, pay over or cause to
be paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders;
(f) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
(g) Prepare and transmit payments for dividends and distributions
declared by the Trust;
(h) Issue replacement certificates for those certificates alleged to
have been lost, stolen or destroyed upon receipt by the Transfer Agent
of indemnification satisfactory to the Transfer Agent and protecting
the Transfer Agent and the Trust, and the Transfer Agent at its option,
may issue replacement certificates in place of mutilated stock
certificates upon presentation thereof and without such indemnity;
(i) Maintain records of account for and advise the Trust and its
Shareholders as to the foregoing; and
(j) Record the issuance of Shares of the Trust and maintain pursuant to
SEC Rule 17Ad-10(e) a record of the total number of Shares of the Trust
which are authorized, based upon data provided to it by the Trust, and
issued and outstanding. The Transfer Agent shall also provide the Trust
on a regular basis with the total number of Shares which are authorized
and issued and outstanding and shall have no obligation, when recording
the issuance of Shares, to monitor the issuance of such Shares or to
take cognizance of any laws relating to the issue or sale of such
Shares, which functions shall be the sole responsibility of the Trust.
1.2 ADDITIONAL SERVICES. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraph, the
Transfer Agent shall perform the following services:
(a) OTHER CUSTOMARY SERVICES. Perform the customary services of a
transfer agent, dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plan (including
without limitation any periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing Shareholder
proxies, Shareholder reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts,
preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions
by federal authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for all
purchases and redemptions of Shares and other confirmable transactions
in Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information;
(b) CONTROL BOOK (ALSO KNOWN AS "SUPER SHEET"). Maintain a daily record
and produce a daily report for the Trust of all transactions and
receipts and disbursements of money and securities and deliver a copy
of such report for the Trust for each business day to the
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Trust, no later than 9:00 AM Eastern Time, or such earlier time as
the Trust may reasonably require, on the next business day;
(c) "BLUE SKY" REPORTING. The Trust shall (i) identify to the Transfer
Agent in writing those transactions and assets to be treated as exempt
from blue sky reporting for each State and (ii) verify the
establishment of transactions for each State on the Transfer Agent's
record keeping system prior to activation and thereafter monitor the
daily activity for each State. The responsibility of the Transfer Agent
for the Trust's blue sky State registration status is solely limited to
the initial establishment of transactions subject to blue sky
compliance by the Trust and providing a system which will enable the
Trust to monitor the total number of Shares sold in each State;
(d) NATIONAL SECURITIES CLEARING CORPORATION (THE "NSCC"). (i) accept
and effectuate 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 NSCC on behalf of NSCC's participants,
including the Trust), in accordance with, instructions transmitted to
and received by the Transfer Agent by transmission from NSCC on behalf
of broker-dealers and banks which have been established by, or in
accordance with the instructions of authorized persons, as hereinafter
defined on the dealer file maintained by the Transfer Agent; (ii) issue
instructions to the Trust's banks for the settlement of transactions
between the Trust and NSCC (acting on behalf of its broker-dealer and
bank participants); (iii) provide account and transaction information
from the affected Fund's records on DST Systems, Inc. computer system
TA2000 ("TA2000 System") in accordance with NSCC's Networking and
Fund/SERV rules for those broker-dealers; and (iv) maintain Shareholder
accounts on TA2000 System through Networking; and
(e) ADDITIONAL TELEPHONE SUPPORT SERVICES. If the parties elect to have
the Transfer Agent provide ADDITIONAL telephone support services under
this Agreement, the parties will agree to such services, fees and
sub-contracting as stated in Schedule 1.2(e) entitled "Telephone
Support Services" attached hereto.
2. THIRD PARTY ADMINISTRATORS FOR DEFINED CONTRIBUTION PLANS
2.1 The Trust may decide to make available to certain of its customers, a
qualified plan program (the "Program") pursuant to which the customers
("Employers") may adopt certain plans of deferred compensation ("Plan"
or "Plans") for the benefit of the individual Plan participant (the
"Plan Participant"), such Plan(s) being qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended ("Code"), and
administered by third party administrators which may be plan
administrators as defined in the Employee Retirement Income Security
Act of 1974, as amended (the "TPA(s)").
2.2 In accordance with the procedures established in the initial Schedule
2.1 entitled "Third Party Administrator Procedures", as may be amended
by the Trust and the Transfer Agent from time to time ("Schedule 2.1"),
the Transfer Agent shall:
(a) Treat Shareholder accounts established by the Plans in the name of
the Trustees, Plans or TPAs as the case may be as omnibus accounts;
(b) Maintain omnibus accounts on its records in the name of the TPA or
its designee as the Trustee for the benefit of the Plan; and
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(c) Perform all services under SECTION 1 as transfer agent of the Funds
and not as a record-keeper for the Plans.
2.3 Transactions identified under SECTION 2 of this Agreement shall be
deemed exception services ("Exception
Services") when such transactions:
(a) Require the Transfer Agent to use methods and procedures other than
those usually employed by the Transfer Agent to perform services under
SECTION 1 of this Agreement;
(b) Involve the provision of information to the Transfer Agent after
the commencement of the nightly processing cycle of the TA2000 System;
or
(c) Require more manual intervention by the Transfer Agent, 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 and pre-nightly transactions.
3. FEES AND EXPENSES
3.1 FEE SCHEDULE. For the performance by the Transfer Agent pursuant to
this Agreement, the Trust agrees to pay the Transfer Agent an annual
maintenance fee for each Shareholder account as set forth in the
attached fee schedule ("Schedule 3.1"). Such fees and out-of-pocket
expenses and advances identified under SECTION 3.2 below may be changed
from time to time subject to mutual written agreement between the Trust
and the Transfer Agent.
3.2 OUT-OF-POCKET EXPENSES. In addition to the fee paid under SECTION 3.1
above, the Trust agrees to reimburse the Transfer Agent for
out-of-pocket expenses, including but not limited to confirmation
production, postage, forms, telephone, microfilm, microfiche, mailing
and tabulating proxies, records storage, movement of records or
advances incurred by the Transfer Agent for the items set out in
Schedule 3.1 attached hereto. In addition, any other expenses incurred
by the Transfer Agent at the request or with the consent of the Trust,
will be reimbursed by the Trust.
3.3 POSTAGE. Postage for mailing of dividends, proxies, Trust reports and
other mailings to all Shareholder accounts shall be advanced to the
Transfer Agent by the Trust at least seven (7) days prior to the
mailing date of such materials.
3.4 INVOICES. The Trust agrees to pay all fees and reimbursable expenses
within thirty (30) days following the receipt of the respective billing
notice, except for any fees or expenses which are subject to good faith
dispute. In the event of such a dispute, the Trust may only withhold
that portion of the fee or expense subject to the good faith dispute.
The Trust shall notify the Transfer Agent in writing within twenty-one
(21) calendar days following the receipt of each billing notice if the
Trust is disputing any amounts in good faith. If the Trust does not
provide such notice of dispute within the required time, the billing
notice will be deemed accepted by the Trust. The Trust shall settle
such disputed amounts within five (5) days of the day on which the
parties agree on the amount to be paid by payment of the agreed amount.
If no agreement is reached, then such disputed amounts shall be settled
by law or legal process.
3.5 COST OF LIVING ADJUSTMENT. Following the Initial Term, unless the
parties shall otherwise agree and provided that the service mix and
volumes remain consistent, as previously provided in the Initial Term,
the total fee for all services shall equal the fee that would be
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charged for the same services based on a fee rate (as reflected in a
fee rate schedule) increased by the percentage increase for the
twelve-month period of such previous calendar year of the Consumer
Price Index for Urban Wage Earners and Clerical Workers ("CPI"), for
the Boston area, as published bimonthly by the United States Department
of Labor, Bureau of Labor Statistics; provided that in no event shall
the fee rate be increased more that 5% pursuant to this section in any
year unless expressly agreed to in writing by the parties, or, in the
event that publication of such Index is terminated, any successor or
substitute index, appropriately adjusted, acceptable to both parties in
writing.
3.6 LATE PAYMENTS. If any undisputed amount in an invoice of the Transfer
Agent (for fees or reimbursable expenses) is not paid when due, the
Trust shall pay the Transfer Agent interest thereon (from the due date
to the date of payment) at a per annum rate equal to one percent (1.0%)
plus the prime rate (that is, the base rate on corporate loans posted
by large domestic banks) published by THE WALL STREET Journal (or, in
the event such rate is not so published, a reasonably equivalent
published rate selected by the Trust on the first day of publication
during the month when such amount was due. Notwithstanding any other
provision hereof, such interest rate shall be no greater than permitted
under applicable provision of Massachusetts law.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to the Transfer Agent that:
4.1 It is a business trust duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts.
4.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
4.3 It is empowered under applicable laws and by its Declaration of Trust
and By-Laws to enter into and perform this Agreement.
4.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
4.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
4.6 It is an open-end management investment company registered under the
Investment Company Act of 1940, as amended.
4.7 A registration statement under the Securities Act of 1933, as amended,
is currently effective and the Trust will use best efforts to cause
the registration statement to remain effective, and appropriate state
securities law filings have been made and the Trust will use best
efforts to cause appropriate state securities law filings to continue
to be made, with respect to all Shares of the Trust being offered for
sale.
5. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Trust that:
5.1 It is a national banking association organized and existing and in
good standing under the laws of the United States.
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5.2 It is empowered under applicable laws and by its Articles of
Association and By-Laws to enter into and perform this Agreement.
5.3 All corporate proceedings required by said Articles of Association and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
6. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM
COMMERCIAL CODE
6.1 OBLIGATION OF SENDER. The Transfer Agent is authorized to promptly
debit the appropriate Fund account(s) upon the receipt of a payment
order in compliance with the selected security procedure (the "Security
Procedure") chosen for funds transfer and in the amount of money that
the Transfer Agent has been instructed to transfer. The Transfer Agent
shall execute payment orders in compliance with the Security Procedure
and with the Trust instructions on the execution date provided that
such payment order is received by the customary deadline for processing
such a request, unless the payment order specifies a later time. All
payment orders and communications received after this the customary
deadline will be deemed to have been received the next business day.
6.2 SECURITY PROCEDURE. The Trust acknowledges that the Security Procedure
it has designated on the Transfer Agent Selection Form was selected by
the Trust from security procedures offered by the Transfer Agent. The
Trust shall restrict access to confidential information relating to the
Security Procedure to authorized persons as communicated to the
Transfer Agent in writing. The Trsut must notify the Transfer Agent
immediately if it has reason to believe unauthorized persons may have
obtained access to such information or of any change in the Trust's
authorized personnel. The Transfer Agent shall verify the authenticity
of all Trust instructions according to the Security Procedure.
6.3 ACCOUNT NUMBERS. The Transfer Agent shall process all payment orders on
the basis of the account number contained in the payment order. In the
event of a discrepancy between any name indicated on the payment order
and the account number, the account number shall take precedence and
govern.
6.4 REJECTION. The Transfer Agent reserves the right to decline to process
or delay the processing of a payment order which (a) is in excess of
the collected balance in the account to be charged at the time of the
Transfer Agent's receipt of such payment order; (b) if initiating such
payment order would cause the Transfer Agent, in the Transfer Agent's
sole judgement, to exceed any volume, aggregate dollar, network, time,
credit or similar limits which are applicable to the Transfer Agent; or
(c) if the Transfer Agent, in good faith, is unable to satisfy itself
that the transaction has been properly authorized.
6.5 CANCELLATION AMENDMENT. The Transfer Agent shall use reasonable efforts
to act on all authorized requests to cancel or amend payment orders
received in compliance with the Security Procedure provided that such
requests are received in a timely manner affording the Transfer Agent
reasonable opportunity to act. However, the Transfer Agent assumes no
liability if the request for amendment or cancellation cannot be
satisfied.
6.6 ERRORS. The Transfer Agent shall assume no responsibility for failure
to detect any erroneous payment order provided that the Transfer Agent
complies with the payment order instructions as received and the
Transfer Agent complies with the Security
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Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors
in payment orders.
6.7 INTEREST. The Transfer Agent shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized
payment order, unless the Transfer Agent is notified of the
unauthorized payment order within thirty (30) days of notification by
the Transfer Agent of the acceptance of such payment order. In no event
(including failure to execute a payment order) shall the Transfer Agent
be liable for special, indirect or consequential damages, even if
advised of the possibility of such damages.
6.8 ACH CREDIT ENTRIES/PROVISIONAL PAYMENTS. When the Transfer Agent
initiates or receives Automated Clearing House credit and debit
entries, on behalf of the Funds, pursuant to these guidelines and the
rules of the National Automated Clearing House Association and the New
England Clearing House Association, State Street Bank (the "Bank") will
act as an Originating Depository Financial Institution and/or Receiving
Depository Financial Institution, as the case may be, with respect to
such entries. Credits given by the Transfer Agent with respect to an
ACH credit entry are provisional until the Transfer Agent receives
final settlement for such entry from the Federal Reserve Bank. If the
Transfer Agent does not receive such final settlement, the Transfer
Agent agrees that the Transfer Agent shall receive a refund of the
amount credited to the Trust in connection with such entry, and the
party making payment to the Transfer Agent Fund via such entry shall
not be deemed to have paid the amount of the entry.
6.9 CONFIRMATION. Confirmation of Transfer Agent's execution of payment
orders shall ordinarily be provided within twenty-four (24) hours
notice of which may be delivered through the Transfer Agent's
proprietary information systems, or by facsimile or call-back. Transfer
Agent must report any objections to the execution of an order within
thirty (30) days.
7. DATA ACCESS AND PROPRIETARY INFORMATION
7.1 The Trust acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Trust by the Transfer Agent as
part of the Trust's ability to access certain Fund-related data
("Customer Data") maintained by the Transfer Agent on databases under
the control and ownership of the Transfer Agent or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of
substantial value to the Transfer Agent or other third party. In no
event shall Proprietary Information be deemed Customer Data. The Trust
agrees to treat all Proprietary Information as proprietary to the
Transfer Agent and further agrees that it shall not divulge any
Proprietary Information to any person or organization except as may be
provided hereunder. Without limiting the foregoing, the Trust agrees
for itself and its employees and agents to:
(a) Use such programs and databases (i) solely on the Trust's
computers, or (ii) solely from equipment at the locations agreed to
between the Trust and the Transfer Agent and (iii) solely in accordance
with the Transfer Agent's applicable user documentation;
(b) Refrain from copying or duplicating in any way (other than in the
normal course of performing processing on the Trust's computer(s)), the
Proprietary Information;
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(c) Refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained,
to inform in a timely manner of such fact and dispose of such
information in accordance with the Transfer Agent's instructions;
(d) Refrain from causing or allowing information transmitted from the
Transfer Agent's computer to the Trust's terminal to be retransmitted
to any other computer terminal or other device except as expressly
permitted by the Transfer Agent (such permission not to be unreasonably
withheld);
(e) Allow the Trust to have access only to those authorized
transactions on the TA2000 System as agreed to between the Transfer
Agent and the Trust; and
(f) Honor all reasonable written requests made by the Transfer Agent to
protect at the Transfer Agent's expense the rights of the Transfer
Agent in Proprietary Information at common law, under federal copyright
law and under other federal or state law.
7.2 Proprietary Information shall not include all or any portion of any of
the foregoing items that: (i) are or become publicly available without
breach of this Agreement; (ii) are released for general disclosure by a
written release by the [Trust]; or (iii) are already in the possession
of the receiving party at the time of receipt without obligation of
confidentiality or breach of this Agreement.
7.3 The Trust acknowledges that its obligation to protect the Transfer
Agents's Proprietary Information is essential to the business interest
of the Transfer Agent and that the disclosure of such Proprietary
Information in breach of this Agreement would cause the Transfer Agent
immediate, substantial and irreparable harm, the value of which would
be extremely difficult to determine. Accordingly, the parties agree
that, in addition to any other remedies that may be available in law,
equity, or otherwise for the disclosure or use of the Proprietary
Information in breach of this Agreement, the Transfer Agent shall be
entitled to seek and obtain a temporary restraining order, injunctive
relief, or other equitable relief against the continuance of such
breach.
7.4 If the Trust notifies the Transfer Agent that any of the Data Access
Services do not operate in material compliance with the most recently
issued user documentation for such services, the Transfer Agent shall
endeavor in a timely manner to correct such failure. Organizations from
which the Transfer Agent may obtain certain data included in the Data
Access Services are solely responsible for the contents of such data
and the Trust agrees to make no claim against the Transfer Agent
arising out of the contents of such third-party data, including, but
not limited to, the accuracy thereof. DATA ACCESS SERVICES AND ALL
COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION
THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE TRANSFER
AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED
HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
7.5 If the transactions available to the Trust include the ability to
originate electronic instructions to the Transfer Agent in order to (i)
effect the transfer or movement of cash or Shares or (ii) transmit
Shareholder information or other information, then in such event the
Transfer Agent shall be entitled to rely on the validity and
authenticity of such instruction without undertaking any further
inquiry as long as such instruction is
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undertaken in conformity with security procedures established by the
Transfer Agent from time to time.
7.6 Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this SECTION 7. The obligations of this
Section shall survive any earlier termination of this Agreement.
8. INDEMNIFICATION
8.1 The Transfer Agent shall not be responsible for, and the Trust shall
indemnify and hold the Transfer Agent and with respect to SECTION
8.1(E) herein, also the Bank, harmless from and against, any and all
losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to:
(a) All actions of the Transfer Agent or its agents or subcontractors
required to be taken pursuant to this Agreement (including the defense
of any law suit in which the Transfer Agent or affiliate is a named
party), provided that such actions are taken in good faith and without
negligence or willful misconduct;
(b) The Trust's lack of good faith, negligence or willful misconduct
which arise out of the breach of any representation or warranty of the
Trust hereunder;
(c) The reliance upon, and any subsequent use of or action taken or
omitted in good faith and without negligence, by the Transfer Agent, or
its agents or subcontractors on: (i) any information, records,
documents, data, stock certificates or services, which are received by
the Transfer Agent or its agents or subcontractors by machine readable
input, facsimile, CRT data entry, electronic instructions or other
similar means authorized by the Trust, and which have been prepared,
maintained or performed by the Trust or each Fund or any other person
or firm on behalf of the Trust including but not limited to any
broker-dealer, TPA or previous transfer agent or registrar; (ii) any
instructions or requests of the Trust or any of its officers; (iii) any
instructions or opinions of legal counsel with respect to any matter
arising in connection with the services to be performed by the Transfer
Agent under this Agreement which are provided to the Transfer Agent
after consultation with such legal counsel; or (iv) any paper or
document reasonably believed to be genuine, authentic, or signed by the
proper person or persons;
(d) The offer or sale of Shares in violation of federal or state
securities laws or regulations requiring that such Shares be registered
or in violation of any stop order or other determination or ruling by
any federal or any state agency with respect to the offer or sale of
such Shares;
(e) The negotiation and processing of any checks including without
limitation for deposit into the Trust's demand deposit account
maintained at the Bank; or
(f) Upon the Trust's request entering into any agreements required by
the NSCC for the transmission of Fund or Shareholder data through the
NSCC clearing systems.
8.2 In order that the indemnification provisions contained in this SECTION
8 shall apply, upon the assertion of a claim for which the Trust may be
required to indemnify the Transfer Agent, the Transfer Agent shall
promptly notify the Trust of such assertion, and shall keep the Trust
advised with respect to all developments concerning such claim. The
Trust shall have the option to participate with the Transfer Agent in
the defense of such
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claim or to defend against said claim in its own name or in the name
of the Transfer Agent. The Transfer Agent shall in no case confess any
claim or make any compromise in any case in which the Trust may be
required to indemnify the Transfer Agent except with the Trust's prior
written consent.
9. STANDARD OF CARE
The Transfer Agent shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to ensure the accuracy of
all services performed under this Agreement, but assumes no
responsibility and shall not be liable for loss or damage due to
errors, including encoding and payment processing errors, unless said
errors are caused by its negligence, bad faith, or willful misconduct
or that of its employees or agents. The parties agree that any encoding
or payment processing errors shall be governed by this standard of care
and Section 4-209 of the Uniform Commercial Code is superseded by
SECTION 9 of this Agreement. This shall apply to Exception Services as
defined in SECTION 2.3 herein, but such application shall take into
consideration the manual processing involved in, and time sensitive
nature of, Exception Services.
10. CONFIDENTIALITY
10.1 The Transfer Agent and the Trust agree that they will not, at any time
during the term of this Agreement or after its termination, reveal,
divulge, or make known to any person, firm, corporation or other
business organization, any customers' lists, trade secrets, cost
figures and projections, profit figures and projections, or any other
secret or confidential information whatsoever, whether of the Transfer
Agent or of the Trust, used or gained by the Transfer Agent or the
Trust during performance under this Agreement. The Transfer Agent and
the Trust further covenant and agree to retain all such knowledge and
information acquired during and after the term of this Agreement
respecting such lists, trade secrets, or any secret or confidential
information whatsoever in trust for the sole benefit of the Transfer
Agent or the Trust and their successors and assigns. In the event of
breach of the foregoing by either party, the remedies provided by
SECTION 7.3 shall be available to the party whose confidential
information is disclosed. The above prohibition of disclosure shall not
apply to disclosures made to the Trust's Board of Trustees, or to the
extent that the Transfer Agent must disclose such data to its
sub-contractor or agent for purposes of providing services under this
Agreement, or as required by law.
10.2 In the event that any requests or demands are made for the inspection
of the Shareholder records of the Trust, other than request for records
of Shareholders pursuant to standard subpoenas from state or federal
government authorities (i.e., divorce and criminal actions), the
Transfer Agent will endeavor to notify the Trust and to secure
instructions from an authorized officer of the Trust as to such
inspection. The Transfer Agent expressly reserves the right, however,
to exhibit the Shareholder records to any person whenever it is advised
by counsel that it may be held liable for the failure to exhibit the
Shareholder records to such person or if required by law or court
order.
10.3 The Transfer Agent acknowledges and agrees that certain information
made available to it hereunder may be deemed non-public personal
information under the Xxxxx-Xxxxx-Xxxxxx Act, other federal or state
privacy laws (as amended), and the rules and regulations promulgated
thereunder (collectively, the "Privacy Laws"). The Transfer Agent
hereby agrees (i) not to disclose or use such information except as
required to carry out it duties under this Agreement or as otherwise
permitted by law in
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its ordinary course of business, (ii) to establish and maintain
procedures reasonably designed to assure the security and privacy of
all such information, and (iii) to cooperate with the Trust and
provide reasonable assistance in ensuring compliance with such Privacy
Laws to the extent applicable to it.
11. COVENANTS OF THE TRUST AND THE TRANSFER AGENT
---------------------------------------------
11.1 The Trust shall promptly furnish to the Transfer Agent a certified copy
of the resolution of the Board of Trustees of the Trust authorizing the
appointment of the Transfer Agent and the execution and delivery of
this Agreement.
11.2 The Transfer Agent hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Trust 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.
11.3 The Transfer Agent shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable.
To the extent required by Section 31 of the Investment Company Act of
1940, as amended, and the Rules thereunder, the Transfer Agent agrees
that all such records prepared or maintained by the Transfer Agent
relating to the services to be performed by the Transfer Agent
hereunder are the property of the Transfer Agent and will be preserved,
maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Transfer Agent on and in
accordance with its request.
12. TERMINATION OF AGREEMENT
12.1 TERM. The initial term of this Agreement (the "Initial Term") shall be
thirty (30) months from the date first stated above unless terminated
pursuant to the provisions of this SECTION 12. Unless a terminating
party gives written notice to the other party one hundred and twenty
(120) days before the expiration of the Initial Term or any Renewal
Term, this Agreement will renew automatically from year to year (each
such year-to-year renewal term a "Renewal Term"). One hundred and
twenty (120) days before the expiration of the Initial Term or a
Renewal Term the parties to this Agreement will agree upon a Fee
Schedule for the upcoming Renewal Term. Otherwise the fees shall be
increased pursuant to SECTION 3.5 of this Agreement.
12.2 EARLY TERMINATION. Notwithstanding anything contained in this Agreement
to the contrary, should the Trust desire to move any of its services
provided by the Transfer Agent hereunder to a successor service
provider prior to the expiration of the then current Initial or Renewal
Term, or without the required notice, the Transfer Agent shall make a
good faith effort to facilitate the conversion on such prior date;
however, there can be no guarantee or assurance that the Transfer Agent
will be able to facilitate a conversion of services on such prior date.
In connection with the foregoing, should services be converted to a
successor service provider, or if the Trust is liquidated or its assets
merged or purchased or the like with or by another entity which does
not utilize the services of the Transfer Agent, the fees payable to the
Transfer Agent shall be calculated as if the services had been
performed by the Transfer Agent until the expiration of the then
current Initial or Renewal Term and calculated at the asset and/or
Shareholder account levels, as the case may be, on the date notice of
termination was given to the Transfer Agent, and the payment of all
fees to the Transfer Agent as set forth shall be accelerated to the
business day immediately prior to the conversion or
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termination of services.
12.3 EXPIRATION OF TERM. During the Initial Term or Renewal Term, whichever
currently is in effect, should either party exercise its right to
terminate, all reasonable out-of-pocket expenses or costs for which
Transfer Agent provides appropriate documentation associated with the
movement of records and material will be borne by the Trust, to the
extent that the same is an expense of the Trust. Additionally, the
Transfer Agent reserves the right to charge for any other reasonable
expenses associated with such termination.
12.4 CONFIDENTIAL INFORMATION. Upon termination of this Agreement, each
party shall return to the other party all copies of confidential or
proprietary materials or information received from such other party
hereunder, other than materials or information required to be retained
by such party under applicable laws or regulations.
12.5 UNPAID INVOICES. The Transfer Agent may terminate this Agreement
immediately upon an unpaid invoice payable by the Trust to the Transfer
Agent being outstanding for more than ninety (90) days, except with
respect to any amount subject to a good faith dispute within the
meaning of SECTION 3.4 of this Agreement.
12.6 BANKRUPTCY. Either party hereto may terminate this Agreement by notice
to the other party, effective at any time specified therein, in the
event that (a) the other party ceases to carry on its business or (b)
an action is commenced by or against the other party under Title 11 of
the United States Code or a receiver, conservator or similar officer is
appointed for the other party and such suit, conservatorship or
receivership is not discharged within thirty (30) days.
13. ASSIGNMENT AND THIRD PARTY BENEFICIARIES
13.1 Except as provided in SECTION 14.1 below and the Additional Telephone
Support Services Schedule 1.2(f) attached, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party
without the written consent of the other party. Any attempt to do so in
violation of this Section shall be void. Unless specifically stated to
the contrary in any written consent to an assignment, no assignment
will release or discharge the assignor from any duty or responsibility
under this Agreement.
13.2 Except as explicitly stated elsewhere in this Agreement, nothing under
this Agreement shall be construed to give any rights or benefits in
this Agreement to anyone other than the Transfer Agent and the Trust,
and the duties and responsibilities undertaken pursuant to this
Agreement shall be for the sole and exclusive benefit of the Transfer
Agent and the Trust. This Agreement shall inure to the benefit of and
be binding upon the parties and their respective permitted successors
and assigns.
13.3 This Agreement does not constitute an agreement for a partnership or
joint venture between the Transfer Agent and the Trust. Other than as
provided in SECTION 14.1 and Schedule 1.2(f), neither party shall make
any commitments with third parties that are binding on the other party
without the other party's prior written consent.
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14. SUBCONTRACTORS
14.1 The Transfer Agent may, without further consent on the part of the
Trust, subcontract for the performance hereof with a Transfer Agent
affiliate duly registered as a transfer agent under Section 17A(c)(2)
of the Securities Exchange Act of 1934; provided, however, that the
Transfer Agent shall be fully responsible to the Trust for the acts and
omissions of the Transfer Agent or its wholly-owned subsidiary as it is
for its own acts and omissions.
14.2 Nothing herein shall impose any duty upon the Transfer Agent in
connection with or make the Transfer Agent liable for the actions or
omissions to act of unaffiliated third parties such as, by way of
example and not limitation, Airborne Services, Federal Express, United
Parcel Service, the U.S. Mails, the NSCC and telecommunication
companies, provided, if the Transfer Agent selected such company, the
Transfer Agent shall have exercised due care in selecting the same.
15. MISCELLANEOUS
15.1 AMENDMENT. This Agreement may be amended or modified by a written
agreement executed by both parties.
15.2 MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws
of The Commonwealth of Massachusetts.
15.3 FORCE MAJEURE. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
strikes, equipment or transmission failure or damage reasonably beyond
its control, or other causes reasonably beyond its control, such party
shall not be liable for damages to the other for any damages resulting
from such failure to perform or otherwise from such causes.
15.4 CONSEQUENTIAL DAMAGES. Neither party to this Agreement shall be liable
to the other party for consequential, indirect or special damages
under any provision of this Agreement or for any consequential,
indirect or special damages arising out of any act or failure to act
hereunder.
15.5 SURVIVAL. All provisions regarding indemnification, warranty,
liability, and limits thereon, and confidentiality and/or protections
of proprietary rights and trade secrets shall survive the termination
of this Agreement.
15.6 SEVERABILITY. If any provision or provisions of this Agreement shall
be held invalid, unlawful, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be
affected or impaired.
15.7 PRIORITIES CLAUSE. In the event of any conflict, discrepancy or
ambiguity between the terms and conditions contained in this Agreement
and any Schedules or attachments hereto, the terms and conditions
contained in this Agreement shall take precedence.
15.8 WAIVER. No waiver by either party or any breach or default of any of
the covenants or conditions herein contained and performed by the
other party shall be construed as a waiver of any succeeding breach of
the same or of any other covenant or condition.
15.9 MERGER OF AGREEMENT. This Agreement constitutes the entire agreement
between the
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parties hereto and supersedes any prior agreement with respect to the
subject matter hereof whether oral or written.
15.10COUNTERPARTS. This Agreement may be executed by the parties hereto on
any number of counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
15.11REPRODUCTION OF DOCUMENTS. This Agreement and all schedules,
exhibits, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties hereto each agree
that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether
or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business,
and that any enlargement, facsimile or further reproduction shall
likewise be admissible in evidence.
15.12NOTICES. All notices and other communications as required or
permitted hereunder shall be in writing and sent by first class mail,
postage prepaid, addressed as follows or to such other address or
addresses of which the respective party shall have notified the other.
(a) If to Transfer Agent, to:
Allfirst Trust Company N.A.
00 Xxxxx Xxxxxxx Xxxxxx, M/C 101-621
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Rus
Facsimile: (000) 000-0000
(b) If to the Trust, to:
ARK Funds
000 X. Xxxxx Xxxxxx
M/C 104-410
Baltimore, MD 21202
Attn: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
ALLFIRST TRUST COMPANY N.A.
BY: /S/ XXXX X. GOLD
----------------------------------
Name: Xxxx X. Gold
ATTEST:
/S/ XXXXXX X. RUS
----------------------------------------
Name: Xxxxxx X. Rus
ARK FUNDS
BY: /S/ XXXXXXX XXXXXX
----------------------------------
Name: Xxxxxxx Xxxxxx
ATTEST:
/S/ XXXXXX X. RUS
----------------------------------------
Name: Xxxxxx X. Rus
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SCHEDULE A
ARK FUNDS
LIST OF PORTFOLIOS AS OF 12/31/01
1. Money Market
2. U.S. Government Money Market
3. U.S.Treasury Money Market
4. Tax-Free Money Market
5. Pennsylvania Tax-Free Money Market
6. Short-Term Treasury
7. Short-Term Bond
8. U.S. Government Bond
9. Intermediate Fixed Income
10. Income
11. Maryland Tax-Free
12. Pennsylvania Tax-Free
13. Balanced
14. Equity Income
15. Value Equity
16. Equity Index
17. Blue Chip Equity
18. Capital Growth
19. Mid-Cap Equity
20. Small-Cap Equity
21. International Equity
22. Emerging Markets Equity
23. Social Issues Intermediate Fixed Income
24. Social Issues Blue Chip Equity
25. Social Issues Capital Growth
26. Social Issues Small-Cap Equity
27. Prime Cash Management
28. U.S. Government Cash Management
29. U.S. Treasury Cash Management
30. Tax-Free Cash Management
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SCHEDULE 3.1
FEES
Dated: September 1, 2001
GENERAL: Fees are calculated on average daily net assets and are billed on a
monthly basis at the rate of 1/12 of the annual fee. A charge is made for an
account in the month that an account opens or closes.
ANNUAL ACCOUNT & SERVICE FEES*
-----------------------------
Open Account Fee (non NSCC) $ 16.00/Account
Open Account Fee (NSCC Level 3) $ 11.00/Account
Closed Account Fee $ 2.00/Account
Retail Minimum Base Fee** $13,800.00/CUSIP
Institutional Minimum Base Fee** $ 4,600.00/CUSIP
*These fees will be subject to an annual 5% increase.
**Sub-Transfer Agent will waive minimum base fee for a new CUSIP for the first
sixty (60) days of operation, however, a system and interface implementation fee
of $1,500.00 will be charged.
NOTE: Each Fund/Class is a separate CUSIP and will be billed accordingly.
ACTIVITY BASED FEES
New Account Set-up $ 4.00/Each
NSCC New Account Set-up $ 1.50/Each
Manual Transactions $ 2.00/Each
Telephone Calls $ 1.00/Minute
Correspondence $ 5.00/Each
ACH $ .50/Each
12b-1 Commissions $ 1.50/Each
XXX Annual Maintenance Fee $ 12.50/Account
OUT-OF-POCKET Billed As Incurred
Out-of-Pocket expenses include but are not limited to: confirmation statements,
investor statements, postage, forms, voice response, Internet products, records
retention, customized programming/enhancements, federal wire, transcripts,
microfilm, microfiche, proxy tabulation, movement of records and expenses
incurred at the specific direction of the Fund.
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