AGENCY AGREEMENT
THIS AGREEMENT made the 24th day of January, 2001, by and between THE
MDL FUNDS, a Massachusetts business trust having its principal place of business
at Xxx Xxxxxxx Xxxxxx Xxxx, Xxxx, Xxxxxxxxxxxx 00000 (the "Trust") and acting on
its own behalf and on behalf of each of the portfolios listed in Appendix I, and
DST SYSTEMS, INC., a corporation existing under the laws of the State of
Delaware, having its principal place of business at 000 Xxxx 00xx Xxxxxx, 0xx
Xxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("DST"):
WITNESSETH:
WHEREAS, the Fund (as used hereinafter, the term "Fund" shall refer
jointly and severally to the Trust and each of the portfolios) is a
Massachusetts business trust registered with the Securities and Exchange
Commission as an investment company pursuant to the Investment Company Act of
1940, as amended, which currently consists of the Funds; and
WHEREAS, the Fund desires to appoint DST as Transfer Agent and Dividend
Disbursing Agent, and DST desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Documents to be Filed with Appointment.
In connection with the appointment of DST as Transfer Agent and
Dividend Disbursing Agent for the Fund, there will be filed with DST the
following documents:
A. A certified copy of the resolutions of the Board of Directors of
the Fund (which term when used herein shall include any Board of
Trustees, or other governing body of the Fund, however styled)
appointing DST as Transfer Agent and Dividend Disbursing Agent,
approving the form of this Agreement, and designating certain
persons to sign stock certificates, if any, and give written
instructions and requests on behalf of the Fund;
B. A certified copy of the Articles of Incorporation (which term as
used herein shall include, where relevant, the Declaration of
Trust, or other basic instrument establishing the existence and
nature of the Fund) of the Fund and all amendments thereto;
C. A certified copy of the Bylaws of the Fund;
D. Copies of Registration Statements and amendments thereto, filed
with the Securities and Exchange Commission;
E. Specimens of all forms of outstanding stock certificates, in the
forms approved by the Board of Directors of the Fund, with a
certificate of the Secretary of the Fund, as to such approval;
F. Specimens of the signatures of the officers of the Fund authorized
to sign stock certificates and individuals authorized to sign
written instructions and requests;
G. An opinion of counsel for the Fund, as such opinion(s) have been
filed with the Fund's Registration Statement or notices required
under Rule 24f-2 under the Investment Company Act of 1940 (the
"1940 Act"), with respect to:
(1) TheFund's organization and existence under the laws of its
state of organization, and
(2 That all issued shares are validly issued, fully paid and
nonassessable.
2. Certain Representations and Warranties of DST.
DST represents and warrants to the Fund that:
A. It is a corporation duly organized and existing and in good
standing under the laws of Delaware.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform the services
contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required under
the Securities Exchange Act of 1934 (the "1934 Act").
E. All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
G. It is in compliance with Securities and Exchange Commission
("SEC") regulations and is not subject to restrictions under Rule
17Ad.
H. Copies of DST's Rule 17Ad-13 reports will be provided to the Fund
annually as and to the extent required under Rule 17Ad-13 under
the 1934 Act.
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I. Its fidelity bonding and minimum capital meet the transfer agency
requirements of the New York Stock Exchange and the American Stock
Exchange.
3. Certain Representations and Warranties of the Fund.
The Fund represents and warrants to DST that:
A. It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
B. It is an open-end management investment company registered under
the 1940 Act, as amended, the portfolios of which may be
diversified or non-diversified.
C. A registration statement under the Securities Act of 1933 has been
filed and will be effective with respect to all shares of the Fund
being offered for sale.
D. All requisite steps have been and will continue to be taken to
register the Fund's shares for sale in all applicable states and
such registration will be effective at all times shares are
offered for sale in such state.
E. The Fund is empowered under applicable laws and by its charter and
Bylaws to enter into and perform this Agreement.
4. Scope of Appointment.
A. Subject to the conditions set forth in this Agreement, the Fund
hereby appoints DST as Transfer Agent and Dividend Disbursing
Agent.
B. DST hereby accepts such appointment and agrees that it will act as
the Fund's Transfer Agent and Dividend Disbursing Agent. DST
agrees that it will also act as agent in connection with the
Fund's periodic withdrawal payment accounts and other open
accounts or similar plans for shareholders, if any.
C. The Fund agrees to use its reasonable efforts to deliver to DST in
Kansas City, Missouri, as soon as they are available, all of its
shareholder account records.
D. DST, utilizing TA2000(R), DST's computerized data processing
system for securityholder accounting (the "TA2000(R) System"),
will perform the following services as transfer and dividend
disbursing agent for the Fund, and as agent of the Fund for
share-holder accounts thereof, in a timely manner: issuing
(including countersigning), transferring and canceling share
certificates, if any; maintaining all shareholder accounts;
providing transaction journals; as requested by the Fund and
subject to payment by the Fund of an additional fee, preparing
shareholder meeting lists for use in connection with any annual or
special meeting and arrange for an affiliate to print, mail and
receive back proxies and to certify the shareholder votes of the
Fund of any portfolios thereof; mailing shareholder reports and
prospectuses; withholding, as required by federal law, taxes on
shareholder accounts, disbursing income dividends and capital
gains distributions to
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shareholders, preparing, filing and mailing U.S. Treasury
Department Forms 1099, 1042, and 1042S and performing and paying
backup withholding as required for all shareholders; preparing and
mailing confirmation forms to shareholders and dealers, as
instructed, for all purchases and liquidations of shares of the
Fund and other confirmable transactions in shareholders' accounts;
recording reinvestment of dividends and distributions in shares of
the Fund; providing or making available on-line daily and monthly
reports as provided by the TA2000 System and as requested by the
Fund or its management company; maintaining those records
necessary to carry out DST's duties hereunder, including all
information reasonably required by the Fund to account for all
transactions in the Fund shares, calculating the appropriate sales
charge with respect to each purchase of the Fund shares as set
forth in the prospectus for the Fund, determining the portion of
each sales charge payable to the dealer participating in a sale in
accordance with schedules delivered to DST by the Fund's principal
underwriter or distributor (hereinafter "principal underwriter")
from time to time, disbursing dealer commissions collected to such
dealers, determining the portion of each sales charge payable to
such principal underwriter and disbursing such commissions to the
principal underwriter; receiving correspondence pertaining to any
former, existing or new shareholder account, processing such
correspondence for proper recordkeeping, and responding promptly
to shareholder correspondence; mailing to dealers confirmations of
wire order trades; mailing copies of shareholder statements to
share
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holders and registered representatives of dealers in accordance
with the Fund's instructions; interfacing with, accepting and
effectuating order for transactions and registration and
maintenance information, all on an automated basis, from, and
providing advices to the Fund's custodian bank and to the Fund's
settlement bank in connection with the settling of such
transactions, with, the National Securities Clearing Corporation
("NSCC") pertaining to NSCC's Fund/SERV and Networking programs;
and processing, generally on the date of receipt, purchases or
redemptions or instructions to settle any mail or wire order
purchases or redemptions received in proper order as set forth in
the prospectus, rejecting promptly any requests not received in
proper order (as defined by the Fund or its agents), and causing
exchanges of shares to be executed in accordance with the Fund's
instructions and prospectus and the general exchange privilege
applicable.
E. DST shall use reasonable efforts to provide, reasonably promptly
under the circumstances, the same transfer agent services with
respect to any new, additional functions or features or any
changes or improvements to existing functions or features as
provided for in the Fund's instructions, prospectus or
application as amended from time to time, for the Fund provided
(i) DST is advised in advance by the Fund of any changes therein
and (ii) the TA2000 System and the mode of operations utilized by
DST as then constituted supports such additional functions and
features. If any addition to, improvement of or change in the
features and functions currently provided by the TA2000 System or
the operations as requested by the Fund requires an enhancement or
modification to the TA2000 System or to operations as then
conducted by DST, DST shall not be liable therefore until such
modification or enhancement is installed on the TA2000 System or
new mode of operation is instituted. If any new, additional
function or feature or change or improvement to existing functions
or features or new service or mode of operation measurably
increases DST's cost of performing the services required hereunder
at the current level of service, DST shall advise the Fund of the
amount of such increase and if the Fund elects to utilize such
function, feature or service, DST shall be entitled to increase
its fees by the amount of the increase in costs. In no event shall
DST be responsible for or liable to provide any additional
function, feature, improvement or change in method of operation
until it has consented thereto in writing.
F. The Fund shall have the right to add new series to the TA2000
System upon at least thirty (30) days' prior written notice to DST
provided that the requirements of the new series are generally
consistent with services then being
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provided by DST under this Agreement. Rates or charges for
additional series shall be as set forth in Exhibit A, as
hereinafter defined, for the remainder of the contract term except
as such series use functions, features or characteristics for
which DST has imposed an additional charge as part of its standard
pricing schedule. In the latter event, rates and charges shall be
in accordance with DST's then-standard pricing schedule.
5. Limit of Authority.
Unless otherwise expressly limited by the resolution of appointment or
by subsequent action by the Fund, the appointment of DST as Transfer
Agent will be construed to cover the full amount of authorized stock of
the class or classes for which DST is appointed as the same will, from
time to time, be constituted, and any subsequent increases in such
authorized amount.
In case of such increase the Fund will file with DST:
A. If the appointment of DST was theretofore expressly limited, a
certified copy of a resolution of the Board of Directors of the
Fund increasing the authority of DST;
B. A certified copy of the amendment to the Articles of Incorporation
of the Fund authorizing the increase of stock;
C. A certified copy of the order or consent of each governmental or
regulatory authority required by law to consent to the issuance of
the increased stock, and an opinion of counsel that the order or
consent of no other governmental or regulatory authority is
required;
D. Opinion of counsel for the Fund, as such opinion(s) have been
filed with the Fund's Registration Statement or notices required
under Rule 24f-2 under the 1940 Act, stating:
(1) The status of the additional shares of stock of the Fund under
the Securities Act of 1933, as amended, and any other
applicable federal or state statute; and
(2) That the additional shares are validly issued, fully paid and
nonassessable.
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6. Compensation and Expenses.
A. In consideration for its services hereunder as Transfer Agent and
Dividend Disbursing Agent, the Fund will pay to DST from time to
time a reasonable compensation for all services rendered as Agent,
and also, all its reasonable billable expenses, charges, counsel
fees, and other disbursements ("Compensation and Expenses")
incurred in connection with the agency. Such compensation is set
forth in a separate schedule to be agreed to by the Fund and DST,
a copy of which is attached hereto as Exhibit A. If the Fund has
not paid such Compensation and Expenses to DST within a reasonable
time, DST may charge against any monies held under this Agreement,
the amount of any Compensation and/or Expenses for which it shall
be entitled to reimbursement under this Agreement.
B. The Fund also agrees promptly to reimburse DST for all reasonable
billable expenses or disbursements incurred by DST in connection
with the performance of services under this Agreement including,
but not limited to, expenses for postage, express delivery
services, freight charges, envelopes, checks, drafts, forms
(continuous or otherwise), specially requested reports and
statements, telephone calls, telegraphs, stationery supplies,
counsel fees, outside printing and mailing firms (includ-ing
Output Technology, Inc. and Support Resources, Inc.), magnetic
tapes, reels or cartridges (if sent to the Fund or to a third
party at the Fund's request) and magnetic tape handling charges,
off-site record storage, media for storage of records (e.g.,
microfilm, microfiche, optical platters, computer tapes), computer
equipment installed at the Fund's request at the Fund's or a third
party's premises, telecommunications equipment,
telephone/telecommunication lines between the Fund and its agents,
on one hand, and DST on the other, proxy soliciting, processing
and/or tabulating costs, second-site backup computer facility,
transmission of statement data for remote printing or processing,
and National Securities Clearing Corporation ("NSCC") transaction
fees to the extent any of the foregoing are paid by DST. The Fund
agrees to pay postage expenses at least one day in advance if so
requested. In addition, any other expenses incurred by DST at the
request or with the consent of the Fund will be promptly
reimbursed by the Fund.
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C. Amounts due hereunder shall be due and paid on or before the
thirtieth (30th) business day after receipt of the statement
therefor by the Fund (the "Due Date"). The Fund is aware that its
failure to pay all amounts in a timely fashion so that they will
be received by DST on or before the Due Date will give rise to
costs to DST not contemplated by this Agreement, including but not
limited to carrying, processing and accounting charges.
Accordingly, subject to Section 6.D. hereof, in the event that any
amounts due hereunder are not received by DST by the Due Date, the
Fund shall pay a late charge equal to the lesser of the maximum
amount permitted by applicable law or the monthly rate of one and
one-half percent (1_%) times the amount overdue, times the number
of whole or partial months 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 A shall increase or may
be increased as follows:
(1) On the first day of each new term, but only in accordance with
the "Fee Increases" provision in Exhibit A;
(2) DST may increase the fees and charges set forth on Exhibit A
upon at least ninety (90)days prior written notice, if changes
in existing laws, rules or regulations:(i) require substantial
system modifications or (ii) material
8
ly increase cost of performance hereunder; and
(3) Upon at least ninety (90) days prior written notice, DST may
impose a reasonable charge for additional features of TA2000
used by the Fund which features are not consistent with the
Fund's current processing requirements.
If DST notifies the Fund of an increase in fees or charges
pursuant to subparagraph (2) of this Section 6.E., the parties
shall confer, diligently and in good faith and agree upon a new
fee to cover the amount necessary, but not more than such amount,
to reimburse DST for the Fund's aliquot portion of the cost of
developing the new software to comply with regulatory charges and
for the increased cost of operation.
If DST notifies the Fund of an increase in fees or charges under
subparagraph (3) of this Section 6.E., the parties shall confer,
diligently and in good faith, and agree upon a new fee to cover
such new fund feature.
7. Operation of DST System.
In connection with the performance of its services under this
Agreement, DST is responsible for such items as:
A. That entries in DST's records, and in the Fund's records on the
TA2000 System created by DST, accurately reflect the orders,
instructions, and other information received by DST from the Fund,
the Fund's distributor, manager or principal underwriter, the
Fund's investment adviser, or the Fund's administrator (each an
"Authorized Person"), broker-dealers and/or shareholders;
B. That shareholder lists, shareholder account verifications,
confirmations and other shareholder account information to be
produced from its records or data be available and accurately
reflect the data in the Fund's records on the TA2000 System;
C. The accurate and timely issuance of dividend and distribution
checks in accordance with instructions received from the Fund and
the data in the Fund's records on the TA2000 System;
9
D. That redemption transactions and payments be effected timely,
under normal circumstances on the day of receipt, and accurately
in accordance with redemption instructions received by DST from
Authorized Persons, broker-dealers or shareholders and the data in
the Fund's records on the TA2000 System;
E. The deposit daily in the Fund's appropriate bank account of all
checks and payments received by DST from NSCC, broker-dealers or
shareholders for investment in shares;
F. Notwithstanding anything herein to the contrary, with respect to
"as of" adjustments, DST will not assume one hundred percent
(100%) responsibility for losses resulting from "as ofs" due to
clerical errors or misinterpretations of shareholder instructions,
but DST will discuss with the Fund DST's accepting liability for
an "as of" on a case-by-case basis and may accept financial
responsibility for a particular situation resulting in a financial
loss to the Fund where such loss is "material", as hereinafter
defined, and, under the particular facts at issue, DST in its
discretion believes DST's conduct was culpable and the sole cause
of the loss. A loss is "material" for purposes of this Section
7.F. when it results in a pricing error on a given day which is
(i) greater than a negligible amount per shareholder, (ii) equals
or exceeds one ($.01) full cent per share times the number of
shares outstanding or (iii) equals or exceeds the product of
one-half of one percent (_%) times Fund's Net Asset Value per
share times the number of shares outstanding (or, in case of (ii)
or (iii), such other amounts as may be adopted by applicable
accounting or regulatory authorities from time to time). When DST
concludes that it should contribute to the settlement of a loss,
DST's responsibility will commence with that portion of the loss
over $0.01 per share calculated on the basis of the total value of
all shares owned by the affected portfolio (i.e., on the basis of
the value of the shares of the total portfolio, including all
classes of that portfolio, not just those of the affected class);
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G. The requiring of proper forms of instructions, signatures and
signature guarantees and any necessary documents supporting the
opening of shareholder accounts, transfers, redemptions and other
shareholder account transactions, all in conformance with DST's
present procedures as set forth in its Legal Manual, Third Party
Check Procedures, Checkwriting Draft Procedures, and Signature
Guarantee Procedures (collectively the "Procedures") with such
changes or deviations therefrom as may be from time to time
required or approved by the Fund, its investment adviser or
principal underwriter, or its or DST's counsel and the rejection
of orders or instructions not in good order in accordance with the
applicable prospectus or the Procedures;
H. The maintenance of customary records in connection with its
agency, and particularly those records required to be maintained
pursuant to subparagraph (2)(iv) of paragraph (b) of Rule 31a-1
under the Investment Company Act of 1940, if any; and
I. The maintenance of a current, duplicate set of the Fund's
essential records at a secure separate location, in a form
available and usable forthwith in the event of any breakdown or
disaster disrupting its main operation.
8. Indemnification.
A. DST shall not be responsible for, and the Fund shall on behalf of
the applicable Portfolio indemnify and hold DST harmless from and
against, any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability ("Adverse Consequences")
arising out of or attributable to:
(1) All actions of DST or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without negligence or
willful misconduct.
(2) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation
or warranty of the Fund hereunder.
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(3) The reliance on or use by DST or its agents or subcontractors
of information, records, documents or services which (i) are
received by DST or its agents or subcontractors, and (ii) have
been prepared, maintained or performed by the Fund or any
other person or firm on behalf of the Fund including but not
limited to any previous transfer agent or registrar.
(4) The reliance on, or the carrying out by DST or its agents or
subcontractors of any instructions or requests of the Fund on
behalf of the applicable Portfolio.
(5) The offer or sale of shares of the Fund or any applicable
Portfolio in violation of any requirement under the federal
securities laws or regulations or the securities laws or
regulations of any state relating to the registration, the
sale, or the manner of sale of such shares or in violation of
any stop order or other determination or ruling by any federal
agency or any state with respect to the offer, the sale or the
manner of sale of such shares in such state.
(6) The negotiation and processing by DST and the applicable bank
on which such check or draft is drawn of checks not made
payable to the order of DST, the Fund, the Fund's management
company, transfer agent or distributor or the retirement
account custodian or trustee for a plan account investing in
shares, which checks are tendered to DST for the purchase of
shares (i.e., checks made payable to prospective or existing
Shareholders, such checks are commonly known as "third party
checks").
B. At any time DST may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to
any matter arising in connection with the services to be performed
by DST under this Agreement, and DST and its agents or
subcontractors shall not be liable and shall be indemnified by the
Fund on behalf of the applicable Portfolio for any action taken or
omitted by it in reliance upon such instructions or upon the
opinion of such counsel. DST, its agents and subcontractors shall
be protected and indemnified in acting upon any paper or document
furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons,
or upon any instruction, information, data, records or documents
provided DST or its agents or subcontractors by machine readable
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input, telex, CRT data entry or other similar means authorized by
the Fund, and shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof
from the Fund. DST, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar,
or of a co-transfer agent or co-registrar.
C. In order that the indemnification provisions contained in this
Section 8 shall apply, upon the assertion of a claim for which the
Fund may be required to indemnify DST, DST shall promptly notify
the Fund of such assertion, and shall keep the Fund advised with
respect to all developments concerning such claim. The Fund shall
have the option to participate with DST in the defense of such
claim or to defend against said claim in its own name or in the
name of DST. DST shall in no case confess any claim or make any
compromise in any case in which the Fund may be required to
indemnify DST except with the Fund's prior written consent.
D. Standard of Care: DST shall at all times act in good faith and
agrees to use its best efforts within reasonable limits to insure
the accuracy of all services performed under this Agreement, but
assumes no responsibility and shall not be liable for loss or
damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct or that of its
employees. In the event that any claim is asserted against DST
under this Agreement for any reason other than DST's bad faith,
willful misconduct or gross negligence, DST's liability with
respect to, arising from or arising in connection with this
Agreement, or from all services provided or omitted to be provided
under this Agreement, whether in con
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tract, or in tort, or otherwise, is limited to, and shall not
exceed, the amounts paid hereunder by the Fund to DST as fees and
charges, but not including reimbursable expenses, during the
previous six (6) months.
E. EXCEPT FOR VIOLATIONS OF SECTION 23, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO
ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR
CONSEQUENTIAL DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER ANY
PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY
THEREOF.
9. Certain Covenants of DST and the Fund.
A. All requisite steps will be taken by the Fund from time to time
when and as necessary to register the Fund's shares for sale in
all states in which the Fund's shares shall at the time be offered
for sale and require registration. If at any time the Fund
receives notice of any stop order or other proceeding in any such
state affecting such registration or the sale of the Fund's
shares, or of any stop order or other proceeding under the federal
securities laws affecting the sale of the Fund's shares, the Fund
will give prompt notice thereof to DST.
B. DST hereby agrees to perform such transfer agency functions as are
set forth in Section 4.D. above and establish and maintain
facilities and procedures reasonably acceptable to the Fund for
safekeeping of stock certificates, check forms, and facsimile
signature imprinting devices, if any; and for the preparation or
use, and for keeping account of, such certificates, forms and
devices, and to carry such insurance as it considers adequate and
reasonably available.
C. To the extent required by Section 31 of the Investment Company Act
of 1940 as amended and Rules thereunder, DST agrees that all
records maintained by DST relating to the services to be performed
by DST under this Agreement are the property of the Fund and will
be preserved and will be surrendered promptly to the Fund on
request.
D. DST agrees to furnish the Fund annual reports of its financial
condition, consisting of a balance sheet, earnings statement and
any other publicly available financial information reasonably
requested by the Fund and a copy of the report issued by its
certified public accountants pursuant to Rule 17Ad-13 under the
1934 Act as filed with the SEC.
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The annual financial statements will be certified by DST's
certified public accountants and may be included in DST's publicly
distributed Annual Report.
E. DST represents and agrees that it will use its reasonable efforts
to keep current on the trends of the investment company industry
relating to shareholder services and will use its reasonable
efforts to continue to modernize and improve.
F. DST will permit the Fund and its authorized representatives to
make periodic inspections of its operations as such would involve
the Fund at reasonable times during business hours.
G. DST will provide in Kansas City at the Fund's request and expense
training for the Fund's personnel in connection with use and
operation of the TA2000 System. All travel and reimbursable
expenses incurred by the Fund's personnel in connection with and
during training at DST's Facility shall be borne by the Fund. At
the Fund's option and expense, DST also agrees to use its
reasonable efforts to provide two (2) man weeks of training at the
Fund's facility for the Fund's personnel in connection with the
continued operation of the TA2000 System. Reasonable travel, per
diem and reimbursable expenses incurred by DST personnel in
connection with and during training at the Fund's facility or in
connection with the conversion shall be borne by the Fund.
10. Recapitalization or Readjustment.
In case of any recapitalization, readjustment or other change in
the capital structure of the Fund requiring a change in the form
of stock certificates, DST will issue or register certificates in
the new form in exchange for, or in transfer of, the outstanding
certificates in the old form, upon receiving:
A. Written instructions from an officer of the Fund;
B. Certified copy of the amendment to the Articles of Incorporation
or other document effecting the change;
C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the stock
in the new form, and an opinion of counsel that the order or
consent of no other government or reg
15
ulatory authority is required;
D. Specimens of the new certificates in the form approved by the
Board of Directors of the Fund, with a certificate of the
Secretary of the Fund as to such approval;
E. Opinion of counsel for the Fund stating:
(1) The status of the shares of stock of the Fund in the new form
under the Securities Act of 1933, as amended and any other
applicable federal or state statute; and
(2) That the issued shares in the new form are, and all unissued
shares will be, when issued, validly issued, fully paid and
nonassessable.
11. Reserved.
12. Death, Resignation or Removal of Signing Officer.
The Fund will file promptly with DST written notice of any change
in the officers authorized to sign written requests or
instructions to give requests or instructions, together with two
signature cards bearing the specimen signature of each newly
authorized officer.
13. Future Amendments of Charter and Bylaws.
The Fund will promptly file with DST copies of all material
amendments to its Articles of Incorporation or Bylaws made after
the date of this Agreement.
14. Instructions, Opinion of Counsel and Signatures.
At any time DST may apply to any person authorized by the Fund to
give instructions to DST, and may with the approval of a Fund
officer and at the expense of the Fund, either consult with legal
counsel for the Fund or consult with counsel chosen by DST and
acceptable to the Fund, with respect to any matter arising in
connection with the agency and it will not be liable for any
action taken or omitted by it in good faith in reliance upon such
instructions or upon the opinion of such counsel. For purposes
hereof, DST's internal counsel and attorneys employed by
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, DST's primary outside counsel, are
acceptable to the Fund. DST will be protected in acting upon any
paper or document reasonably believed by it to be genuine and to
have been signed by the proper person or persons and will not be
held to
16
have notice of any change of authority of any person, until
receipt of written notice thereof from the Fund. It will also be
protected in recognizing stock certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the
officers of the Fund, and the proper countersignature of any
former Transfer Agent or Registrar, or of a co-Transfer Agent or
co-Registrar.
15. Force Majeure and Disaster Recovery Plans.
A. DST shall not be responsible or liable for its failure or delay in
performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation: any
interruption, loss or malfunction or any utility, transportation,
computer hardware, provided such equipment has been reasonably
maintained, or third party software or communication service;
inability to obtain labor, material, equipment or transportation,
or a delay in mails; governmental or exchange action, statute,
ordinance, rulings, regulations or direction; war, strike, riot,
emergency, civil disturbance, terrorism, vandalism, explosions,
labor disputes, freezes, floods, fires, tornadoes, acts of God or
public enemy, revolutions, or insurrection; or any other cause,
contingency, circumstance or delay not subject to DST's reasonable
control which prevents or hinders DST's performance hereunder.
B. DST currently maintains an agreement with a third party whereby
DST is to be permitted to use on a "shared use" basis a "hot site"
(the "Recovery Facility") maintained by such party in event of a
disaster rendering the DST Facilities inoperable. DST has
developed and is continually revising a business contingency plan
(the "Business Contingency Plan") detailing which, how, when, and
by whom data maintained by DST at the DST Facilities will be
installed and operated at the Recovery Facility. Provided the Fund
is paying its pro rata portion of the charge therefor, DST will,
in the event of a disaster rendering the DST Facilities
inoperable, use reasonable efforts to convert the TA2000 System
containing the designated Fund data to the computers at the
Recovery Facility in accordance with the then current Business
Contingency Plan.
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
17
necessary to operate a full service transfer agency business in
the event one of its operations areas is rendered inoperable. The
transfer of operations to other operating areas or to the Crisis
Management Center is also covered in DST's Business Contingency
Plan.
16. Certification of Documents.
The required copy of the Articles of Incorporation of the Fund and
copies of all amendments thereto will be certified by the
Secretary of State (or other appropriate official) of the State of
Incorporation, and if such Articles of Incorporation and
amendments are required by law to be also filed with a county,
city or other officer of official body, a certificate of such
filing will appear on the certified copy submitted to DST. A copy
of the order or consent of each governmental or regulatory
authority required by law to the issuance of the stock will be
certified by the Secretary or Clerk of such governmental or
regulatory authority, under proper seal of such authority. The
copy of the Bylaws and copies of all amendments thereto, and
copies of resolutions of the Board of Directors of the Fund, will
be certified by the Secretary or an Assistant Secretary of the
Fund under the Fund's seal.
17. Records.
DST will maintain customary records in connection with its agency,
and particularly will maintain those records required to be
maintained pursuant to subparagraph (2) (iv) of paragraph (b) of
Rule 31a-1 under the Investment Company Act of 1940, if any.
18. Disposition of Books, Records and Canceled Certificates.
DST may send periodically to the Fund, or to where designated by
the Secretary or an Assistant Secretary of the Fund, all books,
documents, and all records no longer deemed needed for current
purposes and stock certificates which have been canceled in
transfer or in exchange, upon the understanding that such books,
documents, records, and stock certificates will be maintained by
the Fund under and in accordance with the requirements of Section
17Ad-7 adopted under the Securities Exchange Act of 1934. Such
materials 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
19. Provisions Relating to DST as Transfer Agent.
A. Instructions for the transfer, exchange or redemption of shares of
the Fund will be accepted, the registration, redemption or
transfer of the shares be effected and, where applicable, funds
remitted therefor. Upon surrender of the old certificates in form
or receipt by DST of instructions deemed by DST properly endorsed
for transfer, exchange or redemption, accompanied by such
documents as DST may deem necessary to evidence the authority of
the person making the transfer, exchange or redemption, the
transfer, exchange or redemption of the shares reflected by such
certificates be effected and any sums due in connection therewith
be remitted, in accordance with the instructions contained herein.
DST reserves the right to refuse to transfer or redeem shares
until it is satisfied that the endorsement or signature on the
instruction or any other document is valid and genuine, and for
that purpose it may require a guaranty of signature in accordance
with the Signature Guarantee Procedures. DST also reserves the
right to refuse to transfer, exchange or redeem shares until it is
satisfied that the requested transfer, exchange or redemption is
legally authorized, and DST will incur no liability for the
refusal in good faith to make transfers or redemptions which, in
its judgment, are improper or unauthorized. DST may, in effecting
transfers, exchanges or redemptions, rely upon DST's Procedures
and Simplification Acts, Uniform Commercial Code or other statutes
which protect it and the Fund in not requiring complete fiduciary
documentation. In cases in which DST is not directed or otherwise
required to maintain the consolidated records of shareholder's
accounts, DST will not be liable for any loss which may arise by
reason of not having such records.
B. DST will, at the expense of the Fund, issue and mail subscription
warrants, effectuate stock dividends, exchanges or split ups, or
act as Conversion Agent upon receiving written instructions from
any officer of the Fund and such other documents as DST deems
necessary.
C. DST will, at the expense of the Fund, supply a shareholder's list
to the Fund for its annual meeting upon receiving a request from
an officer of the Fund. It will also, at the expense of the Fund,
supply lists at such other times as may be requested by an officer
of the Fund.
19
D. Upon receipt of written instructions of an officer of the Fund,
DST will, at the expense of the Fund, address and mail notices to
shareholders.
E. In case of any request or demand for the inspection of the stock
books of the Fund or any other books in the possession of DST, DST
will endeavor to notify the Fund and to secure instructions as to
permitting or refusing such inspection. DST reserves the right,
however, to exhibit the stock books or other books to any person
in case it is advised by its counsel that it may be held
responsible for the failure to exhibit the stock books or other
books to such person.
20. Provisions Relating to Dividend Disbursing Agency.
A. DST will, at the expense of the Fund, provide a special form of
check containing the imprint of any device or other matter desired
by the Fund. Said checks must, however, be of a form and size
convenient for use by DST.
B. If the Fund desires to include additional printed matter,
financial statements, etc., with the dividend checks, the same
will be furnished DST within a reasonable time prior to the date
of mailing of the dividend checks, at the expense of the Fund.
C. If the Fund desires its distributions mailed in any special form
of envelopes, sufficient supply of the same will be furnished to
DST but the size and form of said envelopes will be subject to the
approval of DST. If stamped envelopes are used, they must be
furnished by the Fund; or if postage stamps are to be affixed to
the envelopes, the stamps or the cash necessary for such stamps
must be furnished by the Fund.
D. DST shall establish and maintain on behalf of the Fund one or more
deposit accounts as Agent for the Fund, into which DST shall
deposit the funds DST receives for payment of dividends,
distributions, redemptions or other disbursements provided for
hereunder and to draw checks against such accounts.
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 pro
20
duced by them for presentation and collection, and, to issue
and deliver duplicate checks in replacement thereof.
21. Assumption of Duties By the Fund or Agents Designated By the Fund.
A. The Fund or its designated agents other than DST may assume
certain duties and responsibilities of DST or those services of
Transfer Agent and Dividend Disbursing Agent as those terms are
referred to in Section 4.D. of this Agreement including but not
limited to answering and responding to telephone inquiries from
shareholders and brokers, accepting shareholder and broker
instructions (either or both oral and written) and transmitting
orders based on such instructions to DST, preparing and mailing
confirmations, obtaining certified TIN numbers, classifying the
status of shareholders and shareholder accounts under applicable
tax law, establishing shareholder accounts on the TA2000 System
and assigning social codes and Taxpayer Identification Number
codes thereof, and disbursing monies of the Fund, said assumption
to be embodied in writing to be signed by both parties.
B. To the extent the Fund or its agent or affiliate assumes such
duties and responsibilities, DST shall be relieved from all
responsibility and liability therefor and is hereby indemnified
and held harmless against any liability therefrom and in the same
manner and degree as provided for in Section 8 hereof.
C. The Fund or its designees shall be responsible for the following:
(i) answering and responding to phone calls from shareholders and
broker-dealers, (ii) faxing information to DST as such calls or
items are received by the Fund, and (iii) monitoring and following
up upon wire order trades originally initiated by the Fund or its
designee which failed to settle timely, and (iv) notifying and
instructing DST as to the establishment of and maintenance of
information pertaining to broker-dealers on the Broker-Dealer
File.
22. Termination of Agreement.
A. This Agreement shall be in effect for an initial period of three
(3) years and, thereafter, shall automatically extend for
additional, successive twelve (12) month terms upon the expiration
of any term hereof unless terminated as hereinafter provided.
21
B. Each party, in addition to any other rights and remedies, shall
have the right to terminate this Agreement forthwith upon the
occurrence at any time of any of the following events with respect
to the other party:
(1) The bankruptcy of the other party or its assigns or the
appointment of a receiver for the other party or its assigns;
or
(2) Failure by the other party or its assigns to perform its
duties in accordance with the Agreement, which failure
materially adversely affects the business operations of the
first party and which failure continues for thirty (30) days
after receipt of written notice from the first party.
C. Either party may terminate this Agreement at any time by delivery
to the other party of six (6) months prior written notice of such
termination; provided, however, that the effective date of any
termination and conversion off the TA2000 System (a
"Deconversion") shall not occur during the period from November 15
through March 15 of any year to avoid adversely impacting year
end.
D. In the event of any termination of this Agreement:
(1) The Fund will continue to pay to DST as invoiced all sums due
for DST's services until completion of the Deconversion and
will pay to DST, no later than contemporaneously with the
dispatch by DST of the Fund's records, all amounts payable to
DST.
(2) If, for any reason, the Fund desires to convert from the
TA2000 System ("Deconvert") other than on the first day after
22
six (6) months from the receipt by DST of the termination notice
(such first day after the expiration of six (6) months being
hereinafter referred to as the "Termination Date"), and DST is
able, through reasonable efforts, to accomplish such earlier
deconversion, the Fund shall pay to DST on the day of or
before the deconversion the fees which DST would have earned
had the Fund not Deconverted, and had DST remained the
transfer/shareholder servicing agent, until the Termination
Date. The amount of such fees shall be calculated by: (a)
dividing the aggregate fees charged to the Fund with respect
to the six (6) whole months immediately preceding receipt by
DST of the six (6) month termination notice by (b) twenty-six
(26) (the number of weeks in such six (6) month period) to
determine the average weekly fee and (c) multiplying the
average weekly fee times the number of whole or partial weeks
between the date on which Deconversion actually occurs and the
Termination Date.
(3) Subsequent to any deconversion:
(a) The Fund shall continue to pay to DST, subject to and in
accordance with the terms and conditions set forth in Sections
6.A., 6.B., 6.C. and 6.D. of this Agreement, for all expenses
incurred on the Fund's behalf and the post-Deconversion fees set
forth in Exhibit B to this Agreement until (i) the Fund accounts
are purged from the TA2000 System (no longer being required for
Year End Reporting) with respect to closed account fees and (ii)
so long as DST's services are utilized with respect to all fees
other than those for closed accounts by the Fund, the Fund's new
transfer agent and the Fund's shareholders, former shareholders,
broker-dealers or other entities with whom the Fund does
business, as well as any persons claiming through or on behalf
of any of the foregoing; and
(b) To the extent applicable regulations of the Internal Revenue
Service and tax laws permit, the Fund shall require the Fund's
new transfer agent to perform and dispatch or file all required
year end reporting (tax or otherwise and federal and state) to
shareholders, broker-dealers, beneficial owners, federal and
state agencies and any other recipients thereof for the entire
year during which the Deconversion occurs and DST shall have no,
and the Fund hereby indemnifies DST and holds DST harmless
against any, liability or Adverse Consequences whatsoever with
respect thereto, including by way of example and not limitation,
reports or returns on Forms 1099, 5498, 945, 1042 and 1042S,
23
annual account valuations for retirement accounts and year end
statements for all accounts and any other reports required to be
made by state governments or the federal government or
regulatory or self-regulatory agencies (the "Returns");
(c) If the Fund is unable to obtain a commitment from the new
transfer agent that the new transfer agent will perform year end
reporting (tax or otherwise) for the entire year and mail and
file all Returns, (i) DST shall perform year end reporting as
instructed by the Fund for the portion of the year DST served as
transfer agent and (ii) DST shall be paid therefore a monthly
per CUSIP fee through the end of the last month during which the
last Return or form is filed. The Fund will cause the new
transfer agent to timely advise DST of all changes to the
shareholder records effecting such reporting until all DST
reporting obligations cease; and DST shall have no, and the Fund
hereby indemnifies DST and holds DST harmless against any,
liability or any Adverse Consequences arising out of or
resulting from the failure of the new transfer agent to timely
and properly advise DST thereof or which could have been avoided
if the new transfer agent had timely and properly advised DST
thereof. All amendments to, or delivery of duplicate, Returns
after their initial dispatch or filing will be effectuated and
filed or dispatched by the new transfer agent regardless of who
filed or dispatched the original Return; and
(d) All of the records belonging to the Fund on the TA2000 System
may be purged by DST without liability on behalf of DST to the
Fund or its agents, shareholders, and parties with whom the
Fund has done or will do business, at any time on or after the
forty-fifth (45th) day after the Termination Date (in which
case DST shall not be able to perform any year end reporting
or the mailing and filing of any Returns for any portion of
the year in which such destruction occurs). The Fund shall and
hereby agrees to indemnify and hold DST harmless against any
Adverse Consequences directly or indirectly arising out of or
resulting from any inability to produce such purged records.
The Fund will, and will cause the new transfer agent to,
maintain and preserve the records converted from the TA2000
System or any hard copy records transferred by DST to the Fund
or the new transfer agent in accordance with the requirements
of all
24
applicable law, including without limitation 17 C.F.R.
ss.ss.240.17Ad-6, -7, -10, -11 and -15 (including without
limitation to make copies thereof available timely and at no
charge to appropriate regulatory agencies in accordance with
the requirements of Section 17Ad-7, and, as reasonably
necessary, DST). Notwithstanding the foregoing, upon the
request and at the expense of the Fund, DST shall not purge,
but shall retain as closed accounts on the TA2000 System, the
records belonging to the Fund.
E. In addition, in the event of any termination, DST will, provided
the Fund contemporaneously pays all outstanding charges and fees,
promptly transfer all of the records of the Fund to the designated
successor transfer agent. DST shall also provide reasonable
assistance to the Fund and its designated successor transfer agent
and other information relating to its services provided hereunder
(subject to the recompense of DST for such assistance and
information at its standard rates and fees for personnel then in
effect at that time); provided, however, as used herein
"reasonable assistance" and "other information" shall not include
assisting any new service or system provider to modify, alter,
enhance, or improve its system or to improve, enhance, or alter
its current system, or to provide any new, functionality or to
require DST to disclose any DST Confidential Information, as
hereinafter defined, or any information which is otherwise
confidential to DST.
23. Confidentiality.
A. DST agrees that, except as provided in the last sentence of
Section 19.J. hereof, or as otherwise required by law, DST will
keep confidential all records of and information in its possession
relating to the Fund or its shareholders or shareholder accounts
and will not disclose the same to any person except at the request
or with the consent of the Fund.
25
B. The Fund owns all of the data supplied by or on behalf of the Fund
to DST. The Fund has proprietary rights to all such data, records
and reports containing such data, but not including the software
programs upon which such data is installed, and all records
containing such data will be transferred in accordance with
Section 22.D above in the event of termination.
C. The Fund agrees to keep confidential all non-public financial
statements and other financial records of DST received hereunder,
all accountants' reports relating to DST, the terms and provisions
of this Agreement, including all exhibits and schedules now or in
the future attached hereto and all manuals, systems and other
technical information and data, not publicly disclosed, relating
to DST's operations and programs furnished to it by DST pursuant
to this Agreement and will not disclose the same to any person
except at the request or with the consent of DST.
D. (1) The Fund acknowledges that DST has proprietary rights in and
to the TA2000 System used to perform services hereunder including,
but not limited to the maintenance of shareholder accounts and
records, processing of related information and generation of
output, including, without limitation any changes or modifications
of the TA2000 System and any other DST programs, data bases,
supporting documentation, or procedures (collectively "DST
Confidential Information") which the Fund's access to the TA2000
System or computer hardware or software may permit the Fund or its
employees or agents to become aware of or to access and that the
DST Confidential Information constitutes confidential material and
trade secrets of DST. The Fund agrees to maintain the
confidentiality of the DST Confidential Information.
(2) The Fund acknowledges that any unauthorized use, misuse,
disclosure or taking of DST Confidential Information which is
confidential as provided by law, or which is a trade secret,
residing or existing internal or external to a computer,
computer system, or computer network, or the knowing and
unauthorized accessing or causing to be accessed of any
computer, computer system, or computer network, may be subject
to civil liabilities and criminal penal
26
ties under applicable state law. The Fund will advise all of
its employees and agents who have access to any DST
Confidential Information or to any computer equipment capable
of accessing DST or DST hardware or software of the foregoing.
(3) The Fund acknowledges that disclosure of the DST Confidential
Information may give rise to an irreparable injury to DST
inadequately compensable in damages. Accordingly, DST may seek
(without the posting of any bond or other security) injunctive
relief against the breach of the foregoing undertaking of
confidentiality and nondisclosure, in addition to any other
legal remedies which may be available, and the Fund consents
to the obtaining of such injunctive relief. All of the
undertakings and obligations relating to confidentiality and
nondisclosure, whether contained in this Section or elsewhere
in this Agreement shall survive the termination or expiration
of this Agreement for a period of ten (10) years.
24. Changes and Modifications.
A. During the term of this Agreement DST will use on behalf of the
Fund without additional cost all modifications, enhancements, or
changes which DST may make to the TA2000 System in the normal
course of its business and which are applicable to functions and
features offered by the Fund, unless substantially all DST clients
are charged separately for such modifications, enhancements or
changes, including, without limitation, substantial system
revisions or modifications necessitated by changes in existing
laws, rules or regulations. The Fund agrees to pay DST promptly
for modifications and improvements which are charged for
separately at the rate provided for in DST's standard pricing
schedule which shall be identical for substantially all clients,
if a standard pricing schedule shall exist. If there is no
standard pricing schedule, the parties shall mutually agree upon
the rates to be charged.
B. DST shall have the right, at any time and from time to time, to
alter and modify any systems, programs, procedures or facilities
used or employed in performing its duties and obligations
hereunder; provided that the Fund will be
27
notified as promptly as possible prior to implementation of such
alterations and modifications and that no such alteration or
modification or deletion shall materially adversely change or
affect the operations and procedures of the Fund in using or
employing the TA2000 System or DST Facilities hereunder or the
reports to be generated by such system and facilities hereunder,
unless the Fund is given thirty (30) days prior notice to allow
the Fund to change its procedures and DST provides the Fund with
revised operating procedures and controls at the time such notice
is delivered to the Fund.
C. All enhancements, improvements, changes, modifications or new
features added to the TA2000 System however developed or paid for
shall be, and shall remain, the confidential and exclusive
property of, and proprietary to, DST.
25. Subcontractors.
Nothing herein shall impose any duty upon DST in connection with or
make DST liable for the actions or omissions to act of unaffiliated
third parties such as, by way of example and not limitation, Airborne
Services, the U.S. mails and telecommunication companies, provided, if
DST selected such company, DST shall have exercised due care in
selecting the same.
26. Limitations on Liability.
A. If the Fund is comprised of more than one Portfolio, each
Portfolio shall be regarded for all purposes hereunder as a
separate party apart from each other Portfolio. Unless the context
otherwise requires, with respect to every transaction covered by
this Agreement, every reference herein to the Fund shall be deemed
to relate solely to the particular Portfolio to which such
transaction relates. Under no circumstances shall the rights,
obligations or remedies with respect to a particular Portfolio
constitute a right, obligation or remedy applicable to any other
Portfolio. The use of this single document to memorialize the
separate agreement of each Portfolio is understood to be for
clerical convenience only and shall not constitute any basis for
joining the Portfolios for any reason.
B. Notice is hereby given that a copy of the Fund's Trust Agreement
and all amendments thereto is on file with the Secretary of State
of the state of its organization; that this Agreement has been
executed on behalf of the Fund
28
by the undersigned duly authorized representative of the Fund in
his/her capacity as such and not individually; and that the
obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any
trustee, officer or shareholder of the Fund individually.
27. Miscellaneous.
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws
of the State of Missouri, excluding that body of law applicable to
choice of law.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto
and their respective successors and permitted assigns.
C. The representations and warranties, and the indemnification
extended hereunder, if any, are intended to and shall continue
after and survive the expiration, termination or cancellation of
this Agreement.
D. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and
executed by each party hereto.
E. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
F. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
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.
29
I. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between the
Fund and DST. It is understood and agreed that all services
performed hereunder by DST shall be as an independent contractor
and not as an employee of the Fund. This Agreement is between DST
and the Fund and neither this Agreement nor the performance of
services under it shall create any rights in any third parties.
There are no third party beneficiaries hereto.
J. Except as specifically provided herein, this Agreement does not in
any way affect any other agreements entered into among the parties
hereto and any actions taken or omitted by any party hereunder
shall not affect any rights or obligations of any other party
hereunder.
K. The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights
resulting from any breach of any of the terms or conditions of
this Agreement, including the payment of damages, shall not be
construed as a continuing or permanent waiver of any such terms,
conditions, rights or privileges, but the same shall continue and
remain in full force and effect as if no such forbearance or
waiver had occurred.
L. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement, draft or
agreement or proposal with respect to the subject matter hereof,
whether oral or written, and this Agreement may not be modified
except by written instrument executed by both parties.
M. All notices to be given hereunder shall be deemed properly given
if delivered in person or if sent by U.S. mail, first class,
postage prepaid, or if sent by facsimile and thereafter, in the
case of non-operational notices only, confirmed by mail as
follows:
If to DST:
DST Systems, Inc.
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Group Vice President-Full Service
Facsimile No.: 000-000-0000
30
With a copy of non-operational notices to:
DST Systems, Inc.
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Legal Department
Facsimile No.: 000-000-0000
If to the Fund:
The MDL Funds
c/o SEI Corporation.
Xxx Xxxxxxx Xxxxxx Xxxx
Xxxx, Xxxxxxxxxxxx 00000
Attn: Legal Department
Facsimile No.: 000-000-0000
or to such other address as shall have been specified in writing
by the party to whom such notice is to be given.
N. The representations and warranties contained herein shall survive
the execution of this Agreement. The representations and
warranties contained herein and the provisions of Section 8 hereof
shall survive the termination of the Agreement and 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.
THE MDL FUNDS DST SYSTEMS, INC.
By: __________________________________ By: ___________________________________
Title: _______________________________ Title: ________________________________
31
EXHIBIT A, p. 1
FEE SCHEDULE
DST SYSTEMS, INC.
MDL FUNDS TRANSFER AGENCY FEE SCHEDULE
EFFECTIVE APRIL 1, 2000 - MARCH 31, 2003
A. MINIMUM FEE
CUSIPs in the range 1 - 10 per year $19,570 per CUSIP
CUSIPs in the range > 10 per year $14,678 per CUSIP
(Note: Minimum applies unless charges included in Section B exceed the
minimum.)
B. ACCOUNT MAINTENANCE AND PROCESSING FEES
Open Accounts $25.75per account per year
Closed Accounts $2.94 per account per year
Lost Shareholder Compliance $1.20 per lost S/H account
+ $1.50 per database match
C. OPTIONAL SERVICES
12b-1 Processing $0.16 per open & closed acct
per cycle
CDSC/Sharelot Processing $1.96 per account per year
Ad-Hoc Reporting:
Multi File Reports $412 per report
Single Reports $258 per report
Escheatment Costs $125 per CUSIP per filing
+ $1.50 per item + OOP
Costs
* TA2000 Voice System Exhibit A.1
* NSCC Exhibit A.2
* Financial Intermediary Interfaces Exhibit A.3
* Reimbursable Expenses Exhibit A.4
Conversion/Acquisition Costs - Out of Pocket expenses including, but not limited
to travel and accommodations, programming, training, equipment installation,
etc.
32
EXHIBIT A, p. 2
FEE SCHEDULE
* Computer/Technical Support (2001 Standard Rates)
Business Analyst/Tester:
Dedicated $106,080 per year
On-Request $93.60 per hour
COBOL Programmer:
Dedicated $176,800 per year
On-Request $140.40 per hour
Workstation Programmer:
Dedicated $204,880 per year
On-Request $166.40 per hour
Full Service Support:
Senior Staff Support $75.00 per hour
Staff Support $55.00 per hour
Clerical Support $45.00 per hour
NOTES TO THE ABOVE FEE SCHEDULE
A. The above schedule does not include reimbursable expenses that are
incurred on the Fund's behalf. Examples of reimbursable expenses include
but are not limited to forms, postage, printing and mailing services,
telephone and data communications lines, long distance charges, remote
client hardware, disaster recovery (range $0.08-$0.12/acct/yr, currently
$0.10 based on actual expense), document storage, proxy
processing/tabulation/certification, magnetic tapes,
microfilm/microfiche/CDROM, bank charges, NSCC charges, Axciom charges,
etc.
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, including attached exhibits, except for those indicated by
an "*", are guaranteed for a 3 year period, subject to an increase on each
anniversary of the agreement in an amount not less than the annual
percentage change in the Consumer Price Index 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. DST agrees not to exceed a total of 12% in
uncompounded CPI-U increases over the three year contract period. In the
event that this Agreement was not signed as of the first day of the month,
the fees and charges increase shall be effective as of the first day of
the month immediately following the month during which the anniversary
occurred. Items marked by an "*" are subject to change with 60 days
written notice.
EXHIBIT A, p. 3
33
FEE SCHEDULE
D. Open and Closed Accounts Fees
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.
34
EXHIBIT A.1, p. 4
FEE SCHEDULE
TA2000 VOICE SYSTEM
FEE SCHEDULE Page 1 of 2
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PER CALL SERVICE FEE
Utilization of DST's TA2000 Voice System is based on a service fee of $.20 per
call. Each call has a maximum duration of seven (7) minutes. This charge is a
flat rate regardless of the number or type of transactions that a shareholder
processes during the call. A given call could result in inquiries and/or
transactions being processed for various funds in the complex. Therefore, on a
monthly basis, DST will report the number of inquiries and/or transactions
processed by fund. A percentage of the total will be derived and reported for
each fund. As a result of this process, DST will allocate the charges among the
individual funds.
MULTIPLE CALL FLOWS
An additional fee of $500 per month will be charged for each additional call
flow that requires different flows, functions, vocabulary, processing, rules or
access method. An additional fee of $200 per month will be charged for each
additional call flow that is identical in flows, functions, vocabulary,
processing rules or access method.
MINIMUM MONTHLY CHARGE
DST's commitment to the reliability and continued enhancement of the TA2000
Voice System necessitates a minimum monthly charge for the service. The minimum
monthly charge will only be assessed when it is greater than the monthly service
fees. The minimum monthly charge will be implemented on a graduated basis based
on the number of CUSIPs and shareholders in a fund complex and is the sum of the
CUSIP and account charges. The schedule for this charge is as follows:
YEARS CHARGE PER CHARGE PER
OF CUSIP AUTHORIZED SHAREHOLDER
SERVICE FOR SERVICE* ACCOUNT**
1 $ 50 $.002
2 $ 75 $.003
3 $100 $.004
* CUSIPS ADDED TO THE SERVICE will be subject to the same minimums
being charged to the other CUSIPs in the complex at the time the
CUSIPs are added.
**THE PER ACCOUNT CHARGE is based on the total number of shareholder
accounts in authorized CUSIPs at the end of each month.
35
EXHIBIT A.1, p. 5
FEE SCHEDULE
Page 2 of 2
OUT OF POCKET COSTS
Each fund complex will require a unique WATS number for their shareholders to
call. Each WATS number will require a specific number of trunks to service a
given volume of shareholder calls. All installation and monthly usage charges
associated with these will be billed through monthly out-of-pocket invoices.
36
EXHIBIT A.2, p. 6
FEE SCHEDULE
NSCC FEES AND OUT-OF-POCKET EXPENSES
Page 1 of 2
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DST Fees
DST charges $1,500 per CUSIP per year for the NSCC platform
Settling Bank Fees
The fund may be charged fees by the Settling Bank at which the net
settlement account resides for monthly maintenance of this account.
These are negotiated directly between the Fund and the Settling Bank.
NSCC Participant Fees
The NSCC charges $40 per month per management company for data
communications costs.
A combined maximum membership fee of $200 per month is charged for
Fund/SERV and Networking:
Fund/SERV:
Membership Fee - $50 per month
The NSCC charges an activity charge of $.25 per inputted transaction.
Transactions include purchases, redemptions and exchanges.
Networking:
Membership Fee - $200 per month
- $.02 per account for funds paying dividends on a monthly basis
$.01 per account for funds paying dividends other than monthly
Position File Fee: $1.50 per 5,000 records in excess of twice the
firm's accounts
37
EXHIBIT A.2, p. 7
FEE SCHEDULE
Page 2 of 2
Commission Settlement:
Membership Fee - $50 per month
- $.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
38
EXHIBIT A.3, p. 8
FEE SCHEDULE
Page 1 of 1
FINANCIAL INTERMEDIARY/THIRD PARTY ADMINISTRATOR FEES
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Phone Calls (inbound/outbound) $4.00 (1)
Transactions:
Manual Same Day (T) Processing/Settlement
Environments (not processed until money received) $3.50/each (1)
Manual or Automated Non-Same Day (T+x) Processing/
Settlement Environments (systematic "as-of" T NAV,
adjusted supersheets, expedited money movement) $11.00/each
All Inbound Electronic Data Transmissions
Data Transmissions/Interfaces:
First 10 Intermediaries $50/intermediary/mo
Next 15 Intermediaries $40/intermediary/mo
Intermediaries over 25 $30/intermediary/mo
Initial Set-up Standard Programming/Client Services Fees
Note: DST will assess charges to receivers of outbound electronic data
transmissions comprised of an initial setup fee, and a monthly fee based on the
number of management companies being accessed.
(1) If the Transfer Agency fee agreement has lower stated rates for phone calls
and manual same day (T) transactions DST will honor those stated rates.
39
EXHIBIT A.4, p. 9
FEE SCHEDULE
REIMBURSABLE EXPENSES
Forms
Postage (to be paid in advance if so requested)
Outside Mailing Services
Computer Hardware
Telecommunications Equipment
Magnetic Tapes, Reels or Cartridges
Magnetic Tape Handling Charges
Microfiche/Microfilm
Freight Charges
Proxy Processing - per proxy mailed
not including postage
Includes: Proxy Card
Printing
Outgoing Envelope
Return Envelope
Tabulation
T.I.N. Certification (W-8 & W-9)
(Postage associated with the return
envelope is included)
N.S.C.C. Communications Charge Currently $1,200.00
(Fund/Serv and Networking) per Fund per Year
Off-site Record Storage
Second Site Disaster Currently $.10
Backup Fee (per account) (guaranteed not to
exceed $.15 through
12/31/01)
Transmission of Statement Data for Currently $.035/per
Remote Processing record
Travel, Per Diem and other Billables
Incurred by DST personnel traveling to,
at and from the Fund at the request
of the Fund
40
EXHIBIT B
POST DECONVERSION FEE SCHEDULE
All fees effective as of deconversion:
Account Maintenance
Closed Accounts $.20/month/acct
Transaction/Maintenance Processing $2.50/item
Telephone Calls $4.00/call
Research Requests $40/hour (1 hr min)
Monthly per CUSIP Fee- under Section 22.D.(3)(c) As set forth in the Fee
Schedule which applied
prior to Deconversion
Programming
As required at DST's then current standard rates
Reimbursable Expenses
This schedule does not include reimbursable expenses that are incurred on the
Fund's behalf. Examples of reimbursable expenses include but are not limited to
forms, postage, mailing services, telephone line/long distance charges,
transmission of statement data for remote print/mail operations, remote client
hardware, document storage, tax certification mailings, magnetic tapes,
printing, microfiche, Fed wire bank charges, ACH bank charges, NSCC charges, as
required or incurred, etc. Reimbursable expenses are billed separately from
Account Maintenance and Programming fees on a monthly basis and late payments
are subject to late charges in accordance with Section 6.C. of this Agreement.
41
EXHIBIT C
AUTHORIZED PERSONNEL
Pursuant to the Agency Agreement between The MDL Funds (the "Fund") and DST (the
"Agreement"), the Fund authorizes the following personnel of the Fund or its
agents to provide instructions to DST, and receive inquiries from DST in
connection with the Agreement:
Name Title
Xxxx X. Xxx _______________________ MDL Advisors, Inc._______________
Xxxxx Xxxxxxx _____________________ MDL Advisors, Inc._______________
Xxxxx Xxxxxxx _____________________ SEI Investments__________________
Xxxxx Xxxxxxxx ____________________ SEI Investments__________________
Xxxxxxx Xxxxx _____________________ SEI Investments__________________
Xxxxxxx Xxxxxxx ___________________ SEI Investments__________________
Xxxxxx Xxxxxxxxxx _________________ SEI Investments__________________
Xxxxxxx Xxxxxx ____________________ SEI Investments__________________
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. THE MDL FUNDS
By:_________________________________ By:_________________________________
Title:______________________________ Title: _____________________________
Date:_______________________________ Date: ______________________________
42
APPENDIX I
Type of State of
Organization Organization
(If Not (If Not Taxpayer
Fund Name Business Trust) Massachusetts) I.D. No.
MDL Broad Market Fixed Income Fund 00-0000000
MDL Large Cap Growth Equity Fund 00-0000000
WHARTON
MBA
STUDENT
DIRECTORY
CLASS
OF
2002
The Xxxxxxx School
University of Pennsylvania
WHARTON MBA STUDENT DIRECTORY 2002
XXXXXXX
MBA
STUDENT
DIRECTORY
CLASS
OF
2002
The Xxxxxxx School
University of Pennsylvania
WHARTON MBA STUDENT DIRECTORY 2002
