FORM OF
CONESTOGA FUNDS
SHAREHOLDER SERVICING AGREEMENT
We, Conestoga Funds (the "Trust"), wish to enter into this Servicing
Agreement with you concerning the provision of support services to your clients
("Clients") who may from time to time beneficially own shares of the series that
we offer (each a "Fund"), as set forth in Schedule I, as amended from time to
time.
The terms and conditions of this Servicing Agreement are as follows:
Section 1. You agree to provide personal or account maintenance services
to Clients who may from time to time beneficially own shares to the extent
permissible under applicable statutes, rules and regulations. Such services will
include some or all of the following: (i) establishing and maintaining accounts
and records relating to shareholders; (ii) processing dividend and distribution
payments from the Fund on behalf of shareholders; (iii) providing information
periodically to shareholders showing their positions in shares and integrating
such statements with those of other transactions and balances in shareholders'
other accounts serviced by such financial institution; (iv) arranging for bank
wires; (v) responding to shareholder inquiries relating to the services
performed; (vi) responding to routine inquiries from shareholders concerning
their investments; (vii) providing subaccounting with respect to shares
beneficially owned by shareholders, or the information to the Fund necessary for
subaccounting; (viii) if required by law, forwarding shareholder communications
from the Fund (such as proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices) to
shareholders; (ix) assisting in processing purchase, exchange and redemption
requests from shareholders and in placing such orders with our service
contractors; (x) assisting shareholders in changing dividend options, account
designations and addresses; (xi) providing shareholders with a service that
invests the assets of their accounts in shares pursuant to specific or
pre-authorized instructions; and (xii) providing such other similar services as
the Fund may reasonably request to the extent that you are permitted to do so
under applicable statutes, rules and regulations.
Section 2. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the aforementioned
services and assistance to Clients.
Section 3. Neither you nor any of your officers, employees or agents are
authorized to make any representations concerning us or the shares except those
contained in our then current prospectuses and statement of additional
information, copies of which will be supplied by us to you, or in such
supplemental literature or advertising as may be authorized by us in writing.
Section 4. For all purposes of this Agreement you will be deemed to be an
independent contractor, and will have no authority to act as agent for us in any
matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify and hold us harmless from and against any and
all direct or indirect liabilities or losses resulting from requests,
directions, actions, or inactions of or by you or your officers, employees or
agents
regarding your responsibilities hereunder or the purchase, redemption, transfer
or registration of shares (or orders relating to the same) by or on behalf of
Clients. You and your employees will, upon request, be available during normal
business hours to consult with us or our designees concerning the performance of
your responsibilities under this Agreement.
Section 5. In consideration of the services and facilities provided by you
hereunder, we will pay to you, and you will accept as full payment therefor, a
fee at the annual rate of 0.25% of the average daily net asset value of the
shares beneficially owned by your Clients for whom you are the dealer of record
or holder of record or with whom you have a servicing relationship (the
"Clients' shares"), which fee will be computed daily (on the basis of 360-day
year) and payable monthly. For purposes of determining the fees payable under
this Section 5, the average daily net asset value of the Clients' shares will be
computed in the manner specified in our Registration Statement (as the same is
in effect from time to time) in connection with the computation of the net asset
value of shares for purposes of purchases and redemptions. By your written
acceptance of this Agreement, you agree to and do waive such portion of any fee
payable to you hereunder to the extent necessary to assure that such fee and
other expenses required to be accrued by us on any day with respect to the
Clients' share in any Fund that declares its net investment income as a dividend
to shareholders on a daily basis does not exceed the income to be accrued by us
to such shares on that day. The fee rate stated above may be prospectively
increased or decreased by us, in our sole discretion, at any time upon notice to
you. Further, we may, in our discretion and without notice, suspend or withdraw
the sale of shares, including the sale of shares to you for the account of any
Client or Clients.
Section 6. Any person authorized to direct the disposition of monies paid
or payable by us pursuant to this Agreement will provide to our Board of
Trustees (the "Board"), and the Board will review, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made. In addition, you will furnish us or our designees with such
information as we or they may reasonably request (including, without limitation,
periodic certifications confirming the provision to Clients of the services
described herein), and will otherwise cooperate with us and our designees
(including, without limitation, any auditors designated by us), in connection
with the preparation of reports to the Board concerning this Agreement and the
monies paid or payable by us pursuant hereto, as well as any other reports or
filings that may be required by law.
Section 7. We may enter into other similar Servicing Agreements with any
other person or persons without your consent.
Section 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you in connection with
the investment of your Clients' assets in shares will be disclosed by you to
your Clients, will be authorized by your Clients and will not be excessive; and
(ii) the series provided by you under this Agreement will in no event be
primarily intended to result in the sale of shares.
Section 9. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless sooner
terminated, this Agreement will continue automatically for successive annual
periods provided such continuance is specifically approved at least annually by
us in the manner described in Section 12. This Agreement is
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terminable without penalty at any time by us (which termination may be by a vote
of a majority of the Qualified Trustees as defined in Section 12) or by you upon
written notice to the other party hereto.
Section 10. All notices and other communications to either you or us will
be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunication device to the appropriate address stated herein, or to such
other address as either party shall so provide the other.
Section 11. This Agreement will be construed in accordance with the laws
of the State of Pennsylvania and is non-assignable by the parties hereto.
Section 12. This Agreement has been approved by vote of a majority of (i)
the Board; and (ii) those Trustees who are not "interested persons" (as defined
in the Investment Company Act of 1940, as amended) of us and have no direct or
indirect financial interest in this Agreement ("Qualified Trustees"), cast in
person at a meeting called for the purpose of voting on such approval.
Section 13. The names "Consetoga Funds" and the "Board of Trustees" refer
respectively to the statory trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Certificate of
Trust filed at the office of the Secretary of State of the State of Delaware.
The obligations of "Conestoga Funds" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually but in such capacities, and are not binding upon any of the
Trustees, Shareholders or representatives of the Trust personally, but bind only
the Trust Property (as defined in the Trust Instrument), and all persons dealing
with any class of shares of our must look solely to the Trust Property belonging
to such class for the enforcement of any claims against us.
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If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us at ____________________________________________________________________.
Very truly yours,
CONESTOGA FUNDS
Date: ____________________ By: ________________________
(Authorized Officer)
Title:
Accepted and Agreed to:
INTERMEDIARY
______________________________________
Date: ____________________ By: ___________________________
(Authorized Officer)
Title:
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SCHEDULE I
This Shareholder Servicing Agreement shall apply to the shares of the
following series of Conestoga Funds:
o Small Cap Fund
Effective as of August 12, 2004
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