TRANSFER AGENCY AGREEMENT
Made as of the 7th day of May, 2001
by and between
EACH OF THE
▇.▇. ▇▇▇▇▇▇ SERIES TRUST,
▇.▇. ▇▇▇▇▇▇ FUNDS,
▇.▇. ▇▇▇▇▇▇ INSTITUTIONAL FUNDS, AND
▇.▇. ▇▇▇▇▇▇ SERIES TRUST II
and
DST SYSTEMS, INC.
TABLE OF CONTENTS
Documents to be Filed with Appointment 1
Certain Representations and Warranties of DST 2
Certain Representations and Warranties of the Trust 3
Scope of Appointment 3
Limit of Authority 6
Compensation and Expenses 7
Operation of DST System 10
Indemnification 12
Certain Covenants of DST and the Trust 16
Recapitalization or Readjustment 17
Stock Certificates 18
Death, Resignation or Removal of Signing Officer 18
Future Amendments of Declaration of Trust and Bylaws 18
Instructions, Opinion of Counsel and Signatures or JPM 19
Force Majeure and Disaster Recovery Plans 19
Certification of Documents 20
Records 21
Disposition of Books, Records and Canceled Certificates 21
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Provisions Relating to DST as Transfer Agent 21
Provisions Relating to Dividend Disbursing Agency 24
Assumption of Duties By the Trust or Agents Designated By the Trust 24
Termination of Agreement 25
Confidentiality 27
Changes and Modifications 28
Assignment and Subcontractors 29
Limitations on Liability 30
Miscellaneous 30
Exhibit A - Fee Schedule 34
Exhibit B - Authorized Personnel 40
Exhibit C - Transfer Agency Services and Systems Features 41
Exhibit D - Confidentiality Agreement for Auditors 43
Appendix I 47
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TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made as of the 7th day of May, 2001, by and between each of
the ▇.▇. ▇▇▇▇▇▇ SERIES TRUST, ▇.▇. ▇▇▇▇▇▇ FUNDS, ▇.▇. ▇▇▇▇▇▇ INSTITUTIONAL FUNDS
AND ▇.▇. ▇▇▇▇▇▇ SERIES TRUST II, each a business trust existing under the laws
of the Commonwealth of Massachusetts, having its principal place of business at
▇▇▇ ▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and acting on its own behalf and on behalf of
each of the portfolios listed under its name in Appendix I (collectively, the
"Fund" or "Funds), and DST SYSTEMS, INC., a corporation existing under the laws
of the State of Delaware, having its principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("DST"):
WITNESSETH:
WHEREAS, each Trust (as used hereinafter, the term "Trust" shall refer
jointly and severally to the ▇.▇. ▇▇▇▇▇▇ Series Trust, ▇.▇. ▇▇▇▇▇▇ Funds, ▇.▇.
▇▇▇▇▇▇ Institutional Funds, and ▇.▇. ▇▇▇▇▇▇ Series Trust II and each Fund) is a
Massachusetts business trust registered with the Securities and Exchange
Commission as an investment company pursuant to the Investment Company Act of
1940, as amended, which currently consists of the Funds listed under its name on
Appendix I; and
WHEREAS, the Trust desires to appoint DST as Transfer Agent and Dividend
Disbursing Agent for all shares of each Fund of each Trust (the "Shares"), and
DST desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. DOCUMENTS TO BE FILED WITH APPOINTMENT.
In connection with the appointment of DST as Transfer Agent and Dividend
Disbursing Agent for the Trust, there will be filed with DST the following
documents:
A. A certified copy of the votes of the Board of Trustees of the Trust
appointing DST as Transfer Agent and Dividend Disbursing Agent,
approving the form of this Agreement, and designating certain
persons to sign Certificates, if any, and give written instructions
and requests on behalf of the Trust;
B. A certified copy of the Declaration of Trust of the Trust and all
amendments thereto;
C. A certified copy of the Bylaws of the Trust;
D. Copies of Registration Statements and amendments thereto, filed with
the Securities and Exchange Commission;
E. Specimens of all forms of outstanding Certificates;
F. Specimens of the signatures of the officers of the Trust authorized
to sign Certificates and individuals authorized to sign written
instructions and requests;
G. An opinion of counsel for the Trust with respect to:
(1) The Trust's organization and existence under the laws of its
state of organization,
(2) The status of all Shares, whether unissued or evidenced by
Certificates of the Trust, covered by the appointment under
the Securities Act of 1933, as amended, (the "'33 Act") and
any other applicable federal or state statute, and
(3) That all issued Shares are, and all unissued Shares will be
when issued, validly issued, fully paid and non-assessable.
2. CERTAIN REPRESENTATIONS AND WARRANTIES OF DST.
DST represents and warrants to the Trust that:
A. It is a corporation duly organized and existing and in good standing
under the laws of Delaware.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform the services
contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required under
the Securities Exchange Act of 1934, as amended, (the "'34 Act") and
it will remain so registered for the duration of this Agreement. It
will promptly notify the Trust in the event of any material change
in its status as a registered transfer agent. Should DST fail to be
registered with the appropriate federal agency as a transfer agent
at any time during this Agreement, the Trust may, on written notice
to DST, immediately terminate this Agreement.
E. All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
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F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
3. CERTAIN REPRESENTATIONS AND WARRANTIES OF THE TRUST.
The Trust represents and warrants to DST that:
A. It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
B. It is an open-end, non-diversified management investment company
registered under the Investment Company Act of 1940, as amended.
C. A registration statement under the '33 Act has been filed and will
be effective with respect to all Shares offered for sale.
D. All requisite steps have been and will continue to be taken to
register the Shares for sale in all applicable states and such
registration will be effective at all times Shares are offered for
sale in such state.
E. The Trust is empowered under applicable laws and by its Declaration
of Trust and Bylaws to enter into and perform this Agreement.
4. SCOPE OF APPOINTMENT.
A. Subject to the conditions and termination of provisions set forth in
this Agreement, the Trust hereby appoints DST as Transfer Agent and
Dividend Disbursing Agent for the Shares and for the Shares of
future portfolios of the Trust (Annex A shall be revised to include
such future portfolio(s)).
B. DST hereby accepts such appointment and agrees that it will act as
the Trust's Transfer Agent and Dividend Disbursing Agent. DST agrees
that it will also act as agent in connection with the Trust's
periodic withdrawal payment accounts and other open accounts or
similar plans for shareholders, if any.
C. The Trust agrees to use its best efforts to deliver to DST in Kansas
City, Missouri, as soon as they are available, all of its
shareholder account records for any new Fund of the Trust.
D. DST, utilizing TA2000(TM), DST's computerized data processing system
for securityholder accounting (the "TA2000(TM) System"), will
perform the following services as transfer and dividend disbursing
agent for the Trust, and as agent of the Trust for shareholder
accounts thereof, in a timely manner: issuing (including
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countersigning), transferring and canceling share certificates;
maintaining all shareholder accounts; providing transaction
journals; once annually preparing shareholder meeting lists for use
in connection with the annual meeting and certifying the shareholder
votes of the Trust; mailing shareholder reports and prospectuses;
withholding, as required by federal law, taxes on shareholder
accounts, disbursing income dividends and capital gains
distributions to shareholders, preparing, filing and mailing U.S.
Treasury Department Forms 1099, 1042, and 1042S and performing and
paying backup withholding as required for all shareholders;
preparing and mailing confirmation forms to shareholders and
dealers, as instructed, for all purchases and liquidations of shares
of the Trust and other transactions in shareholders' accounts
requiring confirmation under applicable law; recording reinvestment
of dividends and distributions in Shares; providing or making
available on-line daily and monthly reports as both are regularly
provided by the TA2000(TM) System and as requested by the Trust or
its management company; maintaining those records necessary to carry
out DST's duties hereunder, including all information reasonably
required by the Trust to account for all transactions in the Shares,
calculating the appropriate sales charge with respect to each
purchase of the Shares as set forth in the prospectus for the Trust,
determining the portion of each sales charge payable to the dealer
participating in a sale in accordance with schedules delivered to
DST by the Trust's principal underwriter or distributor (hereinafter
"principal underwriter") from time to time, disbursing dealer
commissions collected to such dealers, determining the portion of
each sales charge payable to such principal underwriter and
disbursing such commissions to the principal underwriter; receiving
correspondence pertaining to any former, existing or new shareholder
account, processing such correspondence for proper recordkeeping,
and responding promptly to shareholder correspondence; mailing to
dealers confirmations of wire order trades; mailing copies of
shareholder statements to shareholders and dealers in accordance
with the Trust's instructions; processing, generally on the date of
receipt, purchases or redemptions or instructions to settle any mail
or wire order purchases or redemptions received in proper order as
set forth in the prospectus, rejecting promptly any requests not
received in proper order (as
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defined by the Trust, the Trust's agents or prospectus, or the
Procedures, as hereinafter defined), and causing exchanges of shares
to be executed in accordance with the Trust's instructions and
prospectus, the Procedures and the general exchange privilege
applicable; operating the order desk on behalf of the Trust for the
purpose of taking trade orders from broker-dealers and institutions,
confirming orders on "T+1" (Trade Date Plus One), monitoring the
settlement of such orders and advising the Trust once such orders
become delinquent based upon the Trust's guidelines; monitoring "as
of's" and advising broker-dealers of the necessity to reimburse the
Trust when the as of loss from a transaction exceeds the thresholds
established by the Trust; and monitoring, administering and updating
(but not verifying the accuracy of) the MENTAP/Market Advisor
database.
E. At the request of Trust, DST shall use reasonable efforts to provide
the services set forth in Section 4.D. other than through DST's
usual methods and procedures to utilize the TA2000 System, that is
by performing services requiring more manual intervention by DST,
either in the entry of data or in the modification or amendment of
reports generated by the TA2000 System, or where information is
provided to DST after the commencement of the nightly processing
cycle of the TA2000 System, thereby decreasing the effective time
for performance by DST (the "Exception Services").
F. DST shall use reasonable efforts to provide, reasonably promptly
under the circumstances, the same services with respect to any new,
additional functions or features or any changes or improvements to
existing functions or features as provided for in the Trust's
instructions, prospectus or application as amended from time to
time, for the Trust; provided (i) DST is advised in advance by the
Trust of any changes therein and (ii) the TA2000(TM) System and the
mode of operations utilized by DST, as then constituted, supports
such additional functions and features. If any addition to,
improvement of or change in the features and functions currently
provided by the TA2000(TM) System or the operations as requested by
the Trust requires an enhancement or modification to the TA2000(TM)
System or to operations as presently conducted by DST, DST shall not
be liable therefore until such modification or enhancement is
installed on the TA2000(TM) System or new mode of
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operation is instituted. If any new, additional function or feature
or change or improvement to existing functions or features or new
service or mode of operation measurably increases DST's cost of
performing the services required hereunder at the current level of
service, DST shall advise the Trust of the amount of such increase
and if the Trust elects to utilize such function, feature or
service, DST shall be entitled to increase its fees by the amount of
the increase in costs. In no event shall DST be responsible for or
liable to provide any additional function, feature, improvement or
change in method of operation requested by the Trust until it has
consented thereto in writing.
G. The Trust shall have the right to add all new Funds of the Trust to
the TA2000(TM) System, provided that the Trust provides DST with at
least thirty (30) days' prior written notice and provided, further,
that the requirements of the new series are generally consistent
with services then being provided by DST under this Agreement. Rates
or charges for additional Funds shall be as set forth in Exhibit A,
as hereinafter defined, for the remainder of the contract term
except as such Fund uses functions, features or characteristics for
which DST has imposed an additional charge as part of its standard
pricing schedule. In the latter event, rates and charges shall be in
accordance with DST's then-standard pricing schedule.
Notwithstanding the foregoing, nothing herein is intended to, nor
does it, prohibit the Trust from offering Funds under a "private
label" arrangement whereby such Funds consist of omnibus accounts
whose shareowner detail, reflecting ownership of the shares of the
omnibus account, are maintained on another shareholder accounting
and recordkeeping system other than on the TA2000 System.
5. LIMIT OF AUTHORITY.
Unless otherwise expressly limited by the resolution of appointment or by
subsequent action by the Trust, the appointment of DST as Transfer Agent
will be construed to cover the full amount of authorized stock of the
class or classes for which DST is appointed as the same will, from time to
time, be constituted, and any subsequent increases in such authorized
amount.
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In case of such increase the Trust will file with DST:
A. If the appointment of DST was theretofore expressly limited, a
certified copy of a resolution of the Board of Trustees of the Trust
increasing the authority of DST;
B. A certified copy of the amendment to the Declaration of Trust of the
Trust authorizing the increase of stock;
C. A certified copy of the order or consent of each governmental or
regulatory authority required by law to consent to the issuance of
the increased stock, or an opinion of counsel that the order or
consent of no other governmental or regulatory authority is
required;
D. Opinion of counsel for the Trust stating:
(1) The status of the additional shares of stock of the Trust
under the '33 Act and any other applicable federal or state
statute; and
(2) That the additional shares are, or when issued will be,
validly issued, fully paid and non-assessable.
6. COMPENSATION AND EXPENSES.
A. In consideration for its services hereunder as Transfer Agent and
Dividend Disbursing Agent, the Trust will pay to DST, from time to
time, a reasonable compensation for all services rendered as Agent
and, also, all DST's reasonable billable expenses, charges, counsel
fees, and other disbursements ("Compensation and Expenses") incurred
in connection with the agency. "Expenses" are more fully described
in Section 6.B. of this Agreement. Such Compensation and Expenses
are set forth in a separate schedule previously agreed to by the
Trust and DST, a copy of which is attached hereto as Exhibit A. If
the Trust has not paid such Compensation and Expenses to DST within
a reasonable time, DST may charge against any monies held under this
Agreement, the amount of any Compensation and Expenses for which it
shall be entitled to reimbursement under this Agreement.
B. The Trust also agrees promptly to reimburse DST for all reasonable
billable expenses or disbursements incurred by DST in connection
with the performance of services under this Agreement including, but
not limited to: expenses for postage; express delivery services;
freight charges; envelopes, checks, drafts, forms (continuous or
otherwise); specially requested reports and statements; telephone
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calls; telegraphs; stationery supplies; counsel fees incurred in
connection with the review of the legal sufficiency of documentation
provided by a shareholder or otherwise as to the advisability of
complying with the request or instruction of a shareholder or person
purporting to act on behalf of a shareholder; outside printing and
mailing firms (including Output Technologies, Inc. and its
affiliates ["OTI"]); magnetic tapes, reels or cartridges (if sent to
the Trust or to a third party at the Trust's request) and magnetic
tape handling charges; off-site record storage and media for storage
of records (e.g., microfilm, microfiche, optical platters, computer
tapes); computer equipment installed at the Trust's request at the
Trust's or a third party's premises; telecommunications equipment
and telephone/telecommunication lines between the Trust and its
agents, on one hand, and DST on the other; proxy soliciting,
processing and/or tabulating costs; second-site backup computer
facility; transmission of statement data for remote printing or
processing other than by OTI (at a charge of .035/record); and
National Securities Clearing Corporation ("NSCC") transaction fees
to the extent any of the foregoing are paid or incurred by DST. The
Trust agrees to pay postage expenses at least one day in advance if
so requested. In addition, any other expenses incurred by DST at the
request or with the consent of the Trust will be promptly reimbursed
by the Trust.
C. Amounts due hereunder shall be due and paid on or before the
thirtieth (30th) calendar day after receipt of the statement
therefor by the Trust (the "Due Date"). The Trust is aware that its
failure to pay all amounts in a timely fashion so that they will be
received by DST on or before the Due Date will give rise to costs to
DST not contemplated by this Agreement, including but not limited to
carrying, processing and accounting charges. Accordingly, subject to
Section 6.D. hereof, in the event that any amounts due hereunder are
not received by DST by the Due Date, the Trust shall pay a late
charge equal to the lesser of the maximum amount permitted by
applicable law or the product of one and one-half (1 1/2) percentage
points per month times the amount overdue, times the number of days
from the Due Date up to and including the day on which payment is
received by DST. The parties hereby agree that such late charge
represents a fair and reasonable computation of the costs incurred
by reason of late payment or payment of amounts not properly due.
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Acceptance of such late charge shall in no event constitute a waiver
of the Trust's or DST's default or prevent the non-defaulting party
from exercising any other rights and remedies available to it.
D. In the event that any charges are disputed, the Trust shall, on or
before the Due Date, pay all undisputed amounts due hereunder and
notify DST in writing of any disputed charges for billable expenses
which it is disputing in good faith. Payment for such disputed
charges shall be due on or before the close of the fifth (5th)
business day after the day on which DST provides to the Trust
documentation which an objective observer would agree reasonably
supports the disputed charges (the "Revised Due Date"). Late charges
shall not begin to accrue as to charges disputed in good faith until
the first business day after the Revised Due Date.
E. The fees and charges set forth on Exhibit A shall increase or may be
increased as follows:
(1) On the first day of each anniversary of this Agreement, in
accordance with the "Fee Increases" provision in Exhibit A;
(2) DST may increase the fees and charges set forth on Exhibit A
upon at least ninety (90) days prior written notice, if
changes in existing laws, rules or regulations: (i) require
substantial system modifications or (ii) materially increase
DST's cost of performance hereunder;
(3) DST may charge for additional features of TA2000 used by the
Trust which features are not consistent with the Trust's
current processing requirements; and
(4) In the event DST, at the Trust's request or direction,
performs Exception Services, DST shall be entitled to increase
the fees and charges for such Exception Services from those
set forth on Exhibit A to the extent such Exception Services
increase DST's cost of performance.
If DST notifies the Trust of an increase in fees or charges pursuant
to subparagraph (2) of this Section 6.E., the parties shall confer,
diligently and in good faith and agree upon a new fee to cover the
amount necessary, but not more than such amount, to reimburse DST
for the Trust's aliquot portion of the cost of developing
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the new software to comply with regulatory charges and for the
increased cost of operation.
If DST notifies the Trust of an increase in fees or charges under
subparagraphs (3) or (4) of this Section 6.E., the parties shall
confer, diligently and in good faith, and agree upon a new fee to
cover such new Trust feature.
7. OPERATION OF DST SYSTEM.
In connection with the performance of its services under this Agreement,
DST is responsible for such items as:
A. That entries in DST's records, and in the Trust's records on the
TA2000(TM) System created by DST and DST's affiliates, accurately
reflect the orders, instructions, and other information received by
DST and such affiliates from the Trust, the Trust's distributor,
manager or principal underwriter, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset Management,
(USA) Inc. ("JPM") and its affiliates, entities from whom JPM or the
Trust have directed DST to accept orders, instructions or other
information, the Trust's investment adviser, banks or other entities
which DST has been advised by the Trust or JPM are affiliated with
or a correspondent of JPM, or the Trust's administrator (each an
"Authorized Person"), broker-dealers or shareholders (existing or
new). DST has currently been instructed, by way of example and not
limitation, to accept telephone instructions from any person
reasonably believed by DST to be a representative of an Authorized
Person, to accept third party checks initiated by or received from
or through a broker/dealer or a JPM-customer relationship, to accept
transactions and documentation by fax in accordance with the
guidelines established by an Authorized Person, to allow
corporations, partnerships, trusts and other accounts not registered
in the name of a single individual and individually owned accounts
to have telephone or "VOICE" transaction processing privileges (the
"Privileges"), to establish Privileges on all accounts unless the
establishing shareholder explicitly directs that telephone exchanges
and redemptions not be permitted and to accept and to effectuate
transmissions and trades entered on a remote basis by JPM and banks
affiliated with JPM (without verification of the contents of such
transmissions and trades);
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B. That shareholder lists, shareholder account verifications,
confirmations and other shareholder account information to be
produced from its records or data be available and accurately
reflect the data in the Trust's records on the TA2000(TM) System;
C. The accurate and timely issuance of dividend and distribution checks
in accordance with instructions received from the Trust and the data
in the Trust's records on the TA2000(TM) System;
D. That redemption transactions and payments be effected timely, under
normal circumstances on the day of receipt, and accurately in
accordance with redemption instructions received by DST from
Authorized Persons, broker-dealers or shareholders and the data in
the Trust's records on the TA2000(TM) System;
E. The deposit daily in the Trust's appropriate special bank account of
all checks and payments received by DST from NSCC, broker-dealers or
shareholders for investment in shares;
F. Notwithstanding anything herein to the contrary, with respect to "as
of" adjustments, DST will not assume one hundred percent (100%)
responsibility for losses resulting from "as ofs" due to clerical
errors or misinterpretations of shareholder instructions, but DST
will discuss with the Trust DST's accepting liability for an "as of"
on a case-by-case basis and may accept financial responsibility for
a particular situation resulting in a financial loss to the Trust
where DST in its discretion deems that to be appropriate;
G. The requiring of proper forms of instructions, signatures and
signature guarantees and any necessary documents supporting the
opening of shareholder accounts, transfers, redemptions and other
shareholder account transactions, all in conformance with DST's
present procedures as set forth in its Legal Manual, Third Party
Check Procedures, Checkwriting Draft Procedures, and Signature
Guarantee Procedures (collectively the "Procedures") with such
changes or deviations therefrom as may be from time to time required
or approved by the Trust, its investment adviser or principal
underwriter, or its or DST's counsel and the rejection of orders or
instructions not in good order in accordance with the applicable
prospectus or the Procedures;
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H. The maintenance of a current, duplicate set of the Trust's essential
records at a secure separate location, in a form available and
usable forthwith in the event of any breakdown or disaster
disrupting its main operation.
8. INDEMNIFICATION.
A. DST shall at all times use reasonable care, due diligence and act in
good faith in performing its duties under this Agreement. DST shall
provide its services hereunder in accordance with the '34 Act, and
other Federal laws, rules and regulations of governmental
authorities having jurisdiction over DST. In the absence of bad
faith, willful misconduct, knowing violations of applicable law
pertaining to the manner in which transfer agency services are to be
performed by DST (excluding any violations arising directly or
indirectly out of the actions or omissions to act of third parties
unaffiliated with DST), reckless disregard of the performance of its
duties, or negligence on its part, DST shall not be liable for any
action taken, suffered, or omitted by it or for any error of
judgment made by it in the performance of its duties under this
Agreement. For those activities or actions delineated in the
Procedures, DST shall be presumed to have used reasonable care, due
diligence and acted in good faith if it has acted in accordance with
the Procedures, copies of which have been provided to the Trust and
reviewed and approved by the Trust's counsel, as amended from time
to time with approval of counsel, or for any deviation therefrom
approved by the Trust or DST counsel.
B. DST shall not be responsible for, and the Trust shall indemnify and
hold DST harmless from and against, any and all losses, damages,
reasonable costs, reasonable charges, reasonable counsel fees,
payments, reasonable expenses and liability (the "Adverse
Consequences") which may be asserted against DST or for which DST
may be held to be liable, arising out of or attributable to:
(1) All actions of DST required to be taken by DST pursuant to
this Agreement, provided that DST has acted in good faith and
with due diligence and reasonable care;
(2) The Trust's refusal or failure to comply with the terms of
this Agreement, the Trust's negligence or willful misconduct,
or the breach of any representation or warranty of the Trust
hereunder;
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(3) The good faith reliance on, or the carrying out of, any
written or oral instructions or requests of persons designated
by the Trust in writing (see Exhibit B) from time to time as
authorized to give instructions on its behalf or
representatives of an Authorized Person or DST's good faith
reliance on, or use of, information, data, records and
documents received from, or which have been prepared and/or
maintained by the Trust, its investment advisor, its sponsor
or its principal underwriter;
(4) Defaults by dealers or shareowners with respect to payment for
share orders previously entered;
(5) The offer or sale of Shares in violation of any requirement
under federal securities laws or regulations or the securities
laws or regulations of any state or in violation of any stop
order or other determination or ruling by any federal agency
or state with respect to the offer or sale of such shares in
such state (unless such violation results from DST's failure
to comply with written instructions of the Trust or of any
officer of the Trust that no offers or sales be input into the
Trust's securityholder records in or to residents of such
state);
(6) Any error or mistake of the Trust, any Authorized Person, and
any agent designated by the Trust in the use of the TA2000(TM)
System, the data center, computer and related equipment used
to access the TA2000(TM) System (the "DST Facilities"), and
control procedures relating thereto in the verification of
output and in the remote input of data;
(7) Errors, inaccuracies, and omissions in, or errors,
inaccuracies or omissions of DST arising out of or resulting
from such errors, inaccuracies and omissions in, the Trust's
records, shareholder and other records, delivered to DST
hereunder by the Trust or its prior agent(s);
(8) Actions or omissions to act by the Trust or agents designated
by the Trust with respect to duties assumed thereby as
provided for in Section 21 hereof; and
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(9) DST's performance of Exception Services except where DST acted
or omitted to act in bad faith, with reckless disregard of its
obligations or with gross negligence.
C. Except where DST is entitled to indemnification under Section 8.B.
hereof and with respect to "as ofs" set forth in Section 7.F., DST
shall indemnify and hold the Trust harmless from and against any and
all Adverse Consequences arising out of DST's failure to comply with
the terms of this Agreement or arising out of or attributable to
DST's negligence, willful misconduct or reckless disregard of its
obligations under this Agreement or DST's breach of any of its
representations or warranties under this Agreement.
D. EXCEPT FOR VIOLATIONS OF SECTION 23, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO
ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR
CONSEQUENTIAL DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER ANY
PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY
THEREOF.
E. Promptly after receipt by an indemnified person of notice of the
commencement of any action, such indemnified person will, if a claim
in respect thereto is to be made against an indemnifying party
hereunder, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying
party will not relieve an indemnifying party from any liability that
it may have to any indemnified person for contribution or otherwise
under the indemnity agreement contained herein except to the extent
it is prejudiced as a proximate result of such failure to timely
notify. In case any such action is brought against any indemnified
person and such indemnified person seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish,
assume the defense thereof (in its own name or in the name and on
behalf of any indemnified party or both with counsel reasonably
satisfactory to such indemnified person); provided, however, if the
defendants in any such action include both the indemnified person
and an indemnifying party and the
14
indemnified person shall have reasonably concluded that there may be
a conflict between the positions of the indemnified person and an
indemnifying party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other
indemnified persons which are inconsistent with those available to
an indemnifying party, the indemnified person or indemnified persons
shall have the right to select one separate counsel (in addition to
local counsel) to assume such legal defense and to otherwise
participate in the defense of such action on behalf of such
indemnified person or indemnified persons at such indemnified
party's sole expense. Upon receipt of notice from an indemnifying
party to such indemnified person of its election so to assume the
defense of such action and approval by the indemnified person of
counsel, which approval shall not be unreasonably withheld (and any
disapproval shall be accompanied by a written statement of the
reasons therefor), the indemnifying party will not be liable to such
indemnified person hereunder for any legal or other expenses
subsequently incurred by such indemnified person in connection with
the defense thereof. An indemnifying party will not settle or
compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified persons are actual or
potential parties to such claim, action, suit or proceeding) unless
such settlement, compromise or consent includes an unconditional
release of each indemnified person from all liability arising out of
such claim, action, suit or proceeding. An indemnified party will
not, without the prior written consent of the indemnifying party,
settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may
be sought hereunder. If it does so, it waives its right to
indemnification therefor.
F. In any case an indemnifying person may be asked to indemnify or save
an indemnified person harmless, the indemnified person shall use
reasonable care to (i) fully and promptly advise the indemnifying
person of all pertinent facts concerning the situation in question,
and (ii) timely advise the indemnifying person of any matter as to
which the indemnified person is aware that a claim which may
15
give rise to Adverse Consequences has been asserted or is being
threatened and appears reasonably likely to be asserted.
9. CERTAIN COVENANTS OF DST AND THE TRUST.
A. All requisite steps will be taken by the Trust from time to time
when and as necessary to register the Shares for sale in all states
in which the Shares shall at the time be offered for sale and
require registration. If at any time the Trust receives notice of
any stop order or other proceeding in any such state affecting such
registration or the sale of the Shares, or of any stop order or
other proceeding under the federal securities laws affecting the
sale of the Shares, the Trust will give prompt notice thereof to
DST.
B. DST hereby agrees to perform such transfer agency functions as are
set forth in Section 4.D. above and Exhibit C, to establish and to
maintain facilities and procedures reasonably acceptable to the
Trust for safekeeping of Certificates, check forms, and facsimile
signature imprinting devices, if any, and for the preparation or
use, and the keeping account of, such Certificates, forms and
devices, and to carry such insurance as DST considers adequate and
reasonably available.
C. To the extent required by Section 31 of the Investment Company Act
of 1940, as amended, and Rules thereunder, DST agrees that all
records maintained by DST relating to the services to be performed
by DST under this Agreement are the property of the Trust and will
be preserved and will be surrendered promptly to the Trust on
request.
D. DST agrees to furnish the Trust annual reports of (i) DST's
financial condition, consisting of a balance sheet, earnings
statement and any other financial information reasonably requested
by the Trust, and (ii) a report in accordance with Statements on
Auditing Standards No. 70 (the "SAS 70 Report"). The annual
financial statements will be certified by DST's certified public
accountants.
E. DST represents and agrees that it will use its best efforts to keep
current on the trends of the investment company industry relating to
shareholder services and will use its best efforts to continue to
modernize and improve. Notwithstanding the foregoing, (i) DST shall
not be liable for failing to make any modification or
16
improvement as to the necessity of which the Fund has not advised
DST in writing and (ii) for any delay in the implementation of such
modification or improvement where DST reasonably requires more time
than was permitted by circumstances or such regulations.
F. DST will permit the Trust and its authorized representatives to make
periodic inspections of its operations as such would involve the
Trust at reasonable times during business hours subject to such
authorized representatives' execution of DST's "Confidentiality and
Limited Use Agreement, a blank copy of which is attached hereto as
Exhibit D.
G. DST agrees to use its best efforts to provide in Kansas City at the
Trust's expense two (2) man weeks of training for the Trust's
personnel in connection with use and operation of the TA2000(TM)
System. All travel and reimbursable expenses incurred by the Trust's
personnel in connection with and during training at DST's Facility
shall be borne by the Trust. At the Trust's option and expense, DST
also agrees to use its best efforts to provide an additional two (2)
man weeks of training at the Trust's facility for the Trust's
personnel in connection with the conversion to the TA2000(TM)
System. Reasonable travel, per diem and reimbursable expenses
incurred by DST personnel in connection with and during training at
the Trust's facility or in connection with the conversion shall be
borne by the Trust.
H. DST shall reasonably cooperate with the Trust's independent public
accountants and shall take all reasonable action in the performance
of its obligations under this Agreement to assure that all readily
necessary information is made available to such accountants for the
expression of their opinion as such may be required from time to
time. Special reports or information may be charged for. A report is
"Special" if it is not regularly produced by TA2000(TM) or requires
special programming.
10. RECAPITALIZATION OR READJUSTMENT.
In case of any recapitalization, readjustment or other change in the
capital structure of the Trust requiring a change in the form of
Certificates, DST will issue or register Certificates in the new form in
exchange for, or in transfer of, the outstanding Certificates in the old
form, upon receiving:
A. Written instructions from an officer of the Trust;
17
B. Certified copy of the amendment to the Declaration of Trust or other
document effecting the change;
C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the stock
in the new form, and an opinion of counsel that the order or consent
of no other government or regulatory authority is required;
D. Specimens of the new Certificates in the form approved by the Board
of Trustees of the Trust, with a certificate of the Secretary of the
Trust as to such approval;
E. Opinion of counsel for the Trust stating:
(1) The status of the shares of stock of the Trust in the new form
under the '33 Act, as amended and any other applicable federal
or state statute; and
(2) That the issued shares in the new form are, and all unissued
shares will be when registered, validly issued, fully paid and
nonassessable.
11. STOCK CERTIFICATES ("CERTIFICATES").
The Trust will furnish DST with a sufficient supply of blank Certificates
and from time to time will renew such supply upon the request of DST. Such
Certificates will be signed manually or by facsimile signatures of the
officers of the Trust authorized by law and by bylaws to sign
Certificates, and if required, will bear the corporate seal or facsimile
thereof.
12. DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER.
The Trust will file promptly with DST written notice of any change in the
officers authorized to sign Certificates, written instructions or
requests, together with a revised Exhibit B. In case any officer of the
Trust who will have signed manually or whose facsimile signature will have
been affixed to blank Certificates will die, resign, or be removed prior
to the issuance of such certificates, DST may issue or register such
Certificates as the Certificates of the Trust notwithstanding such death,
resignation, or removal, until specifically directed to the contrary by
the Trust in writing. In the absence of such direction, the Trust will
file promptly with DST such approval, adoption, or ratification as may be
required by law.
13. FUTURE AMENDMENTS OF DECLARATION OF TRUST AND BYLAWS.
The Trust will promptly file with DST copies of all material amendments to
its Declaration of Trust or Bylaws made after the date of this Agreement.
18
14. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES OR JPM.
Any time DST shall be in doubt as to any proposed or requested action or
omission to be taken or omitted by it, DST may apply to any person
authorized by the Trust to give instructions to DST. DST may with the
approval of a Trust officer consult with legal counsel for the Trust or
may consult with DST's own legal counsel at DST's own expense, with
respect to any matter involving a question of law involved in any action
to be taken or omitted by DST in connection with the agency. DST will not
be liable for any action taken or omitted by it in good faith in reliance
upon such instructions or upon the opinion of such counsel.
Notwithstanding the foregoing, the Trust shall reimburse DST for outside
counsel fees incurred in connection with the review of the legal
sufficiency of documentation provided by a shareholder or otherwise as to
the advisability of complying with the request of a shareholder or person
purporting to act on behalf of a shareholder. DST will be protected in
acting upon any paper or document reasonably believed by it to be genuine
and to have been signed by the proper person or persons and will not be
held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Trust. It will also be
protected in recognizing Certificates which it reasonably believes to bear
the proper manual or facsimile signatures of the officers of the Trust,
and the proper countersignature of any former Transfer Agent or Registrar,
or of a co-Transfer Agent or co-Registrar.
15. FORCE MAJEURE AND DISASTER RECOVERY PLANS.
A. DST shall not be responsible or liable for its failure or delay in
performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation: any interruption,
loss or malfunction or any utility, transportation, computer
(hardware or software) or communication service; inability to obtain
labor, material, equipment or transportation, or a delay in mails;
governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornadoes, acts of God or public enemy,
revolutions, or insurrection; or any other cause, contingency,
circumstance or delay not subject to DST's reasonable control which
prevents or hinders DST's performance hereunder.
19
B. DST currently maintains an agreement with a third party whereby DST
is to be permitted to use on a "shared use" basis a "hot site" (the
"Recovery Facility") maintained by such party in event of a disaster
rendering the DST Facilities inoperable. DST has developed and is
continually revising a business contingency plan (the "Business
Contingency Plan") detailing which, how, when, and by whom data
maintained by DST at the DST Facilities will be installed and
operated at the Recovery Facility. Provided the Trust is paying its
pro rata portion of the charge therefor, DST would, in event of a
disaster rendering the DST Facilities inoperable, use reasonable
efforts to convert the TA2000(TM) System containing the designated
Trust data to the computers at the Recovery Facility in accordance
with the then current Business Contingency Plan.
C. DST also currently maintains, separate from the area in which the
operations which provides the services to the Trust hereunder are
located, a Crisis Management Center consisting of phones, computers
and the other equipment necessary to operate a full service transfer
agency business in the event one of its operations areas is rendered
inoperable. The transfer of operations to other operating areas or
to the Crisis Management Center is also covered in DST's Business
Contingency Plan.
16. CERTIFICATION OF DOCUMENTS.
The required copy of the Declaration of Trust of the Trust and copies of
all amendments thereto will be certified by the Secretary of State (or
other appropriate official) of the State of Incorporation, and if such
Declaration of Trust and amendments are required by law to be also filed
with a county, city or other officer of official body, a certificate of
such filing will appear on the certified copy submitted to DST. A copy of
the order or consent of each governmental or regulatory authority required
by law to the issuance of the stock will be certified by the Secretary or
Clerk of such governmental or regulatory authority, under proper seal of
such authority. The copy of the Bylaws and copies of all amendments
thereto, and copies of resolutions of the Board of Trustees of the Trust,
will be certified by the Secretary or an Assistant Secretary of the Trust
under the Trust's seal.
20
17. RECORDS.
DST will maintain customary records in connection with its agency, and
particularly will maintain those records required to be maintained
pursuant to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 under the
Investment Company Act of 1940, if any.
18. DISPOSITION OF BOOKS, RECORDS AND CANCELED CERTIFICATES.
DST may send periodically to the Trust, or to where designated by the
Secretary or an Assistant Secretary of the Trust, all books, documents,
and all records no longer deemed needed for current purposes and
Certificates which have been canceled in transfer or in exchange, upon the
understanding that such books, documents, records, and Certificates will
be maintained by the Trust under and in accordance with the requirements
of Section 17Ad-7 adopted under the Securities Exchange Act of 1934. Such
materials will not be destroyed by the Trust without the consent of DST
(which consent will not be unreasonably withheld), but will be safely
stored for possible future reference.
19. PROVISIONS RELATING TO DST AS TRANSFER AGENT.
A. DST will make original issues of Certificates upon written request
of an officer of the Trust and upon being furnished with a certified
copy of a resolution of the Board of Trustees authorizing such
original issue, an opinion of counsel as outlined in subparagraphs
1.G. and 5.D. of this Agreement, any documents required by Sections
5. or 10. of this Agreement, and necessary funds for the payment of
any original issue tax.
B. Before making any original issue of Certificates of the Trust will
furnish DST with sufficient funds to pay all required taxes on the
original issue of the stock, if any. The Trust will furnish DST such
evidence as may be required by DST to show the actual value of the
stock. If no taxes are payable DST will be furnished with a
certified statement from an officer of the Trust to that effect.
C. Shares of stock represented by Certificates will be transferred and
new Certificates issued in transfer, or Shares of stock accepted for
redemption and funds remitted therefor, or book entry transfer be
effected, upon surrender of the old Certificates in form or receipt
by DST of instructions deemed by DST properly endorsed for transfer
or redemption accompanied by such documents as DST may deem
necessary to evidence the authority of the person making the
transfer or redemption.
21
DST reserves the right to refuse to transfer or redeem Shares until
it is satisfied that the endorsement or signature on the Certificate
or any other document is valid and genuine, and for that purpose it
may require a guaranty of signature in accordance with the Signature
Guarantee Procedures. DST will incur no liability and shall be
indemnified and held harmless by the Fund for any action taken by it
in accordance with an instruction bearing what purports to be a
signature guarantee or medallion of an Eligible Guarantor
Institution or otherwise in accordance with DST's Signature
Guarantee Procedures adopted pursuant to 17 C.F.R. Section
240.17Ad-15 under the Securities and Exchange Act of 1934. DST also
reserves the right to refuse to transfer or redeem shares until DST
is satisfied that the requested transfer or redemption is legally
authorized, and it will incur no liability for the refusal in good
faith to make transfers or redemptions which, in its reasonable
judgment, are improper or unauthorized. Authority to perform a
redemption shall be suspended when the Trust suspends the
shareholders' right of redemption provided that the Trust delivers
written notice of such suspension to DST. DST may, in effecting
transfers or redemptions, rely upon Simplification Acts, Uniform
Commercial Code or other statutes which protect it and the Trust in
not requiring complete fiduciary documentation. In cases in which
DST is not directed or otherwise required to maintain the
consolidated records of shareholder's accounts, DST will not be
liable for any loss which may arise by reason of not having such
records.
D. When mail is used for delivery of Certificates, DST will forward
Certificates in "nonnegotiable" form by first class or registered
mail and Certificates in "negotiable" form by registered mail, all
such mail deliveries to be covered while in transit to the addressee
by insurance arranged for by DST.
E. DST will issue and mail subscription warrants, Certificates
representing stock dividends, exchanges or split ups, or act as
Conversion Agent upon receiving written instructions from any
officer of the Trust and such other documents as DST deems
necessary.
F. DST will issue, transfer, and split up Certificates and will issue
Certificates of stock representing full Shares upon surrender of
scrip certificates aggregating one full share or more when presented
to DST for that purpose upon receiving written
22
instructions from an officer of the Trust and such other documents
as DST may deem necessary.
G. DST may issue new Certificates in place of Certificates represented
to have been lost, destroyed, stolen or otherwise wrongfully taken
upon receiving instructions from the Trust and indemnity
satisfactory to DST and the Trust, and may issue new Certificates in
exchange for, and upon surrender of, mutilated Certificates. Such
instructions from the Trust will be in such form as will be approved
by the Board of Trustees of the Trust and will be in accordance with
the provisions of law and the bylaws of the Trust governing such
matter.
H. DST will supply a shareholder's list to the Trust for its annual
meeting upon receiving a request from an officer of the Trust. It
will also, at the expense of the Trust, supply lists at such other
times as may be requested by an officer of the Trust.
I. Upon receipt of written instructions of an officer of the Trust, DST
will, at the expense of the Trust, address and mail notices to
shareholders.
J. In case of any request or demand for the inspection of the
securityholder files or stock books of the Trust or any other books
or records in the possession of the Trust in DST's possession, DST
will not permit such inspection, except (i) after prior notification
to and approval in writing by the Trust or Advisor as appropriate,
which approval shall not be unreasonably withheld and may not be
withheld or delayed where DST may be exposed to civil or criminal
contempt proceedings for failure to comply when requested to divulge
such information by duly constituted authorities, or (ii) when so
requested by the Trust or an Authorized Person. Nothing in the
foregoing is intended to, nor does it, prohibit or deny to DST the
right to disclose information requested by subpoena, Court Order,
administrative order or request issued by a federal, state or local
authority purporting to be issued under statutory authority or a
self-regulatory organization registered under the '34 Act. DST shall
use reasonable efforts to advise the Trust concerning subpoenas
received for records of the Trust and, upon being so advised, the
Trust shall be responsible for handling and responding thereto.
23
20. PROVISIONS RELATING TO DIVIDEND DISBURSING AGENCY.
A. DST will, at the expense of the Trust, provide a special form of
check containing the imprint of any device or other matter desired
by the Trust. Said checks must, however, be of a form and size
convenient for use by DST.
B. If the Trust desires to include additional printed matter, financial
statements, etc., with the dividend checks, the same will be
furnished DST within a reasonable time prior to the date of mailing
of the dividend checks, at the expense of the Trust.
C. If the Trust desires its distributions mailed in any special form of
envelopes, sufficient supply of the same will be furnished to DST
but the size and form of said envelopes will be subject to the
approval of DST. If stamped envelopes are used, they must be
furnished by the Trust; or if postage stamps are to be affixed to
the envelopes, the stamps or the cash necessary for such stamps must
be furnished by the Trust.
D. DST shall establish and maintain on behalf of the Trust one or more
deposit accounts as Agent for the Trust, into which DST shall
deposit the funds DST receives for payment of dividends,
distributions, redemptions or other disbursements provided for
hereunder and to draw checks against such accounts.
E. DST is authorized and directed to stop payment of checks theretofore
issued hereunder, but not presented for payment, when the payees
thereof allege either that they have not received the checks or that
such checks have been mislaid, lost, stolen, destroyed or through no
fault of theirs, are otherwise beyond their control, and cannot be
produced by them for presentation and collection, and, to issue and
deliver duplicate checks in replacement thereof.
21. ASSUMPTION OF DUTIES BY THE TRUST OR AGENTS DESIGNATED BY THE TRUST.
A. The Trust or its designated agents other than DST may assume certain
duties and responsibilities with respect to the operations of the
Trust, including (with DST's agreement) providing all, or a portion,
of those services which DST is obligated to provide under Section
4.D. of this Agreement.
B. To the extent the Trust or its agent or affiliate assumes DST's
duties and responsibilities (which assumption should be embodied in
writing), DST shall be relieved from all responsibility and
liability therefor (including any Adverse
24
Consequences directly or indirectly arising out of or resulting from
the actions or omissions of the Trust or its designees, as well as
from any "as of" liability or withholding reversals in connection
therewith) and DST is hereby indemnified and held harmless against
any liability therefrom in the same manner and degree as provided
for in Section 8 hereof.
C. Initially, with respect to accounts serviced by JPM or banks
affiliated with or a correspondent of JPM, the Trust or its
designees shall be responsible for the following: (i) answering and
responding to telephone inquiries from shareholders and brokers;
(ii) accepting shareholder and broker instructions (either or both
oral and written) and (A) transmitting to DST orders (transactions
and maintenance) based on such instructions for input into TA2000 by
DST or (B) themselves inputting such orders into TA2000 on a remote
basis; (iii) preparing and mailing confirmations; (iv) classifying
the status of shareholders and shareholder accounts under applicable
tax law and in accordance with the capabilities provided on TA2000,
and performing all compliance functions with respect thereto,
including without limitation obtaining certified TIN's, Form W-8's
and other documentation, and properly coding accounts (social codes,
tax status, foreign accounts and so forth) as provided for on
TA2000; (v) on a remote basis establishing shareholder accounts on
the TA2000(TM) System, establishing the appropriate privileges
thereupon and assigning social codes and Taxpayer Identification
Number codes thereof; (vi) disbursing monies of the Trust; (vii)
sending redemption and dividend wires in accordance with
instructions received; and (viii) following up and collecting upon
unsettled trade orders and unpaid broker-dealer, institutional or
shareholder "as of's". Additionally, the Trust or its designees are
also responsible for verifying the accuracy of, and notifying DST as
to errors in, the MENTAP/Market Advisor and Confluence FundStation
databases.
22. TERMINATION OF AGREEMENT.
A. This Agreement shall be in effect until the completion of the merger
of each Trust into other registered investment companies (the "Fund
Merger") in connection with the transaction whereby ▇.▇. ▇▇▇▇▇▇ &
Co. Incorporated and The Chase Manhattan Corporation have merged to
form ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and the transfer of the
25
securityholder accounts in each Trust to accounts in other
registered investment companies whose securityholder accounts are
maintained on the TA2000 System. The Trust shall advise DST of the
date of such Fund Merger no less than five (5) business days before
it occurs.
B. Each party, in addition to any other rights and remedies, shall have
the right to terminate this Agreement forthwith upon the occurrence
at any time of any of the following events with respect to the other
party:
(1) The bankruptcy of the other party or its assigns or the
appointment of a receiver for the other party or its assigns;
(2) failure by the other party or its assigns to perform its
duties (including any material interruption or cessation of
its operations) in accordance with the Agreement, which
failure materially adversely affects the business operations
of the first party and which failure continues for thirty (30)
days after receipt of written notice from the first party,
unless such failure is excused under Section 15 of this
Agreement; or
(3) merger, consolidation or sale of substantially all of the
assets of the other party or its assigns; or
(4) acquisition of a controlling interest in the other party or
its assigns by any third party except as may presently exist
within the previous sixty (60) days.
C. In the event of termination, the Trust will promptly pay DST all
amounts due to DST hereunder, including, if this Agreement is
terminated by the Trust for any reason other than the Fund Merger or
those set forth in Sections 22.B. hereof, the termination fee set
forth in Exhibit A to this Agreement shall apply.
D. In the event of termination, DST will use its best efforts to
transfer the records of the Trust to the designated successor
transfer agent, to provide reasonable assistance to the Trust and
its designated successor transfer agent, and to provide other
information relating to its services provided hereunder (subject to
the recompense of DST for such assistance at its standard rates and
fees for personnel then in effect at that time); provided, however,
as used herein "reasonable assistance" and "other information" shall
not include assisting any new service or system provider to modify,
alter, enhance, or improve its system or to improve, enhance, or
alter its
26
current system, or to provide any new functionality or to require
DST to disclose any DST Confidential Information, as hereinafter
defined, or any information which is otherwise confidential to DST.
23. CONFIDENTIALITY.
A. DST agrees on behalf of itself, its affiliates, its officers and
employees, except as provided in Section 19.J. hereof, or as
otherwise required by law, DST will keep confidential all records of
and information in its possession relating to the Trust or its
shareholders or shareholder accounts and will not disclose the same
to any person except at the request or with the consent of the
Trust. Notwithstanding the foregoing, DST shall be permitted in the
ordinary course of business to provide such information to third
parties providing services to DST which DST utilizes in connection
with the services DST provides to the Trust under this Agreement or
in accordance with Section 19.J. of this Agreement.
B. The Trust on behalf of itself, its affiliates, its officers and
employees and all entities which it directs DST to provide any of
the following information agrees to keep confidential all financial
statements and other financial records (other than statements and
records relating solely to the Trust's business dealings with DST)
and all manuals, systems and other technical information and data,
not publicly disclosed, relating to DST's operations and programs
furnished to it by DST pursuant to this Agreement and will not
disclose the same to any person except at the request or with the
consent of DST.
C. (1) The Trust acknowledges that DST has proprietary rights in and
to the TA2000(TM) System used to perform services hereunder
including, but not limited to the maintenance of shareholder
accounts and records, processing of related information and
generation of output, including, without limitation any
changes or modifications of the TA2000(TM) System and any
other DST programs, data bases, supporting documentation, or
procedures (collectively "DST Confidential Information") which
the Trust's access to the TA2000(TM) System or computer
hardware or software may permit the Trust or its employees or
agents to become aware of or to access and that the DST
Confidential Information constitutes confidential material and
trade secrets
27
of DST. The Trust agrees to maintain the confidentiality of
the DST Confidential Information of which it is, or becomes,
aware or to which it has access.
(2) The Trust acknowledges that any unauthorized use, misuse,
disclosure or taking of DST Confidential Information which is
confidential as provided by law, or which is a trade secret,
residing or existing internal or external to a computer,
computer system, or computer network, or the knowing and
unauthorized accessing or causing to be accessed of any
computer, computer system, or computer network, may be subject
to civil liabilities and criminal penalties under applicable
state law. The Trust will advise all of its employees and
agents who have access to any DST Confidential Information or
to any computer equipment capable of accessing DST or DST
hardware or software of the foregoing.
(3) The Trust acknowledges that disclosure of the DST Confidential
Information may give rise to an irreparable injury to DST
inadequately compensable in damages. Accordingly, DST may seek
(without the posting of any bond or other security) injunctive
relief against the breach of the foregoing undertaking of
confidentiality and nondisclosure, in addition to any other
legal remedies which may be available, and the Trust consents
to the obtaining of such injunctive relief. All of the
undertakings and obligations relating to confidentiality and
nondisclosure, whether contained in this Section or elsewhere
in this Agreement shall survive the termination or expiration
of this Agreement for a period of ten (10) years.
24. CHANGES AND MODIFICATIONS.
A. During the term of this Agreement DST will use on behalf of the
Trust without additional cost all modifications, enhancements, or
changes which DST may make to the TA2000(TM) System in the normal
course of its business and which are applicable to functions and
features offered by the Trust to its shareholders, unless
substantially all DST clients are charged separately for such
modifications, enhancements or changes, including, without
limitation, substantial system revisions or modifications
necessitated by changes in existing laws, rules or regulations. The
28
Trust agrees to pay DST promptly for modifications and improvements
which are charged for separately at the rate provided for in DST's
standard pricing schedule which shall be identical for substantially
all clients, if a standard pricing schedule shall exist. If there is
no standard pricing schedule, the parties shall mutually agree upon
the rates to be charged.
B. DST shall have the right, at any time and from time to time, to
alter and modify any systems, programs, procedures or facilities
used or employed in performing its duties and obligations hereunder;
provided that the Trust will be notified as promptly as possible
prior to implementation of such alterations and modifications and
that no such alteration or modification or deletion shall materially
adversely change or affect the operations and procedures of the
Trust in using or employing the TA2000(TM) System or DST Facilities
hereunder or the reports to be generated by such system and
facilities hereunder, unless the Trust is given thirty (30) days
prior notice to allow the Trust to change its procedures and DST
provides the Trust with revised operating procedures and controls.
C. All enhancements, improvements, changes, modifications or new
features added to the TA2000(TM) System however developed or paid
for shall be, and shall remain, the confidential and exclusive
property of, and proprietary to, DST.
25. ASSIGNMENT AND SUBCONTRACTORS.
A. Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party hereto without the written consent of
the other party. In the event of a mutually agreed to assignment,
each party shall remain liable for the performance of its
assignee(s). DST may, however, employ agents to assist it in
performing its duties hereunder.
B. Notwithstanding anything in this Agreement to the contrary, nothing
herein shall impose any duty upon DST in connection with or make DST
liable for the actions or omissions to act of unaffiliated third
parties such as, by way of example and not limitation, Airborne
Services, the U.S. mails, the National Securities Clearing
Commission and telecommunication companies, provided, if DST
selected such company, DST shall have exercised due care in
selecting the same.
29
26. LIMITATIONS ON LIABILITY.
A. Notwithstanding anything in this Agreement to the contrary, each of
the four Trusts which executed this Agreement, together with each
Fund which is a part of such Trust (SEE, Appendix I) is and shall be
regarded for all purposes hereunder as a separate party apart from
each other Trust and all other Funds. To the extent that a Trust is
comprised of more than one Fund, each Fund shall be regarded for all
purposes hereunder as a separate party apart from each other Fund.
Unless the context otherwise requires, with respect to every
transaction covered by this Agreement, every reference herein to the
Trust shall be deemed to relate solely to the particular Fund or
Trust to which such transaction relates. Under no circumstances
shall the rights, obligations or remedies with respect to a
particular Trust or a particular Fund constitute a right, obligation
or remedy applicable to any other Trust or Fund. The use of this
single document to memorialize the separate agreement of each Trust
and each Fund herein is understood to be for clerical convenience
only and shall not constitute any basis for joining the Trusts or
Funds for any reason.
B. Notice is hereby given that a copy of each Trust's Trust Agreement
and all amendments thereto is on file with the Secretary of State of
the state of its organization; that this Agreement has been executed
on behalf of the Trust by the undersigned duly authorized
representative of the Trust in his/her capacity as such and not
individually; and that the obligations of this Agreement shall only
be binding upon the assets and property of the Trust and shall not
be binding upon any trustee, officer or shareholder of the Trust
individually.
27. MISCELLANEOUS.
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of
the State of Missouri, excluding that body of law applicable to
choice of law.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
30
C. The representations and warranties, and the indemnification extended
hereunder, if any, are intended to and shall continue after and
survive the execution, expiration, termination or cancellation of
this Agreement or the performance of services hereunder until any
statute of limitations applicable to the matter at issues shall have
expired.
D. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and
executed by each party hereto.
E. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
F. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the courts
held to be illegal, in conflict with any law or otherwise invalid,
the remaining portion or portions shall be considered severable and
not be affected, and the rights and obligations of the parties shall
be construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
H. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between the
Trust and DST. It is understood and agreed that all services
performed hereunder by DST shall be as an independent contractor and
not as an employee of the Trust. This Agreement is between DST and
the Trust and neither this Agreement nor the performance of services
under it shall create any rights in any third parties. There are no
third party beneficiaries hereto.
I. Except as specifically provided herein, this Agreement does not in
any way affect any other agreements entered into among the parties
hereto and any actions taken or omitted by any party hereunder shall
not affect any rights or obligations of any other party hereunder.
31
J. The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights
resulting from any breach of any of the terms or conditions of this
Agreement, including the payment of damages, shall not be construed
as a continuing or permanent waiver of any such terms, conditions,
rights or privileges, but the same shall continue and remain in full
force and effect as if no such forbearance or waiver had occurred.
K. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement, draft or agreement or
proposal with respect to the subject matter hereof, whether oral or
written, and this Agreement may not be modified except by written
instrument executed by both parties.
L. All notices to be given hereunder shall be deemed properly given if
delivered in person or if sent by U.S. mail, first class, postage
prepaid, or if sent by facsimile and thereafter confirmed by mail as
follows:
If to DST:
DST Systems, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇., ▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Senior Vice President-Full Service
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy of non-operational notices to:
DST Systems, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇., ▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Trust:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and Assistant Secretary
1211 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
32
or to such other address as shall have been specified in writing by
the party to whom such notice is to be given.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers, to be effective as of the day and
year first above written.
DST SYSTEMS, INC.
By:
------------------------------------
Title:
---------------------------------
▇.▇. ▇▇▇▇▇▇ SERIES TRUST ▇.▇. ▇▇▇▇▇▇ FUNDS
By: By:
------------------------------------- ---------------------------------
Title: Title:
---------------------------------- ------------------------------
▇.▇. ▇▇▇▇▇▇ INSTITUTIONAL FUNDS ▇.▇. ▇▇▇▇▇▇ SERIES TRUST II
By: By:
------------------------------------- ---------------------------------
Title: Title:
---------------------------------- ------------------------------
33
EXHBIT A
FEE SCHEDULE
TERM: MAY 7, 2001 THROUGH FUND MERGER
I. TRANSFER AGENCY
A. BASE FEES
Complex Base Fee - $1,316,250 per year
CUSIP Fees - The standard Chase Vista rate of $21,000 per year is bundled
in the complex fee.
CUSIP Base Fee for Omnibus Positions (DFR CUSIPS) - $13,750 per CUSIP per
year
Closed Cusips - $150 per month through May of the following Year.
Additional Items Bundled in Complex Fee:
- SuperSelect Reports
- Bulk Transmissions
- Standard Tape Generations
B. ACCOUNT MAINTENANCE AND PROCESSING FEES
Non Institutional Non Network Level 3 Open Accounts - $16.35 per account
per year
Non-Institutional Network Level 3 Open Accounts - $12.85 per account per
year
Closed Accounts - Included in Base Fee
Transaction Processing
Contingency Processing - $1,000 per initiation + $5.00 per retail
transaction and/or $10.00 per institutional transaction (for entities
that remotely process; includes financial, non-financial, confirmed
orders, omnibus and maintenance transactions)
Non-Institutional Omnibus Transactions - $1.00 per transaction
Phone Calls - Inbound & Outbound, including Fulfillment - $4.60 per call
Lost Shareholder Compliance - $1.25 per lost s/h account per year + $1.60
per database match
Checkwriting - included in base/account fees
ACH Transactions & Listbill Processing - included in base/account fees
Contingent Deferred Sales Charge / Sharelot Accounting - included in
base/account fees
12b-1 / TASS Processing - included in base/account fees
Investor Facility - included in base/account fees
Special 12b-1 Runs (more than 1 mo cycle and 2 quarterly cycles) -
$1,338/quarter plus $.01 per open and closed account per cycle
34
TRAC-2000 - separate schedule
TA2000 Voice System - see Exhibit A
*NSCC - see Exhibit B
*Remote TA2000 AWD/IWS Software and Licensing Fees - under separate
schedule *FAN - under separate schedule Vision - under separate schedule
Fanmail - under separate schedule
C. SHAREOWNER/MANAGEMENT COMPANY CHARGES
Fiduciary Trustee Fees:
Paid By the Shareowner:
Non-Employees (Traditional and ▇▇▇▇ ▇▇▇) - $15.00 per social
security # per plan type per year
Simples (Non DFI) - $10.00 per social security # per plan type per
year, $0 Set-up charge
Simples (DFI) - $10.00 per social security # per plan type per year,
$10.00 Set-up charge
Paid By the Management Company:
Employees (Traditional and ▇▇▇▇ ▇▇▇) - $5.00 per account per year
No Fee IRA's (Traditional and ▇▇▇▇ ▇▇▇) - $15.00 per social security
# per plan type per year
403(b) Loan Fees:
Application/Origination Fee - $25.00 per loan
Annual Processing Fee - $25.00 per loan per year
D. PROGRAMMING (2001 STANDARD RATES)
*COBOL Programmer:
Dedicated Resources $150,000 per year
On-Request: $120.00 per hour
*Workstation Programmer:
Dedicated Resources $185,000 per year
On-Request $150.00 per hour
*Business Analyst/Tester:
Dedicated Resources $95,000 per year
On-Request $75.00 per hour
35
*Web Developer:
Dedicated Resources $220,000 per year
On-Request $180.00 per hour
*Full Service Staff Support:
Senior Staff Support $75 per hour
Staff Support $55 per hour
Clerical Support $45 per hour
NOTES TO THE ABOVE FEE SCHEDULE
A. The above schedule does not include out of pocket expenses incurred by DST
on the Fund's behalf. Examples of out of pocket expenses include but are
not limited to forms, postage, mailing services, telephone line and long
distance charges, client remote hardware, disaster recovery (range
$0.08-$0.12 per acct per year, currently $0.10 based on actual expense),
magnetic tapes, printing, ACH bank charges, NSCC charges, proxy
processing, microfilm/microfiche, etc.
B. Service fees and out of pocket expenses are billed monthly. Any fees or
out-of-pocket expenses not paid within 30 days of the date of the original
invoice will be charged a late payment fee of 1.5% per month until payment
is received.
C. In the event ▇▇ ▇▇▇▇▇▇ were to move its Transfer Agency servicing
operation to another platform for any reason other than material service
deficiencies brought to DST's attention which were not remedied within an
acceptable timeframe, ▇▇ ▇▇▇▇▇▇ would compensate DST for staff wind down
and related expenses using the aggregate of the salaries paid by DST
during the two months immediately preceding the termination to all DST
personnel utilized to provide Transfer Agent and Corporate Support
services to the fund.
Except for a termination pursuant to the provisions of Section 22.A., six
months notice is required by either party to terminate the Transfer Agency
agreement.
D. The fees in this schedule, except those indicated by an "*", are
guaranteed through the Fund Merger. Items marked by an "*" are subject to
change with 60 days written notice.
36
TA2000 VOICE(TM) SYSTEM
FEE SCHEDULE
PER CALL SERVICE FEE
Utilization of DST's TA2000 Voice(TM) System is based on a service fee of $.21
PER CALL. Each call has a maximum duration of seven (7) minutes. This charge is
a flat rate regardless of the number or type of transactions that a shareholder
processes during the call. A given call could result in inquiries and/or
transactions being processed for various funds in the complex. Therefore, on a
monthly basis, DST will report the number of inquiries and/or transactions
processed by fund. A percentage of the total will be derived and reported for
each fund. As a result of this process, DST will allocate the charges among the
individual funds.
MULTIPLE CALL FLOWS
An additional fee of $525 per month will be charged for each additional call
flow that requires different flows, functions, vocabulary, processing, rules or
access method. An additional fee of $210 per month will be charged for each
additional call flow that is identical in flows, functions, vocabulary,
processing rules or access method.
MINIMUM MONTHLY CHARGE
DST's commitment to the reliability and continued enhancement of the TA2000
Voice System necessitates a minimum monthly charge for the service. The minimum
monthly charge will only be assessed when it is greater than the monthly service
fees. The minimum monthly charge will be implemented on a graduated basis based
on the number of cusips and shareholders in a fund complex and is the sum of the
cusip and account charges. The schedule for this charge is as follows:
YEARS CHARGE PER CHARGE PER
OF CUSIP AUTHORIZED SHAREHOLDER
SERVICE FOR SERVICE* ACCOUNT**
1 $ 52.50 $.002
2 $ 78.75 $.003
3 $105.00 $.004
* CUSIPS ADDED TO THE SERVICE will be subject to the same minimums
being charged to the other cusips in the complex at the time the
cusips are added.
** THE PER ACCOUNT CHARGE is based on the total number of shareholder
accounts in authorized cusips at the end of each month.
37
OUT OF POCKET COSTS
Each fund complex will require a unique WATS number for their shareholders to
call. Each WATS number will require a specific number of trunks to service a
given volume of shareholder calls. All installation and monthly usage charges
associated with these will be billed through monthly out-of-pocket invoices.
38
NSCC FEES AND OUT-OF-POCKET EXPENSES
SETTLING BANK FEES
The fund may be charged fees by the Settling Bank at which the net
settlement account resides for monthly maintenance of this account. These
are negotiated directly between the Fund and the Settling Bank.
NSCC PARTICIPANT FEES
The NSCC charges $40 per month per management company for CPU
access/shared line costs.
A combined participant base fee of $200 per month is charged for the
following services:
FUND/SERV:
The NSCC charges an activity charge of $.25 per inputted transaction.
Transactions include purchases, redemptions and exchanges.
NETWORKING: The NSCC charges the following activity fee:
- $.02 per account for funds paying dividends on a monthly basis
- $.01 per account for funds paying dividends other than monthly
COMMISSION SETTLEMENT: The NSCC charges the following processing fee:
- $.30 per hundred records, per month, for one to 500,000
records; there is a $50 per month minimum processing charge
- $.20 per hundred records, per month, for 500,001 to 1,000,000
records
- $.10 per hundred records, per month, for 1,000,001 records and
above
Note: Participant fees are cumulative when Fund/SERV, Networking and/or
Commission Settlement are used in conjunction with each other.
39
EXHIBIT B
AUTHORIZED PERSONNEL
Pursuant to Section 8.B.(3) of the Agency Agreement between the Trust and DST
(the "Agreement"), the Trust authorizes the following Trust personnel to provide
instructions to DST, and receive inquiries from DST in connection with the
Agreement:
NAME TITLE SIGNATURE
---------------------- -------------------- ----------------------
---------------------- -------------------- ----------------------
---------------------- -------------------- ----------------------
---------------------- -------------------- ----------------------
---------------------- -------------------- ----------------------
---------------------- -------------------- ----------------------
---------------------- -------------------- ----------------------
This Exhibit may be revised by the Trust by providing DST with a substitute
Exhibit B. Any such substitute Exhibit B shall become effective twenty-four (24)
hours after DST's receipt of the document and shall be incorporated into the
Agreement.
ACKNOWLEDGMENT OF RECEIPT:
DST SYSTEMS, INC.
By:
--------------------------------------------------
Title:
-----------------------------------------------
Date:
------------------------------------------------
▇.▇. ▇▇▇▇▇▇ SERIES TRUST ▇.▇. ▇▇▇▇▇▇ FUNDS
By: By:
-------------------------------------- --------------------------------
Title: Title:
----------------------------------- -----------------------------
Date: Date:
------------------------------------ ------------------------------
▇.▇. ▇▇▇▇▇▇ INSTITUTIONAL FUNDS ▇.▇. ▇▇▇▇▇▇ SERIES TRUST II
By: By:
-------------------------------------- ---------------------------------
Title: Title:
----------------------------------- ------------------------------
Date: Date:
------------------------------------ -------------------------------
40
TRANSFER AGENCY SERVICES AND SYSTEMS FEATURES
FUNCTIONS
A. Issuance of stock certificates
B. Recording of non-certificate shares
C. Purchase, redemptions, exchanges, transfers and legal transfer
D. Changes of address, etc.
E. Daily balancing of the Fund (that is maintaining the master, history and
certificate files in balance, advising the Trust of any differences and
resolving those caused by DST's error)
F. Dividend calculation and disbursement
G. Mailing of quarterly and annual reports, if requested
H. Filing of 1099/1042 information to shareholders and government
I. Provide N1R information - as available on TA2000
J. Systematic withdrawal and purchase plans
K. Pre-authorized checks
L. Purchase reminders
M. Reconcilement of dividend and disbursement accounts and advising trust of
any discrepancies
N. Provide research and correspondence to shareholder's inquiries
O. Daily communication of standard reports to the Fund
P. Provide listings, labels and other special reports
Q. Proxy issuance and tabulation
41
R. Annual Statements of shareholders on microfilm
S. Provide reports as required under Section 19K
T. Wire order processing
U. 12B-1 processing
42
EXHIBIT D
ABC - Auditor's Short Name
DEF - Auditor's Address
GHI - Auditor's Legal Name
JKL - Client Short Name
MNO - Client
CONFIDENTIALITY AGREEMENT FOR AUDITORS
This Agreement entered into this ____ day of ____________, 20__, by and
between DST Systems, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
("DST") and GHI, DEF ("ABC").
WHEREAS, DST has developed a proprietary software system for mutual fund
shareholder recordkeeping and accounting ("DST System"); and
WHEREAS, MNO ("JKL") and DST have entered into an Agency Agreement dated
as of ________________________ (the "Agreement"), whereby JKL has obtained the
right to access DST's TA2000(TM) System and the DST Facilities, as defined in
the Agreement, in connection with the provisions of services to JKL's client
investment companies (the "Funds");
WHEREAS, pursuant to the Agreement JKL has the right to cause its
auditors, ABC, to perform on-site audits of records and accounts and operating
procedures directly pertaining to JKL's securityholder accounts in and the
performance of services for the Funds (the "Audit Subject Matter") subject to
the execution of this Confidentiality Agreement;
WHEREAS, DST will not permit any auditor access to its Facilities, its
TA2000 System and JKL's records in its possession and on its computers unless
and until such auditor duly executes this Agreement;
WHEREAS, each person set forth on the list attached hereto as Exhibit I
(the "Auditors") (a) is employed and designated by ABC, JKL's independent,
public auditing firm, to perform the aforementioned
43
audit of the Audit Subject Matter and (b) must obtain such access in order (i)
for ABC to fulfill its obligations to JKL and (ii) for each Auditor to perform
their obligations to ABC;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, the parties agree as follows:
(a) In accordance with the terms and conditions of the Agreement,
DST shall permit the Auditors reasonable access to the DST Facilities, as
defined in the Agreement, and the Audit Subject Matter and provide
reasonable assistance to them.
(b) ABC and each Auditor recognizes the proprietary right of DST in
and to the TA2000 System which ABC and each Auditor agrees that: (i) all
materials, information and data, in whatever form or media, including
without limitation documents, specifications, forms, systems designs,
structures, procedures, flow charts, data and screen formats, algorithms
and source and object code, pertaining to aspects of the DST System which
DST treats as confidential and protected, and requires its customers to
treat as confidential and protected ("DST Information"), provided to or
disclosed to ABC and its auditors shall remain the sole and exclusive
property of DST; (ii) all DST Information shall be held in strictest
confidence by ABC and each Auditor; (iii) ABC and each Auditor shall use
such DST Information solely for the purpose of auditing the Audit Subject
Matter in accordance with generally accepted auditing standards and,
except for such audit, neither ABC nor any Auditor shall utilize,
distribute, transfer or disclose in any way to any person or firm other
than JKL the DST Information provided or disclosed to it by DST, its
employees, representatives and agents; and (iv) only those employees,
representatives or agents of ABC having a "need to know" shall have access
to the DST Information.
(c) Upon completion of its review of the DST Information furnished
or disclosed to it (or upon earlier request by DST upon reasonable cause
being shown) ABC and each of its Auditors: (i) shall return to DST any
tangible materials furnished to any of them hereunder, and any copies
44
thereof; (ii) shall make available to DST any portion of any analyses,
compilations, studies or documents in whatever form or media made by it or
any of the Auditors containing or summarizing the details of any DST
Information; and (iii) shall safeguard or destroy, as DST may reasonably
require, such portions thereof as might compromise the confidentiality of
any DST Information; and (iv) shall provide DST with a written statement
to effect that the obligations undertaken in (i) - (iii) of this Paragraph
(c) have been fulfilled. Subsection (ii) hereof is not intended to, and
does not, apply to or prohibit the preparation and provision solely to JKL
and the Funds of an Audit Report conforming to generally accepted auditing
standards and applicable law with respect thereto.
(d) ABC shall be responsible for any breach of this Agreement by any
of the Auditors.
(e) This Agreement shall be inoperative as to such portions of the
DST Information which
(i) are or become generally available to the public other than as a result
of a disclosure by ABC or the Auditors; or (ii) become available to ABC on
a non-confidential basis from a third party (unrelated to ABC or DST)
which is entitled to disclose it; or (iii) was known to ABC on a
non-confidential basis prior to its disclosure to ABC by DST.
The parties acknowledge that in the event of any breach or threatened
breach of this Agreement remedies at law will be inadequate and the party
seeking to enforce this Agreement will be entitled to injunctive and other
equitable relief (without the posting of any bond).
IN WITNESS WHEREOF, the parties hereto executed this Agreement the day and
year first above written.
ABC DST SYSTEMS, INC.
By: By:
------------------------------------ -----------------------------------
Dated: Dated:
--------------------------------- --------------------------------
45
EXHIBIT I
The following individuals are all employees of ABC and are the only
persons whom ABC will use to perform the audit of the Audit Subject Matter and
to whom DST Information will be disclosed. The signature of each Auditor
hereupon evidences his/her acknowledgment and awareness of and agreement to be
bound by the terms of the attached Confidentiality Agreement.
NAME OF AUDITOR TITLE SIGNATURE
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
46
APPENDIX I
▇.▇. ▇▇▇▇▇▇ FUNDS CUSIP NUMBER
▇. ▇. ▇▇▇▇▇▇ Prime Money Market Fund 617340203
▇.▇. ▇▇▇▇▇▇ Prime Money Market Reserves Fund ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Federal Money Market Fund 617340104
▇.▇. ▇▇▇▇▇▇ Tax Exempt Money Market Fund 617340302
▇.▇. ▇▇▇▇▇▇ New York Tax Exempt Bond Fund 617340856
▇.▇. ▇▇▇▇▇▇ Bond Fund 617340401
▇.▇. ▇▇▇▇▇▇ Tax Exempt Bond Fund 617340500
▇.▇. ▇▇▇▇▇▇ European Equity Fund 617340823
▇.▇. ▇▇▇▇▇▇ International Opportunities Fund 617340799
▇.▇. ▇▇▇▇▇▇ U.S. Equity Fund 617340609
▇.▇. ▇▇▇▇▇▇ Short Term Bond Fund 617340880
▇.▇. ▇▇▇▇▇▇ U.S. Small Company Fund 617340708
▇.▇. ▇▇▇▇▇▇ International Equity Fund 617340807
▇.▇. ▇▇▇▇▇▇ Diversified Fund 617340872
▇.▇. ▇▇▇▇▇▇ Disciplined Equity Fund 617340757
▇.▇. ▇▇▇▇▇▇ Emerging Markets Debt Fund 617340773
▇.▇. ▇▇▇▇▇▇ U.S. Small Company Opportunities Fund 617340781
▇.▇. ▇▇▇▇▇▇ Global Strategic Income Fund 617340815
▇.▇. ▇▇▇▇▇▇ INSTITUTIONAL FUNDS CUSIP NUMBER
▇.▇. ▇▇▇▇▇▇ Institutional Prime Money Market Fund 616918207
▇.▇. ▇▇▇▇▇▇ Institutional Service Prime Money Market Fund 616918744
▇.▇. ▇▇▇▇▇▇ Prime Cash Mgmt Money Market Fund 617340740
▇.▇. ▇▇▇▇▇▇ Institutional Direct Prime Money Market Fund ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Institutional Federal Money Market Fund 616918108
▇.▇. ▇▇▇▇▇▇ Institutional Service Federal Money Market Fund 616918736
▇.▇. ▇▇▇▇▇▇ Institutional Treasury Money Market Fund 616918769
▇.▇. ▇▇▇▇▇▇ Institutional Service Treasury Money Market Fund 616918751
▇.▇. ▇▇▇▇▇▇ Treasury Money Market Reserves Fund ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Institutional Tax Exempt Money Market Fund 616918306
▇.▇. ▇▇▇▇▇▇ Institutional Service Tax Exempt Money Market Fund 616918728
▇.▇. ▇▇▇▇▇▇ Institutional New York Tax Exempt Bond Fund 616918843
▇.▇. ▇▇▇▇▇▇ Institutional Bond Fund 616918504
▇.▇. ▇▇▇▇▇▇ Institutional Bond Fund - Ultra Shares 616918710
▇.▇. ▇▇▇▇▇▇ Institutional Tax Exempt Bond Fund 616918603
▇.▇. ▇▇▇▇▇▇ Institutional European Equity Fund 616918819
▇.▇. ▇▇▇▇▇▇ Institutional International Opportunities Fund 616918777
▇.▇. ▇▇▇▇▇▇ Institutional U.S. Equity Fund 616918702
▇.▇. ▇▇▇▇▇▇ U.S. Equity Fund - Advisory Series 616920773
▇.▇. ▇▇▇▇▇▇ Institutional Short Term Bond Fund 616918405
47
▇.▇. ▇▇▇▇▇▇ Institutional U.S. Small Company Fund 616918801
▇.▇. ▇▇▇▇▇▇ Institutional International Equity Fund 616918884
▇.▇. ▇▇▇▇▇▇ Emerging Markets Equity Fund 617340864
▇.▇. ▇▇▇▇▇▇ Institutional Emerging Markets Equity Fund 616918850
▇.▇. ▇▇▇▇▇▇ Institutional Diversified Fund 616918876
▇.▇. ▇▇▇▇▇▇ Institutional Disciplined Equity Fund 616918793
▇.▇. ▇▇▇▇▇▇ Institutional Global Strategic Income Fund 616918785
▇.▇. ▇▇▇▇▇▇ SERIES TRUST CUSIP NUMBER
▇.▇. ▇▇▇▇▇▇ California Bond Fund - Select Shares 616920500
▇.▇. ▇▇▇▇▇▇ California Bond Fund - Institutional Shares 616920609
▇.▇. ▇▇▇▇▇▇ Tax Aware Small Company Opportunities Fund 616920716
▇.▇. ▇▇▇▇▇▇ Tax Aware U.S. Equity Fund 616920203
▇.▇. ▇▇▇▇▇▇ Global Healthcare Fund 616920724
▇.▇. ▇▇▇▇▇▇ Global 50 Fund 616920708
▇.▇. ▇▇▇▇▇▇ Tax Aware Discipline Equity Fund 616920401
▇.▇. ▇▇▇▇▇▇ Tax Aware Enhanced Income Fund 616920849
▇.▇. ▇▇▇▇▇▇ Tax Aware Enhanced Income Fund 616920856
▇.▇. ▇▇▇▇▇▇ Institutional Smart Index Fund 616920864
▇.▇. ▇▇▇▇▇▇ Institutional Large Cap Growth Fund 616920880
▇.▇. ▇▇▇▇▇▇ Institutional Market Neutral Fund 616920872
▇.▇. ▇▇▇▇▇▇ SERIES TRUST II CUSIP NUMBER
▇.▇. ▇▇▇▇▇▇ Series Trust II International Opportunities Fund 616919502
▇.▇. ▇▇▇▇▇▇ Series Trust II Small Company Fund 616919403
▇.▇. ▇▇▇▇▇▇ Series Trust II U.S. Discipline Equity Fund 616919304
▇.▇. ▇▇▇▇▇▇ Series Trust II Bond Fund 616919205
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AMERICAN CENTURY FUNDS CUSIP NUMBER
American Century Ultra Fund 025083882
American Century Select Fund 025083502
American Century International Growth Fund 025086109
American Century International Discovery Fund 025086505
American Century Value Fund 025076506
American Century California Tax Free Money Market Fund 025075300
American Century Florida Municipal Money Market Fund 024934200
American Century California Intermediate Tax Free Fund 025075508
American Century GNMA Fund 025081605
American Century California High Yield Municipal Fund 025075201
American Century Florida Intermediate Term Municipal Fund 024934309
American Century California Municipal Money Market Fund 025075102
American Century Heritage Fund 025083791
American Century Equity Income Fund 025076100
American Century California Long Term Tax Free Fund 025075607
American Century High Yield Bond Fund 025083445
American Century Real Estate Fund 025076886
American Century Growth Fund 025083106
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