EX-99.h.1
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 19th day of February, 2008, by and between
RevenueShares ETF Trust (the "Trust") and each Series listed on Appendix I
hereto (each such Series hereinafter a "Fund"), and THE BANK OF NEW YORK, a New
York banking company having its principal office and place of business at Xxx
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Bank").
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 will ordinarily issue for purchase and redeem shares of
funds of the Funds (the "Shares") only in aggregations of Shares known as
"Creation Units" (currently 50,000 shares) (each a "Creation Unit") principally
in kind;
WHEREAS, The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York ("DTC"), or its nominee (Cede
& Co.), will be the registered owner (the "Shareholder") of all Shares; and
WHEREAS, the Trust desires to appoint the Bank as its transfer agent,
dividend disbursing agent, and agent in connection with certain other
activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement,
the Trust, on behalf of the Funds, hereby employs and appoints the Bank to
act as, and the Bank agrees to act as, its transfer agent for the
authorized and issued shares of beneficial interest of the Trust
("Shares"), and as the Trust's dividend disbursing agent.
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with the terms and conditions of the form of
Participant Agreement prepared by the Distributor, a copy of which is
attached hereto as Exhibit A, the Bank shall:
(i) Perform and facilitate the performance of purchases and
redemption of Creation Units;
(ii) Prepare and transmit by means of DTC's book-entry
system payments for dividends and distributions declared by the
Trust on behalf of the applicable Fund;
(iii) Maintain the record of the name and address of the
Shareholder and the number of Shares issued by the Trust and held
by the Shareholder;
(iv) Record the issuance of Shares of the Trust and maintain
a record of the total number of Shares of the Trust which are
outstanding, and, based upon data provided to it by the Trust,
the total number of authorized Shares. The Bank shall have no
obligation, when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws
relating to the issue or sale of such Shares, which functions
shall be the sole responsibility of the Trust.
(v) Prepare and transmit to the Trust and the Trust's
administrator and to any applicable securities exchange (as
specified to the Bank by the Trust or its administrator)
information with respect to purchases and redemptions of Shares;
(vi) On days that the Trust may accept orders for purchases
or redemptions, calculate and transmit to Bank, the Trust's
administrator the number of outstanding Shares for each Fund;
(vii) On days that the Trust may accept orders for purchases
or redemptions (pursuant to the Participant Agreement), transmit
to the Bank, the Trust and DTC the amount of Shares purchased on
such day;
(viii) Confirm to DTC the number of Shares issued to the
Shareholder, as DTC may reasonably request;
(ix) Prepare and deliver other reports, information and
documents to DTC as DTC may reasonably request;
(x) Extend the voting rights of the Shareholder for
extension by DTC to DTC participants and the beneficial owners of
Shares in accordance with policies and procedures of DTC for
book-entry only securities;
(xi) Create and maintain those books and records of the
Trust required by the 1940 Act and specified by the Trust in
Schedule A attached hereto;
(xii) Prepare a monthly report of all purchases and
redemptions of Shares during such month on a gross transaction
basis, and identify on a daily basis the net number of Shares
either redeemed or purchased on such Business Day and with
respect to each Authorized Participant purchasing or redeeming
Shares, the amount of Shares purchased or redeemed;
(xiii) Receive from the Distributor (as defined in the
Participant Agreement) or from its agent purchase orders from
Authorized Participants (as defined in the Participant Agreement)
for Creation Unit Aggregations of Shares received in good form
and accepted by or on behalf of the Trust by the Distributor,
promptly transmit appropriate trade instructions to the National
Securities Clearance Corporation or DTC, as applicable, and
pursuant to such orders issue the appropriate number of Shares of
the applicable Fund and hold such Shares in the account of the
Shareholder for each of the respective Funds of the Trust;
(xiv) Receive from the Authorized Participants redemption
requests, deliver the appropriate documentation thereof to The
Bank of New York as custodian for the Trust, generate and
transmit or cause to be generated and transmitted confirmation of
receipt of such redemption requests to the Authorized
Participants submitting the same; transmit appropriate trade
instructions to the National Securities Clearance Corporation or
DTC, as applicable; and redeem the appropriate number of Creation
Unit Aggregations of Shares held in the account of the
Shareholder;
(xv) Confirm the name, U.S taxpayer identification number,
and principle place of business of each Authorized Participant;
and
(xvi) Implement the Trust's Anti-Money Laundering ("AML")
program.
(b) In addition to the services set forth in the above
sub-section 1.2(a), the Bank shall: perform the customary services of
a transfer agent and dividend disbursing agent including, but not
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limited to, maintaining the account of the Shareholder, obtaining at
the request of the Trust from the Shareholder a list of DTC
participants holding interests in the Global Certificate, and those
services set forth on Schedule A attached hereto.
(c) The following shall be delivered by the Bank to DTC as the
Shareholder for delivery to DTC participants and beneficial owners in
accordance with the procedures for book-entry only securities of DTC:
(i) Annual and semi-annual reports of the Trust;
(ii) Fund proxies, proxy statements and other proxy
soliciting materials;
(iii) Fund prospectus and amendments and supplements
thereto, including stickers; and
(iv) Other communications as the Trust may from time to time
identify as required by law or as the Trust may reasonably
request
(d) The Bank shall provide additional services, if any, as may be
agreed upon in writing by the Trust and the Bank.
(e) The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner required by applicable
laws, rules, and regulations, and to the extent required by Section 31
of the 1940 Act and the rules thereunder (the "Rules"). All such books
and records shall be the property of the Trust, will be preserved,
maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Trust on and in
accordance with its request.
2. Fees and Expenses
2.1 The Bank shall receive from the Trust such compensation for the
Transfer Agent's services provided pursuant to this Agreement as may be
agreed to from time to time in a written fee schedule approved by the
parties. The fees are accrued daily and billed monthly and shall be due and
payable upon receipt of the invoice. Upon the termination of 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
termination of this Agreement.
2.2 In addition to the fee paid under Section 2.1 above, the Trust
agrees to reimburse the Bank for reasonable out-of-pocket expenses,
including but not limited to confirmation production, postage, forms,
telephone, microfilm, microfiche, tabulating proxies, records storage, or
advances incurred by the Bank for the items set out in the fee schedule
attached hereto or relating to dividend distributions and reports (whereas
all expenses related to creations and redemptions of Trust Shares shall be
borne by the relevant authorized participant in such creations and
redemptions). In addition, any other expenses incurred by the Bank at the
request or with the consent of the Trust, will be reimbursed by the Trust
on behalf of the applicable Fund.
2.3 The Trust agrees to pay all fees and reimbursable expenses within
thirty (30) business days following the receipt of the respective billing
notice accompanied by supporting documentation, as appropriate. Postage for
mailing of dividends, proxies, Trust reports and other mailings to all
shareholder accounts shall be advanced to the Bank by the Trust at least
seven (7) days prior to the mailing date of such materials.
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3. Representations and Warranties of the Bank
The Bank represents and warrants to the Trust that:
(a) It is a banking company duly organized and existing and in
good standing under the laws of the State of New York.
(b) It is duly qualified to carry on its business in the State of
New York.
(c) It is empowered under applicable laws and by its Charter and
By-Laws to act as transfer agent and dividend disbursing agent, and to
enter into and perform its obligations under this Agreement.
(d) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(e) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
(f) It is registered with the U.S. Securities and Exchange
Commission as a transfer agent under Section 17A of the Securities
Exchange Act of 1934, as amended, or is exempt from registration
thereunder in accordance with the terms thereof.
4. Representations and Warranties of the Trust
The Trust represents and warrants to the Bank that:
(a) It is duly organized and existing and in good standing under
the laws of the State of Delaware.
(b) It is empowered under applicable laws and by its Declaration
of Trust and By-Laws to enter into and perform this Agreement.
(c) All corporate proceedings required by said Articles of
Incorporation and By-Laws have been taken to authorize it to enter
into, and perform its obligations under, this Agreement.
(d) It is an open-end management investment company registered
under the 1940 Act.
(e) A registration statement under the Securities Act of 1933, as
amended, has been filed on behalf of each of the Funds and will be
effective as of this date that the Bank
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begins to provide services hereunder, and appropriate state securities
law filings have been made and will continue to be made, with respect
to all Shares of the Trust being offered for sale.
5. Indemnification
5.1 The Bank shall not be responsible for, and the Trust shall
indemnify and hold the Bank harmless from and against, any and all losses,
damages, costs, charges, counsel fees, including, without limitation, those
incurred by the Bank in a successful defense of any claims by the Trust,
payments, expenses and liability ("Losses") which the Bank may sustain or
incur or which may be asserted against the Bank in connection with or
relating to this Agreement or the Bank's actions or omissions with respect
to this Agreement, except for any Losses for which the Bank has accepted
liability pursuant to Article 6 of this Agreement.
5.2 At any time the Bank may apply to any officer of the Trust for
instructions, and may consult with legal counsel of their choosing with
respect to any matter arising in connection with the services to be
performed by the Bank under this Agreement, and the Bank and its agents or
subcontractors shall not be liable for any action taken or omitted by it in
reliance upon such instructions received from the Trust and shall promptly
advise the Trust of such advice or opinion (except for actions or omissions
by the Bank taken with bad faith, negligence, willful misconduct, or
reckless disregard of its duties hereunder). The Bank, its agents and
subcontractors may act upon any paper or document, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon
any instruction, information, data, records or documents provided to the
Bank or its agents or subcontractors by or on behalf of the Trust by
machine readable input, telex, CRT data entry or other similar means
authorized by the Trust, and shall not be held to have notice of any change
of authority of any person until receipt of written notice thereof from the
Trust.
5.3 This indemnification provision shall apply to actions taken
pursuant to this Agreement and the Participant Agreement.
6. Standard of Care and Limitation of Liability
The Bank shall have no responsibility and shall not be liable for any
Losses, except that the Bank shall be liable to the Trust for direct money
damages caused by its own or its employees' bad faith, negligence, willful
misconduct or reckless disregard of its or their duties hereunder, or its breach
of any of its representations and warranties. In no event shall the Bank be
liable for special, indirect or consequential damages, regardless of the form of
action and even if the same were foreseeable. For purposes of this Agreement,
none of the foregoing shall be or be deemed bad faith, negligence, willful
misconduct or reckless disregard:
(a) The conclusive reliance on or use by the Bank or its agents
or subcontractors of information, records, documents or services that
(i) are received by the Bank or its agents or subcontractors, and (ii)
have been prepared, maintained or performed by the Trust or any other
person or firm on behalf of the Trust including but not limited to any
previous transfer agent or registrar, except where such other person
or firm is the Bank or an affiliate or agent of the Bank.
(b) The conclusive reliance on, or the carrying out by the Bank
or its agents or subcontractors of, any instructions or requests of
the Trust or instructions or requests on behalf of the Trust.
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(c) The offer or sale of Shares by or for the Trust in violation
of any requirement under the federal securities laws or regulations,
or the securities laws or regulations of any state that such Shares be
registered in such state, or any violation of any stop order or other
determination or ruling by any federal agency, or by any state with
respect to the offer or sale of Shares in such state.
7. Concerning the Bank
7.1 (a) The Bank may employ agents or attorneys-in-fact that are not
affiliates of the Bank with the prior written consent of the Trust (which
consent shall not be unreasonably withheld), and shall not be liable for
any loss or expense arising out of, or in connection with, the actions or
omissions to act of such agents or attorneys-in-fact, provided that the
Bank acts in good faith and with reasonable care in the selection and
retention of such agents or attorneys-in-fact.
(b) The Bank may, without the prior consent of the Trust, enter
into subcontracts, agreements and understandings with any Bank
affiliate, whenever and on such terms and conditions as it deems
necessary or appropriate to perform its services hereunder. No such
subcontract, agreement or understanding shall discharge Bank from its
obligations hereunder.
7.2 The Bank shall be entitled to conclusively rely upon any written
or oral instruction actually received by the Bank and reasonably believed
by the Bank to be duly authorized and delivered. The Trust agrees to
forward to the Bank written instructions confirming oral instructions by
the close of business of the same day that such oral instructions are given
to the Bank. The Trust agrees that the fact that such confirming written
instructions are not received or that contrary written instructions are
received by the Bank shall in no way affect the validity or enforceability
of transactions authorized by such oral instructions and effected by the
Bank. If the Trust elects to transmit written instructions through an
on-line communication system offered by the Bank, the Trust's use thereof
shall be subject to the terms and conditions attached hereto as Appendix A.
7.3 The Bank shall establish and maintain a disaster recovery plan and
back-up system satisfying the requirements of its regulators (the "Disaster
Recovery Plan and Back-Up System"). The Bank shall not be responsible or
liable for any failure or delay in the performance of its obligations under
this Agreement arising out of or caused, directly or indirectly, by
circumstances beyond its control which are not a result of its negligence,
including without limitation, acts of God; earthquakes; fires; floods;
wars; civil or military disturbances; sabotage; epidemics; riots;
interruption, loss or malfunctions of transportation, computer (hardware or
software) or communication services; labor disputes; acts of civil or
military authority; governmental actions; or inability to obtain labor,
material, equipment or transportation, provided that the Bank has
established and is maintaining the Disaster Recovery Plan and Back-Up
System, or if not, that such delay or failure would have occurred even if
the Bank had established and was maintaining the Disaster Recovery Plan and
Back-Up System. Upon the occurrence of any such delay or failure the Bank
shall use commercially reasonable best efforts to resume performance as
soon as practicable under the circumstances.
7.4 The Bank shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in
this Agreement and the Participation Agreement, and no covenant or
obligation shall be implied against the Bank in connection with this
Agreement, except as set forth in this Agreement and the Participation
Agreement.
7.5 At any time the Bank may apply to an officer of the Trust for
written instructions with respect to any matter arising in connection with
the Bank's duties and obligations under this Agreement, and the Bank shall
not be liable for any action taken or omitted to be taken by the Bank in
good faith in accordance with such instructions. Such application by the
Bank for instructions from an officer of the
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Trust may, at the option of the Bank, set forth in writing any action
proposed to be taken or omitted to be taken by the Bank with respect to its
duties or obligations under this Agreement and the date on and/or after
which such action shall be taken, and the Bank shall not be liable for any
action taken or omitted to be taken in accordance with a proposal included
in any such application on or after the date specified therein unless,
prior to taking or omitting to take any such action, the Bank has received
written or oral instructions in response to such application specifying the
action to be taken or omitted.
7.6 Notwithstanding any provisions of this Agreement to the contrary,
the Bank shall be under no duty or obligation to inquire into, and shall
not be liable for:
(a) The legality of the issue, sale or transfer of any Shares,
the sufficiency of the amount to be received in connection therewith,
or the authority of the Trust to request such issuance, sale or
transfer;
(b) The legality of the purchase of any Shares, the sufficiency
of the amount to be paid in connection therewith, or the authority of
the Trust to request such purchase;
(c) The legality of the declaration of any dividend by the Trust,
or the legality of the issue of any Shares in payment of any stock
dividend; or
(d) The legality of any recapitalization or readjustment of the
Shares.
8. Providing of Documents by the Trust and Transfers of Shares
8.1 The Trust shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the sole Board of
Trustees of the Trust authorizing the appointment of the Bank and the
execution and delivery of this Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Trust,
and all amendments thereto.
8.2 In the event that DTC ceases to be the Shareholder, the Bank shall
re-register the Shares in the name of the successor to DTC as Shareholder
upon receipt by the Bank of such documentation and assurances as it may
reasonably require.
8.3 Except as specifically provided herein, the Bank shall have no
responsibility whatsoever with respect to any beneficial interest in any of
the Shares owned by the Shareholder.
8.4 The Trust shall deliver to the Bank the following documents on or
before the effective date of any increase, decrease or other change in the
total number of Shares authorized to be issued:
(a) An opinion of counsel for the Trust, in a form satisfactory
to the Bank, with respect to (i) the validity of the Shares, the
obtaining of all necessary governmental consents, whether such Shares
are fully paid and non-assessable and the status of such Shares under
the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, and any other applicable federal law or regulations
(i.e., if subject to registration, that they have been registered and
that the Registration Statement has become effective or, if exempt,
the specific grounds therefore), (ii) the status of the Fund with
regard to the 1940 Act, and (iii) the due and proper listing of the
Shares on all applicable securities exchanges; and
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(b) In the case of an increase, if the appointment of the Bank
was theretofore expressly limited, a certified copy of a resolution of
the Board of Trustees of the Trust increasing the authority of the
Bank.
8.5 RESERVED
8.6 The Bank agrees that all records prepared or maintained by the
Bank relating to the services to be performed by the Bank hereunder are the
property of the Trust and will be preserved, maintained and made available
upon reasonable request, and will be surrendered promptly to the Trust on
and in accordance with its request.
8.7 The Bank and the Trust agree that all books, records,
confidential, non-public, or proprietary information and data pertaining to
the business of the other party which are exchanged or received pursuant to
the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person,
except as may be, or may become required by law, by administrative or
judicial order or by rule. Nothing in this Agreement shall be deemed to
authorize the Bank to waive attorney-client, work product or other legal
privilege by or on behalf of the Trust or its investment adviser.
8.8 In case of any requests or demands for the inspection of
Shareholder records of the Trust, the Bank will promptly employ reasonable
commercial efforts to notify the Trust and secure instructions from an
authorized officer of the Trust as to such inspection. The Bank reserves
the right, however, to exhibit the Shareholder records to any person
whenever it is advised by its counsel that it may be held liable for the
failure to exhibit the Shareholder records to such person.
9. Termination of Agreement
9.1 The term of this Agreement shall be one year commencing upon the
date hereof (the "Initial Term") and shall automatically renew for
additional one-year terms (each a "Subsequent Term") unless either party
provides written notice of termination at least ninety (90) days prior to
the end of any one year term, or unless earlier terminated as provided
below:
(a) Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term in the event the other party breaches
any material provision of this Agreement, including, without
limitation in the case of the Trust, its obligations under Section
2.1, provided that the non-breaching party gives written notice of
such breach to the breaching party and the breaching party does not
cure such violation within 90 days of receipt of such notice.
(b) The Trust may terminate this Agreement at any time upon
ninety (90) days' prior written notice.
9.2 Should the Trust exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and material
will be borne by the Trust.
9.3 The terms of Article 2 (with respect to fees and expenses incurred
prior to termination), and of Article 5 shall survive any termination of
this Agreement.
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10. Additional Funds
In the event that the Trust establishes one or more additional series of
Shares with respect to which it desires to have the Bank render services as
transfer agent under the terms hereof, it shall so notify the Bank in writing,
and if the Bank agrees in writing to provide such services, such additional
issuance shall become Shares hereunder.
11. Assignment
11.1 Neither this Agreement nor any rights or obligations hereunder
may be assigned by either party without the written consent of the other
party.
11.2 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
12. Severability and Beneficiaries
12.1 In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected thereby, provided that the obligation of the Trust to pay
fees and expenses hereunder is conditioned upon the provision of services
to it by the Bank.
13.2 This Agreement is solely for the benefit of the Bank and the
Trust, including each Fund, and none of any Participant (as defined in the
Participation Agreement), the Distributor, any Shareholder or beneficial
owner of any Shares shall be or be deemed a third party beneficiary of this
Agreement.
13. Amendment
This Agreement may be amended or modified only by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
14. New York Law to Apply
This Agreement shall be construed in accordance with the substantive laws
of the State of New York, without regard to conflicts of laws principles
thereof. The Trust and the Bank hereby consent to the jurisdiction of a state or
federal court situated in the Borough of Manhattan, New York City, New York in
connection with any dispute arising hereunder. The Trust hereby irrevocably
waives, to the fullest extent permitted by applicable law, any objection which
it may now or hereafter have to the laying of venue of any such proceeding
brought in such a court and any claim that such proceeding brought in such a
court has been brought in an inconvenient forum. The Trust and the Bank each
hereby irrevocably waives any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
15. Merger of Agreement
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof
whether oral or written.
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16. Counterparts
This Agreement may be executed by the parties hereto in any number of
counterparts, each of which shall be deemed an original and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
17. Trust Liability
The Bank acknowledges and agrees that the obligations of the Trust
hereunder shall not be binding upon any of the shareholders, Trustees, officers,
employees or agents of the Trust personally, but shall bind only the trust
property of the Trust, as provided in its Agreement and Declaration of Trust.
The execution and delivery of this Agreement has been authorized by the Trustees
of the Trust and signed by an officer of the Trust, acting as such, and neither
such authorization by the Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in its Agreement and Declaration of Trust.
18. Several Obligations of the Series
This Agreement is an agreement entered into between the Bank and the Trust
with respect to each Series. With respect to any obligation of the Trust on
behalf of any Series arising out of this Agreement, the Bank shall look for
payment or satisfaction of such obligation solely to the assets of the Series to
which such obligation relates as though the Bank had separately contracted with
the Trust by separate written instrument with respect to each Series.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
REVENUESHARES ETF TRUST
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President
THE BANK OF NEW YORK
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Vice President
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SCHEDULE A
BOOKS AND RECORDS TO BE MAINTAINED BY THE BANK
Source Documents requesting Creations and Redemptions
Correspondence/AP Inquiries
Reconciliations, bank statements, copies of canceled checks, cash proofs
Daily/Monthly reconciliation of outstanding Shares between the Trust and DTC
Dividend Records
Year-end Statements and Tax Forms
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Exhibit A
Form of Authorized Participant Agreement
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Appendix A
Instructions for Electronic Transmission of Instructions
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