INVESTMENT COMPANY SERVICES AGREEMENT
Xxxx Family of Funds
This AGREEMENT, dated as of the 2nd day of May 2005, by and between
Xxxx Family of Funds (the "Fund"), a statutory business trust operating as an
open-end, investment management company registered under the Investment Company
Act of 1940, as amended (the "Act"), duly organized and existing under the laws
of the State of Delaware, and Matrix Capital Group, Inc. ("Matrix"), a
corporation duly organized under the laws of the State of New York
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Fund is authorized by its Agreement and Declaration of
Trust and By-Laws to issue separate series of shares representing interests in
separate investment portfolios which are identified on Schedule "C" attached
hereto and which Schedule "C" may be amended from time to time by mutual
agreement of the Fund and Matrix; and
WHEREAS, the Parties desire to enter into an agreement whereby Matrix
will provide the services to the Fund as specified herein and set forth in
particular in Schedule "A" which is attached hereto and made a part hereof.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
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GENERAL PROVISIONS
Section 1. Appointment.
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The Fund hereby appoints Matrix as servicing agent and Matrix hereby accepts
such appointment. In order that Matrix may perform its duties under the
terms of this Agreement, the Board of Trustees of the Fund shall direct the
officers, investment adviser, legal counsel, independent accountants and
custodian of the Fund to cooperate fully with Matrix and, upon request of
Matrix, to provide such information, documents and advice relating to the
Fund which Matrix requires to execute its responsibilities hereunder. In
connection with its duties, Matrix shall be entitled to rely, and will be
held harmless by the Fund when acting in reasonable reliance, upon any
instruction, advice or document relating to the Fund as provided to Matrix
by any of the aforementioned persons on behalf of the Fund. All fees charged
by any such persons acting on behalf of the Fund would be deemed an expense
of the Fund.
Any services performed by Matrix under this Agreement will conform to the
requirements of:
(a) the provisions of the Act and the Securities Act of 1933, as amended,
and any rules or regulations in force thereunder;
(b) any other applicable provision of state and federal law;
(c) the provisions of the Declaration of Trust and the By-Laws of the Fund
as amended from time to time and delivered to Matrix;
(d) any policies and determinations of the Board of Trustees of the Fund
which are communicated to Matrix; and
(e) the policies of the Fund as reflected in the Fund's registration
statement as filed with the U.S. Securities and Exchange Commission.
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Nothing in this Agreement will prevent Matrix or any officer thereof from
providing the same or comparable services for or with any other person, trust,
firm or corporation. While the services supplied to the Fund may be different
than those supplied to other persons, trusts, firms or corporations, Matrix will
provide the Fund equitable treatment in supplying services. The Fund recognizes
that it will not receive preferential treatment from Matrix as compared with the
treatment provided to other Matrix clients.
Section 2. Duties and Obligations of Matrix.
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Subject to the provisions of this Agreement, Matrix will provide to the Fund the
specific services as set forth in Schedule "A" attached hereto.
Section 3. Definitions. For purposes of this Agreement:
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"Certificate" will mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement. To be effective,
such Certificate shall be given to and received by the custodian and
shall be signed on behalf of the Fund by any two of its designated
officers, and the term Certificate shall also include instructions
communicated to the custodian by Matrix.
"Custodian" will refer to that agent which provides safekeeping of the
assets of the Fund.
"Instructions" will mean communications containing instructions
transmitted by electronic or telecommunications media including, but
not limited to, Industry Standardization for Institutional Trade
Communications, computer-to-computer interface, dedicated transmission
line, facsimile transmission (which may be signed by an officer or
unsigned) and tested telex.
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"Oral Instruction" will mean an authorization, instruction, approval,
item or set of data, or information of any kind transmitted to Matrix
in person or by telephone, telegram, telecopy or other mechanical or
documentary means lacking original signature, by a person or persons
reasonably identified to Matrix to be a person or persons so authorized
by a resolution of the Board of Trustees of the Fund to give Oral
Instructions to Matrix on behalf of the Fund.
"Shareholders" will mean the registered owners of the shares of the
Fund in accordance with the share registry records maintained by Matrix
for the Fund.
"Shares" will mean the issued and outstanding shares of the Fund.
"Signature Guarantee" will mean the guarantee of signatures by an
"eligible guarantor institution" as defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Eligible guarantor institutions include banks, brokers, dealers, credit
unions, and national securities exchanges, registered securities
associations, clearing agencies and savings associations.
Broker-dealers guaranteeing signatures must be members of a clearing
corporation or maintain net capital of at least $100,000. Signature
guarantees will be accepted from any eligible guarantor institution,
which participates in a signature guarantee program.
"Written Instruction" will mean an authorization, instruction,
approval, item or set of data or information of any kind transmitted to
Matrix in an original writing containing an original signature or a
copy of such document transmitted by telecopy including transmission of
such signature reasonably identified to Matrix to be the signature of a
person or persons so authorized by a resolution of the Board of
Trustees of the Fund, or so identified by the Fund to give Written
Instructions to Matrix on behalf of the Fund.
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Concerning Oral and Written Instructions For all purposes under this
Agreement, Matrix is authorized to act upon receipt of the first of any
Written or Oral Instruction it receives from the Fund or its agents. In
cases where the first instruction is an Oral Instruction that is not in
the form of a document or written record, a confirmatory Written
Instruction or Oral Instruction in the form of a document or written
record shall be delivered promptly. In cases where Matrix receives an
Instruction, whether Written or Oral, to enter a portfolio transaction
onto the Fund's records, the Fund shall cause the broker/dealer
executing such transaction to send a written confirmation to the
Custodian.
Matrix shall be entitled to rely on the first Instruction received from the Fund
or its authorized agents, whether Oral or otherwise. For any act or omission
undertaken by Matrix in compliance therewith, it shall be free of liability and
fully indemnified and held harmless by the Fund, provided however, that in the
event any Instruction received by Matrix is countermanded by a subsequent
Written or Oral Instruction received prior to acting upon such countermanded
Instruction, Matrix shall act upon such subsequent Written or Oral Instruction.
The sole obligation of Matrix with respect to any follow-up or confirmatory
Written Instruction or Oral Instruction in documentary or written form shall be
to make reasonable efforts to detect any discrepancy between the original
Instruction and such follow-up or confirmatory Written or Oral Instruction, and
to report such discrepancy to the Fund. The Fund shall be responsible and bear
the expense of its taking any action, including any reprocessing, necessary to
correct any discrepancy or error. To the extent such action requires Matrix to
act; the Fund shall give Matrix specific Written Instruction as to the action
required.
The Fund will file with Matrix a certified copy of each resolution of the Fund's
Board of Trustees authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided above.
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Section 4. Indemnification.
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(a) Matrix, its officers, employees, shareholders, and agents will be
liable for any loss suffered by the Fund resulting from the willful
misfeasance, bad faith, negligence or reckless disregard on the part
of Matrix in the performance of its obligations and duties under this
Agreement.
(b) Any director, officer, employee, shareholder or agent of Matrix,
who may be or become an officer, director, employee or agent of the
Fund, will be deemed, when rendering services to the Fund, or acting
on any business of the Fund (other than services or business in
connection with Matrix's duties hereunder), to be rendering such
services to or acting solely for the Fund and not as a director,
officer, employee, shareholder or agent of, or under the control or
direction of Matrix even though such person may be receiving
compensation from Matrix.
(c) The Fund agrees to indemnify and hold Matrix harmless, together
with its officers, employees, shareholders and agents from and against
any and all claims, demands, expenses and liabilities (whether with or
without basis in fact or law) of any and every nature which Matrix may
sustain or incur or which may be asserted against Matrix by any person
by reason of, or as a result of:
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(i) any action taken or omitted to be taken by Matrix except claims,
demands, expenses and liabilities arising from willful
misfeasance, bad faith, negligence or reckless disregard on the
part of Matrix in the performance of its obligations and duties
under this Agreement; or
(ii) any action taken or omitted to be taken by Matrix in reliance
upon any Certificate, instrument, order or stock certificate or
other document reasonably believed by Matrix to be genuine and
signed, countersigned or executed by any duly authorized
person, upon the Oral Instructions or Written Instructions of an
authorized person of the Fund, or upon the written opinion of
legal counsel for the Fund or Matrix; or
(iii) the offer or sale of shares of the Fund to any person, natural
or otherwise, which is in violation of any state or federal law.
If a claim is made against Matrix as to which Matrix may seek indemnity under
this Section, Matrix will notify the Fund promptly after receipt of any written
assertion of such claim threatening to institute an action or proceeding with
respect thereto and will notify the Fund promptly of any action commenced
against Matrix within ten (10) days after Matrix has been served with a summons
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or other legal process. Failure to notify the Fund will not, however, relieve
the Fund from any liability, which it may have on account of the indemnity under
this Section so long as the Fund has not been prejudiced in any material respect
by such failure. The Fund and Matrix will cooperate in the control of the
defense of any action, suit or proceeding in which Matrix is involved and for
which indemnity is being provided by the Fund to Matrix. The Fund may negotiate
the settlement of any action, suit or proceeding subject to Matrix's approval,
which will not be unreasonably withheld. Matrix reserves the right, but not the
obligation, to participate in the defense or settlement of a claim, action or
proceeding with its own counsel. Costs or expenses incurred by Matrix in
connection with, or as a result of such participation, will be borne solely by
the Fund if:
(i) Matrix has received an opinion of counsel from counsel to
the Fund stating that the use of counsel to the Fund by Matrix
would present an impermissible conflict of interest;
(ii) the defendants in, or targets of, any such action or proceeding
include both Matrix and the Fund, and legal counsel to Matrix
has reasonably concluded that there are legal defenses available
to it which are different from or additional to those available
to the Fund or which may be adverse to or inconsistent with
defenses available to the Fund (in which case the Fund will not
have the right to direct the defense of such action on behalf of
Matrix); or
(iii) the Fund authorizes Matrix to employ separate counsel at the
expense of the Fund.
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(d) The terms of this Section will survive the termination of this
Agreement.
Section 5. Representations and Warranties.
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(a) Matrix represents and warrants that:
(i) it is a corporation duly organized and existing and in good
standing under the laws of New York;
(ii) it is empowered under applicable laws and by its Certificate
of Incorporation and By-Laws to enter into and perform this
Agreement;
(iii) all requisite corporate proceedings have been taken to
authorize Matrix to enter into and perform this Agreement;
(iv) it has and will continue to have access to the facilities,
personnel and equipment required to fully perform its duties
and obligations hereunder;
(v) no legal or administrative proceedings have been instituted or
threatened which would impair Matrix's ability to perform its
duties and obligations under this Agreement;
(vi) its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligation of Matrix or any law or regulation applicable to
it;
(vii) it is registered as a transfer agent under Section 17A(c) (2)
of the Exchange Act;
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(viii) this Agreement has been duly authorized by Matrix and, when
executed and delivered, will constitute a valid, legal and
binding obligation of Matrix, enforceable in accordance with
its terms.
(b) The Fund represents and warrants that:
(i) it is a statutory trust duly organized and existing and in
good standing under the laws of the State of Delaware;
(ii) it is empowered under applicable laws and by its Agreement and
Declaration of Trust and By-Laws to enter into and perform
this Agreement;
(iii) all requisite proceedings have been taken to authorize the
Fund to enter into and perform this Agreement;
(iv) no legal or administrative proceedings have been instituted or
threatened which would impair the Fund's ability to perform
its duties and obligations under this Agreement;
(v) the Fund's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other
agreement or obligations of the Fund, or any law or regulation
applicable to either;
(vi) the Shares are properly registered or otherwise authorized for
issuance and sale;
(vii) this Agreement has been duly authorized by the Fund and, when
executed and delivered, will constitute a valid, legal and
binding obligation of the Fund, enforceable in accordance with
its terms.
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(c) Delivery of Documents
The Fund will furnish or cause to be furnished to Matrix the following
documents;
(i) current Prospectus and Statement of Additional Information for
each portfolio attached hereto as may be amended from time to
time;
(ii) most recent Annual Report;
(iii) most recent Semi-Annual Report for registered investment
companies on Form N-CSR;
(iv) certified copies of resolutions of the Fund's Board of
Trustees authorizing the execution of Written Instructions or
the transmittal of Oral Instructions and those persons
authorized to give those Instructions.
(d) Record Keeping and Other Information
Matrix will create and maintain all records required of it pursuant to its
duties hereunder and as set forth in Schedule "A" in accordance with all
applicable laws, rules and regulations, including records required by Section
31(a) of the Act. All such records will be the property of the Fund and will be
available during regular business hours for inspection, copying and use by the
Fund. Where applicable, such records will be maintained by Matrix for the
periods and in the places required by Rule 31a-2 under the Act. Upon termination
of this Agreement, Matrix will deliver all such records to the Fund or such
person as the Fund may designate.
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In case of any request or demand for the inspection of the Share records of the
Fund, Matrix shall notify the Fund and secure instructions as to permitting or
refusing such inspection. Matrix may, however, exhibit such records to any
person in any case where it is advised by its counsel that it may be held liable
for failure to do so.
Section 6. Compensation.
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The Fund agrees to pay Matrix compensation for its services, and to reimburse it
for expenses at the rates, times, manner and amounts as set forth in Schedule
"B" attached hereto and incorporated herein by reference and as will be set
forth in any amendments to such Schedule "B" agreed upon in writing by the
Parties. Upon receipt and approval of an invoice therefor, Matrix is authorized
to collect such fees by debiting the Fund's custody account. The Fund will
approve or contest any invoice sent by Matrix within five (5) days of receipt.
Disputed amounts shall not be deducted from the Fund's custody account until the
dispute is resolved. In addition, the Fund agrees to reimburse Matrix for any
reasonable and ordinary out-of-pocket expenses paid by Matrix on behalf of the
Fund within five (5) calendar days of the Fund's receipt of an invoice therefor.
For the purpose of determining fees payable to Matrix, the value of the Fund's
net assets will be computed at the times and in the manner specified in the
Fund's Prospectus and Statement of Additional Information then in effect.
During the term of this Agreement, should the Fund seek services or functions in
addition to those outlined below or in Schedule "A" attached hereto, a written
amendment to this Agreement specifying the additional services and corresponding
compensation will be executed by the Parties.
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In the event that the Fund is more than thirty (30) 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
Fund), this Agreement may be terminated upon thirty (30) days' written notice to
the Fund by Matrix. In the event of a dispute over a billing amount, the Fund
must notify Matrix in writing of the contested amounts within a reasonable time
of receipt of a billing for such amounts. Disputed amounts are not due and
payable while they are being disputed.
Section 7. Days of Operation.
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Nothing contained in this Agreement is intended to or will require Matrix, in
any capacity hereunder, to perform any functions or duties on any day on which
the New York Stock Exchange ("NYSE") is closed. Functions or duties normally
scheduled to be performed on such days will be performed on and as of the next
succeeding business day on which the NYSE is open. Notwithstanding the
foregoing, Matrix will compute the net asset value of the Fund on each day
required pursuant to Rule 22c-1 promulgated under the Act.
Section 8. Acts of God, etc.
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Matrix will not be liable or responsible for delays or errors caused by acts of
God or by reason of circumstances beyond its control including, acts of civil or
military authority, national emergencies, labor difficulties, mechanical
breakdown, insurrection, war, riots, or failure or unavailability of
transportation, communication or power supply, fire, flood or other catastrophe.
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In the event of equipment failures beyond Matrix's control, Matrix will, at no
additional expense to the Fund, take reasonable steps to minimize service
interruptions but will have no liability with respect thereto. The foregoing
obligation will not extend to computer terminals located outside of premises
maintained by Matrix. Matrix has entered into and maintains in effect agreements
making reasonable provision for emergency use of electronic data processing
equipment to the extent appropriate equipment are available.
Section 9. Inspection and Ownership of Records.
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In the event of a request or demand for the inspection of the records of the
Fund, Matrix will use its best efforts to notify the Fund and to secure
instructions as to permitting or refusing such inspection. Matrix may, however,
make such records available for inspection to any person in any case where it is
advised in writing by its counsel that it may be held liable for failure to do
so after notice to the Fund.
Matrix recognizes that the records it maintains for the Fund are the property of
the Fund and will be surrendered to the Fund upon written notice to Matrix as
outlined under Section 10(c) below. Matrix agrees to maintain the records and
all other information of the Fund in a confidential manner and will not use such
information for any purpose other than the performance of Matrix's duties under
this Agreement.
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Section 10. Duration and Termination.
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(a) The initial term of this Agreement will be for the period of two (2)
years, commencing on the date hereinabove first written (the "Effective
Date") and will continue thereafter subject to termination by either Party
as set forth in subsection (c) below.
(b) The fee schedules set forth in Schedule "B" attached hereto will be
fixed for the initial term commencing on the Effective Date of this
Agreement and will continue thereafter subject to their review and any
adjustment.
(c) After the initial term of this Agreement, a Party may give written
notice to the other (the day on which the notice is received by the Party
against which the notice is made shall be the "Notice Date") of a date on
which this Agreement shall be terminated ("Termination Date"). The
Termination Date shall be set on a day not less than ninety (90) days
after the Notice Date. The period of time between the Notice Date and the
Termination Date is hereby identified as the "Notice Period". Any time up
to, but not later than fifteen (15) days prior to the Termination Date,
the Fund will pay to Matrix such compensation as may be due as of the
Termination Date and will likewise reimburse Matrix for any out-of-pocket
expenses and disbursements reasonably incurred or expected to by incurred
by Matrix up to and including the Termination Date.
(d) In connection with the termination of this Agreement, if a successor
to any of Matrix's duties or responsibilities under this Agreement is
designated by the Fund by written notice to Matrix, Matrix will promptly
on the Termination Date, transfer to the successor all records which
belong to the Fund and will provide appropriate, reasonable and
professional cooperation in transferring such records to the named
successor. The Fund shall reimburse Matrix for its reasonable
out-of-pocket expenses incurred in connection with the transfer of such
records in accordance with section 10(c) above.
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(e) Should the Fund desire to move any of the services outlined in this
Agreement to a successor service provider prior to the Termination Date,
Matrix shall make a good faith effort to facilitate the conversion on such
prior date, however, there can be no guarantee that Matrix will be able to
facilitate a conversion of services prior to the end of the Notice Period.
Should services be converted to a successor service provider prior to the
end of the Notice Period, or if the Fund is liquidated or its assets
merged or purchased or the like with another entity, payment of fees to
Matrix shall be accelerated to a date prior to the conversion or
termination of services and calculated as if the services had remained at
Matrix until the expiration of the Notice Period and shall be calculated
at the asset levels on the Notice Date.
(f) Notwithstanding any other provisions of Paragraph 10, and after the
passage of two (2) years from the effective date of this Agreement; in the
event the Fund deregisters as an Investment Company with the United States
Securities and Exchange Commission ("SEC"), this Agreement may be
terminated by the Fund upon ninety (90) days written notice to Matrix. The
Termination Date shall be ninety (90) days after the receipt of such
notice by Matrix. Any time up to, but not later than fifteen (15) days
prior to the Termination Date, the Fund will pay to Matrix such
compensation as may be due as of the Termination Date and will likewise
reimburse Matrix for any out- of- pocket expenses and disbursements
reasonably incurred or expected to be incurred by Matrix up to and
including the Termination Date.
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(g) Notwithstanding the foregoing, this Agreement may be terminated at any
time by either Party in the event of a material breach by the other Party
involving gross negligence, willful misfeasance, bad faith or a reckless
disregard of its obligations and duties under this Agreement provided that
such breach shall have remained unremedied for sixty (60) days or more
after receipt of written specification thereof.
Section 11. Rights of Ownership.
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All computer programs and procedures developed to perform services required to
be provided by Matrix under this Agreement are the property of Matrix. All
records and other data except such computer programs and procedures are the
exclusive property of the Fund and all such other records and data will be
furnished to the Fund in appropriate form as soon as practicable after
termination of this Agreement for any reason.
Section 12. Amendments to Documents.
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The Fund will furnish Matrix written copies of any amendments to, or changes in,
the Articles of Incorporation, By-Laws, Prospectus or Statement of Additional
Information in a reasonable time prior to such amendments or changes becoming
effective. In addition, the Fund agrees that no amendments will be made to the
Prospectus or Statement of Additional Information of the Fund which might have
the effect of changing the procedures employed by Matrix in providing the
services agreed to hereunder or which amendment might affect the duties of
Matrix hereunder unless the Fund first obtains Matrix's approval of such
amendments or changes.
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Section 13. Confidentiality.
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Both Parties hereto agree that any non-public information obtained hereunder
concerning the other Party is confidential and may not be disclosed to any other
person without the consent of the other Party, except as may be required by
applicable law or at the request of the U.S. Securities and Exchange Commission
or other governmental agency. Matrix agrees that it will not use any non-public
information for any purpose other than performance of its duties or obligations
hereunder. The obligations of the Parties under this Section will survive the
termination of this Agreement. The Parties further agree that a breach of this
Section would irreparably damage the other Party and accordingly agree that each
of them is entitled, without bond or other security, to an injunction or
injunctions to prevent breaches of this provision.
Section 14. Notices.
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Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
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If to the Fund: If to Matrix:
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Xxxx Family of Funds Matrix Capital Group
0000 Xxxxxx Xxxxxx, Xxxxx 000 335 Madison Avenue, 11th floor
Xxxxxxx, Xxxxxxxxx 00000 Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx Attention: Xxxxxxxxxxx X. Xxxx
Trustee President
Section 15. Amendment.
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No provision of this Agreement may be amended or modified in any manner except
by a written agreement properly authorized and executed by the Parties. This
Agreement may be amended from time to time by supplemental agreement executed by
the Parties and the compensation stated in Schedule "B" attached hereto may be
adjusted accordingly as mutually agreed upon.
Section 16. Authorization.
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The Parties represent and warrant to each other that the execution and delivery
of this Agreement by the undersigned officer of each Party has been duly and
validly authorized; and when duly executed, this Agreement will constitute a
valid and legally binding enforceable obligation of each Party.
Section 17. Counterparts.
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This Agreement may be executed in two or more counterparts, each of which when
so executed will be deemed to be an original, but such counterparts will
together constitute but one and the same instrument.
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Section 18. Assignment.
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This Agreement will extend to and be binding upon the Parties hereto and their
respective successors and assigns; provided, however, that this Agreement will
not be assignable by the Fund without the written consent of Matrix or by Matrix
without the written consent of the Fund which consent must be authorized or
approved by a resolution by its respective Boards of Trustees prior to such
assignment.
Section 19. Governing Law.
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The laws of the State of New York will govern this Agreement and the exclusive
venue of any action arising under this Agreement will be New York, NY.
Section 20. Severability.
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If any part, term or provision of this Agreement is held by any court to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions will be considered severable and not be affected and the rights and
obligations of the parties will be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid, provided that the basic agreement is not thereby materially impaired.
Section 21. Limitation of Liability of the Trustees and Shareholders
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It is expressly agreed that the obligations of the Fund hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the fund personally, but shall bind only the trust property of the
Fund as provided in the Fund's Agreement and Declaration of Trust. The execution
and delivery of this Agreement have been authorized by the Trustees and this
Agreement has been signed and delivered by an authorized officer of the Fund,
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, bust
shall bind only the trust property of the Fund as provided in the Fund's
Agreement and Declaration of Trust.
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Section 22. Anti-Money Laundering
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Each of Matrix and the Fund acknowledge that it is a financial institution
subject to the USA Patriot Act of 2001 (the "AML Act"), which requires among
other things, that financial institutions adopt compliance programs to guard
against money laundering. Each represents and warrants to the other that it is
in compliance with and will continue to comply with the AML Act and applicable
regulations in all relevant respects. In that connection, the parties further
agree as follows:
(a) Matrix shall include specific contractual provisions regarding
anti-money laundering compliance obligations in all future agreements
entered into by Matrix with any financial intermediary that would be
authorized to effect transactions in shares of the Fund.
(b) Each of Matrix and the Fund agrees that it will take such further
steps, and cooperate with the others as may be reasonably necessary,
to facilitate compliance with the AML Act, including but not limited
to the provision of copies of its written procedures, policies and
controls related thereto ("AML Operations"). Matrix undertakes that it
will grant to the Fund, the Fund's anti-money laundering compliance
officer and regulatory agencies, reasonable access to copies of
Matrix's AML Operations, books and records pertaining to the Fund
only.
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Section 23. Entire Agreement
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This Agreement (including the Exhibits attached hereto) contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior written or oral agreements and understandings
with respect thereto (including without limitation, that certain Investment
Company Servicing Agreement by and between the parties dated March 18, 2005).
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement consisting of
twenty-one (21) typewritten pages, together with Schedules "A," "B" and "C"
(Pages 22- 30, attached), to be signed by their duly authorized officers as of
the day and year first above written.
Xxxx Family of Funds Matrix Capital Group
/s/ Xxxxxxx X. Xxxx /s/ Xxxxxxxxxxx X. Xxxx
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By: Xxxxxxx X. Xxxx By: Xxxxxxxxxxx X. Xxxx
Trustee President
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SCHEDULE A
Accounting Services Provided by Matrix Capital Group
o Journalize each Portfolio's investment, capital share and income and
expense activities.
o Post and verify investment buy/sell trade tickets when received from the
advisor or portfolio manager.
o Maintain individual ledgers for investment securities.
o Maintain historical tax lots for each security.
o Reconcile cash and investment balances of each Portfolio with the
custodian, and provide the advisor with the beginning cash balance
available for investment purposes.
o Update the cash availability throughout the day as required by the advisor.
o Post to and prepare each Portfolio's Statement of Assets and Liabilities
and Statement of Operations.
o Calculate expenses payable pursuant to the Fund's various contractual
obligations.
o Control all disbursements from the Fund on behalf of each Portfolio and
authorize such disbursements upon instructions of the Fund.
o Calculate capital gains and losses.
o Determine each Portfolio's net income.
o At the Portfolio's expense, obtain security market prices or if such market
prices are not readily available, then obtain such prices from services
approved by the advisor, and in either case calculate the market or fair
value of each Portfolio's investments.
o Where applicable, calculate the amortized cost value of debt instruments.
o Transmit or mail a copy of the portfolio valuations to the advisor.
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o Compute the net asset value of each Portfolio on a daily basis each day or
partial day that the New York Stock Exchange is open for business or as
otherwise required under the Fund's prospectus or the 1940 Act.
o Report applicable net asset value and performance data to performance
tracking organizations.
o Compute each Portfolio's yields, total returns, expense ratios and
portfolio turnover rate.
o Prepare and monitor the expense accruals and notify Fund management of any
proposed adjustments.
o Prepare monthly security transactions listings.
o Prepare monthly broker security transactions summaries.
o Supply various Fund and Portfolio statistical data to the Fund and its
investment adviser as requested on an ongoing basis.
o Assist in the preparation of support schedules necessary for completion of
Federal and state tax returns.
o Assist in the preparation and filing of the Fund's annual, semiannual or
quarterly reports with the SEC on Form N-SAR, N-CSR and form N-Q.
o Assist in the preparation and filing of the Fund's annual and semiannual
reports to shareholders and proxy statements.
o Assist with the preparation of amendments to the Fund's Registration
Statements on From N-1A and other filings relating to the registration of
shares.
o Monitor each Portfolio's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended from time to
time ("Code").
o Determine the amount of dividends and other distributions payable to
shareholders as necessary to, among other things; maintain the
qualification as a regulated investment company of each Portfolio of the
Fund under the Code.
o Provide other accounting services as may be agreed upon from time to time
in writing by the Fund and Matrix.
24
Administrative Services Provided by Matrix Capital Group
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o Provide overall day-to-day Fund administrative management, including
coordination of investment advisor, custodian, transfer agency,
distribution and pricing and accounting services.
o Assist in the preparation of filing of all Federal and State reports
including:
o Fund's post-effective amendments under the Securities Act of 1933
and the Investment Company Act of 1940.
o Form N-SAR - Semi-Annual Report for Registered Investment Companies.
o Form N-CSR - Certified Shareholder Report.
o Form N-Q - Quarterly Schedule of Portfolio Holdings
o Rule 17g-1 filing with the SEC regarding Fidelity Bond coverage.
o Form 24F-2 - Annual notice of securities sold pursuant to Rule 24f-2.
o Form N-PX - Proxy Voting Report.
o Ongoing monitoring of State Blue Sky registrations and filings with
applicable states.
o Prepare and file such reports, applications and documents as may be
necessary or desirable to register the Fund's shares with the Federal and
state securities authorities, and monitor the sale of Fund shares for
compliance with Federal and state securities laws.
o Prepare and file reports to shareholders, including the annual and
semi-annual report to shareholders; and coordinate mailing Prospectuses,
notices, proxy statements, proxies and other reports to shareholders.
25
o Assist with layout and printing of shareholder communications, including
Prospectuses and reports to shareholders.
o Administer contracts on behalf of the Fund with, among others, the Fund's
investment advisor, custodian, transfer agent/shareholder servicing agent,
distributor, and accounting services agent.
o Assist fund's legal counsel in the preparation for trustees/management
meetings including, coordinating the agenda, distribution of minutes,
attendance records and minute books.
o Coordinate shareholder meetings, including assisting Fund counsel in
preparation of proxy materials, preparation of minutes and tabulation of
results.
o o Monitor and pay Fund bills, maintain Fund budget and report budget
expenses and variances to Fund management.
o Monitor the Fund's compliance with the investment restrictions and
limitations imposed by the 1940 Act and state Blue Sky laws and applicable
regulations thereunder, the fundamental and non-fundamental investment
policies and limitations set forth in the Fund's Prospectuses and Statement
of Additional Information, and the investment restrictions and limitations
necessary for each Portfolio of the Fund to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended, or any successor statute.
o Prepare and distribute to appropriate parties notices announcing dividends
and other distributions to shareholders.
o Provide other administrative services as may be agreed from time to time in
writing by the Fund or Administrator.
26
Compliance Services Provided by Matrix Capital Group
--------------------------------------------------------------------------------
o Provide compliance services to the Fund, including:
o The provision of one of Matrix's employees (initially Xxxxx X. Xxxxxx) to
serve as the Chief Compliance Officer of the Fund ("CCO").
o If approved by the Fund's Board of Trustees, such employee will serve as
CCO for the Fund without any compensation other than compensation paid by
Matrix. As noted on Schedule B, these services are provided to the Fund as
part of the compliance services at the rate of $18,000.
o The CCO shall perform all duties and accept all responsibilities in the
performance of duties for the fund required under rule 35d-1.
27
Transfer Agent, Shareholder Servicing Agent and Dividend Disbursing Agent
Services provided by Matrix Capital Group
--------------------------------------------------------------------------------
o Examine and process new accounts, subsequent payments, liquidations,
exchanges, transfers, telephone transactions, check redemptions automatic
withdrawals, and wire order trades.
o Reinvest or pay dividends and make other distributions.
o Answer investor and dealer telephone and/or written inquiries, except as
otherwise agreed by the Transfer Agent and the Fund.
o Process and confirm address changes.
o Process standard account record changes as required, i.e. Dividend Codes,
etc.
o Microfilm and/or store source documents for transactions, such as account
applications and correspondence.
o Perform backup withholding for those accounts in accordance with Federal
regulations.
o Solicit missing taxpayer identification numbers.
o Provide remote access inquiry to Fund records via Fund supplied hardware
(fund responsible for connection line and monthly fee).
o Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
o Name and address, including zip code.
o Balance of Shares.
o Number of Shares, issuance date of each share outstanding and
cancellation date of each share no longer outstanding, if issued.
o Balance of dollars available for redemption.
o Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash).
o Type of account code.
o Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available.
28
o Original establishment date for accounts opened by exchange.
o W-9 withholding status and periodic reporting.
o State of residence code.
o Social security or taxpayer identification number, and indication of
certification.
o Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time to time.
o Indication as to whether phone transaction can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.
o Provide the following reports and statements:
o Prepare daily journals for Fund reflecting all shares and dollar
activity for the previous day.
o Supply information monthly for Fund's preparation of Blue Sky
reporting.
o Supply monthly purchase, redemption and liquidation information for
use in Fund's N-SAR report.
o Provide monthly average daily balance reports for the Fund.
o Prepare and mail copies of summary statements to dealers and
investment advisors.
o Mail transaction confirmation statements daily to investors.
o Address and mail four periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent).
o Mail periodic statement to investors.
o Compute, prepare and furnish all necessary reports to governmental
authorities: Forms 1099R, 1099DIV, 1099B, 1042 and 1042S.
o Enclose various marketing material as designated by the Fund in
statement mailings, i.e. monthly and quarterly statements (material
must be adaptable to mechanical equipment as reasonably specified by
the Transfer Agent).
o Prepare and mail confirmation statements to dealers daily.
o Prepare certified list of stockholders for proxy mailing.
o Ensure compliance with USA Patriot Act and Privacy Regulations
o On going monitoring of Lost Shareholders and RPO tracking
29
SCHEDULE B
Compensation Schedule for Services Provided by Matrix Capital Group, Inc.
$75,000 per year base fee, for fund accounting, fund administration and
shareholder agent services.
In addition when the assets of the Fund reach $20 million, we charge an
additional fee at the following rate based on the daily net assets for all
classes of shares of the portfolio as follows:
0.10% on assets between $20 million and $50 million of daily net assets
0.075% on next $50 million of daily net assets
0.05% on next $100 million of daily net assets
0.03% in excess of $200 million of daily net assets
Plus out-of-pocket expenses to include, but not limited to:
Wire fees, bank service charges, printing, copying, postage, courier, account
statement/confirmations (including programming costs for specialized statements
and/or confirmation) Fund/SERV fee, price quotation service, record retention
fees, blue sky registration filing fees, shareholder web access fees,
registration fees, travel and other standard miscellaneous items, subject to a
schedule of such charges agreed to by the parties.
$18,000 per year base fee for Compliance Services.
Xxxx Xxxxxx, subject to Board approval will act as the Fund's Chief Compliance
Officer (CCO)
Additional series:
To facilitate the growth of additional series, each additional series fee is 75%
of the base fees then in effect for the first year. Thereafter, fees are as
indicated above.
30
SCHEDULE C
Xxxx Family of Funds
Portfolios covered by this Agreement:
Halter Xxxx USX China Fund
31
