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Exhibit 99.B(9)(i)
INVESTMENT COMPANY SERVICES AGREEMENT
This AGREEMENT, dated as of the 1st day of October, 1997, made by and
between Xxxxxxxx International Funds (the "Trust"), a Delaware business trust
operating as an open-end, management investment 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 FPS Services, Inc.
("FPS"), a corporation duly organized and existing under the laws of the State
of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument 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 Trust
and FPS; and
WHEREAS, the Parties desire to enter into an agreement whereby FPS will
provide the services to the Trust 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 is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
GENERAL PROVISIONS
SECTION 1. APPOINTMENT. The Trust hereby appoints FPS as its servicing
agent and FPS hereby accepts such appointment. In order that FPS may perform its
duties under the terms of this Agreement, the Board of Trustees of the Trust
shall direct the officers, investment adviser, legal counsel, independent
accountants and custodian of the Trust to cooperate fully with FPS and, upon
request of FPS, to provide such information, documents and advice relating to
the Trust which FPS requires to execute its responsibilities hereunder. In
connection with its duties, FPS shall be entitled to rely, and will be held
harmless by the Trust when acting in reasonable reliance, upon any instruction,
advice or document relating to the Trust as provided to FPS by any of the
aforementioned persons on behalf of the Trust. All fees charged by any such
persons acting on behalf of the Trust will be deemed an expense of the Trust.
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Any services performed by FPS 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 Trust's Trust Instrument and the By-Laws as
amended from time to time and delivered to FPS;
(d) any policies and determinations of the Board of Trustees of the
Trust which are communicated to FPS; and
(e) the policies of the Trust as reflected in the Trust's registration
statement as filed with the U.S. Securities and Exchange Commission.
Nothing in this Agreement will prevent FPS or any officer thereof from
providing the same or comparable services for or with any other person, firm or
corporation. While the services supplied to the Trust may be different than
those supplied to other persons, firms or corporations, FPS will provide the
Trust equitable treatment in supplying services. The Trust recognizes that it
will not receive preferential treatment from FPS as compared with the treatment
provided to other FPS clients.
SECTION 2. DUTIES AND OBLIGATIONS OF FPS.
Subject to the provisions of this Agreement, FPS will provide to the
Trust the specific services as set forth in Schedule "A" attached hereto.
SECTION 3. DEFINITIONS. For purposes of this Agreement:
"CERTIFICATE" will mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement or the custody agreement
executed by the Trust ("Custody Agreement"). To be effective, such Certificate
shall be given to and received by the custodian and shall be signed on behalf of
the Trust by any two of its designated officers. The term Certificate shall also
include instructions communicated to the custodian by FPS.
"CUSTODIAN" will refer to that agent which provides safekeeping of the
assets of the Trust.
"INSTRUCTIONS" will mean communications containing instructions
transmitted by electronic or telecommunications media including, but not limited
to, Industry Standardization for Institutional Trade Communications
("I.S.I.T.C."), 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 FPS in person or
by telephone, telegram, telecopy or other mechanical or documentary means
lacking original signature, by a person or persons reasonably identified to FPS
to be a person or persons so authorized by a resolution of the Board of Trustees
of the Trust to give Oral Instructions to FPS on behalf of the Trust.
"SHAREHOLDERS" will mean the registered owners of the shares of the
Trust in accordance with the share registry records maintained by FPS for the
Trust.
"SHARES" will mean the issued and outstanding shares of the Trust.
"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, 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 FPS 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 FPS to be the signature of a person or persons so authorized by a
resolution of the Board of Trustees of the Trust, or so identified by the Trust
to give Written Instructions to FPS on behalf of the Trust.
CONCERNING ORAL AND WRITTEN INSTRUCTIONS. For all purposes under this
Agreement, FPS is authorized to act upon receipt of the first of any
Written or Oral Instruction it receives from the Trust 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. In cases where FPS receives an Instruction,
whether Written or Oral, to enter a portfolio transaction onto the
Trust's records, the Trust shall cause the broker/dealer executing such
transaction to send a written confirmation to the Custodian.
FPS shall be entitled to rely on the first Instruction received. For
any act or omission undertaken by FPS in compliance therewith, it shall
be free of liability and fully indemnified and held harmless by the
Trust, provided however, that in the event a Written or Oral
Instruction received by FPS is countermanded by a subsequent Written or
Oral Instruction received prior to acting upon such countermanded
Instruction, FPS shall act upon such subsequent Written or Oral
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Instruction. The sole obligation of FPS with respect to any follow-up
or confirmatory Written Instruction, Oral Instruction in documentary or
written form shall be to make reasonable efforts to detect any such
discrepancy between the original Instruction and such confirmation and
to report such discrepancy to the Trust. The Trust 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 FPS to act, the Trust shall give FPS
specific Written Instruction as to the action required.
The Trust will file with FPS a certified copy of each resolution of
its Board of Trustees authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided above.
SECTION 4. INDEMNIFICATION.
(a) FPS, its directors, officers, employees, shareholders, and agents
will be liable for any loss suffered by the Trust resulting from the willful
misfeasance, bad faith, negligence or reckless disregard on the part of FPS in
the performance of its obligations and duties under this Agreement.
(b) Any director, officer, employee, shareholder or agent of FPS, who
may be or become an officer, director, employee or agent of the Trust, will be
deemed, when rendering services to the Trust, or acting on any business of the
Trust (other than services or business in connection with FPS' duties
hereunder), to be rendering such services to or acting solely for the Trust and
not as a director, officer, employee, shareholder or agent of, or under the
control or direction of FPS even though such person may be receiving
compensation from FPS.
(c) The Trust agrees to indemnify and hold FPS harmless, together with
its directors, 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 FPS may sustain or incur or which
may be asserted against FPS by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by FPS except
claims, demands, expenses and liabilities arising from willful misfeasance, bad
faith, negligence or reckless disregard on the part of FPS in the performance of
its obligations and duties under this Agreement; or
(ii) any action taken or omitted to be taken by FPS in
reliance upon any Certificate, instrument, order or stock certificate or other
document reasonably believed by FPS to be genuine and signed, countersigned or
executed by any duly authorized person, upon the
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Oral Instructions or Written Instructions of an authorized person of the Trust,
or upon the written opinion of legal counsel for the Trust or FPS; or
(iii) the offer or sale of shares of the Trust to any person,
natural or otherwise, which is in violation of any state or federal law.
If a claim is made against FPS as to which FPS may seek indemnity under
this Section, FPS will notify the Trust promptly after receipt of any written
assertion of such claim threatening to institute an action or proceeding with
respect thereto and will notify the Trust promptly of any action commenced
against FPS within ten (10) days after FPS has been served with a summons or
other legal process. Failure to notify the Trust will not, however, relieve the
Trust from any liability which it may have on account of the indemnity under
this Section so long as the Trust has not been prejudiced in any material
respect by such failure.
The Trust and FPS will cooperate in the control of the defense of any
action, suit or proceeding in which FPS is involved and for which indemnity is
being provided by the Trust to FPS. The Trust may negotiate the settlement of
any action, suit or proceeding subject to FPS' approval, which will not be
unreasonably withheld. FPS 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 FPS in connection with, or as a
result of, such participation will be borne solely by the Trust if:
(i) FPS has received an opinion of counsel from counsel to the
Trust stating that the use of counsel to the Trust by FPS would present an
impermissible conflict of interest;
(ii) the defendants in, or targets of, any such action or
proceeding include both FPS and the Trust, and legal counsel to FPS has
reasonably concluded that there are legal defenses available to it which are
different from or additional to those available to the Trust or which may be
adverse to or inconsistent with defenses available to the Trust (in which case
the Trust will not have the right to direct the defense of such action on behalf
of FPS); or
(iii) the Trust authorizes FPS to employ separate counsel at
the expense of the Trust.
(d) The terms of this Section will survive the termination of this
Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
(a) FPS represents and warrants that:
(i) it is a corporation duly organized and existing and in
good standing under the laws of Delaware;
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(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 FPS 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 proceeding have been instituted
or threatened which would impair FPS'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 FPS 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;
(viii) this Agreement has been duly authorized by FPS, and
when executed and delivered, will constitute valid, legal and binding
obligation of FPS, enforceable in accordance with its terms.
(b) The Trust represents and warrants that:
(i) it is a business 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
Certificate of Trust and By-Laws to enter into and perform this Agreement;
(iii) all requisite proceedings have been taken to authorize
the Trust to enter into and perform this Agreement;
(iv) no legal or administrative proceedings have been
instituted or threatened which would impair the Trust's ability to perform its
duties and obligations under this Agreement;
(v) the Trust's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligations of the Trust, or any law or regulation applicable to either;
(vi) this Agreement has been duly authorized by the Trust and,
when executed and delivered, will constitute valid, legal and binding obligation
of the Trust, enforceable in accordance with its terms.
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(c) Record Keeping and Other Information
FPS 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 Trust and will be
available during regular business hours for inspection, copying and use by the
Trust. Where applicable, such records will be maintained by FPS for the periods
and in the places required by Rule 31a-2 under the Act. Upon termination of this
Agreement, FPS will deliver all such records to the Trust or such person as the
Trust may designate.
In case of any request or demand for the inspection of the Share
records of the Trust, FPS shall notify the Trust and secure instructions as to
permitting or refusing such inspection. FPS 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. The Trust agrees to pay FPS 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 of an invoice therefor, FPS
is authorized to collect such fees by debiting the Trust's custody account. In
addition, the Trust agrees to reimburse FPS for any out-of-pocket expenses paid
by FPS on behalf of the Trust within ten (10) calendar days of the Trust's
receipt of an invoice therefor.
For the purpose of determining fees payable to FPS, the value of the
Trust's net assets will be computed at the times and in the manner specified in
the Trust's Prospectus and Statement of Additional Information then in effect.
During the term of this Agreement, should the Trust 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.
SECTION 7. DAYS OF OPERATION. Nothing contained in this Agreement is
intended to or will require FPS, in any capacity hereunder, to perform any
functions or duties on any holiday, day of special observance or any other 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
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the foregoing, FPS will compute the net asset value of the Trust on each day
required pursuant to Rule 22c-1 promulgated under the Act.
SECTION 8. ACTS OF GOD, ETC. FPS 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.
In the event of equipment failures beyond FPS' control, FPS will, at no
additional expense to the Trust, 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 FPS. FPS has entered into and maintains in effect agreements
making reasonable provision for emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
SECTION 9. INSPECTION AND OWNERSHIP OF RECORDS. In the event that any
request or demand for the inspection of the records of the Trust, FPS will use
its best efforts to notify the Trust and to secure instructions as to permitting
or refusing such inspection. FPS 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
Trust.
FPS recognizes that the records it maintains for the Trust are the
property of the Trust and will be surrendered to the Trust upon written notice
to FPS as outlined under Section 10(c) below and the payment in advance of any
fees owed to FPS. FPS agrees to maintain the records and all other information
of the Trust in a confidential manner and will not use such information for any
purpose other than the performance of FPS' duties under this Agreement.
SECTION 10. DURATION AND TERMINATION.
(a) The initial term of this Agreement will be for the period of three
(3) 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 two (2) years 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
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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
one hundred eighty (180) 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 Trust will pay to FPS such compensation as may be due as
of the Termination Date and will likewise reimburse FPS for any out-of-pocket
expenses and disbursements reasonably incurred or expected to by incurred by FPS
up to and including the Termination Date.
(d) In connection with the termination of this Agreement, if a
successor to any of FPS' duties or responsibilities under this Agreement is
designated by the Trust by written notice to FPS, FPS will promptly, on the
Termination Date and upon receipt by FPS of any payments owed to it as set forth
in Section 10.(c) above, shall transfer to the successor, at the Trust's
expense, all records which belong to the Trust and will provide appropriate,
reasonable and professional cooperation in transferring such records to the
named successor.
(e) Should the Trust desire to move any of the services outlined in
this Agreement to a successor service provider prior to the Termination Date,
FPS shall make a good faith effort to facilitate the conversion on such prior
date, however, there can be no guarantee that FPS 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 Trust is liquidated or its assets merged or purchased or the like with
another entity, payment of fees to FPS shall be accelerated to a date prior to
the conversion or termination of services and calculated as if the services had
remained at FPS until the expiration of the Notice Period and calculated at the
asset levels on the Notice Date.
(f) 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 repeated negligence, 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. All computer programs and procedures
developed to perform services required to be provided by FPS under this
Agreement are the property of FPS. All records and other data except such
computer programs and procedures are the exclusive property of the Trust and all
such other records and data will be furnished to the
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Trust in appropriate form as soon as practicable after termination of this
Agreement for any reason.
SECTION 12. AMENDMENTS TO DOCUMENTS. The Trust will furnish FPS written
copies of any amendments to, or changes in, the Trust's Trust Instrument or
By-Laws, and each Prospectus or Statement of Additional Information in a
reasonable time prior to such amendments or changes becoming effective. In
addition, the Trust agrees that no amendments will be made to the Prospectus or
Statement of Additional Information of the Trust which might have the effect of
changing the procedures employed by FPS in providing the services agreed to
hereunder or which amendment might affect the duties of FPS hereunder unless the
Trust first obtains FPS' approval of such amendments or changes.
SECTION 13. CONFIDENTIALITY. 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. FPS
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. 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:
IF TO XXXXXXXX INTERNATIONAL FUNDS: IF TO FPS:
Xxxxxxxx International Capital Management FPS Services, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000 0000 Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000 King of Xxxxxxx, XX 00000
Attention: G. Xxxx Xxxxxxxx Attention: Xxxxxxx X. Xxxxx
President President
SECTION 15. AMENDMENT. No provision of this Agreement may be amended or
modified in any manner except by a written agreement properly authorized and
executed by FPS and the Trust. This Agreement may be amended from time to time
by supplemental agreement executed
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by the Trust and FPS and the compensation stated in Schedule "B" attached hereto
may be adjusted accordingly as mutually agreed upon.
SECTION 16. AUTHORIZATION. 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. 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.
SECTION 18. ASSIGNMENT. 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 Trust without the
written consent of FPS or by FPS without the written consent of the Trust which
consent be authorized or approved by a resolution of the Trust's Board of
Trustees or FPS' Board of Directors.
SECTION 19. GOVERNING LAW. This Agreement will be governed by the laws
of the State of Pennsylvania and the exclusive venue of any action arising under
this Agreement will be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
SECTION 20. SEVERABILITY. 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.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
consisting of eleven (11) typewritten pages, together with Schedules "X," "X"
and "C" to be signed by their duly authorized officers as of the day and year
first above written.
XXXXXXXX INTERNATIONAL FUNDS FPS SERVICES, INC.
By:______________________________ By:_________________________
G. Xxxx Xxxxxxxx, President Xxxxxxx X. Xxxxx, President
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SCHEDULE "A"
SERVICES TO BE PROVIDED BY FPS SERVICES, INC.
FPS Services, Inc. ("FPS") will (i) provide its own office space, facilities,
equipment and personnel for the performance of its duties under this Agreement;
and (ii) take all actions it deems necessary to properly execute its
responsibilities hereunder.
1. SERVICES RELATED TO ADMINISTRATIVE SERVICES
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I. Regulatory Compliance
A. Compliance - Federal Investment Company Act of 1940
1. Review, report and renew
a. investment advisory contracts
b. fidelity bond
c. underwriting contracts (additional liability for separate
classes)
d. distribution (12b-1) plans for separate classes
e administration contracts
f. accounting contracts
g. custody administration contracts
h. transfer agent and shareholder services contracts
2. Filings
a. Semi-Annual Reports on Form N-SAR
b. Post-Effective Amendments on Form N-1A; Definitive
Prospectuses and Statements of Additional Information; and
Supplements ("stickers")
c. 24f-2 Notice (indefinite registration of shares)
d. Rule 17g-1 (fidelity bond)
e. Rule 30b2-1 (shareholder reports)
3. Annual up-dates of biographical information and questionnaires for
Directors/Trustees and Officers
II. Corporate Business and Shareholder/Public Information
A. Directors/Trustees/Management
1. Preparation of board meetings
a. provide agendas with all compliance items including special
reports on 12b-1 and expenditures for separate classes
b. arrange and conduct meetings
c. prepare minutes
d. keep attendance records
e. maintain corporate records/minute book
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B. Coordinate Proposals
1. Printers
2. Auditors
3. Literature fulfillment
4. Insurance
C. Maintain Separate Class Corporate Calendars and Files
D. Release Corporate Information
1. To shareholders
2. To financial and general press
3. To industry publications - questionnaires and/or announcements
class specific a. distributions (dividends and capital gains for
each class) b. tax information c. changes to prospectus d. letters
from management e. class performance
4. Respond to:
a. financial press
b. miscellaneous shareholders inquiries
c. industry questionnaires
E. Communications to Shareholders - separate class information for
financial highlights table and notes
1. Coordinate printing and distribution of annual, semi-annual
reports, and prospectus
III. Financial and Management Reporting
A. Income and Expenses
1. Monitor separate class expense accruals, expense payments and
expense caps (monthly)
2. Approve and coordinate payment of class specific expenses
3. Establish Funds' operating expense checking account and perform
monthly reconciliation of checking account
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4. Calculate advisory fee, 12b-1 fee and reimbursements to the Funds,
(if applicable)
5. Authorize the recording and amortization of organizational costs
and pre-paid expenses (supplied by advisor), for start-up funds
and reorganizations
6. Calculate separate class average net assets
7. Calculate separate class expense ratios
B. Distributions to Shareholders
1. Calculate separate class dividends and capital gain distributions
(in conjunction with the Funds and their auditors) Record share
method a. compliance with income tax provisions (additional
calculations required) b. compliance with excise tax provisions c.
compliance with Investment Company Act of 1940
2. Book/Tax identification and adjustments at required distribution
periods (in conjunction with the Funds and their auditors
(adjusted for classes)
C. Financial Reporting (additional reporting and disclosure required for
classes)
1. Liaison between Funds' management, independent auditors and
printers for semi- annual and annual shareholder reports
2. Prepare semi-annual and annual reports to shareholders
3. Prepare semi-annual and annual Form NSAR's (including Financial
Data Schedules)
4. Prepare Financial Statements for required SEC Post-Effective
Amendment filings (if applicable)
5. Prepare required annual performance graph (based on advisor
supplied indicies)
D. Subchapter M Compliance (monthly)
1. Asset diversification test
2. Short/short test
E. Other Financial Analyses (additional reporting and disclosure required
for classes)
1. Upon request from Funds' management, other budgeting and analyses
can be constructed to meet the Funds' specific needs (additional
fees may apply) reporting by class
2. Sales information, portfolio turnover (monthly)
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3. Work closely with independent auditors on return of capital
presentation, excise tax calculation
4. Performance (total return) calculation (monthly)
5. 1099 Miscellaneous - prepared and filed for Directors/Trustees
(annual)
6. Analysis of interest derived from various government obligations
(annual) (if interest income was distributed in a calendar year)
7. Analysis of interest derived, by state, for Municipal Bond Funds
8. Review and characterize 1099 - Dividend Forms
9. Prepare and coordinate with printer the printing and mailing of
1099 Dividend Insert cards
F. Review and Monitoring Functions (monthly)
1. Review expense and reclassification entries to ensure proper
update
2. Perform various reviews to ensure accuracy of separate class
accounting (the monthly expense analysis), and custody (review of
daily bank statements to ensure accurate expense money movement
for expense payments)
3. Review separate class accruals and expenditures (where applicable)
G. Preparation and distribution of monthly operational reports to
management by 10th business day (reported by class, additional
disclosure required for classes)
1. Management Statistics (Recap) (separate by class)
a. portfolio summary
b. book gains/losses/per share
c. net income, book income/per share
d. capital stock activity
e. distributions
2. Performance Analysis (separate by class)
a. total return
b. monthly, quarterly, year to date, average annual
3. Expense Analysis (separate by class)
a. schedule
b. summary of due to/from advisor
c. expenses paid
d. expense cap
e. accrual monitoring
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 4 of 21
16
f. advisory fee
4. Short-Short Analysis
a. short-short income
x. xxxxx income (components)
5. Portfolio Turnover
a. market value
b. cost of purchases
c. net proceeds of sales
d. average market value
6. Asset Diversification Test
x. xxxxx assets
b. non-qualifying assets
7. Activity Summary (separate by class)
a. shares sold, redeemed and reinvested
b. change in investment
H. Provide rating agencies statistical data as requested for each class
(monthly/quarterly)
I. For Money-Market Funds - Rule 2-A-7 Weekly Compliance
J. Standard schedules for Board Package - Quarterly (separate by class)
1. Activity Summary (III-G-7 from above)
2. Expense analysis
3. Other schedules can be provided (additional fees may apply)
IV. Special Issues Related to Foreign Securities
A. Financial Reporting
1. Review and provide reports on the treatment of currency gain/loss
and capital gain/loss in conjunction with the Funds' independent
auditors
a. Section 988 transactions
b. Section 1256 contracts
c. Section 1092 deferrals
2. Tax Reporting (depending on the level of assistance required by
the Funds' independent auditors, additional fees may apply)
(additional reporting and disclosure required for classes)
a. Analyze tax treatment of foreign investments based on the
Funds' elections and their impact on:
1. Subchapter M tests -- e.g. diversification, qualified
income, short-short (30%
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 5 of 21
17
tests)
2. Taxable income and capital gains
3. Prepare excise tax
worksheets
b. Calculate distributions to shareholders (separate by class)
(Record share method) 1. Monitor character and impact of
realized currency gain/loss on distribution amount
3. Assist the Advisor and work with the independent auditors in
identification of PFICs (by providing a list of potential PFICs
that the fund may be holding)
V. Blue Sky Administration
A. Sales Data
1. Receive daily sales figures through SUNGARD interface with Price
Waterhouse Blue 2 System
2. Receive daily sales figures broken down by state from Xxxxxxx Xxxxxx
(if applicable)
3. Produce daily warning report for sales in excess of pre-determined
percentage
4. Analysis of all sales data to determine trends within certain states
B. Filings
1. Produce and mail the following required filings:
a. Initial Filings - produce all required forms and follow-up on
any comments, including notification of SEC effectiveness
b. Renewals - produce all renewal documents and mail to states,
includes follow-up to ensure all is in order to continue
selling in states
c. Sales Reports - produce all relevant sales reports for the
states and complete necessary documents to properly file sales
reports with states
d. Annual Report Filings - file copies of all annual reports with
states
e. Prospectus Filings - file all copies of Definitive SAI &
Prospectuses with the states
f. Post-Effective Amendment Filing - file all Post-Effective
Amendments with the states, as well as, any other required
documents
2. On demand additional states - complete filing for any states that
are added - this includes all of the items in 1(A)
3. Amendments to current permits - file in a timely manner any
amendment to registered share amounts
4. Update and file hard copy of all data pertaining to individual
permits
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 6 of 21
18
C. Consulting and Analysis - Supply the most current fee structure for
each state and aid in minimizing the amount of money spent on Blue Sky
Registration
2. SERVICES RELATED TO SHAREHOLDERS AND SHARE TRANSACTIONS
-----------------------------------------------------------
I. Shareholder File
A. Establish new accounts and enter demographic data into shareholder
base. Includes in-house processing and NSCC - FundSERV - Networking
transmissions.
B. Create Customer Information File (CIF) to link accounts within the
Fund and across funds within Fund Group. Facilitates account
maintenance, lead tracking, quality control, household mailings and
combined statements.
C. 100% quality control of new account information including
verification of initial investment.
D. Maintain account and customer file records, based on shareholder
request and routine quality review.
E. Maintain tax ID certification and NRA records for each account,
including backup withholding.
F. Provide written confirmation of address changes.
G. Produce shareholder statements for daily activity, dividends,
on-request, third party and periodic mailings.
H. Establish and maintain dealer file by fund group, including dealer,
branch, representative number and name.
I. Automated processing of dividends and capital gains with daily,
monthly, quarterly or annual distributions. Payment options include
reinvestment, directed payment to another fund, cash via mail, Fed
wire or ACH.
J. Image all applications, account documents, data changes,
correspondence, monetary transactions, and other pertinent
shareholder documents.
II. Shareholder Services
A. Provide quality service through a staff of highly trained NASD
licensed customer service personnel, including phone, research and
correspondence representatives.
B. Answer shareholder calls: provide routine account information,
transaction details including direct and wire purchases, redemptions,
exchanges systematic withdraws, pre-authorized drafts, FundSERV and
wire order trades, problem solving and process telephone
transactions.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 7 of 21
19
C. Silent monitoring of telephone representative calls by the phone
supervisor during live conversations to ensure exceptional customer
service.
D. Record and maintain tape recordings of all shareholder calls for a
six month period.
E. Phone Supervisor produces daily management reports of shareholder
calls which include tracking volumes, call lengths, average wait time
and abandoned call rates to ensure quality service.
F. Provide quality assurance of phone routing by the unit Assistant
phone Supervisor through verification of the Rolm in house computer
terminal linkage.
G. Phone representatives are throughly trained through in house training
programs on the techniques of providing Exceptional Customer Service.
H. Customer inquiries received by letter or telephone are researched by
a correspondence team with an average tenure of 15 years. These
inquiries include such items as, account/customer file information,
complete historical account information, stop payments on checks,
transaction details and lost certificates.
I. Provide written correspondence in response to shareholder inquiries
and request through the XXXXX Letter Writer system and our in house
letter processing programs. Provide written requests for
informational purposes (e.g., received unclear shareholder
instructions). Whenever possible, unclear shareholder instructional
letters are handled by a phone call to the shareholder from our phone
representatives to avoid delay in processing of the request.
III. Investment Processing
A. Establish and maintain Rights of Accumulation and Letter of Intent
files.
B. Initial investment (checks or Fed wires).
C. Subsequent investments processed through lock box.
D. Pre-authorized investments (PAD) through ACH system.
E. Government allotments through ACH system.
F. Wire order and NSCC - Fund/SERV trades.
G. Prepare and process daily bank deposit of shareholder investments.
IV. Redemption Processing
A. Process letter redemption requests.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 8 of 21
20
B. Process telephone redemption transactions.
C. Establish Systematic Withdrawal file and process automated
transactions on monthly basis.
D. Provide wire order and NSCC - Fund/SERV trade processing.
E. Redemption proceeds distributed to shareholder by check, Fed wire or
ACH processing.
V. Exchange & Transfer Processing
A. Process legal transfers.
B. Process ACATS transfers.
C. Issue and cancel certificates.
D Replace certificates through surety bonds (separate charge to
shareholders).
E. Process exchange transactions (letter and telephone requests).
VI. Retirement Plan Services
A. Fund sponsored IRAs offered using Semper Trust Company as custodian.
Services include:
1. Contribution processing
2. Distribution processing
3. Apply rollover transactions
4. Process Transfer of Assets
5. Letters of Acceptance to prior custodians
6. Notify XXX holders of 70 1/2 requirements
7. Calculate Required Minimum Distributions (RMD)
8. Maintain beneficiary information file
9. Solicit birth date information
B. Fund sponsored SEP-XXX plans offered using Semper Trust Company as
custodian. Services include those listed under IRAs and:
1. Identification of employer contributions
C. Fund sponsored Qualified plans offered:
1. Plan document available
2. Omnibus/master account processing only
3. Produce annual statements
4. Process contributions
5. Process distributions
6. Process rollover and Transfer of Assets transactions
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 9 of 21
21
VII. Commission Processing
A. Settlement and payment of dealer commissions on the 10th and 25th of
each month for front end load funds. Dealer checks are sent to the
main branch only.
B. Settlement and payment of Distributor/Underwriter fees on the 10th
and 25th of each month for front end load funds.
C. Settlement and payment of CDSC fees on the 1st of each month for back
end load funds.
VIII. Settlement & Control
A. Daily review of processed shareholder transactions to assure input
was processed correctly. Accurate trade activity figures passed to
Funds' Accounting Agent by 11:00am EST.
B. Preparation of daily cash movement sheets to be passed to Funds'
Accounting Agent and Custodian Bank by 10:00 am EST for use in
determining Funds' daily cash availability.
C. Prepare a daily share reconcilement which balances the shares on the
Transfer Agent system to those on the books of the Fund.
D. Resolve any outstanding share or cash issues that are not cleared by
trade date + 2.
E. Process shareholder adjustments to include also the proper
notification of any booking entries needed, as well as any necessary
cash movement.
F. Settlement and review of Fund's declared dividends and capital gains
to include the following:
1. Review record date report for accuracy of shares.
2. Preparation of dividend settlement report after dividend is
posted. Verify the posting date shares, the rate used and the
NAV price of reinvest date to ensure dividend was posted
properly.
3. Distribute copies to the Funds' Accounting Agent.
4. Preparation of the checks prior to being mailed.
5. Sending of any dividends via wires if requested.
6. Preparation of cash movement sheets for the cash portion of the
dividend payout on payable date.
G. Placement of stop payments on dividend and liquidation checks as well
as the issuance of their replacements.
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 10 of 21
22
H. Maintain inventory control for stock certificates and dividend check
form.
I. Aggregate tax filings for all FPS clients. Monthly deposits to the
IRS of all taxes withheld from shareholder disbursements,
distributions and foreign account distributions. Correspond with the
IRS concerning any of the above issues.
J. Timely settlement and cash movement for all NSCC/FundSERV activity.
IX. Year End Processing
A. Maintain shareholder records in accordance with IRS notices for
under-reporting and invalid Tax IDs. This includes initiating 31%
backup withholding and notifying shareholders of their tax status and
the corrective action which is needed.
B. Conduct annual W-9 solicitation of all uncertified accounts. Update
account tax status to reflect backup withholding or certified status
depending upon responses.
C. Conduct periodic W-8 solicitation of all non-resident alien
shareholder accounts. Update account tax status with updated
shareholder information and treaty rates for NRA tax.
D. Review IRS Revenue Procedures for changes in transaction and
distribution reporting and specifications for the production of forms
to ensure compliance.
E. Coordinate year-end activity with client. Activities include
producing year-end statements, scheduling record dates for year-end
dividends and capital gains, production of combined statements and
printing of inserts to be mailed with tax forms.
F. Distribute Dividend Letter to funds for them to sign off on all
distributions paid year to date. Dates and rates must be authorized
so that they can be used for reporting to the IRS.
G. Coordinate the ordering of form stock envelopes form vendor in
preparation of tax reporting. Review against IRS requirements to
ensure accuracy. Upon receipt of forms and envelopes allocate space
for storage.
H. Prepare form flashes for the microfiche vendor. Test and oversee the
production of fiche for year-end statements and tax forms.
I. Match and settle tax reporting totals to fund records and on-line
data from INVESTAR.
J. Produce forms 1099R, 1099B, 1099Div, 5498, 1042S and year-end
valuations. Quality assure forms before mailing to shareholders.
K. Monitor IRS deadlines and special events such as crossover dividends
and prior year XXX contributions.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 11 of 21
23
L. Prepare IRS magnetic tapes and appropriate forms for the filing of
all reportable activity to the Internal Revenue Service.
X. Client Services
A. An Account Manager is assigned to each relationship. The Account
Manager acts as the liaison between the Fund and the Transfer Agency
staff. Responsibilities include scheduling of events, system
enhancement implementation, special promotion/event implementation
and follow-up, and constant Fund interaction on daily operational
issues.
Specifically:
1. Scheduling of dividends, proxies, report mailings and special
mailings.
2. Coordinate with the Fund shipment of materials for scheduled
mailings.
3. Liaison between the Fund and support services for preparation
of proofs and eventual printing of statement forms,
certificates, proxy cards, envelopes, etc.
4. Handle all notification to the client regarding proxy
tabulation through the meeting. Coordinate scheduling of
materials including voted cards, tabulation letters, and
shareholder list to be available for the meeting.
5. Order special reports, tapes, discs for special systems requests
received.
6. Implement new operational procedures, e.g., check writing
feature, load discounts, minimum waivers, sweeps, telephone
options, PAD promotions, etc.
7. Coordinate with systems, services and operations, special
events, e.g., mergers, new fund start ups, household mailings,
additional mail files.
8. Prepare standard operating procedures and review prospectuses
for new start up funds and our current client base. Coordinate
implementation of suggested changes with the Fund.
9. Liaison between the Fund and the Transfer Agency staff regarding
all service and operational issues.
B. Blue Sky Processing
1. Maintain file with additions, deletions, changes and updates at
the Funds' direction.
XI. Other Related Services
A. Systematic linkage of shareholder accounts with exact matches on SSN
and address for the purpose of consolidated account history
reporting. Periodic production of laser printed combined statements.
B. Production of household mailing labels which enable the Fund to do
special mailings to each address in the Fund Group rather than each
account.
C. Produce shareholder lists, labels and ad hoc reports to Fund
management as requested.
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 12 of 21
24
DAILY REPORTS
REPORT NUMBER REPORT DESCRIPTION
-- Daily Activity Register
024 Tax Reporting Proof
051 Cash Receipts and Disbursement Proof
053 Daily Share Proof
091 Daily Gain/Loss Report
104 Maintenance Register
044 Transfer/Certificate Register
056 Blue Sky Warning Report
MONTHLY REPORTS
REPORT DESCRIPTION
Blue Sky
Certificate Listing
State Sales and Redemption
Monthly Statistical Report
Account Demographic Analysis
MTD Sales - Demographics by Account Group
Account Analysis by Type
3. SERVICES RELATED TO PORTFOLIO VALUATION AND MUTUAL FUND ACCOUNTING
----------------------------------------------------------------------
All financial data provided to, processed and reported by FPS under this
Agreement shall be in United States dollars. FPS' obligation to convert, equate
or deal in foreign currencies or values extends only to the accurate
transposition of information received from the various pricing and information
services.
I. Daily Accounting Services
A. Calculate Net Asset Value ("NAV") and Offering Price Per Share ("POP")
Fund Level
- Update the daily market value of securities held by the Funds
using FPS's standard agents for pricing U.S. equity, bond and
foreign securities. The U.S. equity pricing services are Reuters,
Inc., Xxxxxx Data Corporation, X.X. Xxxxx Co., Inc. and
Interactive Data Corporation (IDC). Xxxxxx Data, Dow Xxxxx
Markets (formerly Telerate Systems, Inc.), X.X. Xxxxx Co., Inc.,
Municipal Market Data and IDC are also used for bond, money
market prices/yields and foreign prices/exchange rates. Bloomberg
is available and used for price research.
- Enter limited number of manual prices supplied by the Funds
and/or broker. Update the daily market value of securities using
an automated pricing file as supplied by the Funds.
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 13 of 21
25
- Review variance reporting on-line and in hard copy for price
changes in individual securities using variance levels established
by the Funds. Verify US dollar security prices exceeding variance
levels by notifying the Funds and pricing sources of noted
variances.
- Complete daily variance analysis on foreign exchange rates and
local foreign prices. Notification of changes exceeding
established levels for The Funds verification. (The Funds should
establish tolerance levels for each country/currency so that local
price changes and foreign exchange rate changes exceeding this
tolerance are identified and NAV problems minimized).
- Review for ex-dividend items indicated by pricing sources; trace
to Fund's general ledger for agreement.
Fund and Each Class
- Allocate daily unrealized Fund appreciation/depreciation,
unrealized currency gains/losses, and unrealized gains/losses on
futures and forwards to classes based upon value of outstanding
class shares.
- Prepare NAV proof sheets. Review components of change in NAV for
reasonableness. Complete Fund and class control proofs.
- Communicate pricing information (NAV/POP) to the Funds, the Funds'
transfer agent (the "Transfer Agent") and electronically to
NASDAQ.
B. Determine and Report Cash Availability to the Funds by approximately
9:30 a.m. Eastern Time:
Fund Level
- Receive daily cash and transaction statements from the agent
responsible for the safekeeping of the Funds' assets (the
"Custodian") by 8:30 a.m. Eastern time
- Receive previous day shareholder activity reports from the
Transfer Agent by 8:30 a.m. Eastern time. Class level shareholder
activity will be accumulated into the Funds' available cash
balances
- Fax hard copy Cash Availability calculations with all details to
the Funds
- Supply the Funds with 3-day cash projection report.
- Prepare daily bank cash reconciliations. Notify the Custodian and
the Funds of any reconciling items.
C. Reconcile and Record All Daily Expense Accruals
Fund Level
- Accrue expenses based on budget supplied by the Funds either as
percentage of net assets or specific dollar amounts
- If applicable, monitor expense limitations established by the
Funds
- If applicable, accrue daily amortization of Organizational
Expense
- If applicable, complete daily accrual of 12b-1 expenses
Fund and Each Class
- Class specific accruals completed such as daily accrual of 12b-1
expenses
- Allocate Fund expenses to classes based upon value of outstanding
class shares
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 14 of 21
26
D. Verify and Record All Daily Income Accruals for Debt Issues
Fund Level
- Review and verify all system generated Interest and Amortization
reports
- Establish unique security codes for bond issues to permit
segregated trial balance income reporting
Fund and Each Class
- Allocate Fund income to classes based upon value of outstanding
class shares
E. Monitor Securities Held for Cash Dividends
corporate actions and capital changes such as splits, mergers,
spinoffs, etc. and process appropriately
Fund Level
- Monitor electronically received information from Xxxxxx Data
Corporation for all domestic securities
- Review current daily security trades for dividend activity
- Monitor collection and postings of corporate actions, dividends
and interest
- Process international dividend and capital change information
received from the Custodian and Advisor. Back-up information on
foreign dividends and corporate actions is also obtained from
Xxxxxx Data Corporation or IDC (as pricing agents for the Funds)
- Provide xxxx-to-market analysis for currency exchange rate
fluctuations on unsettled dividends and interest
Fund and Each Class
- Allocate Fund dividend income and unrealized currency
gains/losses on dividends/interest to classes based upon value of
outstanding class shares
F. Enter All Security Trades on Investment Accounting System (IAS) based
on written instructions from the Advisor
Fund Level
- Review system verification of trade and interest calculations
- Verify settlement through statements supplied by the Custodian
- Maintain security ledger transaction reporting
- Maintain tax lot holdings
- Determine realized gains or losses on security trades
- Provide broker commission reporting
- Provide each Fund's foreign currency exchange rate realized and
unrealized gains/losses detail
Fund and Each Class
- Allocate all Fund level realized and unrealized capital and
currency gains/losses to classes based upon value of class
outstanding shares
G. Enter All Fund Share Transactions on IAS
Each Class
- Process activity identified on reports supplied by the Transfer
Agent.
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 15 of 21
27
- Verify settlement through each Fund's statements supplied by the
Custodian.
- Reconcile to the FPS Services' Transfer Agent report balances.
- Roll each classes' capital share values into Fund and determine
allocation percentages based upon the value of each classes'
outstanding shares to the Fund total.
H. Prepare and Reconcile/Prove Accuracy of the Daily Trial Balance
(listing all asset, liability, equity, income and expense accounts)
Fund Level
- Post manual entries to the general ledger
- Post Custodian activity
- Post security transactions
- Post and verify system generated activity, i.e. income and
expense accruals
- Segregate foreign tax expense
- Prepare daily xxxx-to-market analysis for all unrealized foreign
currency exchange rate gains/losses by asset/liability category
Fund and Each Class
- Prepare Funds' general ledger net cash proof used in NAV
calculation
- Post class specific shareholder activity and roll values into
each Fund
- Allocate all Fund level net cash accounts on the Fund's trial
balance to each specific class based upon value of class
outstanding shares
- Maintain allocated trial balance accounts on class specific
Allocation Reports
- Maintain class-specific expense accounts
- Prepare class-specific proof/control reports to ensure accuracy
of allocations.
I. Review and Reconcile with Custodian Statements
Fund Level
- Verify all posted interest, dividends, expenses, and shareholder
and security payments/receipts, etc. (Discrepancies will be
reported to and resolved by the Custodian)
- Post all cash settlement activity to the Trial Balance
- Reconcile to ending cash balance accounts
- Clear IAS subsidiary reports with settled amounts
- Track status of past due items and failed trades as reported by
the Custodian
J. Submission of Daily Accounting Reports to the Funds (additional
reports readily available)
Fund Level
- Portfolio Valuation (listing inclusive of holdings, costs, market
values, unrealized appreciation/depreciation and percentage of
portfolio comprised of each security.)
- Cash availability.
- 3-Day Cash Projection Report
Fund and Each Class
- Fund Trial Balance and Class Allocation Report
- NAV Calculation Report
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 16 of 21
Draft Dated: December 18, 1997
28
II. Monthly Accounting Services
A. For each Fund, full Financial Statement Preparation (automated
Statements of Assets and Liabilities, of Operations and of Changes in
Net Assets) and submission to the Funds by 10th business day
- Class specific capital share activity and expenses will be
disclosed also.
B. Submission of Monthly Automated IAS Reports to the Funds
Fund Level
- Security Purchase/Sales Journal
- Interest and Maturity Report
- Brokers Ledger (Commission Report)
- Security Ledger Transaction Report with Realized Gains/Losses
- Security Ledger Tax Lot Holdings Report
- Additional reports available upon request
C. Reconcile Accounting Asset Listing to Custodian Asset Listing
Fund Level
- Report any security balance discrepancies to the Custodian/the
Funds
D. Provide Monthly Analysis and Reconciliation of Additional Trial Balance
Accounts, such as: Fund Level
- Security cost and realized gains/losses
- Interest/dividend receivable and income
- Payable/receivable for securities purchased and sold
- Unrealized and realized currency gains/losses
Fund and Each Class
- Payable/receivable for each Fund's shares; issued and redeemed
- Expense payments and accruals analysis
III. Annual (and Semi-Annual) Accounting Services
A. Annually assist and supply the Funds' auditors with schedules
supporting securities and shareholder transactions, income and expense
accruals, etc. for each Fund and each Class during the year in
accordance with standard audit assistance requirements
B. Provide NSAR Reporting (Accounting Questions) on a Semi-Annual Basis If
applicable for Fund and Classes, answer the following items:
2, 12B, 20, 21, 22, 23, 28, 30A, 31, 32, 35, 36, 37, 43, 53, 55, 62,
63, 00X, 00, 00, 00, 00, 00, 00
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 17 of 21
29
ACCOUNTING SERVICES BASIC ASSUMPTIONS FOR THE FUNDS
The Accounting Fees as set forth in Schedule "B" are based on the following
assumptions. To the extent these assumptions are inaccurate or requirements
change, fee revisions may be necessary.
Basic Assumptions:
1. Each Fund has a tax year-end which coincides with its fiscal year-end.
No additional accounting requirements are necessary to identify or
maintain book-tax differences. FPS does not provide security tax
accounting which differs from its book accounting under this fee
schedule.
2. Each Fund agrees to the use of FPS' standard current pricing services
for domestic equity, debt, ADR and foreign securities. The Funds will
supply FPS with an automated pricing file to minimize manual price
input. FPS will supply the Funds with the file layout and communication
software to expedite the process.
3. To the extent a Fund requires a limited number of daily security prices
from specific brokers (as opposed to pricing information received
electronically), these manual prices will be obtained by the Funds'
Advisor and faxed to FPS by 4:00 p.m. Eastern time for inclusion in the
NAV calculations. The Advisor will supply FPS with the appropriate
pricing contacts for these manual quotes.
4. Procedural discussions between FPS and a Fund are required to clarify
the appropriate pricing and dividend rate sources if the Fund invests
in open-end regulated investment companies (RIC's). Depending on the
methodologies selected by the Funds, additional fees may apply.
5. FPS will supply daily Portfolio Valuation Reports to each Funds'
Advisor identifying current security positions, original/amortized
cost, security market values and changes in unrealized
appreciation/depreciation. It will be the responsibility of the Advisor
to review these reports and to promptly notify FPS of any possible
problems, trade discrepancies, incorrect security prices or corporate
action/capital change information that could result in a misstated NAV.
6. The Funds do not currently expect to invest in REIT's, Swaps, Xxxxxx,
Derivatives or non-U.S. dollar futures and options. To the extent these
investment strategies should change, additional fees may apply after
the appropriate procedural discussions have taken place between FPS and
Fund management. (Two weeks advance notice is required should the Funds
commence trading in these investments.)
7. Each Fund will supply FPS with income information such as accrual
methods, interest payment frequency details, coupon payment dates,
floating rate reset dates, and complete security descriptions with
issue types and CUSIP/Sedol numbers for all debt issues.
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 18 of 21
30
8. Each Fund is responsible for the establishment and monitoring of any
segregated accounts pertaining to any line of credit for temporary
administrative purposes, and/or leveraging/hedging the portfolio. FPS
will reflect appropriate trial balance account entries and interest
expense accrual charges on the daily trial balance adjusting as
necessary at month-end.
9. If a Fund commences participation in security lending or short sales
within its portfolio securities, additional fees may apply. Should a
Fund require these additional services, procedural discussions must
take place between FPS and the Funds' Advisor to clarify
responsibilities. (Two weeks advance notice to FPS is required should a
Fund desire to participate in the above.)
10. Each Fund will supply FPS with portfolio specific expense accrual
procedures and monitor the expense accrual balances for adequacy based
on outstanding liabilities monthly.
11. The following specific deadlines will be met and complete information
will be supplied by each Fund in order to minimize any settlement
problems, NAV miscalculations or income accrual adjustments.
Each Fund will direct the Advisor to provide Trade Authorization Forms
to FPS with the appropriate officer's signature on all security trades
placed by the Fund no later than 12:30 p.m. Eastern time on
settlement/value date for short term money market securities issues
(assuming that trade date equals settlement date); and by 11:00 a.m.
Eastern time on trade date plus one for non-money market securities.
Receipt by FPS of trade information within these identified deadlines
may be made via telex, fax or on-line system access. The Advisor will
supply FPS with the trade details in accordance with the above stated
deadlines.
The Advisor will provide all information required by FPS, including
CUSIP/Sedol numbers and/or ticker symbols for all trades on the Trade
Authorization, telex or on-line support. FPS will not be responsible
for NAV changes or distribution rate adjustments that result from
incomplete trade information.
12. To the extent a Fund utilizes purchases in-kind (U.S. dollar
denominated securities only) as a method for shareholder subscriptions,
FPS will provide the Fund with procedures to properly handle and
process such transactions. Should a Fund prefer procedures other than
those provided by FPS, additional fees may apply. Discussions shall
take place at least two weeks in advance between FPS and the Fund to
clarify the appropriate in-kind operational procedures to be followed.
13. The Parties will establish mutually agreed upon amortization procedures
and accretion requirements for debt issues held by the Fund prior to
commencement of operations/conversion. Adjustments for financial
statements regarding any issues with original issue discount (OID) are
not included under this Agreement. Each Fund will direct its
independent auditors to complete the necessary OID adjustments for
financial statements and/or tax reporting.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 19 of 21
31
14. All foreign currency will be held within the Custodian and
sub-custodian network. Time deposits and interest bearing currency
accounts will all be reflected on the Funds' custodian asset listings.
The Funds or Custodian will supply FPS with appropriate and timely
information for any trades/changes in the currency accounts, as well as
interest rates to ensure income accrual accuracy for the debt issues,
time deposits, and currency accounts. Income accrual adjustments
(expected to be immaterial) will be completed when the interest is
actually collected and posted on the Custodian's statements.
15. The Accounting Fees as identified in Schedule "B" assume Transfer
Agency and Custody Administration services will be supplied by FPS.
4. SERVICES RELATED TO CUSTODY ADMINISTRATION
----------------------------------------------
1. Assign a Custody Administrator to accept, control and process the
Funds' daily portfolio transactions through direct computer link with
the Custodian.
2. Match and review DTC eligible ID's and trade information with the
Funds' instructions for accuracy and coordinating with the Custodian
and the Funds' accounting agent for recording and affirmation
processing with the depository.
3. Systematically settle all depository eligible issues. Transactions
requiring physical delivery will be settled through the Custodian's New
York office.
4. Assist the Funds in placing cash management trades through the
Custodian, such as commercial paper, CDs and repurchase agreements.
5. Provide the Funds' fund accounting agent and investment advisor with
daily custodian statements reflecting all prior day cash activity on
behalf of each portfolio by 8:30 a.m. Eastern time. Complete
descriptions of any posting, inclusive of Sedol/CUSIP numbers,
interest/dividend payment date, capital stock details, expense
authorizations, beginning/ending cash balances, etc., will be provided
by the Custodian's reports or system.
6. Provide monthly activity statements combining both cash changes and
security trades, and a full portfolio listing.
7. Communicate to the Funds and the Funds' fund accounting agent on any
corporate actions, capital changes and interest rate changes supported
by appropriate supplemental reports received from the Custodian.
Follow-up will be made with the Custodian to ensure all necessary
actions and/or paperwork is completed.
8. Work with fund accounting and the Custodian on monthly asset
reconciliations.
9. Coordinate and resolve unsettled dividends, interest, paydowns and
capital changes. Assist in resolution of failed transactions and any
settlement problems.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 20 of 21
32
10. Arrange for securities lending, lines of credit, and/or letters of
credit through the Custodian.
11. Provide automated mortgage-backed processing through the Custodian.
12. Provide broker interface ensuring trade settlement with fail trade
follow up.
13. Provide the Funds' auditors with trade documentation to help expedite
the Funds' audit.
14. Cooperation and communication between Fund Accounting, Custodian and
Transfer Agent is facilitated smoothly when Custody Administration is
performed by FPS.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "A" Page 21 of 21
33
Schedule "B"
------------
FEE SCHEDULE
FOR
XXXXXXXX INTERNATIONAL FUNDS
I. Fees related to Fund Administration, and Portfolio Valuation and
Mutual Fund Accounting: (1/12th payable monthly)
A. Subject to a minimum fee of $100,000 for each separate series of
shares of the Trust and subject to the discount as set forth below, the
Trust agrees to pay FPS for services related to Fund Administration,
and Portfolio Valuation and Mutual Fund Accounting at an annual rate
of:
.00100 on the first $250 million of average net assets of each separate
series of shares .00075 on the next $250 million of average net assets
of each separate series of shares .00050 on the next $250 million of
average net assets of each separate series of shares .00030 on average
net assets of each separate series of shares in excess of $750 million
During the first ten months of this Agreement, the annual fees set
forth above are discounted on a monthly basis by 90% in the first
month, 80% in the second month, 70% in the third month 60% in the
fourth month, 50% in the fifth month, 40% in the sixth month, 30% in
the seventh month, 20% in the eighth month 10% in the ninth month and
the stated fees applying for the remaining term. In the event any
separate series of shares' average net assets exceed $100mm, this
discount shall no longer apply and the stated fees shall apply. See
attachment outlining actual numerical fees.
B. PRICING SERVICES QUOTATION FEE
Specific costs will be identified based upon options selected by the
Trust and will be billed monthly.
FPS does not currently pass along the charges for the U.S. equity
prices supplied by Xxxxxx Data. Should the Series invest in security
types other than domestic equities supplied by Xxxxxx, the following
fees would apply.
XXXXXX DATA INTERACTIVE X.X. XXXXX
SECURITY TYPES CORP.* DATA CORP.* CO., INC.*
Government Bonds $ .50 $ .50 $ .25 (a)
Mortgage-Backed (evaluated, seasoned, closing) .50 .50 .25 (a)
Corporate Bonds (short and long term) .50 .50 .25 (a)
U.S. Municipal Bonds (short and long term) .55 .80 .50 (b)
CMO's/ARM's/ABS 1.00 .80 1.00 (a)
Convertible Bonds .50 .50 1.00 (a)
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "B" Page 1 of 6
34
XXXXXX DATA INTERACTIVE X.X. XXXXX
SECURITY TYPES CORP.* DATA CORP.* CO., INC.*
High Yield Bonds .50 .50 1.00 (a)
Mortgage-Backed Factors (per Issue per Month) 1.00 n/a n/a
U.S. Equities (d) .15 n/a
U.S. Options n/a .15 n/a
Domestic Dividends & Capital Changes
(per Issue per Month) (d) 3.50 n/a
Foreign Securities .50 .50 n/a
Foreign Securities Dividends & Capital Changes
(per Issue per Month) 2.00 4.00 n/a
Set-up Fees n/a n/a (e) .25 (c)
All Added Items n/a n/a .25 (c)
* Based on current Vendor costs, subject to change. Costs are quoted
based on individual security CUSIP/identifiers and are per issue per
day.
(a) $35.00 per day minimum
(b) $25.00 per day minimum
(c) $ 1.00, if no CUSIP
(d) At no additional cost to FPS clients
(e) Interactive Data also charges monthly transmission
costs and disk storage charges.
1) Futures and Currency Forward Contracts $2.00 per Issue per Day
2) Dow Xxxxx Markets (formerly Telerate Systems, Inc.)* (if
applicable)
*Based on current vendor costs, subject to change.
Specific costs will be identified based upon options selected by
the Trust and will be billed monthly.
3) Reuters, Inc.*
*Based on current vendor costs, subject to change.
FPS does not currently pass along the charges for the domestic
security prices supplied by Reuters, Inc.
4) Municipal Market Data* (if applicable)
*Based on current vendor costs, subject to change.
Specific costs will be identified based upon options selected by
the Trust and will be billed monthly.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "B" Page 2 of 6
35
II. Fees related to Shareholder Servicing
Subject to a minimum fee of $36,000 for each separate series of shares
of the Trust and $16,500 for each additional class of shares within
each series, and subject to the discount as set forth in section I.A.
above, the Trust will be charged for maintenance of and transactions in
each shareholder account as follows:
A. ACCOUNT FEE: (1/12th payable monthly)
Annual/Semi Annual Dividend Fund: $10.00
Quarterly Dividend Fund 12.00
Monthly Dividend Fund 15.00
Daily Accrual Dividend Fund 18.00
Inactive Account 3.60
B. TRANSACTION CHARGES FOR EACH TRANSACTION IN AN INDIVIDUAL
ACCOUNT:
Master/Omnibus Subscription or Liquidation $1.00
Wire Order for each Broker Call 4.00
New Account Registration; electronic 0.40
New Account Registration; paper 5.00
Rule 12b-1 Plan Calculation 0.25
C. IRA'S, 403(b) PLANS, DEFINED CONTRIBUTION/BENEFIT PLANS:
Annual Maintenance Fee - $12.00/account per year (Normally
charged to participants)
III. Fees related to Custody of Fund Assets using Bank of New York
A. DOMESTIC SECURITIES AND ADRS: (1/12th payable monthly)
U.S. Dollar Denominated Securities only
.00065 On the First $ 10 Million of Average Net Assets
.00035 On the Next $ 20 Million of Average Net Assets
.00025 On the Next $ 20 Million of Average Net Assets
.000175 On the Next $ 50 Million of Average Net Assets
.00015 On the Next $150 Million of Average Net Assets
.000125 Over $250 Million of Average Net Assets
B. CUSTODY DOMESTIC SECURITIES TRANSACTIONS CHARGE:
(billed monthly)
Book Entry DTC, Federal Book Entry, PTC $14.00
Physical/Options/GNMA/RIC's $24.00
Mortgage Backed Securities -
Principal Pay Down Per Pool $11.00
A transaction includes buys, sells, maturities or free
security movements.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "B" Page 3 of 6
36
C. WHEN ISSUED, SECURITIES LENDING, INDEX FUTURES, ETC.:
Should any investment vehicle require a separate segregated
custody account, a fee of $250 per account per month will
apply.
D. CUSTODY OF FOREIGN SECURITIES PER GLOBAL PORTFOLIO:
(Bank of New York Custody Schedule)
COUNTRIES *SAFEKEEPING CHARGES TRANSACTION FEE
(BASIS POINTS) (USD)
Xxxxxxxxx 00 00
Xxxxxxxxx 0 00
Xxxxxxx 6 00
Xxxxxxxxxx 00 000
Xxxxxxx (xxx bds) 3.5 80
Belgium (equities and Cpn bds) 6 80
Brazil 35 40
Canada 3 20
Xxxxx 00 00
Xxxxx 00 00
Xxxxxxxx 55 165
Xxxxx Xxxxxxxx 00 00
Xxxxxxx 4.5 110
Euromarket (Cedel/Euroclear) 4 20
Xxxxxxx 00 00
Xxxxxx 0 00
Xxxxxxx 3 40
Greece 35 150
Hong Kong 13 00
Xxxxxxx 00 000
Xxxxx 55 180**
Indonesia 15 115
Ireland 4.5 00
Xxxxxx 00 00
Xxxxx 0 00
Xxxxx 5 15
Luxembourg 00 00
Xxxxxxxx 00 000
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "B" Page 4 of 6
37
COUNTRIES *SAFEKEEPING CHARGES TRANSACTION FEE
(BASIS POINTS) (USD)
Mexico (bonds) 15 30
Netherlands 8 17
New Zealand 4.5 90
Xxxxxx 0 00
Xxxxxxxx 00 000
Xxxx 80 000
Xxxxxxxxxxx 16.5 000
Xxxxxx 00 000
Xxxxxxxx 35 145
Singapore 10 00
Xxxxx Xxxxxx 3 40
South Korea 16 30
Xxxxx 0 00
Xxxxxx 0 00
Xxxxxxxxxxx 4.5 000
Xxxxxx 00 000
Xxxxxxxx 7 00
Xxxxxx 00 000
Xxxxxx Xxxxxxx 4 40
United Kingdom (gilts) 5 55
Uruguay (Equities) 65 90
Uruguay (bonds) 45 90
Venezuela 55 180
Chart Notes:
* Fee expressed in basis points per annum is calculated based upon month-end
market value
** Transaction charge is per 10,000 shares or part thereof
A transaction includes buys, sells, maturities or Free
Security movements
Global Network Usage Fee:
$500 per portfolio per month
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "B" Page 5 of 6
38
Minimum charges imposed by Agent Banks/Local Administrators:
Chile USD 5,000 per annum
Columbia USD 600 per month
Peru USD 6,000 per annum per account
Brazil USD 15 basis points for annual administrative
charge
Taiwan USD 3,000 account opening charge
E. CUSTODY MISCELLANEOUS FEES:
Administrative fees incurred in certain local markets will be
passed onto the customer with a detailed description of the
fees. Fees include income collection, corporate action
handling, overdraft charges, funds transfer, special local
taxes, stamp duties, registration fees, messenger and courier
services and other out-of-pocket expenses.
IV. Out-of-Pocket Expenses
The Trust will reimburse FPS monthly for all reasonable out-of-pocket
expenses, including telephone, postage, XXXXX filings, Fund/SERV and
Networking expenses, incoming wire charges, telecommunications, special
reports, record retention, special transportation costs, copying and
sending materials to auditors and/or regulatory agencies as incurred
and approved.
V. Additional Services
To the extent the Trust commences investment techniques such as
Security Lending, Swaps, Leveraging, Short Sales, Derivatives, Precious
Metals, or foreign currency futures and options, additional fees will
apply. Activities of a non-recurring nature such as shareholder
in-kinds, fund consolidations, mergers or reorganizations will be
subject to negotiation. Any additional/enhanced services, programming
requests, or reports will be quoted upon request.
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Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "B" Page 6 of 6
39
Schedule "C"
IDENTIFICATION OF FUNDS
Below are listed the separate funds to which services under this Agreement are
to be performed as of the Execution Date of this Agreement:
XXXXXXXX INTERNATIONAL FUNDS
Xxxxxxxx Pacific Tiger Funds - Class A and Class I
Xxxxxxxx Asian Convertible Securities Fund
Xxxxxxxx Korea Fund - Class A and Class I
Xxxxxxxx Dragon Century China Fund - Class A and Class I
Class I = Institutional Class (no-load, no 12b-1,
no CDSC, redemption fee of 1% on all
redemptions made within 90 days of purchase)
Class A = Retail Load Class (front-end load, 12b-1,
redemption fee of 1% on $1 million or more
redemptions made within 90 days of purchase)
This Schedule "C" may be amended from time to time by agreement of the Parties.
================================================================================
Investment Company Services Agreement between Xxxxxxxx International Funds and
FPS Services, Inc. Schedule "C"
