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Exhibit 99(e)(iii)(B)
RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT
This Retirement Plan Order Processing Amendment is made as of October
15, 1998, by and between Xxxxxxx Xxxxxx & Co., Inc. ("Schwab"), a California
corporation; The Xxxxxxx Xxxxxx Trust Company ("CSTC"), a California banking
corporation; and each registered investment company ("Fund Company") listed on
Schedule I hereto, executing this Amendment on its own behalf and on behalf of
each of its series or classes of shares ("Fund(s)"), which are parties to an
Operating Agreement with Schwab, made as of October 25, 1996, as amended
thereafter ("Operating Agreement"), including such Funds as are listed on
Schedule II hereto, which are excluded from participation in retirement plan
order processing under this Amendment ("Excluded Funds"). This Amendment amends
the Operating Agreement. In the event that there are no Funds, then the term
"Fund(s)" shall mean "Fund Company."
WHEREAS, Schwab and Fund Company, on its own behalf and on behalf of
the Funds, have entered into the Operating Agreement pursuant to which shares of
the Funds are made available for purchase and redemption by Xxxxxx'x brokerage
customers through Xxxxxx'x Mutual Fund Marketplace(R) ("MFMP");
WHEREAS, Schwab has designated CSTC as its agent to perform certain
functions under the Operating Agreement, including communication of aggregate
purchase and redemption orders for Fund shares to each Fund, for which Schwab
remains fully responsible to Fund Company and the Funds;
WHEREAS, Schwab and Fund Company desire to amend the Operating
Agreement to facilitate the purchase and redemption of Fund shares on behalf of
certain retirement plans ("Plans") for which CSTC acts as trustee or custodian
of the trust funds under the Plans and for which an entity identified on
Schedule III, as amended by Schwab from time to time, acts as recordkeeper
("Recordkeeper"), subject to the terms and conditions of this Amendment; and
WHEREAS, Fund Company wishes to appoint CSTC as a limited purpose
co-transfer agent to each Fund's named transfer agent to facilitate such
purchases and redemptions on behalf of the Plans, and CSTC wishes to accept this
appointment.
NOW THEREFORE, in consideration of the foregoing and the mutual
promises set forth below, the parties hereto agree as follows:
1. AGENCY APPOINTMENT AND ACCEPTANCE. Fund Company hereby appoints CSTC
to be a limited purpose co-transfer agent to each Fund's named transfer agent
for the purpose of receiving instructions in proper form from the persons
designated to direct investment of the Plan assets ("Instructions") from which
are derived orders for purchases and redemptions of Fund shares ("Orders"). CSTC
hereby accepts the appointment as limited purpose co-transfer agent to each
Fund's named transfer agent.
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2. AGENTS OF CSTC. CSTC, as a co-transfer agent, may engage such
sub-agents as it deems necessary, appropriate or desirable to carry out its
obligation as a limited purpose co-transfer agent to each Fund's named transfer
agent under Section 1 of this Amendment, pursuant to such terms as are
consistent with the agreements set forth in this Amendment and as CSTC deems
necessary, appropriate or desirable. CSTC shall, however, remain fully
responsible to Fund Company and the Funds for any obligations performed by
CSTC's agents under this Section 2. These agents of CSTC shall be the
Recordkeepers and shall each be a service company and a limited purpose
sub-transfer agent to CSTC as co-transfer agent to each Fund's named transfer
agent.
3. CSTC'S RECEIPT AND TRANSMISSION OF ORDERS. CSTC agrees that (a)
Orders derived from Instructions received by Recordkeepers prior to the close of
the New York Stock Exchange (generally, 4:00 p.m. Eastern Time) ("Market Close")
on any Business Day ("Day 1") will be transmitted by CSTC to the Fund by 9:00
a.m. Eastern Time on the next Business Day ("Day 2") (such Orders are referred
to herein as "Day 1 Trades"); and (b) Orders derived from Instructions received
by Recordkeepers after Market Close on any Business Day ("Day 1") will be
transmitted by CSTC to the Fund by 9:00 a.m. Eastern Time on the second Business
Day following Day 1 ("Day 3") (such Orders are referred to herein as "Day 2
Trades").
4. FUND'S PRICING OF ORDERS. Fund Company agrees that Day 1 Trades will
be effected at the net asset value of each Fund's shares ("Net Asset Value")
calculated as of Market Close on Day 1, provided such trades are received by the
Fund by 9:00 a.m. Eastern Time on Day 2; and Day 2 Trades will be effected at
the Net Asset Value calculated as of Market Close on Day 2, provided such trades
are received by the Fund by 9:00 a.m. Eastern Time on Day 3. Fund Company agrees
that, consistent with the foregoing, Day 1 Trades will have been received by the
Fund prior to Market Close on Day 1, and Day 2 Trades will have been received by
the Fund prior to Market Close on Day 2 for all purposes, including, without
limitation, effecting distributions.
5. SETTLEMENT. In accordance with the Operating Agreement, Schwab and
Fund Company will settle Day 1 Trades on Day 2 and will settle Day 2 Trades on
Day 3.
6. PROVISION OF NET ASSET VALUE. In accordance with the Operating
Agreement, Fund Company will provide Schwab the Net Asset Value calculated as of
Market Close on each Business Day by 7:00 p.m. Eastern Time on such Business
Day.
7. REPRESENTATIONS AND WARRANTIES AS TO TRANSFER AGENCY. CSTC
represents and warrants that it is registered as a transfer agent under Section
17A of the Securities Exchange Act of 1934, as amended ("1934 Act"), and CSTC
will amend its TA-1 filing to disclose its appointment pursuant to this
Amendment as a limited purpose co-transfer agent to each Fund's named transfer
agent. CSTC further represents and warrants that each Recordkeeper appointed by
CSTC pursuant to Section 2 of this Amendment shall be registered as a transfer
agent under Section 17A of the 1934 Act, and that it shall cause each
Recordkeeper to amend its TA-1 to disclose its appointment as a service company
and a limited purpose sub-transfer agent to CSTC as co-transfer agent to each
Fund's named transfer agent.
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Fund Company represents and warrants that the Funds' named transfer
agent is set forth on Schedule IV hereto, as amended by Fund Company from time
to time.
8. BOOKS AND RECORDS. To the extent required under the Investment
Company Act of 1940, as amended ("1940 Act"), and the rules thereunder, CSTC
agrees that such records maintained by it or each Recordkeeper hereunder are the
property of the Funds and will be preserved, maintained, and made available in
accordance with the 1940 Act and the rules thereunder. Copies, or if required
originals, of such records shall be surrendered promptly to a Fund and its
agents (or independent accountants) upon request. This Section 8 shall survive
termination of this Amendment.
9. ROLE AND RELATIONSHIP OF CSTC. The parties acknowledge and agree
that, except as specifically provided in this Amendment, and for the sole and
limited purpose set forth herein, CSTC acts as an agent for Schwab under the
Operating Agreement in connection with the effectuation of Orders subject to
this Amendment. CSTC shall not be nor hold itself out as an agent of any Fund
other than as provided herein.
10. ROLE AND RELATIONSHIP OF RECORDKEEPERS. The parties acknowledge and
agree that, except as specifically provided in this Amendment and for the sole
and limited purpose set forth herein, the Recordkeepers act as agents of the
Plans in connection with the effectuation of Orders subject to this Amendment.
The parties agree that the Recordkeepers are not agents of the Funds other than
as provided herein, and CSTC shall ensure that the Recordkeepers do not hold
themselves out as an agent of any Fund other than as provided herein.
11. INSURANCE COVERAGE. CSTC shall maintain, and shall cause each
Recordkeeper to maintain, general liability insurance, at all times that this
Amendment is in effect, that is reasonable and customary in light of its duties
hereunder. Such general liability insurance coverage shall be issued by a
qualified insurance carrier, with limits of not less than $5 million.
12. TERMINATION. Fund Company will provide Schwab and CSTC 90 days'
prior written notice if purchase orders for a Fund's shares may no longer be
effected in accordance with this Amendment. Such termination shall not affect
the remaining provisions of this Amendment as to such Fund, and redemption
orders shall continue to be effected pursuant to this Amendment. Schwab and CSTC
may terminate this Amendment as to a Fund upon 90 days' prior written notice to
Fund Company.
Any termination of the Operating Agreement by Fund Company shall not
apply to transactions effected pursuant to this Amendment prior to 90 days after
the date the Fund Company provides written notice of such termination to Schwab
and CSTC.
13. INDEMNIFICATION. Schwab and CSTC, on the one hand, and Fund
Company, on the other, agree to indemnify and hold harmless Fund Company, on the
one hand, and Schwab and CSTC, on the other, together with each of its
directors, trustees, officers, employees and agents, from and against any and
all losses, liabilities, demands, claims, actions and expenses (including,
without limitation, reasonable attorney's fees) ("Losses") arising out of or in
connection with any breach by Schwab or CSTC, on the one hand, and Fund Company,
on the other, of its obligations
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under this Amendment, except to the extent such breach was a direct consequence
of an act or omission of an indemnified party constituting negligence or willful
misconduct. In no event will any party be liable for consequential, incidental,
special or indirect damages resulting to an indemnified party subject to this
Amendment. This Section 13 shall survive termination of this Amendment.
14. PROPRIETARY INFORMATION. The parties agree that all books, records,
information, and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or carrying out of this
Amendment, including but not limited to the information on Schedule III, as
amended by Schwab from time to time, and any reports regarding Fund
shareholdings of the Plans or the Recordkeepers that CSTC may provide to Fund
Company from time to time as part of its obligations as a limited purpose
co-transfer agent to each Fund's named transfer agent, shall be kept
confidential and shall not be otherwise used or voluntarily disclosed to any
other person, except as may be required by law or judicial process. Fund Company
expressly agrees not to use nor permit others to use any such books, records,
information, or data to solicit Plans, sponsors of Plans, or Recordkeepers. This
Section 14 shall survive termination of this Amendment.
15. EFFECT OF AMENDMENT. This Amendment is intended to amend and
supplement the provisions of the Operating Agreement. In the event of a conflict
between the provisions of this Amendment and the provisions of the Operating
Agreement, the provisions of this Amendment shall control. All other provisions
of the Operating Agreement shall remain in full force and effect.
XXXXXXX XXXXXX & CO., INC. FAIRPORT FUNDS, on its own behalf and
on behalf of each Fund
By: By:
-------------------------------- ---------------------------------
Xxxx Xxxxx
Vice President/Mutual Funds Name:
Operations Administration -------------------------------
Title:
Date: ------------------------------
------------------------------- Date:
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THE XXXXXXX XXXXXX
TRUST COMPANY
By:
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Xxxxxx Xxxxxx
Vice President
Date:
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SCHEDULE I
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT TO THE OPERATING AGREEMENT,
MADE AS OF OCTOBER 15, 1998
FUND COMPANY
Fairport Funds
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SCHEDULE II
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT TO THE OPERATING
AGREEMENT, MADE
AS OF OCTOBER 15, 1998
EXCLUDED FUNDS
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SCHEDULE III
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT TO THE OPERATING
AGREEMENT, MADE
AS OF OCTOBER 15, 1998
RECORDKEEPERS
Schwab Retirement Plan Services, Inc.
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SCHEDULE IV
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT TO THE OPERATING AGREEMENT,
MADE AS OF OCTOBER 15, 1998
NAMED TRANSFER AGENT
First Data Investor Services Group, Inc.
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LIMITED POWER OF ATTORNEY
Xxxxxxx Xxxxxx & Co., Inc. ("Schwab") does hereby make, constitute, and appoint
The Xxxxxxx Xxxxxx Trust Company ("CSTC"), as its trustee and lawful attorney or
agent ("Agent"), to transmit to each account for Schwab for the reinvestment of
capital gains and the reinvestment of dividends ("Account") with each of the
Fairport mutual funds ("Funds"), which are parties to the Retirement Plan Order
Processing Amendment to the Operating Agreement ("Amendment"), dated October 15,
1998, by and among Schwab, CSTC, and the Funds or their transfer agent, orders
for the purchase or redemption of Fund shares for the Account, as set forth in
the Amendment.
Schwab agrees to indemnify and hold harmless the Fund and their transfer agent
from acting upon orders for purchase or redemption of Fund shares received from
Agent to the same extent as if the orders were received from Schwab under the
Amendment.
This authorization and indemnity is a continuing one and shall remain in full
force and effect and shall be binding upon Schwab until revoked by Schwab in
writing.
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Xxxxxx X. Xxxxx
Senior Vice President - Mutual Funds
Date:
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