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EXHIBIT 99(e)(iv) - PART 1
SERVICES AGREEMENT
This Agreement is made as of July 31, 1997, between Xxxxxxx Xxxxxx &
Co., Inc. ("Schwab"), a California corporation, each registered investment
company ("Fund Company " ) executing this Agreement, on its own behalf and on
behalf of each of its series or classes of shares listed on Schedule I, as
amended from time to time (such series or classes being referred to as the
"Fund(s)"), and each Fund Affiliate (defined below) that has executed this
Agreement. Fund Company and each Fund Affiliate are collectively referred to
herein as "Fund Parties." In the event that there are no series or classes of
shares listed on Schedule I, the term "Fund(s)" shall mean "Fund Company" .
WHEREAS Fund Affiliate is either (i) an investment adviser to or
administrator for the Funds and/or (ii) the principal underwriter or distributor
for the Funds.
WHEREAS Fund Parties wish to have Schwab perform certain recordkeeping,
shareholder communication, and other services for each Fund; and
WHEREAS Schwab is willing to perform such services on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises set forth below, the parties agree as follows :
1. SERVICES
a. During the term of this Agreement, Schwab shall perform the
services set forth on Exhibit A hereto, as such exhibit may be amended from time
to time by mutual consent of the parties (the "Services").
b. The parties agree that the Operating Agreement, dated as of
October 25, 1996, between Schwab and Fund Company, as amended from time to time
("Operating Agreement"), is incorporated herein by this reference. In processing
purchase, redemption, transfer and exchange orders placed by Schwab on behalf of
its customers, and in order to facilitate Xxxxxx'x performance of Services, all
terms and conditions of the Operating Agreement shall be binding as between
Schwab and Fund Parties, and the references to Fund Company therein shall be
deemed to mean Fund Parties for the purposes of this Agreement. In the event of
any inconsistency between the Operating Agreement and this Agreement, this
Agreement shall control.
2. FEES
For the Services, Schwab shall receive a fee (the "Fee") which
shall be calculated and paid in accordance with Exhibit B hereto.
Schedule II reflects the portion of the Fee that each Fund Party has
agreed, as between them, to pay. Should Exhibit A be amended to revise
the Services, the parties shall also amend Exhibit B and Schedule II,
if necessary, in order to reflect any changes in the Fee.
3. TRANSACTION CHARGES
The parties acknowledge and agree that Schwab may collect
transaction fees from certain customers (including" Active Traders," as
Schwab may define that term) for certain services and from other
customers upon such other customers , redemption of certain shares.
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4. INDEMNIFICATION
x. Xxxxxx shall indemnify and hold harmless Fund Parties and
their directors or trustees, officers, employees, and agents ("Indemnified
Parties") from and against any and all losses, claims, liabilities and expenses
(including reasonable attorney's fees) ("Losses") incurred by any of them
arising out of (i) Xxxxxx'x dissemination of information regarding Fund Parties
or a Fund that contains an untrue statement of material fact or any omission of
a material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading and that was not
published or provided to Schwab by or on behalf of Fund Company or its
affiliated persons (" Affiliates " ) as defined under the Investment Company Act
of 1940, as amended (the " 1940 Act"), or accurately derived from information
published or provided by or on behalf of Fund Company or any Affiliate, (ii) any
breach by Schwab of any representation, warranty or agreement contained in this
Agreement, or (iii) any willful misconduct or negligence by Schwab in the
performance of, or failure to perform, its obligations under this Agreement,
except to the extent such Losses are caused by Fund Company or Fund's breach of
this Agreement or Fund Company or Fund's willful misconduct or negligence in the
performance, or failure to perform, its obligations under this Agreement. This
Section 4(a) shall survive termination of this Agreement.
b. In any event, no party shall be liable for any special,
consequential or incidental damages.
5. ROLE AND RELATIONSHIP OF SCHWAB
The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related
services only and are not the services of an underwriter or a principal
underwriter of any Fund within the meaning of the Securities Act of
1933, as amended, or the 1940 Act. This Agreement does not xxxxx Xxxxxx
any right to purchase shares from any Fund (although it does not
preclude Schwab from purchasing any such shares), nor does it
constitute Schwab an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent
Schwab is involved in the purchase of shares of any Fund by Xxxxxx'x
customers, such involvement will be as agent of such customer only.
6. INFORMATION TO BE PROVIDED
Fund Parties shall provide to Schwab prior to the
effectiveness of this Agreement or as soon thereafter as practicable,
two (2) copies of the then-current prospectus and statement of
additional information of each Fund. Fund Party shall provide Schwab
with written copies of any amendments to or changes in the Fund's
prospectus or statement of additional information immediately upon
their effective date.
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7. REPRESENTATIONS AND WARRANTIES
a. Each Fund Party represents and warrants that it has
obtained certified resolutions of its board of directors authorizing
such Fund Party to enter into this Agreement.
b. Each Fund Party represents and warrants that the person
signing this Agreement on its behalf is an officer authorized to execute this
Agreement on behalf of such Fund Party.
8. NOTICES
All notices required by this Agreement ( excluding the
Operating Agreement) shall be in writing and
delivered personally or sent by fIrst class mail.
Such notices will be deemed to have been received as
of the earlier of actual physical receipt or three
(3) days after deposit, first class postage prepaid,
in the United States mail. All such notices shall be
made:
if to Schwab, to: Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President/Mutual Funds
with a copy to: General Counsel, at the same address; if to Fund Party,
to the address given below in the signature block.
9. NONEXCLUSIVITY
Each Party acknowledges that the other may enter into
agreements similar to this Agreement with other parties for the
performance of services similar to those to be provided under this
Agreement, unless otherwise agreed to in writing by the parties.
10. ASSIGNABILITY
This Agreement is not assignable by any party without the
other parties' prior written consents and any attempted assignment in
contravention hereof shall be null and void; provided, however, that
Schwab may, without the consent of Fund Parties, assign its rights and
obligations under this Agreement to any Affiliate that controls, is
controlled by, or is under common control with Schwab.
11. EXHIBITS AND SCHEDULES: ENTIRE AGREEMENT
All Exhibits and Schedules to this Agreement, as they may be
amended from time to time, are by this reference incorporated into and
made a part of this Agreement. This Agreement (including the Exhibits
and Schedules hereto) , together with the Operating Agreement,
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constitute the entire agreement between the parties as to the subject
matter hereof and supersede any and all agreements , representations
and warranties, written or oral, regarding such subject matter made
prior to the time at which this Agreement has been executed and
delivered by Schwab and Fund Parties .
12. NO WAIVER
The failure of either party to insist upon exercising any
right under this Agreement shall not be construed as a waiver or
relinquishment to any extent of such party's right to assert or rely
upon such provision or right in any other instance.
13. AMENDMENT
This Agreement and the Exhibits and Schedules hereto may be
amended only by a writing executed by each party hereto that is to be
bound by such amendment.
14. GOVERNING LAW
This Agreement shall be governed by and interpreted under the
laws of the State of California, applicable to contracts between
California residents entered into and to be performed entirely within
the state.
15. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which together shall
constitute one and the same instrument.
16. EFFECTIVENESS OF AGREEMENT: TERMINATION
a. Upon Xxxxxx'x acceptance of Schedule I, as amended from time
to time, the effective date of this Agreement as to any Fund shall be the later
of the date on which this Agreement is made or the date set forth opposite the
name of the Fund on Schedule I.
b. This Agreement may be terminated as to a Fund by any party (i)
upon ninety (90) days' written notice to the other parties or (ii) upon such
shorter notice as is required by law, order, or instruction by a court of
competent jurisdiction or a regulatory body or self-regulatory organization with
jurisdiction over the terminating party or (iii) immediately, effective on the
day following the termination of any plan of distribution/shareholder servicing
("Rule 12b-1 Plan") adopted and maintained pursuant to Rule 12b-1 under the 1940
Act by any Fund that has a Rule 12b-1 Plan in effect as of the effective date of
this Agreement, provided that a portion of the Fee is paid pursuant to the Rule
12b-1 Plan.
c. After the date of termination as to a Fund, Fund Parties will
not be obligated to pay the Fee with respect to any shares of the Fund that are
first held in Schwab customer accounts after the date of such termination.
However , notwithstanding any such termination, Fund Affiliates will remain
obligated to pay Schwab the Fee as to each share of the Fund that was considered
in the calculation of the Fee as of the date of termination (a "Pre- Termination
Share" ), for so long as such Pre- Termination Share is held in any Schwab
brokerage account and Schwab continues to perform substantially all of the
Services as to such Pre- Termination Share. Further , for so long as Schwab
continues to perform the Services as to any Pre- Termination Shares, this
Agreement, as between Schwab and Fund Affiliates, will otherwise remain in full
force and effect as to such Pre- Termination Shares. Fund Affiliates
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shall reimburse Schwab promptly for any reasonable expenses Schwab incurs in
effecting any termination of this Agreement, including delivery to a Fund Party
of any records, instruments, or documents reasonably requested by the Fund
Party.The parties hereto agree that, upon termination of this Agreement as to a
Fund, neither the Fund nor the Fund Company with respect to such Fund shall have
any further obligations under this Agreement whatsoever .
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto .
XXXXXXX XXXXXX & CO., INC. FAIRPORT FUNDS, on its own
behalf and on behalf of
each Fund Company listed on
Schedule I hereto.
By: /s/Xxxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
Vice President/Mutual Funds By: /s/ Xxxxx Xxxxxxxx
------------------------
Name: Xxxxx Xxxxxxxx
----------------------
Date: 8/16/97
----------------------
Title: President
---------------------
Date: 7/28/97
----------------------
Address:4000 Xxxxxxx Xxxxxx
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Xxxxxxxxx, XX 00000
Attn:
----------------------
XXXXXXXX & COMPANY XXXXXXXX RESEARCH CORP.
(Fund Affiliate) (Fund Affiliate)
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxx
------------------------ ------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxx Xxxxxxxx
----------------------- ----------------------
Title: President Title: President
---------------------- ---------------------
Date: 7/28/97 Date: 7/28/97
----------------------- ----------------------
Address: 0000 Xxxxxxx Xxxxxx Address:4000 Xxxxxxx Avenue
-------------------- -------------------
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
---------------------------- ---------------------------
Attn: Attn:
----------------------- ----------------------
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EXHIBIT A
SERVICES
1. RECORD MAINTENANCE
Schwab shall maintain the following records with respect to a
Fund for each customer who holds Fund shares in a Schwab brokerage
account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions
(including dividend reinvestments) and dates and amounts of dividends
paid for at least the current year to date;
c. Name and address of the customer, including zip codes
and social security numbers or taxpayers identification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. SHAREHOLDER COMMUNICATIONS
Schwab shall:
a. Provide to a shareholder mailing agent for the purpose of
mailing certain Fund-related materials the names and addresses of all
Schwab customers who hold shares of such Fund in their Schwab brokerage
accounts. The shareholder mailing agent shall be a person or entity
with whom the Fund has arranged for the distribution of certain
Fund-related material in accordance with the Operating Agreement. The
Fund-related materials shall consist of updated prospectuses and-any
supplements and amendments thereto, annual and other periodic reports,
proxy or information statements and other appropriate shareholder
communications. In the alternative, in accordance with the Operating
Agreement, Schwab may distribute the Fund-related materials to its
customers .
b. Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request
and, as applicable, with confirmation statements;
c. Mail statements to customers on a monthly basis (or, as to
accounts in which there has been no activity in a particular month, no
less frequently than quarterly) showing, among other things, the number
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of shares of each Fund owned by such customer and the net asset value
of such Fund as of a recent date;
d. Produce and mail to customers confirmation statements
reflecting purchases and redemptions of shares of each Fund in Xxxxxx
brokerage accounts;
e. Respond to customer inquiries regarding, among other
things, share prices, account balances, dividend amounts and dividend
payment dates; and
f. With respect to Fund shares purchased by customers after
the effective date of this Agreement, provide average cost basis
reporting to the customers to assist them in preparation of income tax
returns .
3. TRANSACTIONAL SERVICES
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from
its customers. Schwab shall also communicate, as to shares of each
Fund, mergers, splits and other reorganization activities.
4. TAX INFORMATION RETURNS AND REPORTS
Schwab shall prepare and file with the appropriate governmental
agencies, such information, returns and reports as are required to be so filed
for reporting (i) dividends and other distributions made, (ii) amounts withheld
on dividends and other distributions and payments under applicable federal and
state laws, rules and regulations, and (iii) gross proceeds of sales
transactions as required.
5. FUND COMMUNICATIONS
Schwab shall, on a daily basis and for each Fund, report the
number of shares on which the Fee is to be paid
pursuant to this Agreement and the number of shares on
which no such Fee is to be paid. Schwab shall also
provide each Fund with monthly summaries of reports.
Such summaries shall be expressed in both shares and
dollar amounts.
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EXHIBIT B
CALCULATION OF FEE
1. The Fee shall be calculated by multiplying the Daily Value of
Qualifying Shares (defined below) times 35 basis points per annum. The Fee shall
be computed daily and paid monthly in arrears.
2. The Daily Value of Qualifying Shares is the aggregate daily value of
all shares of the Fund held in Schwab brokerage accounts, subject to the
following exclusions ("Qualifying Shares"). There shall be excluded from the
shares (i) shares held in a Schwab brokerage account prior to the effective date
of this Agreement as to the Fund and (ii) shares first held in a Schwab
brokerage account after the termination of this Agreement as to the Fund.
3. For purposes of this Exhibit, the daily value of the shares of each
Fund will be the net asset value reported by such Fund to the National
Association of Securities Dealers, Inc. Automated Quotation System. No
adjustments will be made to the net asset values to correct errors in the net
asset values so reported for any day unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the first business day after the day to which the
error relates.
4. At the request of Fund Parties, Schwab shall provide, on each
business day, a statement detailing the calculation for each Fund and the
aggregate value of the Qualifying Shares of each Fund. As soon as practicable
after the end of the month, Schwab shall also provide to Fund Parties an invoice
for the amount of the Fee due for each Fund. In the calculation of such Fee,
Xxxxxx'x records shall govern unless an error can be shown in the number of
shares used in such calculation.
5. Fund Parties shall pay Schwab the Fee within thirty (30) days after
Fund Parties I receipt of such statement. Such payment shall be by wire
transfer, unless the amount thereof is less than $250. Such wire transfers shall
be separate from wire transfers of redemption proceeds or distributions under
the Operating Agreement. Amounts less than $250 may, at Fund Parties'
discretion, be paid by check.
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SCHEDULE I
TO THE SERVICES AGREEMENT
FUND COMPANY/FUND(S) EFFECTIVE DATE
Fairport Funds
Fairport Midwest Growth Fund* 7/31/97
Fairport Government & Income Fund* 7/31/97
Fairport Government Securities* 7/31/97
* Indicates that Fund is a "no-load" or "no sales
charge" Fund as defined in Rule 2830 of the Conduct
Rules of the National Association of Securities
Dealers, Inc..
SI Indicates that Fund is available only to Xxxxxx Institutional customers.
Accepted by:
XXXXXXX XXXXXX & CO., INC. FAIRPORT FUNDS, on its own
behalf and on behalf of
each Fund Company listed on
Schedule I.
By:/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President Mutual Funds By: /s/ Xxxxx Xxxxxxxx
------------------------
Name: Xxxxx Xxxxxxxx
----------------------
Date: 8/16/97
----------------------
Title: President
---------------------
Date: 7/28/97
---------------------
Acknowledged by:
XXXXXXXX & COMPANY XXXXXXXX RESEARCH CORP.
(Fund Affiliate) (Fund Affiliate)
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxx
------------------------- -----------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxx Xxxxxxxx
------------------------- ----------------------
Title: President Title: President
------------------------ ---------------------
Date: 7/28/97 Date: 7/28/97
------------------------- ---------------------
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SCHEDULE II
TO THE SERVICES AGREEMENT
Fund Company:
Fairport Funds 0.00%
-----------------------
(name)
Fund Affiliate:
Xxxxxxxx Research Corp. 0.25%
Xxxxxxxx & Company, Inc. 0.10%
------------------------
(name)
Fee Rate Percentage Per Annum on 0.35%
All Qualifying Shares
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EXHIBIT 99(e)(iv) - PART 2
AMENDMENT TO SERVICES AGREEMENT
This Amendment ("Amendment") is made as of October 18, 1999, by and
between Xxxxxxx Xxxxxx & Co., Inc. ("Schwab"), a California corporation, each
registered investment company ("Fund Company") executing this Amendment on its
own behalf and on behalf of its series or classes of shares ("Fund(s)") listed
On Schedule I hereto, Xxxxxxxx & Company. Inc. and Xxxxxxxx Research Corp. (each
a "Fund Affiliate"), and amends the Services Agreement made as of July 31, 1997,
as amended thereafter ("Services Agreement"). All capitalized terms used in the
Amendment and not defined herein shall have the meaning ascribed to them in the
Services Agreement.
WHEREAS, the parties wish to amend Exhibit B to implement a minimum
monthly Fee for each Fund for which the effective date of such Fund on Schedule
I is on or after the date on which this Amendment is made, and to implement new
Fee payment terms; and
WHEREAS, the parties wish to amend Schedule I and Schedule II to the
Services Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the parties agree as follows:
1. Sections 1 and 5 of Exhibit B to the Services Agreement shall be
deleted in their entirety and the following Sections 1 and 5 shall be inserted
in lieu thereof.
1. The Fee shall be calculated each month by multiplying the
average Daily Value of Qualifying Shares (defined below) for the month
times 35 basis points per annum. Notwithstanding the foregoing, the
minimum Fee for each Fund for which the effective date of such Fund on
Schedule I is October 18, 1999, or any date thereafter, and which is
designated "MIN" on Schedule I ("MINFund"), shall be $2,000 per month
commencing with the first full month and terminating with the last full
month such Fund is effective under this Agreement. Any Maintenance Fee
set forth on Schedule II as to the Account(s) of a MIN Fund which would
otherwise be assessed under the Operating Agreement shall be waived for
any month for which this Agreement is in effect as to such Fund. The
Fee shall be billed monthly in arrears and paid in accordance with
Section 5 below.
5. The Fee is due and payable by Fund Parties upon receipt of
the invoice setting forth the Fee. Payment shall be made by wire
transfer. Such wire transfer shall be separate from wire transfers of
redemption proceeds or distributions under the Operating Agreement. The
amount of the Fee shall accrue interest from the date of the invoice,
and Schwab shall be entitled to charge Fund Parties with payment of such
accrued interest with respect to any
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outstanding amount in the event that Schwab has not received full
payment by the last business day of the month in which such invoice is
rendered. The rate of interest shall be the Federal Funds "offered"
rate for each day as published in The Wall Street Journal, and shall be
billed by Schwab in the following month's invoice. Schwab shall not be
entitled to charge Fund Parties with payment of such accrued interest
with respect to any amount for which Schwab has received payment by the
last business day of the month in which such invoice is rendered.
2. Schedule I to the Services Agreement shall be deleted in its
entirety and Schedule I attached hereto shall be inserted in lieu thereof.
3. Schedule II to the Services Agreement shall be deleted in its
entirety and Schedule II attached hereto shall be inserted in lieu thereof.
4. Except as specifically set forth herein, all other provisions of the
Services Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
XXXXXXX XXXXXX & CO., INC.XXXXXXXX FUNDS (previously named
Fairport Funds), on its own behalf and on behalf of each
By: Fund listed on Schedule I hereto.
---------------------------
Xxxxxx X. Xxxxx
Senior Vice President By:
Mutual Funds ------------------------
Name:
----------------------
Date:
---------------------------
Title:
---------------------
Date:
----------------------
XXXXXXXX RESEARCH CORP.
By:
-----------------------------
XXXXXXXX & COMPANY, INC.
Name:
---------------------------
By:
------------------------
Title:
--------------------------
Name:
----------------------
Date:
---------------------------
Title:
---------------------
Date:
----------------------
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SCHEDULE I
TO THE SERVICES AGREEMENT
FUND COMPANY/FUNDS EFFECTIVE DATE
Xxxxxxxx Funds (previously named Fairport Funds)
Xxxxxxxx Emerging Growth Fund* MIN 10/18/99
Xxxxxxxx Government Securities Fund* 7/31/97
Xxxxxxxx Growth & Income Fund* 7/31/97
Xxxxxxxx Growth Fund* 7/31/97
Xxxxxxxx International Equity Fund* MIN 10/18/99
* Indicates that Fund is a "no-load" or "no sales charge" Fund as defined
in Rule 2830 of the NASDR.
SI Indicates that Fund is available only to MFMP investors through Schwab
Institutional or another advice program offered or made available by
financial institutions clearing transactions through Schwab.
MIN Indicates that Fund is subject to the minimum monthly fee as set forth
on Exhibit B.
Accepted by:
XXXXXXX XXXXXX & CO., INC.XXXXXXXX FUNDS
(previously named Fairport Funds), on its own behalf and on behalf of
each
By: Fund listed on Schedule I
hereto.
Xxxxxx X. Xxxxx
Senior Vice President By:
Mutual Funds ------------------------
Name:
----------------------
Date:
--------------------
Title:
---------------------
Date:
----------------------
Acknowledged By:
XXXXXXXX RESEARCH CORP.
By: Acknowledged By:
------------------------- XXXXXXXX & COMPANY, INC.
Name:
-----------------------
By:
------------------------
Title:
----------------------
Name:
----------------------
Date:
-----------------------
Title:
---------------------
Date:
----------------------
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SCHEDULE II
TO THE SERVICES AGREEMENT
Qualifying
Shares Fee Rate Minimum Fee
Fund Company:
Xxxxxxxx Funds 0 bps $__________
Fund Affiliate:
Xxxxxxxx Research Corp. 25 bps $__________
Xxxxxxxx & Company, Inc. 10 bps $__________
__________
Total 35 bps $2,000
