EXHIBIT (h)(1)
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of December 18, 2003 by and between PFPC INC., a
Massachusetts corporation ("PFPC"), and ATLAS INSURANCE TRUST, a Delaware
business trust (the "Fund") and any succeeding corporate entity.
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to its
investment portfolios listed on Exhibit A attached hereto and made a part
hereof, as such Exhibit A may be amended from time to time (each a "Portfolio"),
and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as amended.
(c) "AUTHORIZED PERSON" means any officer of the Fund and any other person duly
authorized by the Fund's Board of Trustees to give Oral Instructions and
Written Instructions on behalf of the Fund. An Authorized Person's scope of
authority may be limited by setting forth such limitation in a written
document signed by both parties hereto.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "CHANGE OF CONTROL" means a change in ownership or control (not including
transactions
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between wholly-owned direct or indirect subsidiaries of a common parent) of
25% or more of the beneficial ownership of the shares of common stock or
shares of beneficial interest of an entity or its parents(s).
(f) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be an
Authorized Person. PFPC may, in its sole discretion in each separate
instance, consider and rely upon instructions it receives from an
Authorized Person via electronic mail as Oral Instructions.
(g) "SEC" means the United States Securities and Exchange Commission.
(h) "SECURITIES LAWS" mean the 1933 Act, the 1934 Act, the 1940 Act and the
CEA.
(i) "SHARES" mean the shares of common stock of any series or class of the
Fund.
(j) "WRITTEN INSTRUCTIONS" mean (i) written instructions signed by an
Authorized Person and received by PFPC or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic transaction
reporting system access to which requires use of a password or other
authorized identifier. The instructions may be delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to the Fund
in accordance with the terms set forth in this Agreement. PFPC accepts such
appointment and agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC with such information and documentation as PFPC may reasonably
request in connection with services provided by PFPC to the Fund.
4. COMPLIANCE WITH RULES AND REGULATIONS. PFPC undertakes to comply with all
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applicable requirements of the Securities Laws and any laws, rules and
regulations of governmental authorities having jurisdiction with respect to the
duties to be performed by PFPC hereunder. Except as specifically set forth
herein, PFPC assumes no responsibility for such compliance by the Fund or any
other entity.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon Oral
Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to this
Agreement. PFPC may assume that any Oral Instruction or Written Instruction
received hereunder is not in any way inconsistent with the provisions of
organizational documents or this Agreement or of any vote, resolution or
proceeding of the Fund's Board of Trustees or of the Fund's shareholders,
unless and until PFPC receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming Oral
Instructions so that PFPC receives the Written Instructions by the close of
business on the same day that such Oral Instructions are received. The fact
that such confirming Written Instructions are not received by PFPC or
differ from the Oral Instructions shall in no way invalidate the
transactions or enforceability of the transactions authorized by the Oral
Instructions or PFPC's ability to rely upon such Oral Instructions.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any action it should or
should not take, PFPC may request directions or advice, including Oral
Instructions or Written
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Instructions, from the Fund.
(b) ADVICE OF COUNSEL. If PFPC shall be in doubt as to any question of law
pertaining to any action it should or should not take, PFPC may at its
expense request advice from counsel of its own choosing (who may be counsel
for the Fund, the Fund's investment adviser or PFPC, at the option of
PFPC).
(c) CONFLICTING ADVICE. In the event of a conflict between directions or advice
or Oral Instructions or Written Instructions PFPC receives from the Fund,
and the advice it receives from counsel, PFPC may rely upon and follow the
advice of counsel after consultation with an Authorized Person of the Fund.
(d) PROTECTION OF PFPC. PFPC shall be indemnified by the Fund and without
liability for any action PFPC takes or does not take in reliance upon
directions or advice or Oral Instructions or Written Instructions PFPC
receives from or on behalf of the Fund. Nothing in this section shall be
construed so as to impose an obligation upon PFPC (i) to seek such
directions or advice or Oral Instructions or Written Instructions, or (ii)
to act in accordance with such directions or advice or Oral Instructions or
Written Instructions.
7. RECORDS; VISITS. The books and records pertaining to the Fund, which are in
the possession or under the control of PFPC, shall be the property of the Fund.
Such books and records shall be prepared and maintained as required by the 1940
Act and other applicable securities laws, rules and regulations. The Fund and
Authorized Persons shall have access to such books and records at all times
during PFPC's normal business hours. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided promptly by PFPC to the
Fund or to an Authorized Person, at the Fund's expense.
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8. CONFIDENTIALITY.
(a) Each party shall keep confidential any information relating to the other
party's business ("Confidential Information"). Confidential Information
shall include:
(i) any data or information that is competitively sensitive material, and
not generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finances,
operations, customer relationships, customer profiles, customer lists,
sales estimates, business plans, and internal performance results
relating to the past, present or future business activities of the
Fund or PFPC, their respective subsidiaries and affiliated companies
and the customers, clients and suppliers of any of them;
(ii) any scientific or technical information, design, process, procedure,
formula, or improvement that is commercially valuable and secret in
the sense that its confidentiality affords the Fund or PFPC a
competitive advantage over its competitors;
(iii) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code,
flow charts, databases, inventions, know-how, and trade secrets,
whether or not patentable or copyrightable; and
(iv) anything designated as confidential.
(b) Notwithstanding the foregoing, information shall not be subject to such
confidentiality obligations if it:
(i) is already known to the receiving party at the time it is obtained;
(ii) is or becomes publicly known or available through no wrongful act of
the receiving party;
(iii) is rightfully received from a third party who, to the best of the
receiving party's knowledge, is not under a duty of confidentiality;
(iv) is released by the protected party to a third party without
restriction;
(v) is required to be disclosed by the receiving party pursuant to a
requirement of a court order, subpoena, governmental or regulatory
agency or law (provided the receiving party will provide the other
party written notice of such requirement, to the extent such notice is
permitted);
(vi) is relevant to the defense of any claim or cause of action asserted
against the receiving party; or
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(vii) has been or is independently developed or obtained by the receiving
party.
9. COOPERATION WITH ACCOUNTANTS. PFPC shall cooperate with the Fund's
independent public accountants and shall take all reasonable actions in the
performance of its obligations under this Agreement to ensure that the necessary
information is made available to such accountants for the expression of their
opinion, as required by the Fund.
10. PFPC SYSTEM. PFPC shall retain title to and ownership of any and all data
bases (but not the Fund's data contained therein), computer programs, screen
formats, report formats, interactive design techniques, derivative works,
inventions, discoveries, patentable or copyrightable matters, concepts,
expertise, patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC in connection with the services provided by PFPC to the Fund.
11. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available. In the event of equipment failures, PFPC shall, at no
additional expense to the Fund, take reasonable steps to minimize service
interruptions. PFPC shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure, provided such loss or
interruption is not caused by PFPC's own willful misfeasance, bad faith,
negligence or reckless disregard of its duties or obligations under this
Agreement. A summary of PFPC's Disaster Recovery Plan is attached hereto as
Exhibit D.
12. COMPENSATION. As compensation for services rendered by PFPC during the term
of this Agreement, the Fund will pay to PFPC a fee or fees as may be agreed to
from time to time in writing by the Fund and PFPC. The Fund acknowledges that
PFPC may receive float benefits
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and/or investment earnings in connection with maintaining certain accounts
required to provide services under this Agreement.
13. INDEMNIFICATION. The Fund agrees to indemnify, defend and hold harmless
PFPC and its affiliates, including their respective officers, directors,
agents and employees, from all taxes, charges, expenses, assessments, claims
and liabilities (including, without limitation, attorneys' fees and
disbursements and liabilities arising under the Securities Laws and any state
and foreign securities and blue sky laws) arising directly or indirectly from
any action or omission to act which PFPC takes in connection with the
provision of services to the Fund. Neither PFPC, nor any of its affiliates,
shall be indemnified against any liability (or any expenses incident to such
liability) caused by PFPC's or its affiliates' own willful misfeasance, bad
faith, negligence or reckless disregard in the performance of PFPC's
activities under this Agreement, provided that in the absence of a finding by
a court or regulatory agency to the contrary the acceptance, processing
and/or negotiation of a fraudulent payment for the purchase of Shares shall
be presumed not to have been the result of PFPC's or its affiliates own
willful misfeasance, bad faith, negligence or reckless disregard of such
duties and obligations under this Agreement. The provisions of this Section
13 shall survive termination of this Agreement.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action hereunder on behalf of the
Fund except as specifically set forth herein or as may be specifically
agreed to by PFPC and the Fund in a written amendment hereto. PFPC shall be
obligated to exercise care and diligence in the performance of its duties
hereunder and to act in good faith in performing services provided for
under this Agreement. PFPC shall be liable only for any damages arising out
of PFPC's failure to perform its duties under this Agreement to the extent
such
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damages arise out of PFPC's willful misfeasance, bad faith, negligence or
reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC shall
not be liable for losses, delays, failure, errors, interruption or loss of
data occurring directly or indirectly by reason of circumstances beyond its
reasonable control, including without limitation acts of God; action or
inaction of civil or military authority; public enemy; war; terrorism;
riot; fire; flood; sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party selected with reasonable care by PFPC; and
(ii) PFPC shall not be under any duty or obligation to inquire into and
shall not be liable for the validity or invalidity, authority or lack
thereof, or truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PFPC reasonably
believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, (i) neither
PFPC nor its affiliates shall be liable for any consequential, special or
indirect losses or damages, whether or not the likelihood of such losses or
damages was known by PFPC or its affiliates and (ii) PFPC's cumulative
liability to the Fund for all losses, claims, suits, controversies,
breaches or damages for any cause whatsoever (including but not limited to
those arising out of or related to this Agreement) and regardless of the
form of action or legal theory shall not exceed the two (2) times the fees
received by PFPC for services provided hereunder during the 12 months
immediately prior to the date of such loss or damage.
(d) No party may assert a cause of action against PFPC or any of its affiliates
that allegedly
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occurred more than 12 months immediately prior to the filing of the suit
(or, if applicable, commencement of arbitration proceedings) alleging such
cause of action.
(e) Each party shall have a duty to mitigate damages for which the other party
may become responsible.
(f) The provisions of this Section 14 shall survive termination of this
Agreement.
15. DESCRIPTION OF SERVICES. The services provided by PFPC shall include the
following:
(a) SERVICES PROVIDED ON AN ONGOING BASIS, IF APPLICABLE. PFPC shall provide
the following services:
(i) Calculate 12b-1 payments;
(ii) Maintain shareholder registrations;
(iii) Review new applications and correspond with shareholders to complete
or correct information;
(iv) Direct payment processing of checks or wires;
(v) Prepare and certify stockholder lists in conjunction with proxy
solicitations;
(vi) Prepare and mail to shareholders confirmation of activity;
(vii) Mail duplicate confirmations upon the request of Shareholders;
(viii) Provide periodic shareholder lists and statistics to the Fund;
(ix) Provide detailed data for underwriter/broker confirmations;
(x) Prepare periodic mailing of year-end tax and statement information;
(xi) Notify on a timely basis the investment adviser, accounting agent, and
custodian of fund activity;
(xii) Perform other participating broker-dealer shareholder services as may
be agreed upon from time to time;
(xiii) Accept and post daily Share purchases and redemptions;
(xiv) Accept, post and perform shareholder transfers and exchanges; and
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(xv) Issue and cancel certificates (when requested in writing by the
shareholder).
(b) SERVICES PROVIDED BY PFPC UNDER ORAL INSTRUCTIONS OR WRITTEN INSTRUCTIONS.
PFPC shall provide the following services upon receipt of Oral or Written
Instructions:
(i) Pay dividends and other distributions.
(c) PURCHASE OF SHARES. PFPC shall issue and credit an account of an investor,
in the manner described in the Fund's prospectus, once it receives:
(i) A purchase order in completed proper form;
(ii) Proper information to establish a shareholder account; and
(iii) Confirmation of receipt or crediting of funds for such order to the
Fund's custodian.
(d) REDEMPTION OF SHARES. Shares shall be redeemed and payment therefor shall
be made in accordance with the Fund's prospectus and SAI, when the
recordholder tenders Shares in proper form and directs the method of
redemption. If Shares are received in proper form, Shares shall be redeemed
before the funds are provided to PFPC from the Fund's custodian (the
"Custodian"). If the recordholder has not directed that redemption proceeds
be wired, when the Custodian provides PFPC with funds, the redemption check
shall be sent to and made payable to the recordholder, unless:
(i) the surrendered certificate is drawn to the order of an assignee or
holder and transfer authorization is signed by the recordholder; or
(ii) transfer authorizations are signed by the recordholder when Shares are
held in book-entry form.
When a broker-dealer notifies PFPC of a redemption desired by a customer,
and the Custodian provides PFPC with funds, PFPC shall prepare and send the
redemption check to the broker-dealer and made payable to the broker-dealer
on behalf of its customer.
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(e) DIVIDENDS AND DISTRIBUTIONS. Upon written instruction of the Fund
authorizing the declaration and payment of dividends and distributions,
PFPC shall issue dividends and distributions declared by the Fund in
Shares, or, upon shareholder election, pay such dividends and distributions
in cash, if provided for in the Fund's prospectus. Such issuance or
payment, as well as payments upon redemption as described above, shall be
made after deduction and payment of the required amount of funds to be
withheld in accordance with any applicable tax laws or other laws, rules or
regulations. PFPC shall mail to the Fund's shareholders such tax forms and
other information, or permissible substitute notice, relating to dividends
and distributions paid by the Fund as are required to be filed and mailed
by applicable law, rule or regulation. PFPC shall prepare, maintain and
file with the IRS and/or the applicable state and other appropriate taxing
authorities reports relating to all dividends above a stipulated amount
paid by the Fund to its shareholders as required by tax or other law, rule
or regulation.
(f) SHAREHOLDER ACCOUNT SERVICES.
(i) PFPC may arrange, in accordance with the prospectus, for issuance of
Shares obtained through:
- Any pre-authorized check plan; and
- Direct purchases through broker wire orders, checks and
applications.
(ii) PFPC may arrange, in accordance with the prospectus, for a
shareholder's:
- Exchange of Shares for shares of another fund with which the Fund
has exchange privileges;
- Automatic redemption from an account where that shareholder
participates in a automatic redemption plan; and/or
- Redemption of Shares from an account with a checkwriting
privilege.
(iii) PFPC agrees to maintain such internal controls and procedures as PFPC
deems necessary to ensure transactions received by PFPC are properly
handled with respect to the Fund trade cut-off times as set forth in
the Fund's prospectus and
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SAI, or as otherwise agreed to between PFPC and the Fund or as
otherwise handled in accordance with industry practice.
(g) COMMUNICATIONS TO SHAREHOLDERS. PFPC shall mail all communications by the
Fund to its shareholders, including:
(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of Fund shares;
(iii) Monthly or quarterly statements;
(iv) Dividend and distribution notices; and
(v) Tax form information.
(h) RECORDS. PFPC shall maintain records of the accounts for each shareholder
showing the following information:
(i) Name, address and United States Tax Identification or Social Security
number;
(ii) Number and class of Shares held and number and class of Shares for
which certificates, if any, have been issued, including certificate
numbers and denominations;
(iii) Historical information regarding the account of each shareholder,
including dividends and distributions paid and the date and price for
all transactions on a shareholder's account;
(iv) Any stop or restraining order placed against a shareholder's account;
(v) Any correspondence relating to the current maintenance of a
shareholder's account;
(vi) Information with respect to withholdings; and
(vii) Any information required in order for PFPC to perform any calculations
required by this Agreement.
(i) LOST OR STOLEN CERTIFICATES. PFPC shall place a stop notice against any
certificate reported to be lost or stolen and comply with all applicable
federal regulatory requirements for
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reporting such loss or alleged misappropriation. A new certificate shall be
registered and issued only upon:
(i) The shareholder's pledge of a lost instrument bond or such other
appropriate indemnity bond issued by a surety company approved by
PFPC; and
(ii) Completion of a release and indemnification agreement signed by the
shareholder to protect PFPC and its affiliates.
(j) SHAREHOLDER INSPECTION OF STOCK RECORDS. Upon a request from any Fund
shareholder to inspect stock records, PFPC will notify the Fund and the
Fund will issue instructions granting or denying each such request. Unless
PFPC has acted contrary to the Fund's instructions, the Fund agrees to and
does hereby release PFPC from any liability for refusal of permission for a
particular shareholder to inspect the Fund's stock records.
(k) WITHDRAWAL OF SHARES AND CANCELLATION OF CERTIFICATES. Upon receipt of
Written Instructions, PFPC shall cancel outstanding certificates
surrendered by the Fund to reduce the total amount of outstanding shares by
the number of shares surrendered by the Fund.
(l) LOST SHAREHOLDERS. PFPC shall perform such services as are required in
order to comply with Rules 17a-24 and 17Ad-17 of the 1934 Act (the "Lost
Shareholder Rules"), including, but not limited to, those set forth below.
PFPC may, in its sole discretion, use the services of a third party to
perform some of or all such services.
(i) documentation of search policies and procedures;
(ii) execution of required searches;
(iii) tracking results and maintaining data sufficient to comply with the
Lost Shareholder Rules; and
(iv) preparation and submission of data required under the Lost Shareholder
Rules.
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Except as set forth above, PFPC shall have no responsibility for any
escheatment services.
(m) RETIREMENT PLANS.
(i) In connection with the individual retirement accounts, simplified
employee pension plans, rollover individual retirement plans,
educational IRA's and XXXX individual retirement accounts ("XXX
Plans"), 403(b) Plans and money purchase and profit sharing plans
("Qualified Plans") (collectively, the "Retirement Plans") within the
meaning of Section 408 of the Internal Revenue Code of 1986, as
amended (the "Code") sponsored by the Fund for which contributions of
the Fund's shareholders (the "Participants") are invested solely in
Shares of the Fund, PFPC shall provide the following administrative
services:
(A) Establish a record of types and reasons for distributions (i.e.,
attainment of age 59-1/2, disability, death, return of excess
contributions, etc.);
(B) Record method of distribution requested and/or made;
(C) Receive and process designation of beneficiary forms requests;
(D) Examine and process requests for direct transfers between
Custodians/Trustees, transfer and pay over to the successor
assets in the account and records pertaining thereto as
requested;
(E) Prepare any annual reports or returns required to be prepared
and/or filed by a custodian of a Retirement Plan, including, but
not limited to, an annual fair market value report, Forms 1099R
and 5498; and file same with the IRS and provide same to
Participant/Beneficiary, as applicable; and
(F) Perform applicable federal withholding and send
Participants/Beneficiaries an annual TEFRA notice regarding
required federal tax withholding.
(ii) PFPC shall take the necessary steps for PFPC Trust Company to serve as
custodian for the Retirement Plans sponsored by the Fund.
(iii) With respect to the Retirement Plans, PFPC shall provide the Fund
with the associated Retirement Plan documents for use by the Fund and
PFPC shall be responsible for the maintenance of such documents in
compliance with all applicable provisions of the Code and the
regulations promulgated thereunder.
(n) PRINT MAIL. The Fund hereby engages PFPC as its primary print/mail and
electronic
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presentment service provider with respect to those items and for such fees
as may be agreed to from time to time in writing by the Fund and PFPC.
(o) IMPRESSNET(R) SERVICES. PFPC shall provide to the Fund the internet access
services as set forth on Exhibit B attached hereto and made a part hereof,
as such Exhibit B may be amended from time to time.
(p) IMPRESS(R) SERVICES. In addition to the services set forth in this
Agreement, PFPC hereby grants to the Fund a license to PFPC's proprietary
IMPRESS(R) software under the terms set forth on Exhibit C - IMPRESS(R)
Software Terms, attached hereto and made part hereof, as such Exhibit C may
be amended from time to time.
(q) PFPC agrees to provide the services described herein in accordance with the
performance standards set forth on Exhibit E - Performance Standards,
attached hereto and made part hereof, as such Exhibit E may be amended from
time to time.
(r) The parties agree to follow the policy and guidelines for the treatment of
financial gains and losses resulting from "as-of" shareholder transactions
set forth on Exhibit F - Gain/Loss Policy, attached hereto and made part
hereof, as such Exhibit F may be amended from time to time.
16. PRIVACY.
(a) Each party hereto acknowledges and agrees that, subject to the reuse and
re-disclosure provisions of Xxxxxxxxxx X-X, 00 XXX Part 248.11, it shall
not disclose the non-public personal information of investors ("Personal
Information") in the Fund obtained under this Agreement, except as
necessary to carry out the services set forth in this Agreement.
(b) PFPC shall inform the Fund promptly if Personal Information is disclosed
other than to a Qualified Recipient, as defined below, or if PFPC discovers
facts which indicate such
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disclosure is likely to have occurred, together with details on the nature
and extent of the disclosure. If detailed information is not immediately
available, PFPC shall work diligently to obtain complete details and shall
supply the Fund with information as it becomes available. Except as
required by law, PFPC shall not identify the Fund or any of its customers
or employees as having been affected by the disclosure in communication to
any other party concerning the disclosure. "Qualified Recipient" means (i)
PFPC's employees, agents and contractors that require Personal Information
for PFPC to perform the services set forth herein and that are bound by
restrictions to use the Personal Information only in connection with such
services ; and (ii) a third party requesting such information pursuant to a
court order, subpoena, governmental or regulatory agency or law (provided
PFPC will provide the Fund written notice of such requirement, to the
extent such notice is permitted).
17. ANTI-MONEY LAUNDERING. To the extent the other provisions of this Agreement
require PFPC to establish, maintain and monitor accounts of investors in the
Fund consistent with securities laws, PFPC shall perform reasonable actions
necessary to help the Fund be in compliance with Section 352 of the USA PATRIOT
Act, as follows: In this regard, PFPC shall: (a) establish and implement written
internal policies, procedures and controls reasonably designed to help prevent
the Fund from being used to launder money or finance terrorist activities; (b)
provide for independent testing, by an employee who is not responsible for the
operation of PFPC's AML program or by an outside party, for compliance with
PFPC's established policies and procedures; (c) designate a person or persons
responsible for implementing and monitoring the operation and internal controls
of PFPC's AML program; and (d) provide ongoing training of PFPC personnel
relating to the prevention of money-laundering
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activities. Upon the reasonable request of the Fund, PFPC shall provide to the
Fund: (x) a copy of PFPC's written AML policies and procedures (it being
understood such information is to be considered confidential and treated as such
and afforded all protections provided to confidential information under this
Agreement); (y) at the option of PFPC, a copy of a written assessment or report
prepared by the party performing the independent testing for compliance, or a
summary thereof, or a certification that the findings of the independent party
that the AML policies and procedures are satisfactory; and (z) a summary of the
AML training provided for appropriate personnel. PFPC agrees to permit
inspections relating to its AML program by U.S. Federal departments or
regulatory agencies with appropriate jurisdiction and to make available to
examiners from such departments or regulatory agencies such information and
records relating to its AML program as such examiners shall reasonably request.
Without limiting or expanding the foregoing, the parties agree the provisions
herein do not apply to Section 326 of the USA PATRIOT Act (or other sections
other than Section 352) or regulations promulgated thereunder.
18. CIP SERVICES.
(a) To help the Fund comply with its Customer Identification Program (which the
Fund is required to have under regulations issued under Section 326 of the
USA PATRIOT Act) PFPC will do the following:
(i) Implement procedures under which new accounts in the Fund are not
established unless PFPC has obtained the name, date of birth (for
natural persons only), address and government-issued identification
number (collectively, the "Data Elements") for each corresponding
Customer (as defined in 31 CFR 103.131).
(ii) Use collected Data Elements to attempt to reasonably verify the
identity of each new Customer promptly before or after each
corresponding new account is opened. Methods may consist of
non-documentary methods (for which PFPC may use unaffiliated
information vendors to assist with such verifications) and documentary
methods (as permitted by 31 CFR 103.131), and may include procedures
under which PFPC personnel perform enhanced due diligence to verify
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the identities of Customers the identities of whom were not
successfully verified through the first-level (which will typically be
reliance on results obtained from an information vendor) verification
process(es).
(iii) Record the Data Elements and maintain records relating to
verification of new Customers consistent with 31 CFR 103.131(b)(3).
(iv) (iv) Regularly report to the Fund about measures taken under
(i)-(iii) above.
(v) If PFPC provides services by which prospective Customers may subscribe
for shares in the Fund via the Internet or telephone, work with the
Fund to notify prospective Customers, consistent with 31 CFR
103.(b)(5), about the Fund's CIP.
(vi) Set forth on a separate fee schedule compensation amounts due for
these CIP Services as agreed to from time to time by the Fund and
PFPC.
(b) Notwithstanding anything to the contrary, and without expanding the scope
of the express language above, PFPC need not collect the Data Elements for
(or verify) prospective customer (or accounts) beyond the requirements of
relevant regulation (for example, PFPC will not verify customers opening
accounts through NSCC) and PFPC need not perform any task that need not be
performed for the fund to be in compliance with relevant regulation.
(c) Notwithstanding anything to the contrary, PFPC need not perform any of the
steps described above with respect to persons purchasing Shares via
exchange privileges.
19. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written above and
unless otherwise terminated pursuant to its terms shall continue for a
period of four (4) years from date of conversion (the "Initial Term").
(b) Upon the expiration of the Initial Term, this Agreement shall automatically
renew for successive terms of one (1) years ("Renewal Terms") each, unless
the Fund or PFPC provides written notice to the other of its intent not to
renew. Such notice must be
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received not less than one-hundred twenty (120) days prior to the
expiration of the Initial Term or the then current Renewal Term. PFPC shall
provide the Fund with written notice of the expiration of the Initial Term
at least one-hundred eighty (180) days prior to such expiration.
(c) In the event a termination notice is given by the Fund, all expenses
associated with movement of records and materials and conversion thereof to
a successor transfer agent will be borne by the Fund.
(d) If a party hereto is guilty of a material failure to perform its duties and
obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting
Party, and if such material breach shall not have been remedied within
thirty (30) days after such written notice is given, then the
Non-Defaulting Party may terminate this Agreement by giving thirty (30)
days written notice of such termination to the Defaulting Party. In all
cases, termination by the Non-Defaulting Party shall not constitute a
waiver by the Non-Defaulting Party of any other rights it might have under
this Agreement or otherwise against the Defaulting Party.
(e) Notwithstanding anything contained in this Agreement to the contrary,
should a merger, acquisition, change in control, re-structuring,
re-organization or any other decision involving the Fund or any affiliate
(as defined under the 0000 Xxx) of the Fund result in the Fund's desire to
cease to use PFPC as the provider of any of the services set forth
hereunder in favor of another service provider prior to the expiration of
the then current Initial or Renewal Term, PFPC shall make a good faith
effort to facilitate a conversion of services to the Fund's successor
service provider; however, there can be no guarantee that PFPC will be able
to facilitate such a conversion of services on the conversion date
19
requested by the Fund. In connection with the foregoing and prior to such
conversion to the successor service provider, the payment of all fees to
PFPC as set forth herein shall be accelerated to a date prior to the
conversion or termination of services and calculated as if the services had
remained with PFPC 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 PFPC.
(f) In the event PFPC has failed to meet a specific performance standard
category, as set forth in Exhibit E, in four of any rolling six one-month
periods, the Fund may give written notice thereof to PFPC, and if such
failure shall not have been remedied within thirty (30) days after such
written notice is received, then the Fund may terminate this Agreement
without penalty by giving thirty (30) days written notice of such
termination to PFPC. In addition, for purposes of the Fund's option to
terminate this Agreement under this Section 19(f), PFPC's obligation to
meet the Performance Standards shall (i) be measured in the aggregate with
respect to all of the "Atlas" affiliated mutual funds for which PFPC
provides transfer agency services; and (ii) shall not become effective
until ninety (90) days after the commencement of the services by PFPC
hereunder. Unless the Fund provides PFPC with notice of the Fund's intent
to exercise this option within sixty (60) days of any six-month period ,
the Fund shall be deemed to have waived its option to terminate under this
provision with respect to such period.
20. NOTICES. Notices with respect to this Agreement shall be addressed (a) if
to PFPC, at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
President; (b) if to the Fund, at 000 Xxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000,
Attention: Xxxxx Xxx ; or (c) if to neither of the foregoing, at such other
address as shall have been given by like notice to the sender of any such notice
or
20
other communication by the other party. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed to have
been given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given three days after it has been mailed. If notice is sent
by messenger, it shall be deemed to have been given on the day it is delivered.
21. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by a written amendment, signed by the party against whom enforcement of
such change or waiver is sought.
22. DELEGATION; ASSIGNMENT. PFPC may assign its rights and delegate its duties
hereunder to any majority-owned direct or indirect subsidiary of PFPC or of The
PNC Financial Services Group, Inc., provided that PFPC gives the Fund 30 days
prior written notice of such assignment or delegation and the Fund consents to
such assignment which consent shall not be unreasonably withheld or delayed.
23. COUNTERPARTS. 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.
24. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
25. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the
parties may embody in one or more separate documents executed by both
parties their agreement, if any, with respect to delegated duties.
21
(b) NO CHANGES THAT MATERIALLY AFFECT OBLIGATIONS. Notwithstanding anything in
this Agreement to the contrary, the Fund may make any modifications to its
registration statement, or adopt policies that materially affect the
obligations or responsibilities of PFPC hereunder. At the same time, but
prior to the effective date of any such changes, the parties agree, in good
faith, to modify PFPC's compensation consistent therewith.
(c) CAPTIONS. 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.
(d) GOVERNING LAW. This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law, without regard to principles of
conflicts of law.
(e) PARTIAL INVALIDITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
(g) NO REPRESENTATIONS OR WARRANTIES. Except as expressly provided in this
Agreement, PFPC hereby disclaims all representations and warranties,
express or implied, made to the Fund or any other person, including,
without limitation, any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of trade), of any
services or any goods provided incidental to services provided under this
Agreement. PFPC disclaims any warranty of title or non-infringement except
as otherwise set forth in this Agreement.
(h) FACSIMILE SIGNATURES. The facsimile signature of any party to this
Agreement shall
22
constitute the valid and binding execution hereof by such party.
(i) Neither PFPC nor the Fund shall release or publish news releases, public
announcements, advertising or other publicity relating to this Agreement or
to the transactions contemplated by it without the prior review and written
approval of the other party; provided, however, that either party may make
such disclosures as are required by legal, accounting or regulatory
requirements after making reasonable efforts in the circumstances to
consult in advance with the other party. Notwithstanding the foregoing,
PFPC may use the Fund's name in lists of PFPC's clients until directed by
the Fund to discontinue such use.
(j) CUSTOMER IDENTIFICATION PROGRAM NOTICE. To help the U.S. government fight
the funding of terrorism and money laundering activities, U.S. Federal law
requires each financial institution to obtain, verify, and record certain
information that identifies each person who initially opens an account with
that financial institution on or after October 1, 2003. Certain of PFPC's
affiliates are financial institutions, and PFPC may, as a matter of policy,
request (or may have already requested) the Fund's name, address and
taxpayer identification number or other government-issued identification
number, and, if such party is a natural person, that party's date of birth.
PFPC may also ask (and may have already asked) for additional identifying
information, and PFPC may take steps (and may have already taken steps) to
verify the authenticity and accuracy of these data elements.
[Signature Pages Follow]
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By: [ILLEGIBLE]
------------------------------
Title:____________________________
ATLAS INSURANCE TRUST
By: [ILLEGIBLE]
------------------------------
Title:____________________________
24
EXHIBIT A
THIS EXHIBIT A, dated as of November 25, 2003, is Exhibit A to that certain
Transfer Agency Services Agreement dated as of November 25, 2003, between PFPC
Inc. and Atlas Insurance Trust
PORTFOLIOS
Atlas Balanced Growth Portfolio
25
EXHIBIT B
IMPRESSNet(R) SERVICES
1. DEFINITIONS. Any term not herein defined shall have the meaning given such
term in the Agreement. The following definitions shall apply to this Exhibit:
(a) "End-User" shall mean any Shareholder that accesses the PFPC System via
IMPRESSNet(R).
(b) "Fund Web Site" means the collection of electronic documents,
electronic files and pages residing on any computer system(s) maintained on
behalf of the Fund, connected to the Internet and accessible by hypertext link
through the World Wide Web to and from IMPRESSNet(R).
(c) "IMPRESSNet(R) Services" means the services identified in Section 2
hereof to be provided by PFPC utilizing the Fund Web Site, the Internet and
certain software, equipment and systems provided by PFPC, telecommunications
carriers and security providers which have been certified by ICSA or a
nationally-recognized audit firm (including but not limited to firewalls and
encryption), whereby Inquires may be performed and Transactions may be requested
by accessing IMPRESSNet(R) via hypertext link from the Fund Web Site.
(d) "Inquiry" shall mean any access to the PFPC System via IMPRESSNet(R)
initiated by an End-User which is not a Transaction.
(e) "Internet" shall mean the communications network comprised of multiple
communications networks linking education, government, industrial and private
computer networks.
(f) "IMPRESSNet(R)" means the collection of electronic documents,
electronic files and pages residing on PFPC's computer system(s) (or those
elements of the computer system of one or more Internet Service Providers
("ISPs") retained by PFPC and necessary for PFPC's services hereunder),
connected to the Internet and accessible by hypertext link from the Fund Web
Site through the World Wide Web, where the Inquiry and Transaction data
fields and related screens provided by PFPC may be viewed.
(g) "Shareholder" means the record owner or authorized agent of the record
owner of shares of the Fund.
(h) "Transaction" shall mean purchase, redemption, exchange or any other
activity involving the movement of Shares initiated by an End-User.
2. PFPC RESPONSIBILITIES. Subject to the provisions of this Exhibit, PFPC
shall provide or perform, or shall retain other persons to provide or perform,
the following, at PFPC's expense (unless otherwise provided herein):
26
(a) provide all computers, telecommunications equipment, encryption
technology and other materials and services reasonably necessary to develop
and maintain IMPRESSNet(R) to permit persons to be able to view information
about the Fund and to permit End-Users with appropriate identification and
access codes to perform Inquiries and initiate Transactions;
(b) address and mail, at the Fund's expense, notification and promotional
mailings and other communications provided by the Fund to Shareholders regarding
the availability of IMPRESSNet(R) Services;
(c) prepare and process new account applications received through
IMPRESSNet(R) from Shareholders determined by the Fund to be eligible for such
services and in connection with such, the Fund agrees as follows:
(i) to permit the establishment of Shareholder bank account
information over the Internet in order to facilitate purchase
activity through the Automated Clearing House;
(ii) the ACH prenote process will be waived and the ACH status will be
set to active;
(iii) the Fund shall be responsible for any resulting gain/loss
liability associated with the ACH process;
(iv) the maximum permitted initial purchase amount shall be
$50,000.00;
(d) process the set up of personal identification numbers ("PIN"), as
described in the IMPRESSNet(R) Product Guide provided to the Fund, which shall
include verification of initial identification numbers issued and activation of
personalized PIN's. The Fund shall be responsible for resetting PIN's and
reissuing new PIN's in connection with lost PIN's;
(e) provide installation services which shall include review and approval
of the Fund's network requirements, recommending a method of establishing (and,
as applicable, cooperation with the Fund to implement and maintain) a hypertext
link between IMPRESSNet(R) and the Fund Web Site and testing of the network
connectivity and performance;
(f) establish systems to guide, assist and permit End-Users who access
IMPRESSNet(R) from the Fund Web Site to electronically perform Inquires and
create and transmit Transaction requests to PFPC;
(f) deliver to the Fund one (1) copy of the PFPC IMPRESSNet(R) Product
Guide, as well as all updates thereto on a timely basis;
(g) deliver a monthly billing report to the Fund, which shall include a
report of Inquiries and Transactions;
(h) provide a form of encryption that is generally available to the public
in the U.S. for standard Internet browsers and establish, monitor and verify
firewalls and other security
27
features (commercially reasonable for this type of information and data) and
exercise commercially reasonable efforts to attempt to maintain the security and
integrity of the PFPC Web Site;
(i) maintain all on-screen disclaimers and copyright, trademark and service
xxxx notifications, if any, provided by the Fund to PFPC in writing from time to
time, and all "point and click" features of the PFPC Web Site relating to
Shareholder acknowledgment and acceptance of such disclaimers and notifications;
(j) provide periodic site visitation (hit reports) and other information
regarding End-User activity under this Agreement as agreed by PFPC and the Fund
from time to time;
(k) monitor the telephone lines involved in providing IMPRESSNet(R)
Services and inform the Fund promptly of any malfunctions or service
interruptions;
(l) periodically scan PFPC's Internet interfaces and IMPRESSNet(R) for
viruses and promptly remove any such viruses located thereon;
(m) maintain and support IMPRESSNet(R), which includes providing error
corrections, minor enhancements and interim upgrades to IMPRESSNet(R) which
are made generally available to IMPRESSNet(R) customers and provide help desk
support to provide assistance to Fund employees with the Fund's use of
IMPRESSNet(R). Maintenance and support shall NOT include (i) access to or use
of any substantial added functionality, new interfaces, new architecture, new
platforms, new versions or major development efforts, unless made generally
available by PFPC to IMPRESSNet(R) clients, as determined solely by PFPC; or
(ii) maintenance of customized features.
The Fund recognizes and acknowledges that (i) a logon I.D. and PIN are
required by End-Users to access PFPC's IMPRESSNet(R); (ii) to access
IMPRESSNet(R), an End-User's Web Browser and ISP must support Secure Sockets
Layer (SSL) encryption technology; and (iii) PFPC will not provide any
software for access to the Internet, and such software must be acquired from
a third-party vendor.
3. FUND RESPONSIBILITIES. Subject to the provisions of this Exhibit and the
Agreement, the Fund shall at its expense (unless otherwise provided herein):
(a) provide, or retain other persons to provide, all computers,
telecommunications equipment, encryption technology and other materials,
services, equipment and software reasonably necessary to develop and maintain
the Fund Web Site, including the functionality necessary to maintain the
hypertext links to IMPRESSNet(R);
(b) promptly provide PFPC written notice of changes in Fund policies or
procedures requiring changes to the IMPRESSNet(R) Services;
(c) work with PFPC to develop Internet marketing materials for End-Users
and forward a copy of appropriate marketing materials to PFPC;
28
(d) revise and update the applicable prospectus(es) and other pertinent
materials, such as user agreements with End-Users, to include the appropriate
consents, notices and disclosures for IMPRESSNet(R) Services, including
disclaimers and information reasonably requested by PFPC;
(e) maintain all on-screen disclaimers and copyright, trademark and service
xxxx notifications, if any, provided by PFPC to the Fund in writing from time to
time, and all "point and click" features of the Fund Web Site relating to
acknowledgment and acceptance of such disclaimers and notifications; and
(f) design and develop the Fund Web Site functionality necessary to
facilitate, implement and maintain the hypertext links to IMPRESSNet(R) and the
various Inquiry and Transaction web pages and otherwise make the Fund Web Site
available to End-Users.
4. STANDARDS OF CARE FOR INTERNET SERVICES. Notwithstanding anything to the
contrary contained in the Agreement or this Exhibit, although PFPC shall comply
with the standard of care specified in the Agreement and above in providing
IMPRESSNet(R) Services, PFPC shall not be obligated to ensure or verify the
accuracy or actual receipt, or the transmission, of any data or information
contained in any transmission via IMPRESSNet(R) Services or the consummation of
any Inquiry or Transaction request not actually received by PFPC. The Fund shall
advise End-Users to promptly notify the Fund or PFPC of any errors or
inaccuracies in Shareholder data or information transmitted via IMPRESSNet(R)
Services.
5. PROPRIETARY RIGHTS.
(a) Each of the parties acknowledges and agrees that it obtains no rights
in or to any of the software, hardware, processes, trade secrets, proprietary
information or distribution and communication networks of the other under this
Agreement. Any software, interfaces or other programs a party provides to the
other hereunder shall be used by such receiving party only during the term of
the Agreement and only in accordance with the provisions of this Agreement. Any
interfaces, other software or other programs developed by one party shall not be
used directly or indirectly by or for the other party or any of its affiliates
to connect such receiving party or any affiliate to any other person, without
the first party's prior written approval, which it may give or withhold in its
sole discretion. Except in the normal course of business and in conformity with
Federal copyright law or with the other party's consent, neither party nor any
of its affiliates shall disclose, use, copy, decompile or reverse engineer any
software or other programs provided to such party by the other in connection
herewith.
(b) The Fund Web Site and IMPRESSNet(R) may contain certain intellectual
property, including, but not limited to, rights in copyrighted works, trademarks
and trade dress that is the property of the other party. Each party retains all
rights in such intellectual property that may reside on the other party's web
site, not including any intellectual property provided by or otherwise obtained
from such other party. To the extent the intellectual property of one party is
cached to expedite communication, such party grants to the other a limited,
non-exclusive, non-transferable license to such intellectual property for a
period of time no longer than that reasonably necessary for the communication.
To the extent that the intellectual property of one party is duplicated within
the other party's web site to replicate the "look and feel", "trade dress" or
other aspect of the appearance or functionality of the first site, that party
grants to the other a limited, non-exclusive, non-
29
transferable license to such intellectual property for the duration of the
Agreement. This license is limited to the intellectual property needed to
replicate the appearance of the first site and does not extend to any other
intellectual property owned by the owner of the first site. Each party warrants
that it has sufficient right, title and interest in and to its web site and its
intellectual property to enter into these obligations, and that to its
knowledge, the license hereby granted to the other party does not and will not
infringe on any U.S. patent, U.S. copyright or other U.S. proprietary right of a
third party.
7. REPRESENTATION AND WARRANTY. Neither party shall knowingly insert into any
interface, other software, or other program provided by such party to the other
hereunder, or accessible on IMPRESSNet(R) or Fund Web Site, as the case may be,
any "back door," "time bomb," "Trojan Horse," "worm," "drop dead device,"
"virus" or other computer software code or routines or hardware components
designed to disable, damage or impair the operation of any system, program or
operation hereunder. For failure to comply with this warranty, the non-complying
party shall immediately replace all copies of the affected work product, system
or software. All costs incurred with replacement including, but not limited to
cost of media, shipping, deliveries and installation shall be borne by such
party.
8. LIABILITY LIMITATIONS.
(a) THE INTERNET. Each party acknowledges that the Internet is an
unsecured, unstable, unregulated, unorganized and unreliable network, and that
the ability of the other party to provide or perform services or duties
hereunder is dependent upon the Internet and equipment, software, systems, data
and services provided by various telecommunications carriers, equipment
manufacturers, firewall providers, encryption system developers and other
vendors and third parties. Each party agrees that the other shall not be liable
in any respect for the functions or malfunctions of the Internet. Each party
agrees the other shall not be liable in any respect for the actions or omissions
of any third party wrongdoers (e.g., hackers not employed by such party or its
affiliates) or of any third parties involved in the Internet and shall not be
liable in any respect for the selection of any such third party, unless such
party breached the standard of care specified herein.
(b) PFPC'S EXPLICIT DISCLAIMER OF CERTAIN WARRANTIES. EXCEPT AS
SPECIFICALLY PROVIDED IN SECTIONS 2 AND 4, ALL SOFTWARE AND SYSTEMS DESCRIBED IN
THIS EXHIBIT ARE PROVIDED "AS-IS" ON AN "AS-AVAILABLE" BASIS, AND PFPC HEREBY
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR
COURSE OF PERFORMANCE.
30
9. MISCELLANEOUS.
(a) INDEPENDENT CONTRACTOR. The parties to this Agreement are and shall
remain independent contractors, and nothing herein shall be construed to create
a partnership or joint venture between them and none of them shall have the
power or authority to bind or obligate the other in any manner not expressly set
forth herein. Any contributions to IMPRESSNet(R) by the Fund and any
contributions to the Fund Web Site by PFPC shall be works for hire pursuant
to Section 101 of the Copyright Act.
(b) CONFLICT WITH AGREEMENT. In the event of a conflict between specific
terms of this Exhibit and the Agreement, this Exhibit shall control as to
IMPRESSNet(R) Services.
31
EXHIBIT C
IMPRESS(R) LICENSE
ARTICLE 1 - SYSTEM, SUPPORT AND IMPLEMENTATION
1.1 SOFTWARE AND SUPPORT. PFPC shall provide or has previously provided to the
Fund and the Fund shall acquire from PFPC the right to use the computer software
programs ("SOFTWARE") set forth in Schedule 1 of this Exhibit C ("SCHEDULE 1").
Software includes related user manuals and reference guides (collectively,
"DOCUMENTATION"). One copy of the Documentation shall be provided to the Fund at
no additional cost. PFPC shall provide only the machine readable object version
of the Software and not source code. Additional terms and conditions concerning
the Software are set forth in Schedules 1 and 1.A of this Exhibit C ("SOFTWARE
SCHEDULES"). Subject to the Agreement terms and conditions, PFPC grants to the
Fund and the Fund accepts from PFPC the non-exclusive, non-transferable license
to use the Software during the term of the Agreement ("LICENSE"). Some software
components ("THIRD PARTY SOFTWARE") required to be used with the Software were
developed by a third party ("THIRD PARTY VENDOR"). Schedule 1 shall indicate
which Third Party Software the Fund is licensing from PFPC pursuant to this
Agreement ("PFPC PROVIDED THIRD PARTY SOFTWARE") and which Third Party Software
the Fund is required to obtain directly from Third Party Vendors ("DIRECTLY
OBTAINED THIRD PARTY SOFTWARE"). Directly Obtained Third Party Software is
licensed to Fund only pursuant to shrink wrapped or other agreements between the
Third Party Vendor and the Fund. PFPC Provided Third Party Software is licensed
to the Fund pursuant to the terms and conditions set forth in this Agreement. As
part of the Software, PFPC shall provide the Fund with the interfaces set forth
in Schedule 1, between the Software and Third Party Software ("INTERFACES").
PFPC shall provide the software support services ("SOFTWARE SUPPORT") so
designated in Schedule 2 of this Exhibit C ("SCHEDULE 2"). Software Support
shall include a License to error corrections, minor enhancements and interim
upgrades to the Software which are made generally available to PFPC clients of
the Software under Software Support, but shall not include a License to
substantial added functionality, new interfaces, new architecture, new platforms
or other major software development efforts, as determined solely by PFPC.
1.2 OWNERSHIP. PFPC or its licensors shall retain title to and ownership of the
Software, copies, derivative works, inventions, discoveries, patentable or
copyrightable matter, concepts, expertise, techniques, patents, copyrights,
trade secrets and other related legal rights ("PROPRIETARY INFORMATION" ). PFPC
reserves all rights in the Proprietary Information not expressly granted to the
Fund in the Agreement. Upon PFPC's request, the Fund shall inform PFPC in
writing of the quantity and location of any Software.
1.3 EQUIPMENT, SYSTEM IMPLEMENTATION AND ACCESS. The Fund is responsible for
acquiring, installing and maintaining the data processing and related equipment
necessary to properly operate the Software. PFPC and Fund shall (a) within a
reasonable time after the Effective Date, agree upon the tasks required to
implement the Software, Third Party Software and Equipment ("SYSTEM") and the
party responsible and time frames for each task; (b) perform their respective
assigned tasks; and (c) if not the party assigned to a task, cooperate with the
responsible party. The Fund shall give reasonable and safe access to the System
to PFPC, PFPC's employees, affiliates, representatives, agents, contractors,
licensors and suppliers ("PFPC'S AGENTS") who are providing services under the
Agreement or auditing adherence to the Agreement.
1.4 USE OF SOFTWARE. The Fund may use the Software during the term of this
Agreement only on the Equipment to process the Fund's and affiliates' data for
internal business purposes. No right is granted for use of the Software by any
third party or by the Fund to process for any third party, or for any other
purpose whatsoever, except as expressly provided in this paragraph. The Fund
shall not modify, disassemble, decompile or reverse engineer the Software or
otherwise attempt to derive source code from the Software without PFPC's prior
written consent.
1.5 SOFTWARE INSTALLATION AND ACCEPTANCE. PFPC shall advise the Fund that the
Software is installed and functioning on the Equipment ("Software Installation
Date"). The Fund shall be deemed to have accepted the Software thirty (30) days
after Software Installation Date or thirty (30) days after the Fund's first use
of Software to process live production data ("Software Acceptance Date").
1.6 COPIES OF SOFTWARE. The Fund may not copy the software except for backup and
archival purposes only, and the Fund shall include on all copies of the Software
all copyright and other proprietary notices or legends included on the Software.
The provisions of this Paragraph do not apply to the Fund data files in
machine-readable form.
1.7 NO-EXPORT. The Software shall not be shipped or used by the Fund outside the
United States. The Fund shall comply with all applicable export and re-export
restrictions and regulations of the U.S. Department of Commerce or
32
other U.S. agency or authority. The Software shall not be transferred to a
prohibited country or otherwise in violation of any such restrictions or
regulations.
1.8 TERMINATION. Terms and conditions which require their performance after the
termination of the Agreement, including but not limited to the License and
Software use restrictions, limitations of liability, indemnification, and
confidentiality obligations, shall survive and be enforceable despite the
termination of the Agreement.
1.9 ASSIGNMENT. Absent PFPC's prior written consent, the Fund shall not assign,
sublicense or transfer, whether by operation of law or otherwise, the Fund's
rights or obligations with respect to the License and PFPC may void any such
attempt.
ARTICLE 2 - LICENSE TERM.
2.1 LICENSE TERM. The License granted pursuant to this Exhibit C shall continue
for the term of the Agreement unless earlier terminated pursuant to the terms
hereof. PFPC's obligations and the Fund's rights to use the Software are
conditional upon the Fund's payment of the fees and charges set forth in the
Agreement. If the Fund elects to use any additional software or equipment with
the System, the Fund shall request PFPC's written approval of such product,
which approval shall not be unreasonably withheld. Absent such approval,
Software Support and the related warranties shall not be effective for so long
as the Fund uses the unapproved products with the System.
ARTICLE 3 - WARRANTIES, REPRESENTATIONS AND LIABILITY
3.1 SOFTWARE WARRANTIES AND REMEDIES. For a period of ninety (90) days, PFPC
warrants ("PERFORMANCE WARRANTY") that the Software, excluding the Directly
Obtained Third Party Software, shall perform on the Equipment substantially in
accordance with the Documentation. The correction of errors and deficiencies in
the Software pursuant to Software Support shall be the Fund's sole and exclusive
remedy for the Performance Warranty. PFPC warrants ("RIGHTS WARRANTY") it has
the right to license the Software in accordance with the Agreement. Provided the
Fund gives PFPC timely written notice, reasonable assistance, including
assistance from the Fund's employees, agents and affiliates (collectively, the
"FUND'S AGENTS"), and sole authority to defend or settle the action, then PFPC
shall do the following ("INFRINGEMENT INDEMNIFICATION"): (a) defend or settle,
at its expense, any action brought against the Fund to the extent the action is
based on a claim that the Software infringes a duly issued United States' patent
or copyright or violates a third party's proprietary trade secrets or other
similar intellectual property rights ("INFRINGEMENT"); and (b) pay damages and
costs finally awarded against the Fund directly attributable to such claim. PFPC
shall have no Infringement Indemnification obligation if the alleged
Infringement is based upon the Fund's use of the Software with equipment or
software not furnished or approved by PFPC or if such claim arises from PFPC's
compliance with the Fund's designs or instructions, or from the Fund's
modifications of the Software. The Infringement Indemnification states PFPC's
entire liability for Infringement and shall be the Fund's sole and exclusive
remedy for the Rights Warranty.
3.2 THIRD PARTY WARRANTIES. All warranties for the Directly Obtained Third Party
Software, if any, are specifically set forth applicable agreements supplied by
the Third Party Vendors.
3.3 EXCLUSION OF WARRANTIES. THE WARRANTIES SET FORTH IN PARAGRAPH 3.1 AS TO THE
SOFTWARE AND IN PARAGRAPH 3.2 AS TO DIRECTLY OBTAINED THIRD PARTY SOFTWARE ARE
IN LIEU OF ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ARISING OUT OF
OR RELATED TO THE AGREEMENT. PFPC SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND
FITNESS FOR A PARTICULAR PURPOSE.
3.4 FUND RESPONSIBILITY. The System is an information system only, designed to
assist the Fund in performing its professional activities and is not intended to
replace the professional skill and judgment of the Fund. The Fund shall be
solely responsible for: (a) acts or omissions of the Fund in entering data into
the System, including its accuracy and adequacy; (b) checking the correctness
and accuracy of the System output and data; and (c) any use of or reliance upon
the System output by Fund. Except for the Infringement Indemnification and as
limited by applicable law, the Fund shall indemnify, defend and hold PFPC
harmless from any losses, costs, damages, and liabilities, reasonable attorneys'
fees and court costs, relating to any claim by any third party arising from or
related to the Fund's use of the System or System output, but in no event for an
amount greater than the value of this Exhibit C.
33
SCHEDULE 1 OF EXHIBIT C
SOFTWARE
The License granted pursuant to this Agreement shall be for a maximum of
concurrent user seats identified for each software product below.
1. PFPC SOFTWARE.
1.1 PFPC Software includes the following IMPRESS products which are further
described in Schedule 1.A of Exhibit C ("Specifications"):
IMPRESS Workflow/Image Release 7.2.3 - 30 maximum user seats(1)
IMPRESS Customer Relationship Manager Release 3.3 - 30 maximum user
seats(1)
1.2 INTERFACES. Except as agreed in writing, PFPC shall not be required to
modify the Software or the Interfaces to accommodate changes made by the Fund
vendor to its portion of the interface. If the Fund's vendor needs information
about the Software, then the vendor must first execute a nondisclosure agreement
in form and content reasonably acceptable to PFPC. PFPC shall not be liable for
any delay or degradation to the Software or Equipment attributable to the Fund's
use of Interfaces.
1.3 CUSTOMIZATION. The listed products are licensed for IMPRESS use and
customization only. Use of these tools to develop or customize non-IMPRESS
applications is not permitted without the express written authorization of PFPC.
2. THIRD PARTY SOFTWARE.
2.1 PFPC PROVIDED THIRD PARTY SOFTWARE. The following Third Party Software is
licensed to the Fund directly by PFPC:
2.1.1 BANCTEC SOFTWARE. The following Third Party Software is licensed directly
to the Fund by PFPC subject to the terms of this Agreement and the mandatory
BancTec ("BancTec") terms and conditions set forth in Attachment 1 to Schedule
1, attached and incorporated by reference. To the extent the terms of Attachment
1 to Schedule 1, conflict with or differ from the terms and conditions in the
Agreement, Attachment 1 to Schedule 1 shall prevail with respect to the
following BancTec Software ("BancTec Software")
Informix Multi-User with 30 maximum user seats(1)
XDP Storage Manager Multi-User with 30 maximum user seats(1)
FloWare Multi-User with 30 maximum user seats(1)
Each Banctec Software program listed above and identified as "Multi-User"
("Multi-User Program") is licensed for installation on a single network server
computer which is supplied by a third party, and which is electronically linked
with one or more workstations having access to the Banctec Software program. If
the above designates a maximum number of users authorized to simultaneously
access the Multi-User Program, no access will be permitted in excess of such
maximum number. In all other cases, Multi-User Program is authorized to be
accessed by all workstations which are configured to communication with that
network server computer.
2.1.2 PEGASYSTEMS SOFTWARE. The following Third Party Software is licensed
directly to the Fund by PFPC subject to the mandatory Pegasystems
("Pegasystems") terms and conditions set forth in Attachment 2 to Schedule 1. To
the extent the terms of Attachment 2 of Schedule 1 conflict with or differ from
the other terms and conditions in the Agreement, the terms of Attachment 2 of
Schedule 1 shall prevail with respect to the following Pegasystems Software
("Pegasystems Software"):
34
Product Name Version Function - 30 maximum user seats(1)
------------ ------- ------------------------------------------------------
PegaWorks 7.2 Workflow Engine - 30 maximum user seats(1)
PegaENVIRONMENT 7.2 Operating Shell - 30 maximum user seats(1)
PegaREACH 8.11 Desktop Graphical Interface - 30 maximum user seats(1)
2.2 DIRECTLY OBTAINED THIRD PARTY SOFTWARE. The following Third Party Software
are separately licensed by the Third Party Vendor directly to the Fund subject
to the respective terms and conditions of "shrink-wrapped" or other agreements
between the Third Party Vendor and the Fund. The Fund accepts the provisions of
such agreements, including the warranty provisions, if any, and agrees to comply
with the terms set forth in such agreements:
- Microsoft Windows NT 4.0 with SP6a, or Microsoft Windows 2000 or
Microsoft Windows XP
- Microsoft Office 2000 or greater
- Microsoft NT Server 2000
- Microsoft TCP/IP Stack
- UNIX ESQL/C Compiler for selected UNIX platform
(1) Maximum number of user seats is per fund complex/family
35
ATTACHMENT 1 TO SCHEDULE 1
TERMS AND CONDITIONS
BANCTEC
1. Each BancTec Software Package listed in Section 2.1.1 of Schedule 1
("Program") which is identified as "Multi-User Program" is licensed for
installation on a single network server computer which is supplied by
BancTec, PFPC, or a third party, and which is electronically linked with
one or more workstations having access to the Program. If Schedule 1
designates a maximum number of users authorized to simultaneously access
the Multi-User Program, no access will be permitted in excess of such
maximum number. In all other cases, Multi-User Program is authorized to be
accessed by all workstations which are configured to communicate with that
network server computer.
2. Each Program listed in Schedule 1 identified as "Single-User Software" is
licensed for installation and use on a single computer.
3. Each Program listed in Schedule 1 identified as an "Unlimited-User Program"
is licensed for use by the Fund after ordering a copy of the Program. Once
ordered, the Fund may make unlimited copies of such Programs at no
additional charge.
4. Each Program listed in Schedule 1 identified as a "Device Program" is
licensed for use solely to facilitate the operation of the corresponding
equipment device.
5. Each Program listed in Schedule 1 identified as a "Development-User
Program" is licensed for installation and use on a single computer for
development and testing purposes. The license for Development-User Programs
also includes a license for production use on a single computer.
6. Each Program listed in Schedule 1 identified as a "Production-User Program"
consists of necessary runtime modules and associated link libraries for
inclusion with custom software applications. Production-User Programs are
not licensed for use in the development of custom software applications and
may be either Multi-User or Single-User Programs.
7. Only a nontransferable, nonexclusive, perpetual license to use the Programs
and related BancTec documentation for its own internal use (including,
without limitation, providing processing services to third parties in a
service bureau or facilities management environment) is granted to the
Fund.
8. BancTec or its vendors retain all title to the Programs, and all copies
thereof, and no title to the Programs, or any intellectual property in the
Programs, is being transferred; provided, however, nothing contained
herein shall give BancTec or its vendors any right, title or interest in
the Software.
9. The Programs shall not be copied, except as specifically authorized under
an Schedule to this Agreement and except for backup or archival purposes.
All such copies shall contain all copyright and other proprietary notices
or legends of BancTec or its vendors contained in the Programs delivered
under this Agreement.
10. The Programs shall not be modified, reverse assembled or decompiled by the
Fund. No attempt shall be made by the Fund to derive source code from the
Programs.
11. The Programs will not be shipped or used by PFPC or the Fund to Africa or
the Middle East. All applicable export and re-export restrictions and
regulations of the U.S. Department of Commerce or other U.S. agency or
authority shall be complied with. The Programs shall not be transferred to
a prohibited country or otherwise in violation of any such restrictions or
regulations.
12. Each Program is copyrighted and contains proprietary and confidential trade
secret information of BancTec and its vendors. Each sublicensee of the
Programs shall protect the confidentiality of the Programs with at least
the same standard of care used to protect the Fund's own similar
confidential information.
13. BancTec and its vendors are each a direct and intended beneficiary of the
sublicenses granted for the Programs and may enforce such sublicenses
directly against sublicenses of the Programs.
14. Neither BancTec nor its vendors shall be liable to the Fund for any
general, special, direct, indirect, consequential, incidental, or other
damages arising out of the sublicense of the Programs.
15. The license granted to the Fund of the Programs may be terminated, either
immediately or after a notice period not exceeding thirty (30) days, upon
violation by the Fund of any of the terms or conditions of the Agreement,
including but not limited to this Attachment 1 to Schedule 1.
16. Upon termination of the license grant to the Fund to use the Program or the
Agreement, the Fund shall return all copies of the Programs to PFPC.
36
EXHIBIT D
PFPC Disaster Recovery Plan Summary
-------------------------------------------------------------------------------
[PNC LOGO]
ENTERPRISE BUSINESS RESILIENCY OVERVIEW
Prepared by PNC Corporate Business Resiliency
1/22/2003
CONTENTS ARE INCLUDED IN THIS DOCUMENT SOLELY FOR THE USE OF THE INTENDED
RECIPIENT. YOU MAY NOT COPY, MODIFY, DISTRIBUTE, TRANSMIT, DISPLAY, PERFORM,
REPRODUCE, TRANSFER, RESELL, OR REPUBLISH ANY OF THE CONTENTS OF THIS DOCUMENT
WITHOUT THE PRIOR WRITTEN CONSENT OF PNC, WHICH MAY BE WITHHELD IN ITS SOLE
DISCRETION.
EXCEPT WHERE OTHERWISE EXPRESSLY NOTED OR AS NOTED BELOW, ALL CONTENTS OF THIS
DOCUMENT, INCLUDING THE GRAPHICS, ICONS AND OVERALL APPEARANCE OF THE DOCUMENT,
ARE THE SOLE AND EXCLUSIVE PROPERTY OF THE PNC FINANCIAL SERVICES GROUP, INC.,
PITTSBURGH, PENNSYLVANIA AND/OR ITS SUBSIDIARIES OR AFFILIATES.
-------------------------------------------------------------------------------
37
[PNC LOGO]
ENTERPRISE BUSINESS RESILIENCY OVERVIEW
PNC's Business Continuity Plan and Resiliency Model is composed of nearly 1,000
individual plans for people, facilities, business functions and technology
throughout the entire corporation. It is the policy that:
"Appropriate contingency measures will be established to ensure the
Resiliency of critical business functions and information processing
support in the event of a disruption of service. Business continuity plans
will be developed, maintained and periodically tested for critical business
functions and systems as determined by the Business through a process that
is commensurate to the level of risk associated with disruption."
Disaster recovery testing is a key component of PNC's architecture for Business
Resiliency. The problem, emergency, and crisis response teams are tested on a
periodic basis and evaluated whenever "real" situations occur.
Disaster recovery tests are scheduled, and conducted in accordance with
expectations from Regulators, Shareholders and Customers for each critical
application system. The PNC policy is, at a minimum, to schedule tests for each
information system platform each year, based upon: application criticality;
business unit requirements; recovery process maturity; and prior test results.
Test results are critiqued, and results presented by Business Resiliency to all
interested parties.
ALTERNATE RECOVERY SITES
The PNC Data Center deploys a mixture of both internal and external recovery hot
sites for those computer platforms, which process critically-rated applications
(i.e. IBM Mainframe, Stratus, DEC, SUN, INTEL).
Mainframe, AS/400, RS/6000, SUN Hot sites - PNC maintains an extensive
relationship with the leading industry providers of recovery services. Multiple
geographically diverse locations are used for technology hot-site and business
work area recovery. More specific vendor and location information is withheld in
the interest of our customers' safety and security.
Other platforms use vendor drop ship agreements, or other arrangements to meet
requirements defined by the business units.
38
RECOVERY TIER RATINGS
PNC is committed to recover all applications and services in a timely fashion.
PNC has developed a set of Tier Ratings based on risk ensuring that the most
critical applications and services are recovered first. This best practice
allows for the placement and matching of business segments to facilities and
infrastructure with similar criticality requirements. The level of availability
supported by the infrastructure determines ratings.
Using the Business Impact Analysis Survey (BIA), PNC departments and functions
are analyzed to determine their criticality to the organization and its
customers and then are assigned a Tier rating. Risk profiles for facilities,
telecommunications systems and information technology systems provide data as to
the ability to satisfy customer and business requirements and to meet their
service level objectives. Based upon the information provided in the Business
Impact Analysis, Target and Supported Tier ratings are applied, and then gaps
are identified and addressed to mitigate existing deficiencies within the
delivery infrastructure.
OPERATIONAL AVAILABILITY
The PNC Data Center is comprised of computer systems from various technology
vendors, ranging from mainframe technology, to midrange UNIX and Intel based
solutions to meet the varied needs of our businesses. Some key highlights
include:
o IBM's CMOS Mainframe technology for large transaction processing
systems.
o 20+ Terabytes of mainframe class storage designed to meet the
availability and performance needs of the businesses.
o Automated Tape technology systems, including both Robotic silos as
well as Virtual Tape subsystems to support processing and offsite
archival of critical information for recovery.
o PNC has implemented a robust design for implementation of Intel and
Unix processing platforms. This design incorporates a standardized,
redundant network configuration, dual redundant power supply, and
implementation of a high-speed, automated backup system all within a
flexible, scalable, space efficient environment.
39
(Operational Availability-Cont.)
THE PNC DATA CENTER NETWORK CONSISTS OF:
o Redundant connections to robust self-healing Metropolitan Area and
Wide Area networks.
o Redundant front-end and channel extension components.
o Thirty-five miles of ESCON fiber technology.
o Redundant/alternate equipment data paths.
o Computerm recovery capability at the hot site.
o Redundant path link recovery topology to the hot site.
EBUSINESS CONTINUITY AND THE INTERNET
The existing recovery strategy and investment for the e-Business technology
infrastructure is based on management assessment of the probable dollar risk,
transaction levels and the alternate processing capabilities available to the
customers. The recovery capabilities are adequate to meet the current identified
level of risk. As the risk increases, additional investments are being made.
A risk based, tiered business resiliency and recovery strategy and plan for the
eBusiness technology infrastructure has been an integral part of the
implementation plan. As part of the overall risk based implementation strategy,
a very high operational availability solution was designed and implemented for
the e-Business infrastructure. This solution features multiple Internet
providers and connections, clustered processors with instant fail-over
technology, as well as multiple firewalls and internally multi-routed pathing.
The implementation of the clustered high operational availability for the Web
Java environment supplied the last component in this very robust high
availability solution. This development path has been deliberate and represents
application of funding towards the highest failure risk first, and builds
towards the highly mitigated and unlikely scenario of major data center outage.
This strategy capitalizes upon the existing investment in extremely high
operational availability for the data center infrastructure and the low
transaction volume of the new applications.
PNC maintains dual connections to the Internet through the Tier 1 service
providers. Operational availability is achieved through load balancing and
automatic fail over.
Current recovery contracts in place also allow, in catastrophic circumstances,
for a staged recovery on vendor premises using vendor supplied Internet access
and equipment.
40
BACKUPS
Critical application file back-up tapes are transported offsite, to a remote,
secure storage vault provided by a leading national vendor.
A copy of the mainframe operating environment is maintained continually at the
hot-site vendor. Daily critical operating system and application file back-up
tapes are segregated and transported off-site to the secure storage vault. These
tapes would be used to establish an immediate recovery process, while the
remaining application back-up tapes are shipped from the offsite storage as
well.
ENVIRONMENT
Power Systems
Dual local utility power feeds provide five-megawatt redundant
electrical service. Either feed can sustain the entire building load.
In addition there is:
o Redundant electrical switchgear and substation equipment.
o Two redundant Uninterruptible Power Supply (UPS) battery back-up
systems in separate rooms, each containing three 500 KVA 60 cycle
modules. Each room alone supplies continual power leveling to all
critical data processing equipment and will supply 20 minutes of
power to key systems to allow for switching to generators, or an
orderly shutdown, if required. The other room is a redundant
mirror image.
o Four 1.5 KVA (2,168 horsepower) diesel generators. Three
generators can sustain the building load, with one in continuous
standby. These generators can provide a continuous supply of
power to the entire facility including all data processing
systems indefinitely by refueling the on-site fuel tanks.
o Two 15,000-gallon main tanks and two redundant day tanks. This is
enough fuel to sustain the building's operation for 96 hours
without external refueling.
41
(Environment - Cont.)
Cooling & Mechanical Systems
o 732 tons of all types cooling power, including building chillers,
CPU heat exchange, and free standing raised floor units.
o Redundant building chillers and pumps.
o 20,000-gallon water reservoir containing enough water to sustain
all mechanical systems for 24 hours under adverse weather
conditions.
o All piping and wiring systems are designed and installed to
provide maximum effectiveness and optimal change and/or
maintenance management without disruption.
FIRE SUPPRESSION SYSTEMS
The facility is fire protected by using a combination of five types of fire
suppression systems.
o Overhead WET system (lines are water charged)
o Overhead DRY system (lines are not water charged)
o Pre-action WET/DRY system
o Halon 1301* Full Concentration
o Halon 1301* Under floor Saturation
*Halon 1301 production has been discontinued will be replaced with FM2000 when
needed
PROBLEM RESPONSE
PNC employs a corporate help desk to escalate and track all problems. This
service is available via an 800 number 24/7/365. There are specific escalation
procedures that are followed for each incident.
Corporate Business Continuity administers the PNC Corporate Emergency Response
Plan. There are also Computer Escalation and Response 911 Plans in place for
specific critical functions and applications.
SUMMARY
PNC has a highly developed and effective business resiliency program in place
that meets the critical needs of business functions and technology throughout
the corporation.
42
EXHIBIT E
PERFORMANCE STANDARDS
PFPC will use a statistical sampling as a percentage of transactions processed
through the transaction processing and quality control units of PFPC providing
services to the Fund and will track and report to the Fund on the accuracy of
the transactions processed. Examining the sampling against predetermined PFPC
criteria for accuracy, PFPC will provide an accuracy rate as represented by
"percent" measured to the last Friday of each month from the last Friday of the
previous month. The Fund reserves the right to inspect, or have a third party
inspect, the Quality Assurance procedures and documentation and all documents
reviewed and considered in determining the accuracy of processing.
I. TRANSACTION PROCESSING
MANUAL DATA ENTRY - PFPC provides a manual data entry service to the Fund
for establishing new Shareholder accounts and monitoring existing account
records.
PFPC'S OBJECTIVE - PFPC's objective is to establish new accounts with a
data accuracy rate of 98%. PFPC's objective is to process all other
financial transactions with a data accuracy rate of 98%.
Accuracy
Turnaround* Standard
----------- --------
A. NEW ACCOUNTS 98%
-Purchases T
-Exchanges T
-Transfer T+4
B. FINANCIALS 98%
1. Purchases
-Directs T
-Wire Orders
(Placement) T
-Wire Orders
(Settlement) T
2. Redemptions
-Direct T
-Wire Orders T
* T = Trade Date in good order
43
Accuracy
Turnaround* Standard
----------- --------
3. Exchanges T
C. NON FINANCIALS
1. Transfers T+4 98%
2. Maintenance T+4 98%
* T = Trade Date in good order
II. SHAREHOLDER SERVICES
PFPC'S OBJECTIVE - PFPC's objective is to accurately respond to 98% of the
research requests within the periods set forth below.
**Financial: Complete within 72 hours
**Non-Financials: Complete within 120 hours
** Assuming the previous TA has provided all documents and correct date
ranges on any archived boxes.
Accuracy
Turnaround* Standard
----------- --------
A. Research
-Priority (Financial) T+3 n/a
-Non-Priority(Non- T+5 n/a
Financial)
B. Correspondence
-Priority (Financial) T+3 98%
-Non-Priority (Other) T+5 98%
44
III. PRINT/MAIL ADMINISTRATION
ACCURACY AND TIMELINESS OF SHAREHOLDER STATEMENTS
SERVICE DESCRIPTION - Based on the mail frequency of the Fund, PFPC will
produce and mail periodic statements to Shareholders.
PFPC'S OBJECTIVE - PFPC's objective is to manage this service so that all
Statements from the Fund are accurate and are mailed no later than five (5)
business days after receipt of all necessary data from the Fund or the
Fund's third party service provider.
TIMELINESS OF DISTRIBUTION CHECKS AND DIVIDEND MAILINGS
SERVICE DESCRIPTION - Periodically, PFPC will create and mail
advices/checks for Fund's respective Shareholders.
PFPC'S OBJECTIVES - PFPC's objective is to manage this service so that such
advices/checks are mailed no later than two (2) business days following the
date of the transaction.
Turnaround*
A. Shareholder Statements
Mailed T+5
B. All Checks T+1
C. Daily Confirms T+2
* T = Trade Date in good order
IV. DATA CENTER SERVICES
A. RESPONSE TIME - An average of 98% of all inquiries into the PFPC
Mainframe system (CICS entries) on Business Days from 8:00 a.m. to
8:00 p.m. eastern time ("Business Hours") during a calendar month will
have a response time of three (3) seconds or less.
B. ON-LINE SYSTEMS AVAILABILITY - The On-Line System will be available
for inquiry and data entry at least 96% of the time during Business
Hours, measured on a calendar month basis.
45
V. QUALITY ASSURANCE.
PFPC will use a statistical sampling of transactions processed through the
transaction processing and the quality control units of PFPC providing
services to the Funds and will track and report on a weekly and monthly
basis to the Funds on the accuracy of the transactions processed. Examining
the sampling against pre-determined PFPC criteria for accuracy, PFPC will
achieve the preceding quality assurance levels identified in the Accuracy
Standard Column above, measured monthly by their independent Quality
Assurance Department.
46
EXHIBIT F
Set forth below is the Fund policy and guidelines for the treatment of financial
gains and losses resulting from "as-of" shareholder transactions.
GENERAL PRACTICE
PFPC has the capability to track, at the fund or class level, both on a daily
and cumulative basis, the impact of all shareholder "as-of" transactions
processed through the PFPC System. This tracking is reflected on the daily
SuperSheets prepared by PFPC. Daily and cumulative gain/loss balances are
reported "net" at the fund or class level. To facilitate the tracking and
reporting process, PFPC assigns a responsibility code to track gain/loss by the
following parties:
1. MANAGEMENT COMPANY
o Management Company
o Dealer
2. FUND
o Estimates
o Shareholder
o Transmission Issue
3. TRANSFER AGENT
STANDARD OF MATERIALITY
Materiality shall be defined as the point at which the NAV is impacted at the
fund class level. Gains or losses that do not impact the NAV at the fund class
level shall be defined as immaterial.
CUMULATIVE BASIS
A pricing error will be considered material if the error is greater than or
equal to $.005 per outstanding share over a cumulative period.
POLICY
CUMULATIVE BASIS
In the event that an "as-of" gain/loss amount, at the fund or class level, is
equal to or exceeds $.005 per outstanding share on a cumulative basis (annual
"accumulation period"), Fund Accounting will notify the PFPC and the Fund
immediately and will book the appropriate payable/receivable entry in order to
"keep the Fund whole". At that time, PFPC will provide a detailed explanation of
the transaction, or transactions, which caused the "as-of" amount to equal or
exceed the $.005 per outstanding share threshold. PFPC will work closely with
the Fund to identify and resolve the full gain/loss amount.
47
Upon confirmation of the reason(s) for any such material "as-of" loss on a
cumulative basis within the relevant accumulation period, the responsible party
or parties will reimburse the full amount due to the fund. Such reimbursement
will occur no later than one month from the date of the transaction. PFPC will
be responsible for reimbursing the fund for any material losses designated with
a "Transfer Agent" responsibility code. The responsibility for the recovery of
all other components of the cumulative material loss resides with the Management
Company.
At the end of each accumulation period, any immaterial "as-of" gains or losses
or any material "as-of" gain remaining on the books of the fund will be absorbed
by the fund. The cumulative tracking mechanism for "as-of" gains and losses will
be reset to zero to begin the next accumulation period.
PRICING ERROR CORRECTIONS
Additionally, in cases where a material "as-of" loss has occurred on a given
day, PFPC may request that the Fund recalculate the impacted NAV(s) and allow
PFPC to re-process the affected shareholder transactions as if the "as-of"
trade(s) had been processed in a timely manner on the applicable trade date with
the correct NAV. Individual account adjustments of less than or equal to $25.00
are considered "de minimus" and will not be processed by PFPC.
-------------------------------------
PFPC will utilize the procedures outlined below for "as-of" dividend accrual
resulting from adjustments occurring within a month and "late dividends"
resulting from "as-of" transactions crossing a fund's ex-date.
ACCRUAL GAIN/LOSS:
If the accrual gain/loss reaches one-half cent ($.005) in materiality for
dividend payouts, the responsible party will settle the dollar amount.
LATE DIVIDEND GAIN/LOSS:
Late dividend gain/loss results from "as-of" trade activity that generates a
dividend/capital gain after the fund's payable date. Late dividend gain/loss
will be absorbed by the Fund.
-------------------------------------
INTEREST COMPENSATION:
In the event of a check disbursement or wire payment error in which the
shareholder has lost interest due to a misrouting of the proceeds, PFPC will not
pay interest compensation to the shareholder until reimbursement of such
interest earnings from the bank that benefited in error from the misrouted
payment. In cases where PFPC is at fault, payment of interest compensation to
the shareholder will not be delayed.
48
GAIN/LOSS REPORTING AND TRACKING
PFPC tracks the responsibility (by Management Company, Fund and Transfer Agent)
for all gains and losses generated by "as-of" transactions. PFPC may also
prepare detailed explanations of "as-of" activity, primarily for internal
process improvement purposes. Additionally, a daily/weekly/monthly gain/loss
report can be made available to designated individuals at the Fund.
49
November 25, 2003
ATLAS ASSETS, INC.
ATLAS INSURANCE TRUST
Re: TRANSFER AGENCY SERVICES FEES
Dear Sir/Madam:
This letter constitutes our agreement with respect to compensation to
be paid to PFPC Inc. ("PFPC") under the terms of the
Transfer Agency Services
Agreements each dated November 25, 2003 (the "Agreement") between PFPC and
Atlas Assets, Inc. on one hand and PFPC and
Atlas Insurance Trust on the other
(Atlas Assets, Inc. and
Atlas Insurance Trust are referred to hereinafter as
"you" or the "Fund") for service provided on behalf of each of the Funds'
investment portfolios ("Portfolio"). Pursuant to paragraph 12 of the Agreement,
and in consideration of the services to be provided to each Portfolio, the Fund
will pay PFPC certain fees and reimburse PFPC for its out-of-pocket expenses
incurred on its behalf, as follows:
1) ACCOUNT FEE:
Active Direct Account $9.00 per account per annum
Active NSCC Level 3 Accounts $7.00 per account per annum
Inactive Account: $3.60 per account per annum
Fees shall be calculated and paid monthly based on one-twelfth (1/12th) of
the annual fee. An inactive account is defined as having a zero balance for
the entire month. Inactive accounts are purged at least annually after
year-end tax reporting.
2) MINIMUM MONTHLY FEE:
The minimum monthly fee will be $2,000 for each portfolio/class, exclusive
of transaction charges, Fund/SERV\Networking charges, retirement custodian
fees, annual retirement plan document fees, CIP fees, advanced output
services fees, DAZL(R) fees, IMPRESS and IMPRESSNet(R) fees, cost basis
accounting fees, voice response fees, data warehouse fees, out-of-pocket
expenses and miscellaneous fees.
The minimum monthly fee will be waived for the existing 17
portfolios/classes. The minimum monthly fee will apply to each new
portfolio/class.
3) RETIREMENT CUSTODIAN FEE:
Active Retirement Accounts $10.00 per plan, per social security
number, per annum
1
4) ANNUAL RETIREMENT PLAN DOCUMENT FEES (PER FUND FAMILY):
XXX - Traditional (includes SEP) $500
XXX - Xxxx $500
XXX - Simple $500
Xxxxxxxxx ESA $500
Non-ERISA 403(b)(7) $750
Money Purchase $750
Profit Sharing $750
EZ-k $750
5) TRANSACTION CHARGES:
The following transaction fees are applicable only on manually processed
transactions in excess of the stated monthly volume thresholds per fund
family:
---------------------------------------------------------------------------------------------------------
TRANSACTION TYPE FEE MONTHLY VOLUME THRESHOLD(1)
---------------------------------------------------------------------------------------------------------
Purchases, redemption, $1.00 per transaction Thru 3/1/2005: 7,875
transfers, exchanges, 3/1/2005: 8,663
maintenance, correspondence 3/1/2006: 9,529
and adjustments(2) 3/1/2007: 10,481
---------------------------------------------------------------------------------------------------------
New Account Opening(3) $5.00 per account Thru 3/1/2005: 1,575
3/1/2005: 1,733
3/1/2006: 1,906
3/1/2007: 2,097
---------------------------------------------------------------------------------------------------------
(1) In the event of transaction volume changes resulting from mergers and
acquisitions involving the Fund, the parties will adjust the monthly
volume thresholds upon mutual agreement
(2) Excludes telephone trades taken and processed by Atlas
(3) Excludes new account copy transactions which are exchanges to new
funds, and adding new funds to existing account numbers
6) PFPC FUNDSERV/NETWORKING FEES:
PFPC Setup fee: $2,000.00 one-time setup charge per fund family (WAIVED)
PFPC Transaction fees:
NSCC FundSERV: $.10 per transaction, plus
$.15 per transaction if the trade is confirmed same day
Commission Settlement: No charge
ACATS: No charge
Mutual Fund Profile Service: $10.00 per month per fund/class
($100.00 maximum per month)
Note: NSCC will deduct its direct monthly fee on the 15th of each month
from PFPC's cash settlement that day. PFPC will include these charges as an
out-of-pocket expense on its next
2
invoice. These fees do not include related out-of-pocket expenses.
7) ANTI-MONEY LAUNDERING FEE:
$0.15 per open non-network Xxxxx 0 account, per annum.
8) CUSTOMER IDENTIFICATION PROGRAM (CIP) FEES:
$2.25 per customer verification
$0.02 per month per search result stored
9) IMPRESS(R)
License and Maintenance: $2,600 per seat, per annum per fund family
(up to 30 seats) (Image & CRM)
Billing for installation, training and project management would be based on
actual hours at $150 per hour. The estimate for installation, training
and project management is 56 hours.
10) COST BASIS ACCOUNTING:
One-time setup charge: $50,000 per fund family plus (WAIVED)
Hybrid service: $ 0.10 per eligible account per month
11) IMPRESSNET(R) SERVICES
One Time Set-Up Fee per fund family: (WAIVED)
-----------------------------------------------------------
NUMBER OF OPEN ACCOUNTS Set-Up Fee
(COUNTED AT IMPLEMENTATION)
-----------------------------------------------------------
Less than 20,000 Accounts $15,000
-----------------------------------------------------------
Between 20,001 and 50,000 Accounts $20,000
-----------------------------------------------------------
Between 50,001 and 100,000 Accounts $25,000
-----------------------------------------------------------
Between 100,001 and 500,000 Accounts $30,000
-----------------------------------------------------------
Between 500,001 and 1,000,000 Accounts $40,000
-----------------------------------------------------------
Over 1,000,000 Accounts $50,000
-----------------------------------------------------------
Annual Recurring Fee per fund family - Starts in Year 1:
-----------------------------------------------------------
NUMBER OF OPEN ACCOUNTS(2) ANNUAL FEE
-----------------------------------------------------------
Less than 20,000 Accounts $10,500
-----------------------------------------------------------
Between 20,001 and 50,000 Accounts $14,000
-----------------------------------------------------------
Between 50,001 and 100,000 Accounts $17,500
-----------------------------------------------------------
Between 100,001 and 500,000 Accounts $21,000
-----------------------------------------------------------
Between 500,001 and 1,000,000 Accounts $28,000
-----------------------------------------------------------
Over 1,000,000 Accounts $35,000
-----------------------------------------------------------
(2) Counted at implementation and then at each subsequent anniversary date
from the date of implementation. Annual fee will be adjusted
accordingly.
3
Monthly Minimums per fund family:
-------------------------------------------------------------------------------
NUMBER OF OPEN ACCOUNTS INQUIRY TRANSACTION
MINIMUM MINIMUM
-------------------------------------------------------------------------------
Less than 20,000 Accounts $1,200 $120
-------------------------------------------------------------------------------
Between 20,001 and 50,000 Accounts $1,600 $160
-------------------------------------------------------------------------------
Between 50,001 and 100,000 Accounts $2,000 $200
-------------------------------------------------------------------------------
Between 100,001 and 500,000 Accounts $2,600 $260
-------------------------------------------------------------------------------
Between 500,001 and 1,000,000 Accounts $3,200 $320
-------------------------------------------------------------------------------
Over 1,000,000 Accounts $4,000 $400
-------------------------------------------------------------------------------
Inquiry/Transaction/Account Maintenance Fees:
The fee for an Account Inquiry is $0.10 per occurrence. For an Account
Transaction, the fee is $0.50 per occurrence. The fee for Account
Maintenance is $1.00 per occurrence. The fee for New Account Set-Up is
$1.50 per occurrence. Atlas will handle PIN change requests internally and
will therefore not be charged the fee for each PIN change of $2.50. These
fees are tracked and billed monthly. There is a minimum each month for both
inquiries and transactions.
Volume Discount for Inquiries:
--------------------------------------------------------------------
(OVER LIFE OF THE AGREEMENT) FEE PER INQUIRY
NUMBER OF INQUIRIES PER FUND FAMILY
--------------------------------------------------------------------
Less than 100,000 Inquiries $0.10
--------------------------------------------------------------------
Between 100,001 and 200,000 Inquiries $0.08
--------------------------------------------------------------------
Between 200,001 and 300,000 Inquiries $0.05
--------------------------------------------------------------------
Over 300,000 Inquiries $0.03
--------------------------------------------------------------------
Other fees:
Customization Fee: $180 per hour
12) VOICE RESPONSE FEES:
$10,000 per fund family setup charge (WAIVED)
$1,000 per month maintenance fee/per fund family(3)
$0.23 per minute
$0.10 per call
(3) If average monthly call volume is greater than 2,000 then the monthly
Maintenance fee will be $500.
13) TRAINING:
$125 per hour, per resource, Travel and entertainment will be billed
separately.
14) ADVANCE OUTPUT SERVICES FEES:
Implementation Fee:
4
Production and Inventory Set-up $5,000-$10,000 per fund family
(WAIVED)
Printing/Processing:
Per Confirm/Statement/Image Printing $0.07
Per Check Printing $0.10
Highlight Color $0.09
Inserting: (daily minimums may apply):
Confirms Machine Inserting per page (includes BRE or CRE) $42/K(4)
Confirms Hands Inserting per page (includes BRE or CRE) $78/K(4)
Statements Machine Inserting per page (includes BRE or CRE) $42/K(4)
Statements Hands Inserting per page (includes BRE or CRE) $78/K(4)
Checks Machine Inserting per page $52/K(5)
Checks Hands Inserting per page $91/K(5)
Additional Inserts Hand $0.07
Additional Inserts Machine $0.01
Machine Intelligent Inserting $58/K
Hands Intelligent Inserting $58/K
(4) $50.00 minimum per day applies
(5) $75.00 minimum per day applies
Shipping/Inventory:
Non-USPS courier support/package $4.50
Inventory receipts/S.K.U. $20.00
Inventory storage/location/month - per skid $25.00
Inventory Dump/Destruct Charge $20.00
Courier Charge $50.00
Shipping Boxes $0.85
Oversized Envelopes $0.45
Special Mailing:
Working Order Administration fee $15.00 each
Creation of Admark Tape $135.00
ZIP+4 Data Enhancement $10/K-$125.00 min
Data Manipulation $80.00 per hour
Admark & Machine Insert #10 or 6x9
(includes 1 piece) $62/K-$125.00 min
Additional Machine Insert #10 $2.50/K
Admark & Machine Insert 9x12
(includes 1 piece) $125K-$125.00 min
Additional Machine Insert 9x12 $5.00/K
Admark Only #10, 6x9 or 9x12 $38.00/K-$75.00 min
Admark & Hand insert #10, 6x9 & 9x12
(includes 1 insert) $0.08
Hand Sort $25.00/K
Pressure Sensitive Labels:
Print, Affix & Insert one piece $0.32-$75.00 min
5
Print labels only $0.10
Affix labels only $0.10
Insert only $0.14
Additional inserts $0.08
Legal Drop per Mailing $150.00
Copy of 3602 or 3606 per Mailing $3.00 each
Miscellaneous Fees:
Manual pulls $2.50
Special Projects Hourly Work $24.00
Per piece mail preparation/presort fee $0.035
Fast Forward Fees $0.15
Tax Form Output Processing:
Print & Process $0.42 each
Work Order Administration Fee $15.00 each
Minimum Processing/Job $75.00 each
Dupe Tax Forms $0.50 each
Intelligent Inserting $0.045 each
Additional Machine Insert $0.01
Additional Hand Insert $0.07
Digital Services:
Alchemy Annual User License $35,000
Original Images (annual pages):
Up to 1 Million Images $0.05 per
1 Million - 3 Million Images $0.04 per
3 Million + Images $0.03 per
Web Maintenance and PDF Server Storage
For Internet Presentment (pages) $0.01 per
E-mail notification TBD
Consent for Suppression TBD
Original CD-ROM Charges $175.00 per
Note: Any portal clicks/view charges apply based on existing
IMPRESSNet(R)/AdvisorCentral(TM) contracts.
15) DAZL(R) FEES:
One-time set-up fee: $5,000 per fund family
Includes management company level coding, report programming.
Monthly Maintenance Fee: $1,000 per fund family
Includes client and broker dealer access to DAZL Support Group.
DAZL Base Transmission Fee/Record:
Price records $0.015
Other records $0.030
(security, distribution, account master, transaction, position)
6
DAZL Direct/Interactive/Trust/401K/ICI/Mgt. Co. Level Fee/Record:
Prince records $0.01
Other records $0.01
(security, distribution, account master, transaction, position)
Enhancement Fee: $150.00/hour
Note: If DAZL is mutually chosen as the vehicle to replicate existing data
transmissions between Atlas Assets, Inc. and the transfer agent, these
transmissions will be exempt from the fees illustrated above.
16) MUTUAL FUND TRANSFER AGENT DATA WAREHOUSE FEES(6)
Monthly Fee: $3,000.00 per fund family(7)
(6) Mutual Fund Data Warehouse Fee to begin upon service availability
(7) PFPC agrees to waive the monthly fee for a period of six (6) months
beginning with the first month in which the service is used
17) MISCELLANEOUS CHARGES include, but are not limited to, charges for the
following products and services as applicable, ad hoc reports, ad hoc SQL
time, banking services, COLD storage, imaging, digital recording, training,
microfiche/microfilm production, magnetic media tapes and freight, and
pre-printed stock, including business forms, certificates, envelopes,
checks and stationary. In addition, consolidated statement, audio response
and development/programming costs, and deconversion expenses.
18) OUT-OF-POCKET EXPENSES include, but are not limited to, telephone lines,
postage, overnight delivery, mailgrams, hardware/phone lines for
transmissions, wire fees, ACH charges, record retention, b/c notices, lost
shareholder searches, labels, user tapes, approved travel expenses, and
expenses incurred at the direction of the Fund. Out-of-pocket expenses are
billed as they are incurred.
19) SHAREHOLDER EXPENSES include, but are not limited to: lost certificate
bonding, overnight delivery as requested by the shareholder, and wire fee
for disbursement if requested by the shareholder. If the Fund chooses not
to charge the shareholder for these services, the fees will be billed as
an out-of-pocket. Shareholder expenses are billed as they are incurred.
20) FEE ADJUSTMENTS. PFPC waives its right to annually adjust the fees
described in the above sections based upon the cumulative percentage
increase in the Consumer Price Index for All Urban Consumers (CPI-U) U.S.
City Average.
Any fee, out-of-pocket expenses or shareholder expenses not paid within 30
days of the date of the original invoice will be charged a late payment fee of
1% per month until payment of the fees are received by PFPC. PFPC agrees to
waive this late payment fee.
The fee for the period from the date hereof until end of the year shall be
prorated according to the proportion which such period bears to the full annual
period.
[Signature Page Follows]
7
If the foregoing accurately sets forth our agreement and you intend to be
legally bound thereby, please execute a copy of this letter and return it to us.
Very truly yours,
[APPROVED LEGAL - illegible] PFPC INC.
By: /s/ [ILLEGIBLE]
-----------------------------------
Name: ________________________________
Title: ________________________________
Agreed and Accepted:
ATLAS ASSETS, INC.
By: /s/ [ILLEGIBLE]
-----------------------------------
Name: Xxxxx Xxx
________________________________
Title: COO
________________________________
ATLAS INSURANCE TRUST
By: /s/ [ILLEGIBLE]
-----------------------------------
Name: Xxxxx Xxx
________________________________
Title: COO
________________________________
8
