EXHIBIT (h)(7)
SHAREHOLDER SERVICING AGREEMENT
THIS AGREEMENT, by and between Excelsior Institutional Trust (the
"Trust") and the shareholder service organization (the "Organization") listed on
the signature page hereof;
WITNESSETH:
WHEREAS, certain transactions in shares of beneficial interest,
$0.00001 par value, of the Trust or of any series now existing or later created
of the Trust ("Shares") may be made by investors who are customers of, and using
the services of or arranged by, an Organization, including without limitation
the Company's service providers and their affiliates, that has entered into a
shareholder servicing agreement with the Trust; and
WHEREAS, the Organization wishes to make it possible for its customers
(the "Customers") to purchase Shares and wishes to act as the Customers' agent
in performing or arranging for the performance of certain administrative
functions in connection with purchases, exchanges and redemptions of Shares from
time to time upon the order and for the account of Customers and to provide
related services to its Customers in connection with their investments in the
Trust; and
WHEREAS, it is in the interest of the Trust to make the services of
the Organization available to Customers who are or may become beneficial owners
of Shares of the Trust;
NOW, THEREFORE, the Trust and the Organization hereby agree as
follows:
1. Appointment. The Organization, as an independent contractor, hereby
-----------
agrees to perform or to have performed certain services for Customers as
hereinafter set forth. The Organization's appointment hereunder is non-
exclusive, and the parties recognize and agree that, from time to time, the
Trust may enter into other shareholder servicing agreements with others without
the Organization's consent. For the purposes of this Agreement, the Organization
is deemed an independent contractor and will have no authority to act as the
Trust's agent in any respect.
2. Service to be Performed.
-----------------------
2.1 Type of Service. The Organization shall be responsible for
---------------
performing or having performed shareholder account administrative and servicing
functions, which shall include without limitation /1/: (a) assisting Customers
in designating and changing dividend options, account designations and
addresses; (b) providing necessary personnel and facilities to establish and
maintain certain shareholder accounts and records, as may reasonably be
requested from time to time by the Trust; (c) assisting in processing purchases,
exchange and redemption transactions; (d) arranging for the wiring of funds; (e)
transmitting and receiving funds in connection with Customer orders to purchase,
exchange or redeem Shares; (f) verifying and guaranteeing Customer signatures in
connection with redemption orders, transfers among and changes in Customer-
designated accounts; (g) providing periodic statements showing a Customer's
account balances and, to the extent practicable, integration of such information
with information concerning other client transactions otherwise effected with or
through the Organization; (h) furnishing on behalf of the Trust's distributor
(either separately or on an integrated basis with other reports sent to a
Customer by the Organization) periodic statements and confirmations of all
purchases, exchanges and redemptions of Shares in a Customer's account required
by applicable federal or state law, all such confirmations and statements to
conform to Rule 10b-10 under the Securities Exchange Act of 1934 and other
applicable federal or state law; (i) transmitting proxy statements, annual
reports, updating prospectuses and other communications from the Trust to
Customers; (j) receiving, tabulating and transmitting to the Trust proxies
executed by Customers with respect to annual and special meetings of
shareholders of the Trust; (k) providing reports (at least monthly, but more
frequently if so requested by the Trust's distributor) containing state-by-state
listings of the principal residences of the beneficial owners of the Shares; and
(l) providing or arranging for the provision of such other related services as
the Trust or a Customer may reasonably request. The Organization shall provide
or arrange for all personnel and facilities to perform the functions described
in this paragraph with respect to its Customers.
2.2 Standard of Services. All services to be rendered or arranged for
--------------------
by the Organization hereunder shall be performed in a professional, competent
and timely manner. The details of the operating standards and procedures to be
followed in performance of the services described above shall be determined from
time to time by agreement between the Organization and the Trust. The Trust
acknowledges that the Organization's ability to perform on a timely basis
certain of its obligations under this Agreement depends upon the Trust's timely
delivery of certain materials and/or information to the Organization. The Trust
agrees to use its best efforts to provide such materials to the Organization in
a timely manner.
____________________
/1/. Services may be modified or omitted in a particular case and items
relettered or renumbered.
-2-
3. Fees.
----
3.1 Fees from the Trust. In consideration for the services described in
-------------------
Section 2 hereof and the incurring of expenses in connection therewith, the
Organization shall receive fees set forth in Appendix A hereto, such fees to be
paid in arrears periodically (but in no event less frequently than semi-
annually) at annual rates of up to .40% of the average daily net assets of the
Trust's Shares owned during the period for which payment has been made by
Customers for whom the Organization is the holder or agent of record or with
whom it maintains a servicing relationship. For purposes of determining the
fees payable to the Organization hereunder, the value of the Trust's net assets
shall be computed in the manner specified in the Trust's then-current prospectus
for computation of the net asset value of the Trust's Shares. The above fees
constitute all fees to be paid to the Organization by the Trust with respect to
the transactions contemplated hereby. The Trust may at any time in its
discretion suspend or withdraw the sale of its Shares.
3.2 Fees from Customers. It is agreed that the Organization may impose
-------------------
certain conditions on Customers, in addition to or different from those imposed
by the Trust, such as requiring a minimum initial investment or charging
Customers direct fees for the same or similar services as are provided hereunder
by the Organization (which fees may either relate specifically to the
Organization's services with respect to the Trust or generally cover services
not limited to those with respect to the Trust). The Organization shall xxxx
Customers directly for such fees. In the event the Organization charges
Customers such fees, it shall notify the Trust in advance and make appropriate
prior written disclosure (such disclosure to be in accordance with all
applicable laws) to Customers of any such fees charged to the Customer. To the
extent required by applicable rules and regulations of the Securities and
Exchange Commission, the Trust shall make written disclosure of the fees paid or
to be paid to the Organization pursuant to Section 3.1 of this Agreement. It is
understood, however, that in no event shall the Organization have recourse or
access to the account of any shareholder of the Trust except to the extent
expressly authorized by law or by such shareholder, or to any assets of the
Trust, for payment of any direct fees referred to in this Section 3.2.
4. Information Pertaining to the Shares. The Organization and its
------------------------------------
officers, employees and agents are not authorized to make any representations
concerning the Trust or the Shares to Customers or prospective Customers,
excepting only accurate communication of any information provided by or on
behalf of any administrator or distributor of the Trust or any factual
information contained in the then-current prospectus relating to the Trust or to
any series of the Trust. In furnishing such information regarding the Trust or
the Shares, the Organization shall act as agent for the Customer only and shall
have no authority to act as agent for the Trust. Advance copies or proofs of all
materials which are generally circulated or disseminated by the Organization to
Customers or prospective Customers which identify or describe the Trust shall be
provided to the Trust at least 10 days prior to such circulation or
dissemination (unless the Trust consents in writing to a shorter period), and
such materials shall not be circulated or disseminated or further circulated or
disseminated at any time after the Trust shall have given written notice within
such 10 day period to the Organization of any objection thereto.
-3-
Nothing in this Section 4 shall be construed to make the Trust liable
for the use (or accuracy unless prepared by the Trust for the specific use) of
any information about the Trust which is disseminated by the Organization.
5. Use of the Organization's Name. The Trust shall not use the name of
------------------------------
the Organization (or any of its affiliates or subsidiaries) in any prospectus,
sales literature or other material relating to the Trust in a manner not
approved by the Organization prior thereto in writing; provided, however, that
the approval of the Organization shall not be required for any use of its name
which merely refers in accurate and factual terms to its appointment hereunder
and the terms hereof or which is required by law, including without limitation,
by the Securities and Exchange Commission or any state securities authority or
any other appropriate regulatory, governmental or judicial authority; provided,
further, that in no event shall such approval be unreasonably withheld or
delayed.
6. Use of the Trust's Name. The Organization shall not use the name of
-----------------------
the Trust on any checks, bank drafts, bank statements or forms for other than
internal use in a manner not approved by the Trust prior thereto in writing;
provided, however, that the approval of the Trust shall not be required for the
use of the Trust's name in connection with communications permitted by Section 4
hereof or (subject to Section 4, to the extent the same may be applicable) for
any use of the Trust's name which merely refers in accurate and factual terms to
the Trust in connection with the Organization's role hereunder or which is
required by law, including without limitations, by the Securities and Exchange
Commission or any state securities authority or any other appropriate
regulatory, governmental or judicial authority; provided, further, that in no
event shall such approval be unreasonably withheld or delayed.
7. Security. The Organization represents and warrants that to the best
--------
of its knowledge, the various procedures and systems which it has implemented
(including provision for twenty-four hours a day restricted access) with regard
to safeguarding from loss or damage attributable to fire, theft or any other
cause the Trust's records and other data and the Organization's records, data,
equipment, facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as in its judgment are required for the secure performance of
its obligations hereunder. The parties shall review such systems and procedures
on a periodic basis, and the Trust shall from time to time specify the types of
records and other data of the Trust to be safeguarded in accordance with this
Section 7.
8. Compliance with Laws. The Organization shall comply with all
--------------------
applicable federal and state laws and regulations, including without limitation
securities laws. The Organization represents and warrants to the Trust that the
performance of all its obligations hereunder will comply with all applicable
laws and regulations, the provisions of its charter documents and by-laws and
all material contractual obligations binding upon the Organization. The
Organization furthermore undertakes that it will promptly, after the
Organization becomes so aware, inform the Trust of any change in applicable laws
or regulations (or interpretations thereof) or in its charter or by-laws or
material contracts which would prevent or impair full performance of any of its
obligations hereunder.
-4-
9. Reports. Quarterly, and more frequently to the extent requested by
-------
the Trust from time to time, the Organization agrees that it will provide the
administrator of the Trust with a written report of the amounts expended by the
Organization pursuant to this Agreement and the purposes for which such
expenditures were made. Such written reports shall be in a form satisfactory to
the Trust and shall supply all information necessary for the Trust to discharge
its responsibilities under applicable laws and regulations.
10. Record Keeping.
--------------
10.1 Section 31. The Organization shall maintain records in a form
----------
reasonably acceptable to the Trust and in compliance with applicable laws and
the rules and regulations of the Securities and Exchange Commission, including
but not limited to the record-keeping requirements of Section 31 of the
Investment Company Act of 1940, as amended (the "1940 Act") and the rules
thereunder. Such records shall be deemed to be the property of the Trust and
will be made available at the Trust's request for inspection and use by the
Trust, representatives of the Trust and governmental authorities. The
Organization agrees that, for so long as it retains any records of the Trust, it
will meet all reporting requirements pursuant to the 1940 Act and applicable to
the Organization with respect to such records. Upon termination of this
Agreement, the Organization shall deliver to the administrator of the Trust all
books and records maintained by the Organization and deemed to be the Trust's
property hereunder.
10.2 Rules 17a-3 and 17a-4. The Organization shall maintain accurate and
---------------------
complete records with respect to services performed by the Organization in
connection with the purchase and redemption of Shares. Such records shall be
maintained in form reasonably acceptable to the Trust and in compliance with the
requirements of all applicable laws, rules and regulations, including without
limitation, Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934, as
amended, pursuant to which any dealer of the Shares must maintain certain
records. All such records maintained by the Organization shall be the property
of such dealer and will be made available for inspection and use by the Trust or
such dealer upon the request of either. The Organization shall file with the
Securities and Exchange Commission and other appropriate governmental
authorities, and furnish to the Trust and any such dealer copies of, all reports
and undertakings as may be reasonably requested by the Trust or such dealer in
order to comply with the said rules. If so requested by any such dealer, the
Organization shall confirm to such dealer its obligations under this Section
10.2 by a writing reasonably satisfactory to such dealer.
10.3 Transfer of Customer Data. In the event this Agreement is terminated
-------------------------
or a successor to the Organization is appointed, the Organization shall transfer
to such designee as the Trust may direct a certified list of the shareholders of
the Trust serviced by the Organization (with name, address and tax
identification or Social Security number, if any), a complete record of the
account of each such shareholder and the status thereof, and all other relevant
books, records, correspondence, and other data established or maintained by the
Organization under this Agreement. In the event this Agreement is terminated,
the Organization will use its best efforts to cooperate in the orderly transfer
of such duties and responsibilities, including assistance in the establishment
of books, records and other data by the successor.
-5-
10.4 Survival of Record-Keeping Obligations. The record-keeping
--------------------------------------
obligations imposed in this Section 10 shall survive the termination of this
Agreement for a period of three years.
10.5 Obligations Pursuant to Agreement Only. Nothing in this Section 10
--------------------------------------
shall be construed so that the Organization would, by virtue of its role
hereunder, be required under applicable law to maintain the records required to
be maintained by it under this Section 10, but is understood that the
Organization has agreed to do so in order to enable the Trust and its dealer or
dealers to comply with laws and regulations applicable to them.
10.6 Organization's Rights to Copy Records. Anything in this Section 10
-------------------------------------
to the contrary notwithstanding, except to the extent otherwise prohibited by
law, the Organization shall have the right to copy, maintain and use any records
maintained by the Organization pursuant to this Section 10, except as otherwise
prohibited by Sections 4 and 6 hereof.
11. Force Majeure. The Organization shall not be liable or responsible
-------------
for delays or errors by reason of circumstances beyond its reasonable control,
including, but not limited to, acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdown, flood or
catastrophe, Acts of God, insurrection, war, riots or failure of communication
or power supply.
12. Indemnification.
---------------
12.1 Indemnification of the Organization. The Trust will indemnify and
-----------------------------------
hold the Organization harmless from all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses) from any claim,
demand, action or suit (collectively, "Claims") arising in connection with
material misstatements or omissions in the Trust's Prospectus. Notwithstanding
anything herein to the contrary, the Trust will indemnify and hold the
Organization harmless from any and all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses) resulting from any
Claim as a result of its acting in accordance with any written instructions
reasonably believed by the Organization to have been executed by any person duly
authorized by the Trust, or as a result of acting in reliance upon any
instrument or stock certificate reasonably believed by the Organization to have
been genuine and signed, countersigned or executed by a person duly authorized
by the Trust, excepting only the negligence or bad faith of the Organization.
In any case in which the Trust may be asked to indemnify or hold the
Organization harmless, the Trust shall be advised of all pertinent facts
concerning the situation in question and the Organization shall use reasonable
care to identify and notify the Trust promptly concerning any situation which
presents or appears likely to present a claim for indemnification against the
Trust. The Trust shall have the option to defend the Organization against any
Claim which may be the subject of indemnification hereunder. In the event that
the Trust elects to defend against such Claim, the defense shall be conducted by
counsel chosen by the Trust and satisfactory to the Organization. The
Organization may retain additional counsel at its expense. Except with the
prior written consent of the Trust, the Organization shall not confess any Claim
-6-
or make any compromise in any case in which the Trust will be asked to indemnify
the Organization.
12.2 Indemnification of the Trust. Without limiting the rights of the
----------------------------
Trust under applicable law, the Organization will indemnify and hold the Trust
harmless from all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) from any Claim (a) arising from (i) the
bad faith or negligence of the Organization, its officers, employees or agents,
(ii) any breach of applicable law by the Organization, its officers, employees
or agents, (iii) any action of the Organization, its officers, employees or
agents which exceeds the legal authority of the Organization or its authority
hereunder, or (iv) any actions, inactions, errors or omissions of the
Organization, its officers, employees or agents with respect to the purchase,
redemption, transfer and registration of Customers' Shares or the Trust's
verification or guarantee of any Customer signature.
In any case in which the Organization may be asked to indemnify or
hold the Trust harmless, the Organization shall be advised of all pertinent
facts concerning the situation in question and the Trust shall use reasonable
care to identify and notify the Organization promptly concerning any situation
which presents or appears likely to present a claim for indemnification against
the Organization. The Organization shall have the option to defend the Trust
against any Claim which may be the subject of indemnification hereunder. In the
event that the Organization elects to defend against such Claim, the defense
shall be conducted by counsel chosen by the Organization and satisfactory to the
Trust. The Trust may retain additional counsel at its expense. Except with the
prior written consent of the Organization, the Trust shall not confess any Claim
or make any compromise in any case in which the Organization will be asked to
indemnify the Trust.
12.3 Survival of Indemnities. The indemnities granted by the parties in
-----------------------
this Section 12 shall survive the termination of this Agreement.
13. Notices. All notices or other communications hereunder to either
-------
party shall be in writing and shall be deemed sufficient if mailed to such party
at the address of such party set forth on the signature page of this Agreement
or at such other address as such party may have designated by written notice to
the other.
14. Further Assurances. Each party agrees to perform such further acts
------------------
and execute such further documents as are necessary to effectuate the purposes
hereof.
15. Termination. Unless sooner terminated, this Agreement will continue
-----------
until _________, 2000 and thereafter will continue automatically for successive
annual periods provided such continuance is specifically approved at least
annually by vote of a majority of (i) the Board of Trustees of the Trust and
(ii) those Trustees who are not "interested persons" (as defined in the 0000
Xxx) of the Trust and have no direct or indirect financial interest in the
operation of the Trust's Administrative Services Plan or in any agreement
related thereto cast in person at a meeting called for the purpose of voting on
such approval ("Disinterested Trustees"). This Agreement is terminable, without
penalty, at any time by the Trust (which termination may be by a vote of a
majority of the Disinterested Trustees) or by you upon notice to the Trust.
-7-
16. Changes; Amendments. This Agreement may be changed or amended only by
-------------------
written instrument signed by both parties hereto.
17. Subcontracting By Organization. The Organization may, with the
------------------------------
written approval of the Trust (such approval not to be unreasonably withheld),
subcontract for the performance of the Organization's obligations hereunder with
any one or more persons, including but not limited to any one or more persons
which is an affiliate of the Organization; provided, however, that the
Organization shall be as fully responsible to the Trust for the acts and
omissions of any subcontractor as it would be for its own acts or omissions.
18. Compliance with Laws and Policies; Cooperation. The Trust hereby
----------------------------------------------
agrees that it will comply with all laws and regulations applicable to its
operations and the Organization agrees that it will comply with all laws and
regulations applicable to its operations hereunder. Each party understands that
the other may from time to time adopt or modify policies relating to the subject
matter of this Agreement, in which case the party adopting or modifying such a
policy shall notify the other thereof and the parties shall consider the
applicability thereof and endeavor to comply therewith to the extent not
impracticable or unreasonably burdensome. Each of the parties agrees to
cooperate with the other in connection with the performance of this Agreement
and the resolution of any problems, questions or disagreements in connection
herewith.
18.1 Annual Financial Reports. At least once a year, the Trust shall
------------------------
send to the record owners of its Shares the Trust's audited financial
statements.
18.2 Annual Certification. At least once a year, the Organization shall
--------------------
certify to the Trust that it is conducting its business in accordance with the
terms and conditions of the Agreement.
19. Single Portfolio. Notwithstanding anything in this Agreement to the
----------------
contrary, any amount owed by the Trust to the Organization under this Agreement
or otherwise with respect to any matter hereunder shall be paid only from and
shall be limited to the assets and property of the particular investment
portfolio of the Trust to which the matter relates.
20. Miscellaneous. This Agreement shall be construed and enforced in
-------------
accordance with and governed by the laws of the State of Delaware. The captions
in this Agreement are included for convenience of reference only and in no way
define or limit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument. The terms of this
Agreement shall become effective as of the date set forth below.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
hereto have caused this Agreement to be executed and delivered in their names
and on their behalf by the undersigned, thereunto duly authorized, all as of the
day and year set forth below.
-8-
Dated as of:_____________________
Excelsior Institutional Trust Address for Notices:
______________________________
______________________________
______________________________
______________________________
By: _____________________________
(Authorized Officer)
_________________________________ Address for Notices:
[Service Organization]
______________________________
______________________________
______________________________
______________________________
By: _____________________________
(Authorized Officer)
-9-
APPENDIX A
----------
EXCELSIOR INSTITUTIONAL TRUST
Pursuant to the terms and conditions set forth in the attached Shareholder
Servicing Agreement, the Organization will receive the fees set forth below in
consideration for the services described in Section 2 of said Agreement and the
incurring of expenses in connection therewith, such fees (calculated pursuant to
Section 3.1 of said Agreement) to be paid in arrears periodically (but in no
event less frequently than semi-annually):
======================================================
FUND Shareholder
Servicing
Fee
======================================================
Equity Fund __ BP
International Equity Fund __ BP
Value Equity Fund __ BP
=======================================================
Income Fund __ BP
Total Return Bond Fund __ BP
=======================================================
Optimum Growth Fund __ BP
High Yield Fund __ BP
=======================================================
-10-
