AGENCY AGREEMENT
THIS AGREEMENT made the ___ day of ________, 1998, by and between
INVESTORS FIDUCIARY TRUST COMPANY, a state chartered trust company organized and
existing under the laws of the State of Missouri, having its principal place of
business at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("IFTC"), and
MENTOR FUNDS, a Massachusetts business trust, having its principal place of
business at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000 on behalf of each of
Mentor Institutional Money Market Portfolio, Mentor Institutional U.S.
Government Money Market Portfolio, and Mentor Institutional Tax- Exempt Money
Market Portfolio (A reference to "Fund" shall be to Mentor Funds on behalf of
each such Portfolio, severally and not jointly).:
WITNESSETH:
WHEREAS, Mentor Funds desires to appoint IFTC as Transfer Agent and
Dividend Disbursing Agent for each Fund, and IFTC 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 IFTC as Transfer Agent and
Dividend Disbursing Agent for Fund, there will be filed with IFTC the
following documents, upon request:
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A. A certified copy of the resolutions of the Trustees of Mentor
Funds appointing IFTC as Transfer Agent and Dividend
Disbursing Agent, approving the form of
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this Agreement, and designating certain persons to sign share
certificates, if any, and give written instructions and
requests on behalf of Fund;
B. A certified copy of the Agreement and Declaration of Trust of
Mentor Funds and all amendments thereto,:
C. A certified copy of the Bylaws of Mentor Funds;
D. Copies of Registration Statements and amendments thereto,
filed with the Securities and Exchange Commission.
E. Specimens of all forms of outstanding share certificates, in
the forms approved by the Trustees of Mentor Funds, with a
certificate of the Secretary of Mentor Funds as to such
approval;
F. Specimens of the signatures of the officers of Mentor Funds
authorized to sign share certificates and individuals
authorized to sign written instructions and requests;
G. An opinion of counsel for Mentor Funds with respect to:
(1) Mentor Funds' organization and existence under the
laws of its state of organization,
(2) The status of all shares of beneficial interest of
Fund under the Securities Act of 1933, as amended,
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
nonassessable.
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2. Certain Representations and Warranties of IFTC. IFTC represents and
warrants to Fund that:
A. It is a trust company duly organized and existing and in good
standing under the laws of Missouri.
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 charter 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.
E. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
3. Certain Representations and Warranties of Fund. Mentor Fund represents
and warrants to IFTC that:
A. It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
B. It is an open-end management investment company registered
under the Investment Company Act of 1940, as amended.
C. A registration statement under the Securities Act of 1933 has
been filed and will be effective with respect to all shares of
Fund being offered for sale.
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D. All requisite steps have been or will be taken to register
Fund's shares for sale in all applicable states.
E. Mentor Funds is empowered under applicable laws and by its
Agreement and Declaration of Trust and bylaws to enter into
and perform this Agreement.
4. Scope of Appointment.
A. Subject to the conditions set forth in this Agreement, Mentor
Funds hereby appoints IFTC as Transfer Agent and Dividend
Disbursing Agent in respect of each Fund.
B. IFTC hereby accepts such appointment and agrees that it will
act as each Fund's Transfer Agent and Dividend Disbursing
Agent. IFTC agrees that it will also act as agent in
connection with Fund's periodic withdrawal payment accounts
and other open accounts or similar plans for shareholders, if
any.
C. IFTC agrees to provide the necessary facilities, equipment and
personnel to perform its duties and obligations hereunder in
accordance with industry practice.
D. Mentor Funds agrees to use its best efforts to deliver to IFTC
in Kansas City, Missouri, as soon as they are available,
originals or copies of all of its shareholder account records
in respect of each Fund.
E. IFTC agrees that it will perform the usual and ordinary
services as transfer, dividend disbursing and shareholders'
servicing agent for Fund, and as agent of Fund for shareholder
accounts thereof, in a timely manner, including issuing
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(including countersigning), transferring and canceling share
certificates; maintaining all shareholder accounts; providing
transaction journals; preparing shareholder meeting lists,
mailing proxies and proxy materials, receiving and tabulating
proxies, certifying the shareholder votes in the Fund; 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, W2-P, 1042S and backup withholding as
required for all shareholders; preparing and mailing
confirmation forms to shareholders and dealers, as instructed,
for all purchases and liquidations of shares of the Fund and
other confirmable transactions in shareholders' accounts;
recording reinvestment of dividends and distributions in
shares of the Fund; providing or making available on-line
daily and monthly reports as provided by the mutual fund
processing system utilized by IFTC (the "DST System") and as
requested by the Fund or its management company; maintaining
those records necessary to carry out IFTC's duties hereunder,
including all information reasonably required by the Fund to
account for all transactions in Fund shares, calculating the
appropriate sales charge with respect to each purchase of Fund
shares as set forth in the prospectus for the Fund,
determining the portion of each sales charge payable to the
dealer participating in a sale in accordance with schedules
delivered to IFTC by the Fund's principal underwriter or
distributor (hereinafter
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"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; processing, as provided in the Fund's
prospectus, purchases or redemptions or instructions to settle
any mail or wire order purchases or redemptions received in
proper order as set forth in the prospectus, rejecting
promptly any requests not received in proper order (as defined
by the Fund or its designated agents), and causing exchanges
of shares to be executed in accordance with the Fund's
instructions and prospectus and the general exchange privilege
application, as they may be amended for time to time; mailing
to dealers confirmations of wire order trades; and mailing
copies of shareholder statements to shareholders and
registered representatives of dealers in accordance with the
Fund's instructions.
F. IFTC will 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 Fund's prospectus as amended from time to
time, provided, however, that IFTC is advised in advance by
the Fund of any changes therein and the mutual fund processing
system utilized by IFTC (the "DST System") as
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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 DST System
requested by the Fund requires an enhancement or modification
to the DST System, IFTC shall not be liable therefor until
such modification or enhancement is installed on the DST
System. If any new, additional function or feature or change
or improvement to existing functions or features or new
service measurably increases IFTC's cost of performing the
services required hereunder at the current level of service,
IFTC shall advise the Fund of the amount of such increase and
if the Fund elects to utilize such function, feature or
service, IFTC shall be entitled to increase its fees by the
amount of the increase in costs.
5. Limit of Authority.
Unless otherwise expressly limited by the resolution of appointment or
by subsequent action by the Fund, the appointment of IFTC as Transfer
Agent will be construed to cover the full amount of authorized shares
of the class or classes for which IFTC is appointed as the same will,
from time to time, be constituted, and any subsequent increases in such
authorized amount.
6. Compensation and Expenses.
A. In consideration for its services hereunder as Transfer Agent
and Dividend Disbursing Agent, Fund will pay to IFTC from time
to time, as compensation for all services rendered as Agent,
the fees set forth in a separate schedule to be
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B. agreed to by Fund and IFTC in writing from time to time and
also all its reasonable out-of-pocket expenses, charges,
counsel fees, and other disbursements (Compensation and
Expenses) incurred in connection with the agency. The initial
fee schedule is attached hereto and incorporated herein by
reference. If the Fund has not paid such Compensation and
Expenses to IFTC within a reasonable time, IFTC may charge
against any monies held under this Agreement, the amount of
any Compensation and/or Expenses for which it shall be
entitled to reimbursement under this Agreement. The Fund also
agrees promptly to reimburse IFTC for all reasonable out of-
pocket expenses or disbursements incurred by IFTC in
connection with the performance of services under this
Agreement including, but not limited to, expenses for postage
(in advance if requested), express delivery services, freight
charges, envelopes, checks, drafts, forms (continuous or
otherwise), specially requested reports and statements,
telephone calls, telegraphs, stationery supplies, reasonable
outside counsel fees, outside mailing fu-ms, (including
Support Resources, Inc.), magnetic tapes, reels or cartridges
(if sent to Fund or to a third party at Fund's request) and
magnetic tape handling charges, record storage and media for
storage of records (e.g., microfilm, microfiche, optical
platters, computer tapes), computer equipment installed at
the Fund's request at the Fund's or third party's premises,
telecommunications equipment and related telephone lines,
proxy soliciting, processing and/or tabulating costs, and
NSCC
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transaction fees to the extent any of the foregoing are paid
by IFTC. The Fund agrees to pay postage expenses at least one
day in advance if so requested. In addition, any other
expenses incurred by IFTC at the request or with the consent
of the Fund will be promptly reimbursed by the Fund.
7. Operation of IFTC System.
A. In connection with the performance of its services under this
Agreement, IFTC is responsible for such items as:
(1) The accuracy of entries in IFTC's records reflecting
orders and instructions received by IFTC from
dealers, shareholders, Fund or its principal
underwriter;
(2) The availability and the accuracy of shareholder
lists, shareholder account verifications,
confirmations and other shareholder account
information to be produced from its records or data;
(3) The accurate and timely issuance of dividend and
distribution checks in accordance with instructions
received from Fund;
(4) The accuracy of redemption transactions and payments
in accordance with redemption instructions received
from dealers, shareholders or Fund;
(5) The deposit daily in Fund's appropriate special bank
account of all checks and payments received from
dealers or shareholders for investment in shares;
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(6) The requiring of proper forms of instruction,
signatures and signature guarantees and any necessary
documents supporting the legality of transfers,
redemptions and other shareholder account
transactions, all in conformance with IFTC's present
procedures with such changes as may be required or
approved by Fund; and
(7) The maintenance of a current duplicate set of Fund's
essential records at a secure distant location, in a
form available and usable forthwith in the event of
any break-down or disaster disrupting its main
operation.
8. Indemnification.
A. IFTC shall at all times use reasonable care, due diligence
and act in good faith in performing its duties under this
Agreement. Except to the extent caused by IFTC's bad faith
conduct, IFTC shall not be responsible for, and the Fund
shall indemnify and hold IFTC harmless from and against,
any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability which may be asserted
against IFTC or for which IFTC may be held to be liable, to
the extent arising out of or attributable to:
(1) All actions of IFTC required to be taken by
IFTC pursuant to this Agreement, provided that
IFTC has acted in good faith and with due
diligence and reasonable care;
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(2) The Fund's refusal or failure to comply with the
terms of this Agreement, the Fund's negligence or
willful misconduct, or the breach of any
representation or warranty of the Fund hereunder;
(3) The good faith reliance on, or the carrying out of,
any written or recorded oral instructions or requests
of persons designated by the Fund in writing from
time to time as authorized to give instructions on
its behalf or representatives of the Fund's
investment advisor, sponsor or principal underwriter
or IFTC'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 Fund, 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 the Fund's 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 IFTC's failure to comply with written
instructions of the Fund or of any officer of the
Fund that no offers or sales be made in or to
residents of such state);
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(6) The Fund's errors and mistakes in the use of the DST
System, the data center, computer and related
equipment used to access the DST System (the "DST
Facilities"), and control procedures relating thereto
in the verification of output and in the remote input
of data; and
(7) Errors, inaccuracies, and omissions in, or errors,
inaccuracies or omissions of IFTC arising out of or
resulting from such errors, inaccuracies and
omissions in, the Fund's records, shareholder and
other records, delivered to IFTC hereunder by the
Fund or its prior agent(s).
B. IFTC shall indemnify and hold the Fund harmless from and against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of IFTC's failure to comply with the terms of this
Agreement or arising out of or attributable to IFTC's negligence or willful
misconduct or breach of any representation or warranty of IFTC hereunder. In the
event IFTC shall be liable under this subsection, then the Fund shall (unless
the liability arises out of IFTC's willful misconduct) take reasonable steps
with IFTC to mitigate the amount of such liability.
C. 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, SPECIAL OR PUNITIVE DAMAGES FOR ANY ACT OR
FAILURE TO
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ACT UNDER ANY PROVISION OF THIS AGREEMENT EVEN IF
ADVISED OF THE POSSIBILITY THEREOF.
9. Certain Covenants of IFTC and Fund.
A. All requisite steps will be taken by Fund from time to time
when and as necessary to register the Fund's shares for sale
in 0 states in which Fund's shares shall at the time be
offered for sale and require registration. If at any time Fund
will receive notice of any stop order or other proceeding in
any such state affecting such registration or the sale of
Fund's shares, or of any stop order or other proceeding under
the federal securities laws affecting the sale of Fund's
shares, Fund will give prompt notice thereof to IFTC.
B. IFTC hereby agrees to perform such transfer agency functions
as are set forth in Section 4.E. above and establish and
maintain facilities and procedures reasonably acceptable to
Fund for safekeeping of share certificates, check forms, and
facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of, such
certificates, forms and devices, and to carry such insurance
as it considers adequate and reasonably available.
C. To the extent required by Section 31 of the Investment Company
Act of 1940 as amended and Rules thereunder, IFTC agrees that
all records maintained by IFTC relating to the services to be
performed by IFTC under this Agreement are
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the property of Fund and will be preserved and will be
surrendered promptly to Fund on request.
D. IFTC agrees to furnish Fund semiannual reports of its
financial condition, consisting of a balance sheet, earnings
statement and any other financial information reasonably
requested by Fund. The annual financial statements will be
certified by IFTC's certified public accountants.
E. IFTC 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.
F. IFTC will permit Fund and its authorized representatives to
make periodic inspections of its operations as such would
involve the Fund at reasonable times during business hours.
10. Recapitalization or Readjustment.
In case of any recapitalization, readjustment or other change in the
capital structure of Fund requiring a change in the form of share
certificates, IFTC 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 Fund;
B. Certified copy of the amendment to Mentor Funds' Agreement and
Declaration of Trust or other document effecting the change;
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C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the
shares 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
Trustees of Mentor Funds, with a certificate of the Secretary
of Mentor Funds as to such approval;
E. Opinion of counsel for Mentor Funds stating:
(1) The status of the shares of beneficial interest of
Fund in the new form under the Securities Act of
1933, as amended and any other applicable federal or
state statute; and
(2) That the issued shares in the new form are, and all
unissued shares will be, when issued, validly issued,
fully paid and nonassessable.
11. Share Certificates.
Fund will furnish IFTC with a sufficient supply of blank share
certificates and from time to time will renew such supply upon the
request of IFTC. Such certificates will be signed manually or by
facsimile signatures of the officers of Fund authorized by law and by
bylaws to sign share certificates, and if required, will bear the
corporate seal or facsimile thereof.
12. Death, Resignation or Removal of Signing Officer.
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Fund will file promptly with IFTC written notice of any change in the
officers authorized to sign share certificates, written instructions or
requests, together with two signature cards bearing the specimen
signature of each newly authorized officer. In case any officer of Fund
who will have signed manually or whose facsimile signature will have
been affixed to blank share certificates will die, resign, or be
removed prior to the issuance of such certificates, IFTC may issue or
register such share certificates as the share certificates of Fund
notwithstanding such death, resignation, or removal, until specifically
directed to the contrary by Fund in writing. In the absence of such
direction, Fund will file promptly with IFTC such approval, adoption,
or ratification as may be required by law.
13. Future Amendments of Charter and Bylaws.
Fund will promptly file with IFTC copies of all material amendments to
its Agreement and Declaration of Trust or bylaws made after the date of
this Agreement.
14. Instructions, Opinion of Counsel and Signatures.
At any time IFTC may apply to any person authorized by the Fund to give
instructions to IFTC, and may with the approval of a Fund officer
consult with legal counsel for Fund or its own legal counsel at the
expense of Fund, with respect to any matter arising in connection with
the agency and it will not be liable for any action taken or omitted by
it reasonably and in good faith in reliance upon such instructions or
upon the opinion of such counsel. IFTC 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
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persons and will not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from Fund. It
will also be protected in recognizing share certificates which it
reasonably believes to bear the proper manual or facsimile signatures
of the officers of Mentor Funds, and the proper countersignature of any
former Transfer Agent or Registrar, or of a co-Transfer Agent or
co-Registrar.
15. Omnibus Accounts.
The Fund recognizes that the Fund shall be marketed primarily through
broker-dealers whose clients' positions and holdings in the Fund will
be contained within an omnibus account in the broker-dealer's name.
Accordingly, the books and records of the Fund as maintained by IFTC
may not reflect the name, address and other identifying information
concerning the ultimate investors but merely the name, address and
other identifying information concerning the nominee broker-dealer.
Further, IFTC shall not have any role or responsibility in choosing,
accepting or rejecting prospective broker-dealer nominees. Accordingly,
IFTC shall have no responsibility or liability for the actions or
omissions of any such broker-dealer.
16. [Intentionally Omitted].
17. Records.
IFTC 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-l under
the Investment Company Act of 1940, if any.
18. Disposition of Books, Records and Canceled Certificates.
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IFTC will send periodically to Fund, or to where designated by the
Secretary or an Assistant Secretary of Mentor Funds, all books,
documents, and all records no longer deemed needed for current purposes
and share certificates which have been canceled in transfer or in
exchange, upon the understanding that such books, documents, records,
and share certificates will be maintained by the Fund under and in
accordance with the requirements of Section 17Ad-7 adopted under the
Securities Exchange Act of 1934. Such materials relating to share
certificates which have been stopped and replaced and share
certificates escheated will not be destroyed by Fund without the
written consent of IFTC (which consent will not be unreasonably
withheld), but will be safely stored for possible future reference.
19. Provisions Relating to IFTC as Transfer Aunt.
A. IFTC will make original issues of share certificates upon
written request of an officer of Fund and upon being furnished
with a certified copy of a resolution of the Trustees
authorizing such original issue, an opinion of counsel as
outlined in paragraphs LD. and G. of this Agreement, any
documents required by paragraphs 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 Fund will
furnish IFTC with sufficient funds to pay all required taxes
on the original issue of the share, if any. Fund will furnish
IFTC such evidence as may be required by IFTC to show the
actual value of the shares.
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C. Shares will be transferred and new certificates issued in
transfer, or shares accepted for redemption and funds
remitted therefor, upon surrender of the old certificates in
form reasonably deemed by IFTC properly endorsed for transfer
or redemption accompanied by such documents as IFTC may
reasonably deem necessary to evidence that authority of the
person making the transfer or redemption, and bearing
satisfactory evidence of the payment of any applicable share
transfer taxes. IFTC 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 by a firm having membership in the New
York Stock Exchange, Midwest Stock Exchange, American Stock
Exchange, Pacific Coast Stock Exchange, or any other exchange
acceptable to IFTC or by a bank or trust company approved by
it. IFTC also reserves the right to refuse to transfer or
redeem shares until it 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. IFTC may, in effecting
transfers or redemptions, rely upon Simplification Acts or
other statutes which protect it and Fund in not requiring
complete fiduciary documentation.
D. When mail is used for delivery of share certificates IFTC will
forward share certificates in "nonnegotiable" form by first
class or registered mail and share
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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 IFTC.
E. IFTC will issue and mail subscription warrants, certificates
representing share dividends, exchanges or split ups, or act
as Conversion Agent upon receiving written instructions from
any officer of Mentor Funds and such other documents as IFTC
deems necessary.
F. IFTC will issue, transfer, and split up certificates and will
issue certificates representing full shares upon surrender of
scrip certificates aggregating one full share or more when
presented to IFTC for that purpose upon receiving written
instructions from an officer of Mentor Funds and such other
documents as IFTC may deem necessary.
G. IFTC may issue new certificates in place of certificates
represented to have been lost, destroyed, stolen or otherwise
wrongfully taken upon receiving instructions from Fund and
indemnity satisfactory to IFTC and Fund, and may issue new
certificates in exchange for, and upon surrender of, mutilated
certificates. Such instructions from Fund will be in such form
as will be approved by the Trustees of Fund and will be in
accordance with the provisions of law and the bylaws of Fund
governing such matter.
H. IFTC will supply a shareholder's list to Fund for any
shareholder meeting upon receiving a request from an officer
of Mentor Funds. It will also supply lists at such other times
as may be requested by an officer of Mentor Funds.
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I. Upon receipt of written instructions of an officer of Mentor
Funds, IFTC will address and mail notices to shareholders.
J. In case of any request or demand for the inspection of the
share books of Fund or any other books in the possession of
IFTC, IFTC will endeavor to notify Fund and to secure
instructions as to permitting or refusing such inspection.
IFTC reserves the right, however, to exhibit the share books
or other books to any person in case it is advised by its
counsel that it may be held responsible for the failure to
exhibit the share books or other books to such person.
20. Provisions Relating to Dividend Disbursing Agency.
A. IFTC will, at the expense of Fund, provide a special form of
check containing the imprint of any device or other matter
desired by Fund. Said checks must, however, be of a form and
size convenient for use by IFTC.
B. If Fund desires to include additional printed matter,
financial statements, etc., with the dividend checks, the same
will be furnished IFTC within a reasonable time prior to the
date of mailing of the dividend checks, at the expense of
Fund.
C. If Fund desires its distributions mailed in any special form
of envelopes, sufficient supply of the same will be furnished
to IFTC but the size and form of said envelopes will be
subject to the approval of IFTC. If stamped envelopes are
used, they must be furnished by Fund; or if postage stamps are
to be affixed to the envelopes, the stamps or the cash
necessary for such stamps must be furnished by Fund.
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IFTC will maintain one or more deposit accounts as Agent for
Fund, into which the monies received by IFTC as agent of the
Fund and monies for payment of dividends, distributions,
redemptions or other disbursements provided for hereunder will
be deposited, and against which checks will be drawn. If IFTC
shall, in its sole discretion, advance funds to the account of
the Fund which results in an overdraft on any account of Fund
maintained at IFTC, the amount of the overdraft shall be
payable on demand along with the overdraft fee provided for in
the then-current fee schedule. IFTC shall be entitled to
offset the amount owed for any such overdraft against any
other monies of Fund held by IFTC.
E. IFTC 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, upon receipt of
appropriate indemnities or undertakings from the payees, to
issue and deliver duplicate checks in replacement thereof.
21. Assumption of Duties By the Fund.
The Fund may assume certain duties and responsibilities of IFTC or
those usual and ordinary services of Transfer Agent and Dividend
Disbursement Agent as those terms are referred to in Section 4.E. of
this Agreement including but not limited to accepting
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shareholder instructions and transmitting orders based on such
instructions to IFTC, preparing and mailing confirmations, obtaining
certified TIN numbers, and disbursing monies of the Fund. To the extent
the Fund or its agent or affiliate assumes such duties and
responsibilities, IFTC shall be relieved from all responsibility and
liability therefor.
22. Termination of Agreement.
A. This Agreement may be terminated by either party upon receipt
of ninety (90) days written notice from the other party.
B. Fund, 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:
(1) Any interruption or cessation of operations by IFTC
or its assigns which materially interferes with the
business operation of Fund;
(2) The insolvency or bankruptcy of IFTC or the
appointment of a receiver for IFTC;
(3) Any merger, consolidation or sale of substantially
all the assets of IFTC;
(4) The acquisition of a controlling interest in IFTC
by any broker, dealer, investment adviser or
investment company except as may presently exist; or
(5) Failure by IFTC or its assigns to perform its duties
in accordance with the Agreement, which failure
materially adversely affects the business operations
of Fund and which failure continues for ten (10)
business days
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after receipt of written notice from Fund; provided,
however, that notwithstanding the foregoing, if such
failure cannot reasonably be cured within ten (10)
business days, then IFTC shall have such time as is
reasonably necessary to cure such failure, but not to
exceed thirty (30) days.
C. In the event of termination, Fund will promptly pay IFTC all
amounts due to IFTC hereunder.
D. In the event of termination, (1) IFTC will transfer the books
and records of the Fund to the designated successor transfer
for reasonable compensation therefor, and (2) IFTC will
provide other reasonably necessary information relating to its
services provided hereunder other than IFTC Protected
Information (as defined in Section 23.C.) for reasonable
compensation therefor.
23. Confidentiality.
A. IFTC agrees that, except as provided in the last sentence of
Section 19.J hereof, or as otherwise required by law, IFTC
will keep confidential all records of and information in its
possession relating to Fund or its shareholders or shareholder
accounts and will not disclose the same to any person except
at the request or with the consent of Fund.
B. Fund agrees that, except as otherwise required by law, Fund
will keep confidential all financial statements and other
financial records (other than statements and records relating
solely to Fund's business dealings with IFTC or
-25-
Fund operations) and all manuals, systems and other technical
information and data, not publicly disclosed, relating to
IFTC's operations and programs furnished to it by IFTC
pursuant to this Agreement and will not disclose the same to
any person except at the request or with the consent of IFTC.
C. The Fund acknowledges that IFTC and DST Systems, Inc. (DST)
have proprietary rights in and to the computerized data
processing recordkeeping system used by IFTC to perform
services hereunder including, but not limited to the
maintenance of shareholder accounts and records, processing of
related information and generation of output (the MFS System),
including, without limitation any changes or modifications of
the MFS System and any other IFTC or DST programs, data bases,
supporting documentation, or procedures (collectively "IFTC
Protected Information") which the Fund's access to the MFS
System or computer hardware or software may permit the Fund or
its employees or agents to become aware of or to access and
that the IFTC Protected Information constitutes confidential
material and trade secrets of IFTC. The Fund agrees to
maintain the confidentiality of the IFTC Protected
Information. The Fund acknowledges that any unauthorized use,
misuse, disclosure or taking of IFTC Protected 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,
-26-
computer system, or computer network, may be subject to civil
liabilities and criminal penalties under applicable state law.
The Fund will advise all of its employees and agents who have
access to any IFTC Protected Information or to any computer
equipment capable of accessing IFTC or DST hardware or
software of the foregoing. DST is intended to be, and shall
be, a third party beneficiary of the Fund's obligations and
undertakings contained in this Section.
D. If either party believes at any time that it is or may be
required by law to disclose confidential information of the
other party, it shall notify such other party thereof as
promptly as possible and permit the other party to contest the
disclosure by appropriate legal proceedings or other action.
24. Changes and Modifications.
A. During the term of this Agreement IFTC will use on behalf of
the Fund without additional cost all modifications,
enhancements, or changes which DST or IFTC may make to its
shareholder/transfer agent processing system in the normal
course of its business and which are applicable to functions
and features offered by the Fund, unless substantially all DST
or IFTC clients are charged separately for such modifications,
enhancements or changes, including, without limitation,
substantial system revisions or modifications necessitated by
changes in existing laws, rules or regulations. The Fund
agrees to pay IFTC promptly for modifications and improvements
utilized by the Fund which are charged for separately at the
rate provided for in DST's or IFTC's standard pricing schedule
-27-
which shall be identical for substantially all clients, if a
standard pricing schedule shall exist, provided that IFTC
shall give the Fund ninety (90) days advance written notice
thereof. If there is no standard pricing schedule, the parties
shall mutually agree upon the rates to be charged.
-28-
B. IFTC shall have the right, at any time and from time to time,
to alter and modify any systems, programs, procedures or
facilities used or employed in performing its duties and
obligations hereunder; provided that the Fund will be notified
as promptly as possible prior to implementation of such
alterations and modifications and that no such alteration or
modification or deletion shall materially adversely change or
affect the operations and procedures of the Fund unless the
Fund is given sixty (60) days prior notice to allow the Fund
to change its procedures; and provided further, that if any
fee increase shall result therefrom, IFTC shall give the Fund
ninety (90) days advance written notice thereof. All
enhancements, improvements, changes, modifications or new
features added to the DST System however developed or paid for
shall be, and shall remain, the confidential and exclusive
property of, and proprietary to, DST Systems, Inc.
Notwithstanding the foregoing, at the request of the Fund, all
enhancements, improvements, modifications or new features
added to the DST System developed at the expense of the Fund,
may be subject to a period of exclusivity as mutually agreed
to by the Fund and IFTC, which period may not exceed three (3)
months.
25. Subcontractors.
The Fund acknowledges that IFTC intends to subcontract certain
obligations hereunder and consents to such subcontract on condition
that IFTC shall remain fully responsible and liable for the complete
and proper performance of IFTC's obligations hereunder,
-29-
that all acts and omissions of any such subcontractor hereunder shall
for all purposes hereof be considered and deemed to be acts or
omissions of IFTC and that the Fund shall be fully responsible and
liable hereunder to IFTC as if no subcontract had occurred and such
obligations had been performed by IFTC itself.
26. Force Majeure.
IFTC shall not be responsible or liable for its failure or delay in
performance of its obligations under this Agreement to the extent
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, tornados, acts of God or public enemy, revolutions, or
insurrection; or any other cause, contingency, circumstance or delay
not subject to IFTC's reasonable control.
27. Declaration of Trust. The parties agree that this Agreement shall
constitute a separate and discrete agreement between IFTC and each
Fund, as if set out in a separate writing executed by IFTC and Mentor
Funds on behalf solely of that Fund alone, and no other series of
shares of Mentor Funds shall have any obligation or incur any liability
under or
-30-
in respect of such agreement. Any reference in this Agreement to a
"Fund" shall be construed so as to give effect to the foregoing.
A copy of the Agreement and Declaration of Trust of Mentor Funds is on
file with the Secretary of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of
the Trustees of Mentor Funds as Trustees and not individually and that
the obligations of or arising out of this instrument are not binding
upon any of the Trustees or beneficiaries individually, but binding
only upon the assets and property of the Fund in question.
28. 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.
B. All terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted
assigns.
C. The representations and warranties, and the indemnification
extended hereunder, if any, are intended to and shall continue
after and survive the expiration, termination or cancellation
of this Agreement.
D. No provisions of the Agreement may be amended or modified in
any manner except by a written agreement properly authorized
and executed each party hereto.
-31-
E. The captions in the Agreement are included for convenience of
reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
F. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall be
considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
H. This Agreement may not be assigned by any party hereto without
prior written consent of the other parties.
I. Neither the execution nor performance of this Agreement shall
be deemed to create a partnership or joint venture by and
between Fund and IFTC.
J. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among
the parties hereto and any actions taken or omitted by any
party hereunder shall not affect any rights or obligations of
any other party hereunder.
-32-
K. The failure of either party to insist upon the performance of
any terms or conditions of this Agreement or to enforce any
rights resulting from any breach of any of the terms or
conditions of this Agreement, including the payment of
damages, shall not be construed as a continuing or permanent
waiver of any such terms, conditions, rights or privileges,
but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred.
L. This Agreement constitutes the entire agreement between the
par-ties 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.
-33-
WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers, to be effective the ____ day of
_________, 1998.
INVESTORS FIDUCIARY TRUST COMPANY
By:_______________________________
Title:____________________________
MENTOR FUNDS
By:_______________________________
Title:____________________________
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