Exhibit No. EX-99.h.2
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of the 31st day of December,
2007, by and between ACADEMY FUNDS TRUST, a Delaware statutory trust (the
"Trust") and U.S. BANCORP FUND SERVICES, LLC, a Wisconsin limited liability
company ("USBFS").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company, and
is authorized to issue shares of beneficial interest in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets;
WHEREAS, USBFS is, among other things, in the business of providing fund
administration services for the benefit of its customers; and
WHEREAS, the Trust desires to retain USBFS to provide fund administration
services to each series of the Trust listed on Exhibit A hereto (as amended from
time to time) (each a "Fund" and collectively, the "Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. Appointment of USBFS as Administrator
The Trust hereby appoints USBFS as administrator of the Trust on the terms
and conditions set forth in this Agreement, and USBFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement. The services and duties of USBFS shall be confined to those
matters expressly set forth herein, and no implied duties are assumed by or
may be asserted against USBFS hereunder.
2. Services and Duties of USBFS
USBFS shall provide the following administration services to the Fund:
A. General Fund Management:
(1) Act as liaison among Fund service providers.
(2) Supply:
a. Corporate secretarial services.
b. Office facilities (which may be in USBFS's, or an
affiliate's, own offices).
c. Non-investment-related statistical and research data as
needed.
(3) Coordinate the Trust's board of trustees' (the "Board of
Trustees" or the "Trustees") communications, such as:
a. Prepare meeting agendas and resolutions, with the assistance
of Fund counsel.
b. Prepare reports for the Board of Trustees based on financial
and administrative data.
c. Evaluate independent auditor.
d. Secure and monitor fidelity bond and director and officer
liability coverage, and make the necessary Securities and
Exchange Commission (the "SEC") filings relating thereto.
e. Prepare minutes of meetings of the Board of Trustees and
Fund shareholders.
f. Recommend dividend declarations to the Board of Trustees and
prepare and distribute to appropriate parties notices
announcing declaration of dividends and other distributions
to shareholders.
g. Attend Board of Trustees meetings and present materials for
Trustees' review at such meetings.
(4) Audits:
a. Prepare appropriate schedules and assist independent
auditors.
b. Provide information to the SEC and facilitate audit process.
c. Provide office facilities.
(5) Assist in overall operations of the Fund.
(6) Pay Fund expenses upon written authorization from the Trust.
(7) Keep the Trust's governing documents, including its charter,
bylaws and minute books, but only to the extent such documents
are provided to USBFS by the Trust or its representatives for
safe keeping.
B. Compliance:
(1) Regulatory Compliance:
a. Monitor compliance with the 1940 Act requirements,
including:
(i) Asset diversification tests.
(ii) Total return and SEC yield calculations.
(iii) Maintenance of books and records under Rule 31a-3.
(iv) Code of ethics requirements under Rule 17j-1 for the
disinterested Trustees.
b. Monitor Fund's compliance with the policies and investment
limitations as set forth in its prospectus (the
"Prospectus") and statement of additional information (the
"SAI").
c. Perform its duties hereunder in compliance with all
applicable laws and regulations and provide any
sub-certifications reasonably requested by the Trust in
connection with any certification required of the Trust
pursuant to the Xxxxxxxx-Xxxxx Act of 2002 (the "SOX Act")
or any rules or regulations promulgated by the SEC
thereunder, provided the same shall not be deemed to change
USBFS's standard of care as set forth herein.
d. Monitor applicable regulatory and operational service
issues, and update Board of Trustees periodically.
(2) Blue Sky Compliance:
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings relating
to the qualification of the securities of the Fund so as to
enable the Fund to make a continuous offering of its shares
in all states.
b. Monitor status and maintain registrations in each state.
c. Provide updates regarding material developments in state
securities regulation.
(3) SEC Registration and Reporting:
a. Assist Fund counsel in annual update of the Prospectus and
SAI and in preparation of proxy statements as needed.
b. Prepare and file annual and semiannual shareholder reports,
Form N-SAR, Form N-CSR, and Form N-Q filings and Rule 24f-2
notices. As requested by the Trust, prepare and file Form
N-PX filings.
c. Coordinate the printing, filing and mailing of Prospectuses
and shareholder reports, and amendments and supplements
thereto.
d. File fidelity bond under Rule 17g-1.
e. Monitor sales of Fund shares and ensure that such shares are
properly registered or qualified, as applicable, with the
SEC and the appropriate state authorities.
(4) IRS Compliance:
a. Monitor the Trust's status as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), including without limitation, review
of the following:
(i) Asset diversification requirements.
(ii) Qualifying income requirements.
(iii) Distribution requirements.
b. Calculate required distributions (including excise tax
distributions).
C. Financial Reporting:
(1) Provide financial data required by the Prospectus and SAI.
(2) Prepare financial reports for officers, shareholders, tax
authorities, performance reporting companies, the Board of
Trustees, the SEC, and independent accountants.
(3) Supervise the Fund's custodian and fund accountants in the
maintenance of the Fund's general ledger and in the preparation
of the Fund's financial statements, including oversight of
expense accruals and payments, the determination of net asset
value and the declaration and payment of dividends and other
distributions to shareholders.
(4) Compute the yield, total return, expense ratio and portfolio
turnover rate of each class of the Fund.
(5) Monitor the expense accruals and notify the Trust's management of
any proposed adjustments.
(6) Prepare monthly financial statements, which include, without
limitation, the following items:
a. Schedule of Investments.
b. Statement of Assets and Liabilities.
c. Statement of Operations.
d. Statement of Changes in Net Assets.
e. Cash Statement.
f. Schedule of Capital Gains and Losses.
(7) Prepare quarterly broker security transaction summaries.
D. Tax Reporting:
(1) Prepare and file on a timely basis appropriate federal and state
tax returns including, without limitation, Forms 1120/8613, with
any necessary schedules.
(2) Prepare state income breakdowns where relevant.
(3) File Form 1099 for payments to disinterested Trustees and other
service providers.
(4) Monitor wash sale losses.
(5) Calculate eligible dividend income for corporate shareholders.
3. Compensation
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit B hereto
(as amended from time to time). USBFS shall also be compensated for such
out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by
USBFS in performing its duties hereunder. The Trust shall pay all such fees
and reimbursable expenses within 30 calendar days following receipt of the
billing notice, except for any fee or expense subject to a good faith
dispute. The Trust shall notify USBFS in writing within 30 calendar days
following receipt of each invoice if the Trust is disputing any amounts in
good faith. The Trust shall pay such disputed amounts within 10 calendar
days of the day on which the parties agree to the amount to be paid. With
the exception of any fee or expense the Trust is disputing in good faith as
set forth above, unpaid invoices shall accrue a finance charge of 1 1/2%
per month after the due date. Notwithstanding anything to the contrary,
amounts owed by the Trust to USBFS shall only be paid out of the assets and
property of the particular Fund involved.
4. Representations and Warranties
A. The Trust hereby represents and warrants to USBFS, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(2) This Agreement has been duly authorized, executed and delivered
by the Trust in accordance with all requisite action and
constitutes a valid and legally binding obligation of the Trust,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and
secured parties; and
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
B. USBFS hereby represents and warrants to the Trust, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(2) This Agreement has been duly authorized, executed and delivered
by USBFS in accordance with all requisite action and constitutes
a valid and legally binding obligation of USBFS, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured
parties; and
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
5. Standard of Care; Indemnification; Limitation of Liability
A. USBFS shall exercise reasonable care in the performance of its duties
under this Agreement. USBFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with its duties under this Agreement, including losses
resulting from mechanical breakdowns or the failure of communication
or power supplies beyond USBFS's control, except a loss arising out of
or relating to USBFS's refusal or failure to comply with the terms of
this Agreement or from its bad faith, negligence, or willful
misconduct in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, if USBFS has
exercised reasonable care in the performance of its duties under this
Agreement, the Trust shall indemnify and hold harmless USBFS from and
against any and all claims, demands, losses, expenses, and liabilities
of any and every nature (including reasonable attorneys' fees) that
USBFS may sustain or incur or that may be asserted against USBFS by
any person arising out of any action taken or omitted to be taken by
it in performing the services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to USBFS by any duly authorized officer of the
Trust, as approved by the Board of Trustees of the Trust, except for
any and all claims, demands, losses, expenses, and liabilities arising
out of or relating to USBFS's refusal or failure to comply with the
terms of this Agreement or from its bad faith, negligence or willful
misconduct in the performance of its duties under this Agreement. This
indemnity shall be a continuing obligation of the Trust, its
successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term "USBFS" shall include
USBFS's directors, officers and employees.
USBFS shall indemnify and hold the Trust harmless from and against any
and all claims, demands, losses, expenses, and liabilities of any and
every nature (including reasonable attorneys' fees) that the Trust may
sustain or incur or that may be asserted against the Trust by any
person arising out of any action taken or omitted to be taken by USBFS
as a result of USBFS's refusal or failure to comply with the terms of
this Agreement, or from its bad faith, negligence, or willful
misconduct in the performance of its duties under this Agreement. This
indemnity shall be a continuing obligation of USBFS, its successors
and assigns, notwithstanding the termination of this Agreement. As
used in this paragraph, the term "Trust" shall include the Trust's
directors, officers and employees.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, USBFS shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues. USBFS will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from
such a breakdown at the expense of USBFS. USBFS agrees that it shall,
at all times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of electrical
data processing equipment to the extent appropriate equipment is
available. Representatives of the Trust shall be entitled to inspect
USBFS's premises and operating capabilities at any time during regular
business hours of USBFS, upon reasonable notice to USBFS. Moreover,
USBFS shall provide the Trust, at such times as the Trust may
reasonably require, copies of reports rendered by independent
accountants on the internal controls and procedures of USBFS relating
to the services provided by USBFS under this Agreement.
Notwithstanding the above, USBFS reserves the right to reprocess and
correct administrative errors at its own expense.
In no case shall either party be liable to the other for (i) any
special, indirect or consequential damages, loss of profits or
goodwill (even if advised of the possibility of such); or (ii) any
delay by reason of circumstances beyond its control, including acts of
civil or military authority, national emergencies, labor difficulties,
fire, mechanical breakdown, flood or catastrophe, acts of God,
insurrection, war, riots, or failure beyond its control of
transportation or power supply.
B. In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the indemnitor may
be asked to indemnify or hold the indemnitee harmless, the indemnitor
shall be fully and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood that the
indemnitee will use all reasonable care to notify the indemnitor
promptly concerning any situation that presents or appears likely to
present the probability of a claim for indemnification. The indemnitor
shall have the option to defend the indemnitee against any claim that
may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon
the indemnitor shall take over complete defense of the claim, and the
indemnitee shall in such situation initiate no further legal or other
expenses for which it shall seek indemnification under this section.
The indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked to
indemnify the indemnitee except with the indemnitor's prior written
consent.
C. The indemnity and defense provisions set forth in this Section 5 shall
indefinitely survive the termination and/or assignment of this
Agreement.
D. If USBFS is acting in another capacity for the Trust pursuant to a
separate agreement, nothing herein shall be deemed to relieve USBFS of
any of its obligations in such other capacity.
6. Data Necessary to Perform Services
The Trust or its agent shall furnish to USBFS the data necessary to perform
the services described herein at such times and in such form as mutually
agreed upon.
7. Proprietary and Confidential Information
USBFS agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Trust, all
records and other information relative to the Trust and prior, present, or
potential shareholders of the Trust (and clients of said shareholders), and
not to use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, except (i) after
prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where USBFS may
be exposed to civil or criminal contempt proceedings for failure to comply,
(ii) when requested to divulge such information by duly constituted
authorities, or (iii) when so requested by the Trust. Records and other
information which have become known to the public through no wrongful act
of USBFS or any of its employees, agents or representatives, and
information that was already in the possession of USBFS prior to receipt
thereof from the Trust or its agent, shall not be subject to this
paragraph.
Further, USBFS will adhere to the privacy policies adopted by the Trust
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from
time to time. In this regard, USBFS shall have in place and maintain
physical, electronic and procedural safeguards reasonably designed to
protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information relating to the
Trust and its shareholders.
8. Records
USBFS shall keep records relating to the services to be performed hereunder
in the form and manner, and for such period, as it may deem advisable and
is agreeable to the Trust, but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section
31 of the 1940 Act and the rules thereunder. USBFS agrees that all such
records prepared or maintained by USBFS relating to the services to be
performed by USBFS hereunder are the property of the Trust and will be
preserved, maintained, and made available in accordance with such
applicable sections and rules of the 1940 Act and will be promptly
surrendered to the Trust or its designee on and in accordance with its
request.
9. Compliance with Laws
The Trust has and retains primary responsibility for all compliance matters
relating to the Fund, including but not limited to compliance with the 1940
Act, the Code, the SOX Act, the USA Patriot Act of 2002 and the policies
and limitations of the Fund relating to its portfolio investments as set
forth in its Prospectus and SAI. USBFS's services hereunder shall not
relieve the Trust of its responsibilities for assuring such compliance or
the Board of Trustee's oversight responsibility with respect thereto.
10. Term of Agreement; Amendment
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of three (3) years. Subsequent to
the initial three-year term, this Agreement may be terminated by either
party upon giving 90 days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. Notwithstanding
the foregoing, this Agreement may be terminated by any party upon the
breach of the other party of any material term of this Agreement if such
breach is not cured within 15 days of notice of such breach to the
breaching party. This Agreement may not be amended or modified in any
manner except by written agreement executed by USBFS and the Trust, and
authorized or approved by the Board of Trustees.
11. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the Trust by
written notice to USBFS, USBFS will promptly, upon such termination and at
the expense of the Trust, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by USBFS
under this Agreement in a form reasonably acceptable to the Trust (if such
form differs from the form in which USBFS has maintained the same, the
Trust shall pay any expenses associated with transferring the data to such
form), and will cooperate in the transfer of such duties and
responsibilities, including provision for assistance from USBFS's personnel
in the establishment of books, records, and other data by such successor.
If no such successor is designated, then such books, records and other data
shall be returned to the Trust.
12. Early Termination
In the absence of any material breach of this Agreement, should the Trust
elect to terminate this Agreement prior to the end of the term, the Trust
agrees to pay the following fees:
a. all monthly fees through the life of the contract, including the
rebate of any negotiated discounts;
b. all fees associated with converting services to successor service
provider;
c. all fees associated with any record retention and/or tax reporting
obligations that may not be eliminated due to the conversion to a
successor service provider;
d. all out-of-pocket costs associated with a-c above.
13. Assignment
This Agreement shall extend to and be binding upon the parties hereto and
their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Trust without the written consent
of USBFS, or by USBFS without the written consent of the Trust accompanied
by the authorization or approval of the Trust's Board of Trustees.
14. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Wisconsin, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control, and nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or order of the SEC thereunder.
15. No Agency Relationship
Nothing herein contained shall be deemed to authorize or empower either
party to act as agent for the other party to this Agreement, or to conduct
business in the name, or for the account, of the other party to this
Agreement.
16. Services Not Exclusive
Nothing in this Agreement shall limit or restrict USBFS from providing
services to other parties that are similar or identical to some or all of
the services provided hereunder.
17. Invalidity
Any provision of this Agreement which may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the
parties.
18. Legal-Related Services
Nothing in this Agreement shall be deemed to appoint USBFS and its
officers, directors and employees as the Fund attorneys, form
attorney-client relationships or require the provision of legal advice. The
Fund acknowledges that in-house USBFS attorneys exclusively represent USBFS
and rely on outside counsel retained by the Fund to review all services
provided by in-house USBFS attorneys and to provide independent judgment on
the Fund's behalf. Because no attorney-client relationship exists between
in-house USBFS attorneys and the Fund, any information provided to USBFS
attorneys may not be privileged and may be subject to compulsory disclosure
under certain circumstances. USBFS represents that it will maintain the
confidentiality of information disclosed to its in-house attorneys on a
best efforts basis.
19. Notices
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given on the date
delivered personally or by courier service, or three days after sent by
registered or certified mail, postage prepaid, return receipt requested, or
on the date sent and confirmed received by facsimile transmission to the
other party's address set forth below:
Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Trust shall be sent to:
Academy Funds Trust
c/o Academy Asset Management, LLC
0000 Xxxxxx Xx., Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
20. Multiple Originals
This Agreement may be executed on two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
ACADEMY FUNDS TRUST U.S. BANCORP FUND SERVICES, LLC
By:________________________________ By:______________________________
Name:_____________________________ Name: Xxxxxxx X. XxXxx
Title:______________________________ Title: Executive Vice President
Exhibit A
to the
Fund Administration Servicing Agreement
Fund Names
Separate Series of Academy Funds Trust
Name of Series Date Added
Academy Core Equity Fund On or after 12/31/2007
Academy Select Opportunities Fund On or after 12/31/2007
