Exhibit (h)(3)
CUSTODY, RECORDKEEPING AND ADMINISTRATIVE SERVICES
AGREEMENT
THIS AGREEMENT is made this 1st day of November, 2002, by and
between UMB BANK, N.A., a national banking association, having its
principal office and place of business at 0000 Xxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000 (the "Bank"), UMB FUND SERVICES, INC., a Wisconsin
corporation, having its principal office and place of business at 000
Xxxx Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxx 00000 ("UMBFS"), and
CHOICE FUNDS, a Delaware business trust, having its principal office and
place of business at 0000 XXX Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx Xxxxxxx,
Xxxxxxxx 00000 ("Fund").
WHEREAS, the Fund offers or intends to offer to its shareholders and
potential shareholders one or more retirement or similar plans described
in Appendix A hereto and as such is the sponsor of custodial accounts
("Accounts") pursuant to Custodial Agreements (the "Account Agreements");
WHEREAS, the Fund wishes to confirm the appointment of the Bank as
the custodian for the Accounts, and the Bank is willing to accept
appointment as custodian for the Accounts, on the terms and conditions
set forth herein; and
WHEREAS, the Fund and the Bank desire UMBFS to perform, in its
capacity as transfer agent for the Fund, certain administrative and
recordkeeping duties relative to the Accounts.
NOW, THEREFORE, the parties to this Agreement agree to the
following:
1. The Bank represents to Fund and UMBFS that it is, and as long
as the Accounts and this Agreement are in effect will be,
qualified to act as custodian under all applicable provisions
of the Internal Revenue Code of 1986, as amended (the "Code")
and all other applicable laws, rules and regulations.
2. The Fund hereby appoints the Bank and the Bank hereby accepts
appointment as custodian for the Accounts. The Bank agrees to
act as custodian for the Accounts subject to the terms hereof,
and of each of the Account Agreements.
a. The Bank understands and agrees that from time to time the
Fund may propose amendments to the Account Agreements,
whether to comply with then-current provisions of the Code
or otherwise, and such amendments shall take effect
subject to the provisions of the Account Agreements and
subject to the Bank's rights thereunder. The rights of
the Fund to propose amendments from time to time shall not
affect the Bank's responsibilities as provided herein.
b. The appointment of the Bank as custodian hereunder is
subject to (i) the terms of the respective Account
Agreements; (ii) this Agreement (which shall govern in
case of any inconsistency between the terms of this
Agreement and any of the Account Agreements or to the
extent the respective Account Agreements do not
apply) and the right of Fund hereunder to terminate the
appointment of the Bank as custodian under the Account
Agreements and to name a successor custodian at any time
and from time to time on written notice to the Bank; and
(iii) the rights of the Bank and of Fund to terminate such
custodianship in accordance with the terms of the Account
Agreements and this Agreement.
3. UMBFS hereby agrees to diligently perform the administrative
and recordkeeping services described in Appendix B with respect
to the Accounts. It is understood that it is not the
responsibility of any party hereunder to perform tests and/or
monitor and enforce any contribution or benefit limitations or
distribution requirements imposed by the Code, such
responsibility being that of the party adopting the Account
Agreement.
4. The parties acknowledge and agree that UMBFS and the Bank will
not serve as "plan administrator" (as defined by the Employee
Retirement Income Security Act of 1974, as amended) of any
Account or in any other administrative capacity or other
capacity except as transfer agent and custodian, respectively,
thereof.
5. The responsibilities for preparing and keeping current the
documents related to the Account Agreements shall be as
follows:
a. The Fund or its designee shall provide UMBFS with final
forms of (i) Account Agreements, disclosure statements and
similar documents ("Account Documents") and (ii)
application forms, transfer forms, beneficiary designation
forms and similar documents ("Related Documents"), and
shall keep such Account Documents and Related Documents
current by providing timely any necessary amendments,
modifications and supplements thereto. The use of any
Account Documents and Related Documents shall be subject
to the advance approval of UMBFS and the Bank, which
approval shall not be unreasonably withheld.
b. Any approvals by UMBFS or the Bank under Section 5(a)
shall constitute only UMBFS' or the Bank's consent to use
any such materials and not the approval of the contents or
the effect thereof. The Fund shall bear full
responsibility for the Account Documents and the Related
Documents it provides and the compliance thereof with all
applicable laws, rules and regulations, as amended from
time to time, and shall fully protect, indemnify and hold
harmless the Bank and UMBFS against any losses arising out
of its or their reliance thereon.
6. UMBFS is hereby authorized to sign any Account Agreement or
application for an account by and on behalf of the Bank as
custodian, or endorse any check or draft or other item payable
to the Bank by and on behalf of the Bank as custodian, and to
designate an employee or employees of UMBFS as authorized
persons to execute such signatures and endorsements upon
approval and authorization of such persons by the Fund. The
Bank shall promptly transmit, properly endorsed, to UMBFS any
monies, checks or other property received by the Bank as
custodian for investment for the Accounts.
7. UMBFS shall collect all fees charged to the Accounts. UMBFS
shall remit to the Bank a portion (as specified in Appendix C
hereto) of the fees described in Appendix C hereto which are
collected by UMBFS as compensation for its services hereunder.
UMBFS shall retain the balance as compensation for its services
performed under this Agreement. UMBFS may from time to time,
after receipt of approval from the Fund, change such fee
schedule; provided, however, no such revision may reduce the
compensation to be remitted to the Bank without the Bank's
prior approval. The Bank authorizes the distribution on its
behalf of any revised fee schedule to existing and prospective
Account holders. In the event the Fund determines to waive all
or a portion of any related Account fees, the Fund shall
continue to be responsible for arranging for payment of all
Account related fees to UMBFS and the Bank.
8. UMBFS shall furnish to the Bank a quarterly report consisting
of the number of Accounts and their aggregate market value as
of the end of each quarter. UMBFS shall also provide Bank with
a shareholder list from time to time as Bank may reasonably
request and the Fund hereby authorizes UMBFS to furnish such
reports.
9. The Bank and UMBFS acknowledge the proprietary and confidential
nature of Fund's list of shareholders, and hereby agree not to
disclose to any other person the names of such shareholders
without prior written permission from Fund, except where such
disclosure is required by the Code or other law or where the
Bank or UMBFS may be exposed to civil or criminal proceedings
for failure to comply, when requested to divulge such
information by duly constituted authorities, or when subject to
governmental or regulatory audit or investigation. In such
event, the Bank and/or UMBFS, as applicable, will provide
notice to the Fund of its intent to disclose to give the Fund
an opportunity to seek relief prior to disclosure.
..
10. UMBFS and Fund agree to fully protect the Bank in relying upon
the respective duties and responsibilities of UMBFS and Fund
under the Account Agreements and this Agreement, and agree that
each will fully indemnify the Bank and save and hold the Bank
harmless from and against any and all claims, damages
(including reasonable attorneys' fees), costs, expenses,
losses, judgments, taxes (including penalties and interest
thereon), or liabilities of any nature whatsoever resulting
from or arising out of their respective duties and
responsibilities under the Account Agreements and this
Agreement; provided however, neither UMBFS nor the Fund is
required to protect, indemnify or hold the Bank harmless for
any claims, damages, costs, expenses, losses, judgments, taxes
or liabilities arising out of, resulting from, or in connection
with the negligence, bad faith or willful misconduct of the
Bank. The Bank may reasonably rely on the actions or inactions
of UMBFS or the Fund in performing their respective duties
under this Agreement and such reasonable reliance shall not be
deemed negligence on part of the Bank.
11. The Bank agrees to fully protect Fund and UMBFS in relying upon
the Bank's duties and responsibilities with respect to the
Account Agreements and this Agreement, and agrees that it will
fully indemnify the Fund and UMBFS and save and hold each
harmless from and against any and all claims, damages
(including reasonable attorneys' fees), costs, expenses,
losses, judgments, taxes (including penalties and interest
thereon), or liabilities of any nature whatsoever resulting
from or arising out of its duties and responsibilities under
the Account Agreements and this Agreement; provided however,
the Bank is not required to protect, indemnify or hold the Fund
or UMBFS harmless for any claims, damages, costs, expenses,
losses, judgments, taxes or liabilities arising out of,
resulting from, or in connection with (i) the respective
negligence, bad faith or willful misconduct of the Fund or
UMBFS, or (ii) the preparation and keeping current of the
Account Documents or the Related Documents. Fund and UMBFS may
reasonably rely on the actions or inactions of the Bank in
performing its duties under this Agreement and such reasonable
reliance shall not be deemed negligence on the part of the Fund
or UMBFS.
12. No provision of this Agreement shall modify or supersede any
provision of the Transfer Agency Agreements executed by UMBFS
and Fund.
13. This Agreement may be terminated at any time by mutual consent
of the Bank, UMBFS, and Fund, or upon sixty (60) days' written
notice to each of the other parties by any party and will
terminate simultaneously with any termination of the Transfer
Agency Agreement in place between UMBFS and the Fund. Upon
termination, the Bank and UMBFS shall transfer the records of
the Account as directed by Fund. In the absence of such
designation by the Fund, the Fund shall upon the date specified
in the notice of termination of this Agreement and delivery of
the records maintained hereunder, assume full responsibility
hereunder and UMBFS and Bank shall thereby be relieved of all
duties and responsibilities pursuant to this Agreement.
Anything herein to the contrary notwithstanding, the protective
covenants and indemnities provided by this Agreement shall
survive the termination of the Agreement and shall continue in
effect with respect to any and all matters arising (or alleged
by any third party to have occurred, whether by way of act or
default) during the existence of the Agreement.
14. No modification or amendment of this Agreement shall be valid
or binding on the parties unless made in writing and signed on
behalf of each of the parties by their respective duly
authorized officers or representatives.
15. Notices shall be communicated by first class mail, or by such
other means as the parties may agree, to the persons and
addresses specified below or to such other persons and
addresses as the parties may specify in writing.
If to Bank: UMB Bank, N.A.
X.X. Xxx 000000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx
If to UMBFS: UMB Fund Services, Inc.
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
If to Fund: Choice Funds
0000 XXX Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
16. This Agreement shall be governed by the laws of the State of
Wisconsin.
17. This Agreement may be executed in any number of counterparts,
and by the parties hereto on separate counterparts, each of
which when so executed shall be deemed an original and all of
which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their duly authorized officers under authority of their
respective Boards as of the day and year first above written.
UMB BANK, N.A.,
By: /s/ Xxxxxx X. Xxxxxxx
Title: Vice President
UMB FUND SERVICES, INC.
By: /s/ Xxxxx Xxxxxxx
Title: EVP
CHOICE FUNDS
By: /s/ Xxxxxxx Xxxxx
Title: President
APPENDIX A
PLANS
Individual Retirement Accounts that are offered by the Fund under the
provisions of Sections 408, 403(b) and/or 530 of the Code, and the
regulations promulgated thereunder.
APPENDIX B
SERVICES
Pursuant to the Agreement, UMBFS shall:
a. Receive, allocate to the appropriate Account, and invest
pursuant to the governing Account Agreement, all
contributions made thereunder, in accordance with the
written instructions of the duly authorized directing
authority;
b. Reinvest for each Account all dividends and capital gains
or other distributions payable on the shares credited
thereto;
c. Maintain and reconcile Account records and investment
transaction records;
d. Furnish to each Account grantor (with respect to each
grantor's individual Account), promptly after the end of
each calendar year, a statement of such grantor's account
showing:
i. The net asset value of all full and fractional shares
as of the first and last business days of the
calendar year,
ii. Contributions to and distributions from the account
during the calendar year, and
iii. Earnings reinvested in the account during the
calendar year.
e. Furnish to each Account grantor (with respect to each
grantor's individual Account) a confirmation of each
transaction in accordance with the terms of the Fund's
then current prospectus;
f. Make distributions from Accounts, including withholding
and remittance of federal tax, in accordance with the
provisions of the Account Agreements and relevant
provisions of the Code;
g. Furnish information returns and reports to each Account
grantor (with respect to each grantor's individual
Account) and to the Internal Revenue Service as may be
required by the Code; and
h. Other such functions as all of the parties may agree to
from time to time.
APPENDIX C
FEES
Individual Retirement Accounts that are offered by the Fund under the
provisions of Sections 408, 403(b) and/or 530 of the Code, and the
regulations promulgated thereunder:
FEES: Annual maintenance fee: $12.50 per account; with a maximum
fee of $25 per Social Security Number. The annual maintenance fee
will be deducted from shareholder accounts unless otherwise paid by
or on behalf of the shareholder typically during the fourth quarter
of each calendar year.
PERCENTAGE TO BANK: 25% of the foregoing fees collected by UMBFS.
