Exhibits 99(h)(3)
TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of July 1, 2005, by and among
First American Strategy Funds, Inc., a Minnesota corporation (the "Fund"), U.S.
Bancorp Fund Services, LLC, a Wisconsin limited liability company ("USBFS") and
U.S. Bancorp Asset Management, Inc., a Delaware corporation ("USBAM").
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company
consisting of several series of shares of Common Stock;
WHEREAS, USBFS is, among other things, in the business of administering
transfer and dividend disbursing agent functions for the benefit of its
customers; and
WHEREAS, the Fund desires to retain USBFS to provide transfer and dividend
disbursing agent services to all portfolios of the Fund now and hereafter
created ("Portfolios"), on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. APPOINTMENT OF USBFS AS TRANSFER AGENT
The Fund hereby appoints USBFS as transfer agent of the Fund on the terms
and conditions set forth in this Agreement, and USBFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement. The Fund hereby also authorizes USBFS to contract with
qualifying financial institutions for the establishment and maintenance of
omnibus accounts and for the provision of customary services related to
such omnibus accounts.
2. SERVICES AND DUTIES OF USBFS
A. USBFS shall perform all of the customary services of a transfer agent
and dividend disbursing agent for the Fund, and as relevant, agent in
connection with accumulation, open account or similar plans (including
without limitation any periodic investment plan or periodic withdrawal
program), including but not limited to:
1) Receive and process all orders for the purchase, exchange, and/or
redemption of shares in accordance with Rule 22c-1 of the 1940
Act, including the
calculation and collection of any applicable sales charges.
2) Process purchase orders with prompt delivery, where appropriate,
of payment and supporting documentation to the Fund's custodian,
and issue the appropriate number of uncertificated shares with
such uncertificated shares being held in the appropriate
shareholder account.
3) Arrange for issuance of shares obtained through transfers of
funds from Fund shareholders' accounts at financial institutions
and arrange for the exchange of shares for shares of other
eligible investment companies, when permitted by the Fund's
current prospectuses ("Prospectuses").
4) Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Fund's
custodian.
5) Pay monies upon receipt from the Fund's custodian, where
relevant, in accordance with the instructions of redeeming
shareholders.
6) Process transfers of shares in accordance with the shareholder's
instructions.
7) Process exchanges between Portfolios and/or classes of shares of
Portfolios and between a Portfolio and any other investment
company or series thereof for which U.S. Bancorp Asset
Management, Inc. acts as investment adviser.
8) Prepare and transmit payments for dividends and distributions
declared by the Fund, after deducting any amount required to be
withheld by any applicable laws, rules and regulations and in
accordance with shareholder instructions.
9) Serve as agent of the Fund in connection with accumulation, open
account or similar plans (e.g., periodic investment plans and
periodic withdrawal plans.
10) Make changes to shareholder records, including, but not limited
to, address changes in plans (e.g., systematic withdrawal,
automatic investment, dividend reinvestment).
11) Handle load and multi-class processing, including rights of
accumulation and purchases by letters of intent.
12) Record the issuance of shares of the Fund and maintain, pursuant
to Rule 17Ad-10(e) promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), a record of the total
number of shares of the Fund which are authorized, issued and
outstanding.
13) Prepare shareholder meeting lists and, if applicable, mail,
receive and tabulate proxies.
14) Mail shareholder reports and Prospectuses to current
shareholders.
15) Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to
dividends and distributions for shareholders.
16) Provide shareholder account information upon request and prepare
and mail confirmations and statements of account to shareholders
for purchases, redemptions and other confirmable transactions as
agreed upon with the Fund.
17) Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate federal
authorities any taxes to be withheld on dividends and
distributions paid by the Fund, all as required by applicable
federal tax laws and regulations.
18) Provide a Blue Sky system that will enable the Fund to monitor
the total number of shares of the Fund sold in each state. In
addition, the Fund or its agent shall identify to USBFS in
writing those classes of shares or transactions to be treated as
exempt from the Blue Sky reporting for each state.
19) Answer correspondence from shareholders, securities brokers and
others relating to USBFS's duties hereunder and such other
correspondence as may from time to time be mutually agreed upon
between USBFS and the Fund.
20) Reimburse the Fund each month for all material losses resulting
from "as of" processing errors for which USBFS is responsible in
accordance with the "as of" processing guidelines agreed to by
USBFS and USBAM.
B. In addition, USBFS shall provide the Fund with shareholder services
including answering shareholder inquiries, processing telephone
redemptions, exchanges and purchases, and providing information and
data to prospective shareholders or marketing materials to selling
brokers and potential selling brokers. USBFS shall also contract with
qualifying financial institutions for the establishment and
maintenance of omnibus
accounts and for the provision of customary services related to such
omnibus accounts.
3. REPRESENTATIONS OF USBFS
USBFS represents and warrants to the Fund, which representations and
warranties shall be deemed to be continuing throughout the term of this
Agreement, that:
A. It is a limited liability corporation duly organized, existing and in
good standing under the laws of Wisconsin;
B. It is a registered transfer agent under the Exchange Act.
C. It is duly qualified to carry on its business in the State of
Wisconsin;
D. It is empowered under applicable laws and by its charter and bylaws to
enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to authorize it to
enter and perform this Agreement;
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
G. It is conducting its business in compliance in all material respects
with all applicable laws and regulations, both state and federal, and
has obtained all regulatory approvals necessary to carry on its
business as now conducted; there is no statute, rule, regulation,
order or judgment binding on it and no provision of its charter,
bylaws or any contract binding it or affecting its property which
would prohibit its execution or performance of this Agreement.
H. This Agreement has been duly authorized, executed and delivered by
USBFS in accordance with all requisite action and constitutes a valid
and legally binding obligation of USBFS, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights
and remedies of creditors and secured parties.
4. REPRESENTATIONS OF THE FUND
The Fund represents and warrants to USBFS, which representations and
warranties shall be deemed to be continuing throughout the term of this
Agreement, that:
A. The Fund is an open-end investment company under the 1940 Act;
B. The Fund is a corporation organized, existing, and in good standing
under the laws of the State of Maryland;
C. The Fund is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform this Agreement;
D. The Fund will comply with all applicable requirements of the
Securities Act of 1933, as amended, the Exchange Act, the 1940 Act,
and any laws, rules and regulations of governmental authorities having
jurisdiction;
E. The Fund is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to carry
on its business as now conducted; there is no statute, rule,
regulation, order or judgment binding on it and no provision of its
charter, bylaws or any contract binding it or affecting its property
which would prohibit its execution or performance of this Agreement;
F. A registration statement under the 1940 Act and the Securities Act of
1933, as amended, is made effective and will remain effective, and
appropriate state securities law filings have been made and will
continue to be made, with respect to all shares of the Fund being
offered for sale; and
G. This Agreement has been duly authorized, executed and delivered by the
Fund in accordance with all requisite action and constitutes a valid
and legally binding obligation of the Fund, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights
and remedies of creditors and secured parties.
5. SERVICE STANDARDS
On a monthly basis, USBFS shall submit a written report to USBAM concerning
the performance of its obligations under this Agreement, including the
accuracy and timeliness of the various services provided pursuant to this
Agreement (the "Service Standards Report"). The Service Standards Report
shall include such measures as are agreed to by the parties from time to
time. In addition, USBFS agrees to make such reports and presentations to
the Board of Directors as may be reasonably requested from time to time.
6. COMPENSATION
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit A hereto
(as amended from time to time). Further, to the extent that the fees paid
to USBFS as
compensation for providing shareholder services and to reimburse USBFS for
its payments to financial institutions with which it has contracted, as set
forth in Exhibit A, are not sufficient to cover the fees charged to USBFS
by such financial institutions USBAM shall pay the difference to USBFS out
of USBAM's resources. USBAM is a party to this Agreement for the limited
purpose of accepting the payment obligations set forth in the previous
sentence.
USBFS shall also be compensated for such out-of-pocket expenses as are
reasonably incurred by USBFS in performing its duties hereunder as set
forth on Exhibit A. The Fund shall pay all fees and reimbursable expenses
within thirty (30) calendar days following receipt of the billing notice,
except for any fee or expense subject to a good faith dispute. The Fund
shall notify USBFS in writing within thirty (30) calendar days following
receipt of each invoice if the Fund is disputing any amounts in good faith.
The Fund shall settle such disputed amounts within ten (10) calendar days
of the day on which the parties agree to the amount to be paid.
Notwithstanding anything to the contrary, amounts owed by the Fund to USBFS
shall only be paid out of assets and property of the Fund.
7. STANDARD OF CARE; INDEMNIFICATION; LIMITATION OF LIABILITY
The duties of the USBFS shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against
USBFS hereunder. USBFS shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in
carrying out its duties hereunder, except a loss resulting from willful
misfeasance, bad faith or negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable law
which cannot be waived or modified hereby. (As used in this Section 7, the
term "USBFS" shall include directors, officers, employees and other
corporate agents of USBFS as well as that corporation itself.)
So long as USBFS acts in good faith and with due diligence and without
negligence, the Fund assumes full responsibility and shall indemnify USBFS
and hold it harmless from and against any and all actions, suits and
claims, whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation
expenses) arising directly or indirectly out of USBFS' relationship with
the Fund, including USBFS' actions taken or nonactions with respect to the
performance of services hereunder. The indemnity and defense provisions set
forth herein shall survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited;
provided, however, that in
the event that it is ultimately determined that indemnification is not
warranted, any such amounts advanced hereunder shall be repaid. In order
that the indemnification provision contained herein shall apply, however,
it is understood that if in any case the Fund may be asked to indemnify or
hold USBFS harmless, the Fund shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that USBFS will use all reasonable care to identify and notify
the Fund promptly concerning any situation which presents or appears likely
to present the probability of such a claim for indemnification against the
Fund.
The Fund shall be entitled to participate at its own expense or, if it so
elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the Fund elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen
by the Fund and satisfactory to USBFS, whose approval shall not be
unreasonably withheld. In the event that the Fund elects to assume the
defense of any suit and retain counsel, USBFS shall bear the fees and
expenses of any additional counsel retained by it. If the Fund does not
elect to assume the defense of a suit, it will reimburse USBFS for the
reasonable fees and expenses of any counsel retained by USBFS.
USBFS may apply to the Fund at any time for instructions and may consult
outside counsel for the Fund or its own counsel and with accountants and
other experts with respect to any matter arising in connection with USBFS'
duties, and, except for such actions or omissions constituting negligence,
USBFS shall not be liable or accountable for any action taken or omitted by
it in good faith and in accordance with such instruction or with the
opinion of such counsel, accountants or other experts.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
USBFS agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Fund all
records and other information relative to the Fund and prior, present, or
potential shareholders (and clients of said shareholders) and not to use
such records and information for any purpose other than the performance of
its responsibilities and duties hereunder, except after prior notification
to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where USBFS may be exposed to
civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities, or
when so requested by the Fund.
Further, USBFS will adhere to the privacy policies adopted by the Fund
pursuant to Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, as may be modified from
time to time (the "Act"). Notwithstanding the foregoing, USBFS will not
share any nonpublic personal information concerning any of the Fund's
shareholders with any third
party unless specifically directed by the Fund or allowed under one of the
exceptions noted under the Act. USBFS shall have in place and maintain
physical, electronic, and procedural safeguards reasonably designed to
protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information relating to the
Fund or its shareholders.
9. ANTI-MONEY LAUNDERING PROGRAM
USBFS, as named transfer agent for the Fund, has established and
implemented an anti-money laundering program reasonably designed to prevent
the Fund from being used to launder money.
A. Policies and Procedures. USBFS has implemented policies, procedures,
and internal controls that achieve compliance with the applicable
provisions of the Bank Secrecy Act ("BSA") and are reasonably designed
to detect activities indicative of money laundering, including but not
limited to detection of the following transactions:
1) An investment in a fund by check or checks drawn on the account
of a third party or parties unrelated to the investor;
2) An investment in a fund by one or more wire transfers from an
account of a third party or parties unrelated to the investor;
3) Frequent wire transfer activity to and from a cash reserve
account, coming from or sent to the same bank;
4) Payments that indicate structuring occurring at another financial
institution, such as large amounts of sequentially numbered money
orders or travelers checks or cashiers checks in amounts under
the $10,000 currency reporting threshold;
5) Large deposits with relatively small fund investments;
6) Frequent purchases of Fund shares followed by large redemptions;
and
7) Transfers to accounts in countries where drugs are known to be
produced or other high-risk countries.
USBFS will file all reports that are required by law or regulation in
order to report certain types of transactions. USBFS will also analyze
the money laundering risks posed by particular omnibus accounts based
on a risk-based evaluation of relevant factors. In addition, USBFS
will follow its procedures to prohibit transactions with individuals,
entities or jurisdictions identified on any list of known or suspected
terrorists or on the Treasury's Office of Foreign Assets Control
("OFAC") List.
USBFS agrees that federal examiners will have access to information
and records relating to its anti-money laundering program and consents
to any inspection authorized by law or regulation in connection
thereof.
USBFS will amend its anti-money laundering program as necessary to
reflect future implementing regulations applicable to the Fund.
B. Customer Identification Program ("CIP"). USBFS has implemented
risk-based procedures designed to ensure that the Fund verifies the
identity of new customers to the extent reasonable and practicable,
including but not limited to:
1) Procedures for opening an account that specify the identifying
information that will be obtained with respect to each customer
prior to opening an account;
2) Procedures for verifying the identity of the customer within a
reasonable time after the account is opened; 3) Procedures for
making and maintaining certain records relating to the
identification and verification of customers;
4) Procedures for determining whether the customer appears on
certain lists of known or suspected terrorists or terrorist
organizations; and
5) Procedures for providing mutual fund customers with adequate
notice that the mutual fund is requesting information to verify
their identities.
USBFS will certify annually to the Fund that it has implemented an
anti-money laundering program and will perform the specified
requirements of the Fund's CIP.
C. Training. USBFS will provide ongoing training to employees that is
relevant to their functions, including but not limited to BSA
requirements. The level, frequency, and focus of the training will be
determined according to the responsibilities of the employees.
Training will be provided whenever employees, including new employees,
assume duties that bring them in contact with BSA requirements or
potential money laundering activities. The ongoing training program
will include periodic updates and refresher courses regarding the
anti-money laundering program.
D. Quarterly Reports. USBFS will report to the Fund Board of Directors,
at least quarterly, any anti-money laundering compliance exceptions,
including the resolution of such exceptions. Summary reports will
include but not be limited to "OFAC hits" and any Suspicious Activity
Report filings.
E. Inspection. USBFS agrees that federal, state and other self-regulatory
organization examiners will have access to information and records
relating to any anti-money laundering activities performed by USBFS
for the Fund, and USBFS consents to any inspection authorized by law
or regulation in connection thereof.
F. Annual Audit. USBFS agrees to an annual independent audit of its
anti-money laundering program. Any recommendation resulting from such
review will be promptly implemented or submitted to the Fund's Board
of Directors for consideration.
10. TERM OF AGREEMENT; AMENDMENT
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of one year. This Agreement shall
continue in effect from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Fund's Board
of Directors, including the specific approval of a majority of the
directors who are not interested persons of the Fund. Subsequent to the
initial one-year term, this Agreement may be terminated by the Fund or
USBFS upon giving ninety (90) days' prior written notice to the other party
or such shorter period as is mutually agreed upon by the parties.
Nothwithstanding the foregoing, this Agreement may be terminated by any
party upon a material breach of this Agreement by the other party if such
breach is not cured within 15 days of notice of such material breach to the
breaching party. This Agreement may not be amended or modified in any
manner except by written agreement executed by USBFS and the Fund, and
authorized or approved by the Board of Directors.
11. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the Fund by
written notice to USBFS, USBFS will promptly, upon such termination and at
the expense of the Fund, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by USBFS
under this Agreement in a form reasonably acceptable to the Fund (if such
form differs from the form in which USBFS has maintained, the Fund shall
pay any expenses associated with transferring the data to such form), and
will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from USBFS's personnel in the
establishment of books, records, and other data by such successor. If no
successor is designated, such books, records, and other data will be
returned to the Fund.
12. RECORDS
USBFS shall keep records relating to the services to be performed hereunder
in the form and manner, and for such period, as it may deem advisable and
is agreeable to the Fund, but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section
31 of the 1940 Act and the rules thereunder. USBFS agrees that all such
records prepared or maintained by USBFS relating to the services to be
performed by USBFS hereunder are the
property of the Fund and will be preserved, maintained, and made available
in accordance with such applicable sections and rules of the 1940 Act and
will be promptly surrendered to the Fund on and in accordance with its
request. Further, federal examiners shall have access to information and
records relating to anti-money laundering activities performed by USBFS
hereunder and USBFS consents to any inspection authorized by law or
regulation in connection thereof.
13. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Minnesota, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Minnesota, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control, and nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or order of the Securities and
Exchange Commission thereunder.
14. DATA NECESSARY TO PERFORM SERVICES
The Fund or its agent shall furnish to USBFS the data necessary to perform
the services described herein at such times and in such form as mutually
agreed upon.
15. ASSIGNMENT
This Agreement may not be assigned by the Fund without the written consent
of USBFS, or by USBFS without the written consent of the Fund accompanied
by the authorization or approval of the Board of Directors.
16. SERVICES NOT EXCLUSIVE
Nothing in this Agreement shall limit or restrict USBFS from providing
services to other parties that are similar or identical to some or all of
the services provided hereunder.
17. INVALIDITY
Any provision of this Agreement which may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. In such case, the parties shall in good
faith modify or substitute such provision consistent with the original
intent of the parties.
18. NOTICES
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given on the date
delivered personally or by courier service, or three (3) days after sent by
registered or certified mail, postage prepaid, return receipt requested, or
on the date sent and confirmed received by facsimile transmission to the
other party's address set forth below: Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and notice to the Fund shall be sent to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Fund Treasurer
First American Funds, US Bancorp Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
19. MULTIPLE ORIGINALS
This Agreement may be executed on two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the
date first above written.
FIRST AMERICAN STRATEGY FUNDS, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Vice President - Administration
U.S. BANCORP FUND SERVICES, LLC.
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇
Its President
U.S. BANCORP ASSET MANAGEMENT, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Its Chief Financial Officer
EXHIBIT A TO THE TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT
FEE SCHEDULE
TRANSFER AGENCY AND DIVIDEND DISBURSING CHARGES
The Fund (on behalf of each share class of each Portfolio) shall pay USBFS the
following fees for transfer agency and dividend disbursing services:
Annual CUSIP Fee: $18,500 per CUSIP per year
Open Account Fees:
- ▇▇▇▇▇ ▇▇▇▇▇▇▇ Accounts $15.00 per account per year
- Fund Direct & Networked Accounts* $15.00 per account per year
- ▇▇▇ Accounts $15.00 per account per year
Closed Account Fees:
- ▇▇▇▇▇ ▇▇▇▇▇▇▇ Accounts $15.00 per account per year
- Fund Direct & Networked Accounts $3.50 per account per year
Omnibus Accounts: No per account fee
An account is deemed to be closed when the account is fully redeemed.
An account shall be removed from the books when the account remains continuously
fully redeemed at the end of the calendar year immediately following the
calendar year in which the account first became fully redeemed. For example, if
an account is fully redeemed on 7/1/05, that account shall be removed from the
books on 12/31/06 so long the account contained no assets from 7/1/05 to
12/31/06.
The aggregate amount of such fees for transfer agency and dividend disbursing
services shall be allocated among all Portfolios within the Fund (on behalf of
each share class of each Portfolio) on a pro rata basis based upon relative net
assets.
* Any additional networking fees charged by a third party clearing firm will
be charged directly to the Fund.
SHAREHOLDER SERVICES; OMNIBUS ACCOUNTS
As compensation for providing shareholder services as set forth in the last
paragraph of Section 2 of the Agreement, and to reimburse USBFS for its payments
to qualifying financial institutions with which it has contracted pursuant to
such paragraph, each
Portfolio shall pay USBFS an annual fee, calculated and payable monthly, equal
to 0.10% of such Portfolio's average daily net assets. If such fees are not
sufficient to cover the fees charged to USBFS by such institutions, USBAM shall
pay USBFS the difference as required by Section 6 of the Agreement.
OUT OF POCKET EXPENSES
In addition to paying USBFS the fees described above, the Fund agrees to
reimburse USBFS for its out-of-pocket expenses in providing services hereunder,
including without limitation the following:
(a) All postage and delivery charges incurred by USBFS in delivering
materials to and from the Fund;
(b) All telephone, telecopy or other electronic transmission and
communication expenses incurred by USBFS in communication with the
Fund, the Fund's custodian or others as required for USBFS to perform
the services to be provided hereunder;
(c) The cost of any media used to create and store records or other
materials;
(d) All systems-related expenses associated with the provision of special
reports and services;
(e) Any expenses USBFS shall incur at the written direction of an officer
of the Fund thereunto duly authorized; and
(f) Any additional expenses, agreed to in advance by the Fund, reasonably
incurred by USBFS in the performance of its duties and obligations
under this Agreement.