MUTUAL FUNDS SERVICE AGREEMENT
Exhibit
(H)(1)
| · |
FUND
ADMINISTRATION
SERVICES
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| · |
FUND
ACCOUNTING
SERVICES
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XXXXXXX
EXCHANGE TRADED TRUST
FEBRUARY 5,
2007
Table
of Contents
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Section
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Page
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1.
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Appointment
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1
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2.
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Representations
and Warranties
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1
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3.
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Delivery
of Documents
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3
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4.
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Services
Provided
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3
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5.
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Fees
and Expenses
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4
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6.
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Limitation
of Liability and Indemnification
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6
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7.
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Term
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9
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8.
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Notices
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9
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9.
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Waiver
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9
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10.
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Force
Majeure
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9
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11.
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Assignment
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10
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12,
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Amendments
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10
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13.
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Severability
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10
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14.
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Governing
Law
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10
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15.
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Confidentiality
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10
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Signatures
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11
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i
Table
of Contents (continued)
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Page
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Schedule
A -- Fees and Expenses
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A-1
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Schedule
B -- Fund Administration Services Description
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B-1
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Schedule
C -- Fund Accounting Services Description
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C-1
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ii
AGREEMENT
made as of February 5, 2007 between Xxxxxxx
Exchange Traded Trust (the
“Trust"), a Delaware statutory trust, and X.X.
Xxxxxx Investor Services Co.
(“X.X.
Xxxxxx”), a Delaware corporation.
WITNESSETH:
WHEREAS,
the Trust is registered as an open-end management investment company under
the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS,
the Trust wishes to contract with X.X. Xxxxxx to provide certain services with
respect to the Trust and the designated series of the Trust (individually
referred to as a "Fund") and X.X. Xxxxxx has agreed to render such services;
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1.
APPOINTMENT.
The
Trust hereby appoints X.X. Xxxxxx to provide services for the Trust, as
described hereinafter, subject to the supervision of the Board of Trustees
of
the Trust (the "Board"), for the period and on the terms set forth in this
Agreement for the Trust and each Fund. X.X. Xxxxxx accepts such appointment
and
agrees to furnish the services herein set forth in return for the compensation
as provided in Section 5 of and Schedule A to this Agreement.
2. REPRESENTATIONS
AND WARRANTIES.
(a) X.X.
Xxxxxx represents and warrants to the Trust that:
(i) X.X.
Xxxxxx is a corporation, duly organized and existing under the laws of the
State
of Delaware;
(ii) X.X.
Xxxxxx is duly qualified to carry on its business in the Commonwealth of
Massachusetts;
(iii) X.X.
Xxxxxx is empowered under applicable laws and by its Articles of Incorporation
and By-Laws to enter into and perform this Agreement;
(iv) all
requisite corporate proceedings have been taken to authorize X.X. Xxxxxx to
enter into and perform this Agreement;
1
(v) X.X.
Xxxxxx has, and will continue to have, access to the facilities, personnel
and
equipment required to fully perform its duties and obligations
hereunder;
(vi) no
legal
or administrative proceedings have been instituted or threatened, which would
impair X.X. Xxxxxx’x ability to perform its duties and obligations under this
Agreement; and
(vii) X.X.
Xxxxxx’x entrance into this Agreement shall not cause a material breach or be in
material conflict with any other agreement or obligation of X.X. Xxxxxx or
any
law or regulation applicable to X.X. Xxxxxx;
(b) The
Trust
represents and warrants to X.X. Xxxxxx that:
(i) the
Trust
is a statutory trust, duly organized and existing and in good standing under
the
laws of the State of Delaware;
(ii) the
Trust
is empowered under applicable laws and by its Charter Document and By-Laws
to
enter into and perform this Agreement;
(iii) all
requisite proceedings have been taken to authorize the Trust to enter into
and
perform this Agreement;
(iv) the
Trust
is an investment company properly registered under the 1940 Act;
(v) a
registration statement under the Securities Act of 1933, as amended ("1933
Act")
and the 1940 Act on Form N-1A has been filed and will be effective and will
remain effective during the term of this Agreement, and all necessary filings
under the laws of the states will have been made and will be current during
the
term of this Agreement;
(vi) no
legal
or administrative proceedings have been instituted or threatened, which would
impair the Trust's ability to perform its duties and obligations under this
Agreement;
(vii) the
Trust’s registration statement complies in all material respects with the 1933
Act and the 1940 Act (including the rules and regulations thereunder) and none
of the Trust’s prospectuses and/or statements of additional information contain
any untrue statement of material fact or omit to state a material fact necessary
to make the statements therein not misleading; and
2
(viii) the
Trust's entrance into this Agreement shall not cause a material breach or be
in
material conflict with any other agreement or obligation of the Trust or any
law
or regulation applicable to it.
3.
DELIVERY
OF
DOCUMENTS.
The
Trust will promptly furnish to X.X. Xxxxxx such copies, properly certified
or
authenticated, of contracts, documents and other related information that
X.X.
Xxxxxx may request or requires to properly discharge its duties. Such documents
may include but are not limited to the following:
(a) Resolutions
of the Board authorizing the appointment of X.X. Xxxxxx to provide certain
services to the Trust and approving this Agreement;
(b) The
Trust's Charter Document;
(c) The
Trust's By-Laws;
(d) The
Trust's Notification of Registration on Form N-8A under the 1940 Act as filed
with the Securities and Exchange Commission ("SEC");
(e) The
Trust's registration statement including exhibits, as amended, on Form N-1A
(the
"Registration Statement") under the 1933 Act and the 1940 Act, as filed with
the
SEC;
(f) Copies
of
the Investment Advisory Agreement between the Trust and its investment adviser
(the "Advisory Agreement");
(g) Opinions
of counsel and auditors’ reports relating to the Registration
Statement;
(h) The
Trust's prospectus(es) and statement(s) of additional information relating
to
each Fund, as applicable, and all amendments and supplements thereto (such
Prospectus(es) and Statement(s) of Additional Information and supplements
thereto, as presently in effect and as from time to time hereafter amended
and
supplemented, herein called the "Prospectuses"); and
(i) Such
other agreements as the Trust may enter into from time to time, which relate
to
X.X. Xxxxxx'x duties and responsibilities hereunder, including securities
lending agreements, futures and commodities account agreements, brokerage
agreements and options agreements.
4.
SERVICES
PROVIDED.
(a) X.X.
Xxxxxx will provide the following services subject to the control, direction
and
supervision of the Board and in compliance with the objectives, policies and
limitations set forth in the Trust's Registration Statement, Charter Document
and By-Laws; applicable U.S. laws and regulations; and all resolutions, codes,
procedures and policies implemented by the Board, of which X.X. Xxxxxx has
been
notified by the Trust:
3
(i) Trust
Administration and
(ii) Trust
Accounting.
A
detailed description of each of the above services is contained in Schedules
B
and C respectively, to this Agreement.
(b) X.X.
Xxxxxx will also:
(i) provide
office facilities with respect to the provision of the services contemplated
herein (which may be in the offices of X.X. Xxxxxx or a corporate affiliate
of
X.X. Xxxxxx);
(ii) provide
or otherwise obtain personnel sufficient for provision of the services
contemplated herein;
(iii) furnish
equipment and other materials, which are necessary or desirable for provision
of
the services contemplated herein; and
(iv) keep
records relating to the services provided hereunder in such form and manner
as
X.X. Xxxxxx may xxxx appropriate or advisable, but in all circumstances in
accordance with Section 31 of the 1940 Act and the rules thereunder. To the
extent required by Section 31 of the 1940 Act and the rules thereunder, X.X.
Xxxxxx agrees that all such records prepared or maintained by X.X. Xxxxxx
relating to the services provided hereunder are the property of the Trust and
will be preserved for the periods prescribed under Rule 31a-2 under the 1940
Act, maintained at the Trust's expense, and made available in accordance with
such Section and rules.
5. FEES
AND EXPENSES.
(a) As
compensation for the services rendered to the Trust pursuant to this Agreement
the Trust shall pay X.X. Xxxxxx monthly fees determined as set forth in Schedule
A to this Agreement. Such fees are to be billed monthly and shall be due and
payable upon receipt of the invoice. Upon any termination of the provision
of
services under this Agreement before the end of any month, the fee for the
part
of the month before such termination shall be prorated according to the
proportion which such part bears to the full monthly period and shall be payable
upon the date of such termination.
(b) For
the
purpose of determining fees calculated as a function of the Trust's assets,
the
value of the Trust's assets and net assets shall be computed as required by
its
currently effective Prospectus and/or Statement of Additional Information,
generally accepted accounting principles, and resolutions of the
Board.
4
(c) The
Trust
may request additional services, additional processing, or special reports,
with
such specifications and requirements documentation as may be reasonably required
by X.X. Xxxxxx. In addition, significant regulatory and legal changes and
changes in the Trust’s status may necessitate additional services, processing or
reports. In either instance, if X.X. Xxxxxx elects to provide such services
or
arrange for their provision, it shall be entitled to such additional fees and
expenses as the parties agree to in writing.
(d)
X.X.
Xxxxxx will bear its own expenses in connection with the performance of the
services under this Agreement except as provided herein or as agreed to by
the
parties. The Trust agrees to reimburse, within a reasonable period of time,
X.X.
Xxxxxx for any services, equipment or supplies ordered by or for the Trust
through X.X. Xxxxxx and for any other expenses that X.X. Xxxxxx may incur on
the
Trust's behalf at the Trust's request or as consented to by the Trust. Such
other expenses to be incurred in the operation of the Trust and to be borne
by
the Trust, may include, but are not limited to: taxes; interest; brokerage
fees
and commissions; salaries and fees of officers and trustees who are not
officers, directors, shareholders or employees of X.X. Xxxxxx, or the Fund's
investment adviser or distributor;
SEC and
state Blue Sky registration and qualification fees, levies, fines and other
charges; XXXXX filing fees, processing services and related fees; postage and
mailing costs; costs of share certificates; advisory and administration fees;
charges and expenses of pricing and data services, independent public
accountants and custodians; insurance premiums including fidelity bond premiums;
legal expenses; consulting fees; customary bank charges and fees; costs of
maintenance of corporate or trust existence; expenses of typesetting and
printing of Prospectuses for regulatory purposes and for distribution to current
shareholders of the Trust (the Trust's distributor to bear the expense of all
other printing, production, and distribution of Prospectuses, and marketing
materials); expenses of printing and production costs of shareholders' reports
and proxy statements and materials; expenses of proxy solicitation, proxy
tabulation and annual meetings; costs and expenses of Trust stationery and
forms; costs and expenses of special telephone and data lines and devices;
costs
associated with corporate or trust, shareholder, and Board meetings; trade
association dues and expenses; reprocessing costs to X.X. Xxxxxx caused by
third
party errors; copying charges; overtime work when necessitated by unusual client
requests; microfilm and storage, audio response unit costs; corporate action
services; service termination and conversion costs; any expenses necessitated
by
regulatory or legal changes; and any extraordinary expenses and other customary
Trust expenses. In addition, X.X. Xxxxxx may utilize one or more independent
pricing services to obtain securities prices and to act as backup to the primary
pricing services designated by the Trust, in connection with determining the
net
asset values of each Fund. The Trust will reimburse X.X. Xxxxxx for the Trust's
share of the cost of such services based upon the actual usage, or a pro-rata
estimate of the use, of the services for the benefit of the Trust.
5
(e) All
fees,
out-of-pocket expenses, or additional charges of X.X. Xxxxxx shall be billed
on
a monthly basis and shall be due and payable upon receipt of the
invoice.
(f) X.X.
Xxxxxx will render, after the close of each month in which services have been
furnished, a statement reflecting all of the charges for such month. Charges
remaining unpaid after thirty (30) days shall bear interest in finance charges
equivalent to, in the aggregate, the Prime Rate (as determined by X.X. Xxxxxx)
plus two percent per year and all costs and expenses of effecting collection
of
any such sums, including reasonable attorney's fees, shall be paid by the Trust
to X.X. Xxxxxx.
(g) In
the
event that the Trust is more than sixty (60) days delinquent in its payments
of
monthly xxxxxxxx in connection with this Agreement (with the exception of
specific amounts which may be contested in good faith by the Trust), this
Agreement may be terminated upon thirty (30) days' written notice to the Trust
by X.X. Xxxxxx. The Trust must notify X.X. Xxxxxx in writing of any contested
amounts within thirty (30) days of receipt of a billing for such amounts.
Disputed amounts are not due and payable while they are being
investigated.
6. LIMITATION
OF LIABILITY
AND INDEMNIFICATION.
(a) X.X.
Xxxxxx shall not be liable for any error of judgment or mistake of law or for
any loss or expense suffered by the Trust or third parties, in connection with
the matters to which this Agreement relates, except that X.X. Xxxxxx shall
be
liable for a loss or expense caused by or resulting from
X.X.
Xxxxxx'x bad faith, negligence or willful misconduct.
(b) X.X.
Xxxxxx shall not be responsible for, and the Trust shall indemnify and hold
X.X.
Xxxxxx and its directors, officers, agents and employees (collectively the
“Indemnitees”) harmless from and against any and all claims, liabilities,
losses, damages, fines, penalties and expenses, including out-of-pocket and
incidental expenses and legal fees (“Losses”) that may be imposed on, incurred
by, or asserted against, the Indemnitees or any of them in the performance
of
its/their duties hereunder, including but not limited to those arising out
of or
attributable to:
6
(i) any
and
all actions of the Indemnitees required to be taken pursuant to this Agreement
and that are taken without bad faith, negligence, or willful
misconduct;
(ii) the
reliance on or use by the Indemnitees of information, records, or documents
which are received by the Indemnitees and furnished to it or them by or on
behalf of the Trust, and which have been prepared or maintained by the Trust
or
any third party on behalf of the Trust;
(iii) the
Trust's refusal or failure to comply with the terms of this Agreement or the
Trust's lack of good faith, or its actions, or lack thereof, involving
negligence or willful misfeasance;
(iv) following
any instructions or other directions reasonably believed to be requests of
the
Trust or otherwise duly authorized, and upon which X.X. Xxxxxx is authorized
to
rely pursuant to the terms of this Agreement;
(v) the
breach of any representation or warranty of the Fund hereunder;
(vi) any
delays, inaccuracies, errors in or omissions from information or data provided
to X.X. Xxxxxx by the Trust, its investment advisers and/or sub-advisers, and
providers of other services such as data services, corporate action services,
pricing services or securities brokerage;
(vii) the
offer
or sale of shares by the Trust in violation of any requirement under the 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 any state agency with respect to the offer or sale of such
shares in such state (1) resulting from activities, actions, or omissions by
the
Trust or its other service providers and agents, or (2) existing or arising
out
of activities, actions or omissions by or on behalf of the Trust prior to the
effective date of this Agreement;
(viii) any
failure of the Trust’s registration statement to comply with the 1933 Act and
the 1940 Act (including the rules and regulations thereunder) and any other
applicable laws, or any untrue statement of a material fact or omission of
a
material fact necessary to make any statement therein not misleading in a
Trust’s prospectus;
7
(ix) the
actions taken by the Trust, its investment adviser and/or sub-advisers, and
its
distributor in compliance with applicable securities, tax, commodities and
other
laws, rules and regulations, or the failure to so comply; and
(x) all
actions, inactions, omissions, or errors caused by third parties to whom the
Trust has assigned any rights and/or delegated any duties under this Agreement
at the request of or as required by the Trust, its investment advisers or
distributor.
(c) In
performing its services hereunder, X.X. Xxxxxx shall be entitled to rely on
any
oral or written instructions, notices or other communications, including
electronic transmissions, from the Trust and its officers and directors,
investment advisers and sub-advisers, agents and other service providers which
X.X. Xxxxxx reasonably believes to be genuine, valid and authorized. X.X. Xxxxxx
shall also be entitled to consult with and rely on the advice and opinions
of
outside legal counsel and public accountants retained by the Trust, as necessary
or appropriate.
(d)
X.X.
Xxxxxx shall use reasonable care in performing its duties under this Agreement.
X.X. Xxxxxx shall not be in violation of this Agreement with respect to any
matter as to which it has satisfied its duty of reasonable care, except that
a
loss arising out of or relating to X.X. Xxxxxx'x bad faith, negligence or
willful misconduct on its part in the performance of its duties under this
Agreement.
(e) Anything
in this agreement to the contrary notwithstanding, in no event shall X.X. Xxxxxx
be liable for any special or consequential losses or damages of any kind
whatsoever (including but not limited to lost profits), whether or not
foreseeable and regardless of the form of action in which such claim may be
brought. This provision shall survive the termination of this
Agreement.
8
7. TERM.
This
Agreement shall become effective on the date first hereinabove written and
may
be modified or amended from time to time by mutual written agreement between
the
parties hereto. The Agreement shall continue in effect unless terminated
by
either party on 180 days' prior written notice. Upon termination of this
Agreement, the Trust shall pay to X.X. Xxxxxx such compensation and any
out-of-pocket or other reimbursable expenses which may become due or payable
under the terms hereof as of the date of termination or after the date that
the
provision of services ceases, whichever is later. In the event of late payment
or non-payment, X.X. Xxxxxx shall have the right to retain the records of
the
Trust until all fees and monies due X.X. Xxxxxx are paid. However, at all
times,
all such records shall be available for review, at the Trust's request, by
the
Trust and/or other authorized individual.
8. NOTICES.
Any
notice required or permitted hereunder shall be in writing and shall be deemed
effective on the date of personal delivery (by private messenger, courier
service or otherwise) or upon confirmed receipt of telex or facsimile, whichever
occurs first, or upon receipt if by mail to the parties at the following
address
(or such other address as a party may specify by notice to the
other):
If
to the
Trust:
Xxxxxxx
Exchange Traded Trust
000
Xxxx
Xxxxxxxxx Xxxxxx
Xxxxx
0000
Xxxxxxxxx,
XX 00000
Attention:
Legal Department
Fax:
000-000-0000
If
to
X.X. Xxxxxx:
X.X.
Xxxxxx Investor Services Co.
00
Xxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Attention:
Legal Department
Fax:
000-000-0000
9. WAIVER.
The
failure of a party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver nor shall it deprive such
party
of the right thereafter to insist upon strict adherence to that term or any
term
of this Agreement. Any waiver must be in writing signed by the waiving
party.
10. FORCE
MAJEURE. X.X.
Xxxxxx shall maintain and update from time to time business continuation
and
disaster recovery procedures with respect to its administration and accounting
business that it determines from time to time meet reasonable commercial
standards. Neither party shall be responsible or liable for any harm, loss
or
damage suffered by the Trust, its investors, or other third parties or for
any
failure or delay in performance of their obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances reasonably
beyond their control, such as an act of God, fire, flood, civil or labor
disturbance, war, terrorism, act of any governmental authority or other act
or
threat of any authority (de jure or de facto), legal constraint, fraud or
forgery (except to the extent that such fraud or forgery is attributed to
X.X.
Xxxxxx or to its employees) and inability to obtain or interruption of external
communications facilities. However, that in the event of a failure or delay,
X.X. Xxxxxx (i) shall not discriminate against the Trust in favor of any
other
customer of X.X. Xxxxxx in making computer time and personnel available to
input
of process the transactions contemplated by this Agreement, and (ii) shall
use
reasonable efforts to ameliorate the effects of any such failure or delay.
X.X.
Xxxxxx shall use reasonable efforts to resume service and mitigate loss to
the
Trust through implementation of its disaster recovery and business continuation
plan. X.X. Xxxxxx shall promptly notify the Trust of a force majeure that
may
affect services provided to the Trust under this Agreement. In the event
of a
force majeure, any resulting harm, loss, damage, failure or delay by X.X.
Xxxxxx
will not give the Trust the right to terminate this Agreement.
9
11. AMENDMENTS.
This
Agreement may be modified or amended from time to time by mutual written
agreement between the parties. No provision of this Agreement may be changed,
discharged, or terminated orally, but only by an instrument in writing signed
by
the party against which enforcement of the change, discharge or termination
is
sought.
12. ASSIGNMENT.
Neither
party may assign this Agreement or any interest hereunder either voluntarily
or
involuntarily, by operation of law or otherwise, without the prior consent
of
the other party.
13. SEVERABILITY.
If any
provision of this Agreement is invalid or unenforceable, the balance of the
Agreement shall remain in effect, and if any provision is inapplicable to
any
person or circumstance it shall nevertheless remain applicable to all other
persons and circumstances.
14. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW
YORK.
15. CONFIDENTIALITY. In
accordance with the provisions of the Financial Service Modernization Act
of
1999 (Xxxxx-Xxxxx Xxxxxx Act), the Securities and Exchange Commission’s
regulation S-P (“Regulation S-P”) and any other applicable federal and state
privacy laws, rules and regulations, nonpublic personal financial information
relating to consumers and customers of the Trust provided by, or at the
direction of the Trust to X.X. Xxxxxx, or collected or retained by X.X. Xxxxxx
in the course of providing services to the Trust shall be considered
confidential information. X.X. Xxxxxx agrees that it shall not use such
confidential information for any purpose other than to carry out its obligations
under this Agreement, and further agrees that it shall not give, sell or
in any
way transfer or disclose such confidential information to any person or entity,
other than (i) affiliates of X.X. Xxxxxx or third parties who have entered
into
contractual arrangements with the Trust or with X.X. Xxxxxx, and then only
to
the extent necessary to carry out the obligations under such contractual
arrangements, (ii) at the direction of the Trust, (iii) as required by law
or
(iv) subject to (i) above, as permitted by law. X.X. Xxxxxx represents that
it
has in place and shall maintain physical, electronic, and procedural safeguards
reasonably designed to protect the security, confidentiality and integrity
of,
and to prevent unauthorized access to or use of records and information related
to consumers or customers of the Trust. X.X. Xxxxxx warrants that it shall
not
disclose such confidential information to any person or entity as permitted
in
the previous sentence unless such person or entity has agreed to keep such
information confidential. The Trust represents to X.X. Xxxxxx that it has
adopted a Statement of its privacy policies and practices as required by
Regulation S-P and agrees to provide X.X. Xxxxxx with a copy of that statement
annually.
10
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their officers designated below as of the date first written above.
| Xxxxxxx Exchange Traded Trust | ||
| |
|
|
| By: |
/s/
Xxxxx X. Xxxxxx
|
|
|
Name: Xxxxx X. Xxxxxx |
||
| Title: President | ||
|
X.X.
Xxxxxx Investor Services Co.
|
||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxx | |
|
Name:
Xxxxxxx
X. Xxxxxx
Title:
Senior
Vice President
|
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11
SCHEDULE
A
FEES
AND EXPENSES
Fund
Administration and Accounting Fees
|
A.
|
For
the services rendered under this Agreement, the
Trust shall pay to the Administrator an annual fee based on the following
schedule:
|
|
Year
One:
|
||
|
First
6 months
|
10.00
bp per annum
|
|
|
Next
6 months
|
20.00
bp per annum1
|
|
|
Year
Two:
|
|
|
|
Minimum
Charge per Fund
|
$15,000
per annum
|
|
|
Market
Value Fee
|
20.00
bp per annum1
|
|
|
After
Year Two:
|
|
|
|
Minimum
Charge per Fund
|
$100,000
per annum
|
1
The
maximum amount a single fund will pay for Fund Accounting and Fund
Administration services will be $100,000
|
B.
|
The
foregoing calculation is based on the average daily net assets of
the
Trust. The fees will be computed, billed and payable monthly.
|
|
C.
|
Out-of-pocket
expenses will be computed, billed and payable
monthly.
|
A-1
SCHEDULE
B
GENERAL
DESCRIPTION OF FUND ADMINISTRATION
AND
COMPLIANCE SERVICES
X.X.
Xxxxxx’x Fund Administration and Compliance Services are designed and intended
to address the Trust’s
routine financial and tax reporting, portfolio compliance and general
administration needs. X.X. Xxxxxx will work closely with the Trust’s
experts, such as its public accountants and legal counsel, with respect to
these
services.
I. Routine
Financial Reporting Services
|
A.
|
Semi-annual
and annual reports.
Prepare for review and approval by the Trust’s
officers, the Trust’s
semi-annual reports, annual reports and financial statements for
routine
prospectus updates, including, but not limited to, the Trust's Schedule
of
Investments, Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes, Financial Highlights, Statement of Cash Flows,
Notes
to Financial Statements, Review of Financial Data in MD&A and other
line graph and performance information. Assist with financial statement
process by preparing and reviewing ROC SOP disclosure and tax footnote
disclosures.
|
|
B.
|
Regular
N-SAR filings.
Prepare for review and approval by the Trust’s
officers, Form N-SAR. Upon approval of the N-SAR by the Trust’s
adviser and officers, X.X. Xxxxxx will file Form N-SAR with the
SEC.
|
|
C.
|
24f-2
Notices.
Prepare and file with the SEC the annual Rule 24f-2 Notice, upon
approval
by the Trust
officers.
|
|
D.
|
Form
N-Q.
Prepare for review and approval by the Trust’s
officers, Form N-Q. Upon approval of the N-Q by the Trust’s
adviser and officers, X.X. Xxxxxx will file Form N-Q with the
SEC.
|
|
E.
|
Form
N-CSR.
Prepare for review and approval by the Trust’s
officers, Form N-CSR. Upon approval of the N-CSR by the Trust’s
adviser and officers, X.X. Xxxxxx will file Form N-CSR with the
SEC.
|
|
F.
|
Other.
Review Form N-1A and proxies and provide certain financial information.
|
II. Routine
Tax Services
|
A.
|
Financial
Statement Support.
Provide financial reporting group with year end tax footnote disclosure,
ROCSOP and 60 day notification
information
|
|
B.
|
Tax
Filings.
X.X. Xxxxxx will prepare and review the Trust’s fiscal and excise taxable
income calculations. In addition, X.X. Xxxxxx will prepare and review
the
Trust’s Federal tax returns and supporting schedules ( i.e. Form 1120RIC
and Form 8613).Taxable income calculations and tax returns will be
provided to the Trust’s auditors for review and sign off as paid preparer.
X.X. Xxxxxx will work closely with the Trust’s auditors to determine state
and local income tax filing requirements for the Trust.
|
B-1
|
C.
|
Form
1099-DIV Support.
Prepare and review data such as foreign tax credit, qualified dividend
income, tax exempt percentages, return of capital and any distribution
re-characterizations and provide to the Trust’s transfer agent at calendar
year end.
|
|
D.
|
Supplementary
Form 1099-DIV Support.
Prepare and review supplementary year end reporting data such as
state by
state, foreign source income, AMT percentages, treasury income and
asset
and state intangible tax information and provide to Trust’s transfer agent
at calendar year end.
|
|
E.
|
Other.
Prepare and review periodic distributions; review IRS diversification
and
qualifying income tests; prepare and review qualified interest income
percentages; provide tax consultation and research; review complex
corporate actions.
|
III. Routine
Compliance
X.X.
Xxxxxx will provide assistance to the Trust
and its
investment adviser with respect to compliance with federal tax and securities
laws. Responsibility for such compliance services are subject to the development
of a more precise allocation of duties and responsibilities between X.X. Xxxxxx,
the adviser and other relevant service providers. In addition, X.X. Xxxxxx’x
provision of compliance services is designed to assist the Trust
and its
adviser but is not intended as an assumption by X.X. Xxxxxx of the adviser’s
fiduciary duties and legal responsibilities to the Trust.
|
A.
|
Portfolio
compliance.
Monitor and periodically test the Trust’s
compliance with such investment restrictions and other regulatory
requirements, as may be agreed to between the adviser, X.X. Xxxxxx
and the
Trust
(e.g., issuer or industry diversification, etc.), including 1940
Act
Compliance monitoring.
|
|
B.
|
Tax
compliance.
Monitor and periodically test, including on required quarterly testing
dates, the Trust’s
compliance with the requirements of Section 851 of the Internal Revenue
Code and all other applicable Treasury Regulations, including, but
not
limited to, testing for qualification as a regulated investment company,
performance of IRS asset diversification and good income tests, quarterly
tax exempt asset test and annual foreign security asset test.
|
|
C.
|
Policies
and procedures compliance.
Assist the investment adviser with monitoring its compliance with
Trust
Board directives, such as “Approved Issuers Listings for Repurchase
Agreements”, Rule 17a-7, Rule 17e-1 and Rule 12d3-1
procedures.
|
|
D.
|
Other.
Provide assistance with calculation of portfolio turnover, and perform
annual gross income test.
|
B-2
IV. General
Administration
|
A.
|
Board
materials.
Prepare or compile performance and expense information, financial
reports,
and compliance data and information for inclusion in the Trust’s
regular quarterly Board meeting
materials.
|
|
B.
|
Dividend
distributions.
Calculate dividend distributions in accordance with distribution
policies
detailed in the Trust’s
prospectuses or Board resolutions. Assist Trust
management in making final determinations of distribution
amounts.
|
|
C.
|
Expense
accruals.
Prepare Fund
expense projections and budgets, establish accruals and review on
a
periodic basis, at least monthly, including expenses based on a percentage
of average daily net assets (e.g., management, advisory and administrative
fees) and expenses based on actual charges annualized and accrued
daily
(audit fees, registration fees, directors’ fees, etc.). Provide expense
budgeting consulting to review expense ratios/fee waivers.
|
|
D.
|
Expense
payments.
Arrange, if directed by the appropriate Trust
officers, for the payment of the Trust’s
and each Fund's expenses.
|
|
E.
|
Reports
to statistical service providers.
Report Trust
performance to outside statistical service providers as directed
by
Trust
management. Provide all survey reporting services requested by the
Trust.
|
|
F.
|
SEC
examinations.
Provide support and coordinate communications and data collection,
of
records and documents held by X.X. Xxxxxx on the Trust’s
behalf, with respect to routine SEC regulatory examinations of the
Trust.
|
|
G.
|
Bills.
Allocate Fund bills based on client-directly methodology.
|
B-3
SCHEDULE
C
DESCRIPTION
OF FUND ACCOUNTING SERVICES
X.X.
Xxxxxx shall provide the following accounting services to the Trust:
|
A.
|
Maintenance
of the books and records for the Trust
's
assets, including records of all securities
transactions.
|
|
B.
|
Maintenance
of general and auxiliary ledgers reflecting all asset, liability,
capital
income and expense accounts. Verify and reconcile with the Trust's
custodian and adviser all daily trade activity.
|
|
C.
|
Calculation
of each Fund's Net Asset Value in accordance with the Prospectus
and
Statement of Additional Information, as presently in effect, and
as
amended, supplement and/or superseded from time to time. X.X. Xxxxxx
shall
prepare and maintain all documentation and records as are necessary
to
reflect the determination of the Net Asset Value per share for each
Fund.
After the Fund meets eligibility requirements, transmission to NASDAQ
and
to such other entities as directed by the Trust.
|
|
D.
|
Accounting
for dividends and interest received and distributions made by the
Trust.
|
|
E.
|
Coordinate
with the Trust
's
independent auditors with respect to the annual audit, and as otherwise
requested by the Trust.
|
|
F.
|
As
mutually agreed upon, X.X. Xxxxxx will provide domestic and/or
international reports.
|
|
G.
|
Provide
all other related accounting services, including, but not limited
to,
standard/automated inputs, trade processing, capital stock processing,
expense processing, portfolio income recognition, corporate actions
processing, market value calculations utilizing automated price vendors,
standard/automated reporting and deadlines, rate calculation for
daily
distributing Funds, cash component information and NAV calculation
and
dissemination of the Portfolio Listing File, Fund information reporting
to
client and third party agencies, risk reporting (e.g., statistics,
past
due income, etc.), daily cash reconciliation, weekly asset reconciliation,
monthly SEC yield calculations, external audit, SAS 70 and client
due
diligence coordination and generally accepted accounting principles
and
materiality thresholds to support a daily valuation environment.
|
C-1
