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Exhibit 99(h)
SERVICES AGREEMENT
THIS AGREEMENT, dated as of this 3rd day of May, 1999 (the "Effective Date")
between KELMOORE STRATEGIC TRUST (the "Trust"), a Delaware business trust having
its principal place of business at 0000 Xxxx Xxxxxxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000 and FIRST DATA INVESTOR SERVICES GROUP, INC. ("Investor
Services Group"), a Massachusetts corporation with principal offices at 0000
Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000.
WITNESSETH
WHEREAS, the Trust is authorized to issue Shares in separate series,
with each such series representing interests in a separate portfolio of
securities or other assets.
WHEREAS, the Trust initially intends to offer Shares in those
Portfolios identified in the attached Schedule A, and each such Portfolio,
together with all other Portfolios subsequently established by the Trust, shall
be subject to this Agreement in accordance with Article 14;
WHEREAS, the Trust on behalf of the Portfolios, desires to appoint
Investor Services Group as its administrator, fund accounting agent, transfer
agent, dividend disbursing agent, shareholder servicing agent and agent in
connection with certain other activities and Investor Services Group desires to
accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Trust and Investor Services Group agree as follows:
Article 1 Definitions.
1.1 Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of the Trust as the same may be amended
from time to time.
(b) "Authorized Person" shall be deemed to include (i) any
authorized officer of the Trust (other than an officer or employee of
Investor Services Group); or (ii) any person, whether or not such
person is an officer or employee of the Trust, duly authorized to give
Oral Instructions or Written Instructions on behalf of the Trust as
indicated in writing to Investor Services Group from time to time.
(c) "Board Members" shall mean the Directors or Trustees of
the governing body of the Trust, as the case may be.
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(d) "Board of Directors" shall mean the Board of Directors or
Board of Trustees of the Trust, as the case may be.
(e) "Commencement Date" shall mean the date on which Investor
Services Group commences providing services to the Trust pursuant to
this Agreement.
(f) "Commission" shall mean the Securities and Exchange
Commission.
(g) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Trust may from time to time
deposit, or cause to be deposited or held under the name or account of
such a custodian pursuant to a Custodian Agreement.
(h) "1934 Act" shall mean the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder, all as amended
from time to time.
(i) "1940 Act" shall mean the Investment Company Act of 1940
and the rules and regulations promulgated thereunder, all as amended
from time to time.
(j) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by Investor Services Group from
a person reasonably believed by Investor Services Group to be an
Authorized Person;
(k) "Portfolio" shall mean each separate series of shares
offered by the Trust representing interests in a separate portfolio of
securities and other assets;
(l) "Prospectus" shall mean the most recently dated Trust
Prospectus and Statement of Additional Information, including any
supplements thereto if any, which has become effective under the
Securities Act of 1933 and the 1940 Act.
(m) "Shares" refers collectively to such shares of capital
stock or beneficial interest, as the case may be, or class thereof, of
each respective Portfolio of the Trust as may be issued from time to
time.
(n) "Shareholder" shall mean a record owner of Shares of each
respective Portfolio of the Trust.
(o) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by Investor Services Group to be
an Authorized Person and actually received by Investor Services Group.
Written Instructions shall include manually executed originals and
authorized electronic transmissions, including telefacsimile of a
manually executed original or other process.
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Article 2 Appointment of Investor Services Group.
The Trust, on behalf of the Portfolios, hereby appoints and constitutes
Investor Services Group as its sole and exclusive transfer agent and dividend
disbursing agent for Shares of each respective Portfolio of the Trust and as
administrator, fund accounting agent, shareholder servicing agent for the Trust
and Investor Services Group hereby accepts such appointments and agrees to
perform the duties hereinafter set forth. This Agreement shall be effective as
of the Effective Date.
Article 3 Duties of Investor Services Group.
3.1 Investor Services Group shall be responsible for:
(a) Administering and/or performing the customary services of
a transfer agent; acting as service agent in connection with dividend
and distribution functions; and performing shareholder account and
administrative agent functions in connection with the issuance,
transfer and redemption or repurchase (including coordination with the
Custodian) of Shares of each Portfolio, as more fully described in the
written schedule of Duties of Investor Services Group annexed hereto as
Schedule B and incorporated herein, and in accordance with the terms of
the Prospectus of the Trust on behalf of the applicable Portfolio,
applicable law and the procedures established from time to time between
Investor Services Group and the Trust.
(b) Recording the issuance of Shares and maintaining pursuant
to Rule 17Ad-10(e) of the 1934 Act a record of the total number of
Shares of each Portfolio which are authorized, issued and outstanding.
Investor Services Group shall provide the Trust on a regular basis with
the total number of Shares of each Portfolio which are authorized and
issued and outstanding.
(c) Performing the customary services of an administrator,
including corporate secretarial, treasury, legal and blue sky services,
and fund accounting agent for the Trust, as more fully described in the
written schedule of Duties of Investor Services Group annexed hereto as
Schedule B and incorporated herein, and subject to the supervision and
direction of the Board of Directors of the Trust.
(d) Performing the Custody Administration services described
in Schedule B.
3.2 In addition to providing the foregoing services, the Trust hereby
engages Investor Services Group as its exclusive service provider with respect
to the Print/Mail Services itemized in Schedule C for the fees also identified
in Schedule C. Investor Services Group agrees to perform the services and its
obligations subject to the terms and conditions of this Agreement.
3.3 Notwithstanding any of the foregoing provisions of this Agreement,
Investor Services Group shall be under no duty or obligation to inquire into,
and shall not be liable for: (i) the legality of the issuance or sale of any
Shares or the sufficiency of the amount to be
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received therefor; (ii) the legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor; (iii) the legality of the
declaration of any dividend by the Board of Directors, or the legality of the
issuance of any Shares in payment of any dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares.
3.4 In performing its duties under this Agreement, Investor Services
Group: (a) will act in accordance with the Articles of Incorporation, By-Laws,
Prospectuses and with the Oral Instructions and Written Instructions of the
Trust and will conform to and comply with the requirements of the 1940 Act and
all other applicable federal or state laws and regulations; and (b) will consult
with legal counsel to the Trust, as necessary and appropriate. Furthermore,
Investor Services Group shall not have or be required to have any authority to
supervise the investment or reinvestment of the securities or other properties
which comprise the assets of the Trust or any of its Portfolios and shall not
provide any investment advisory services to the Trust or any of its Portfolios.
3.5 Investor Services Group agrees to provide the services described
herein in accordance with the Performance Standards annexed hereto as Exhibit 1
of Schedule B and incorporated herein (the "Performance Standards"). Such
Performance Standards may be amended from time to time upon written agreement of
the parties.
3.6 In addition to the duties set forth herein, Investor Services Group
shall perform such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing between the Trust
and Investor Services Group.
Article 4 Recordkeeping and Other Information.
4.1 Investor Services Group shall create and maintain all records
required of it pursuant to its duties hereunder and as set forth in Schedule B
and in the Fund's Registration Statement in accordance with all applicable laws,
rules and regulations, including records required by Section 31(a) of the 1940
Act. Where applicable, such records shall be maintained by Investor Services
Group for the periods and in the places required by Rule 31a-2 under the 1940
Act.
4.2 To the extent required by Section 31 of the 1940 Act, Investor
Services Group agrees that all such records prepared or maintained by Investor
Services Group relating to the services to be performed by Investor Services
Group hereunder are the property of the Trust and will be preserved, maintained
and made available in accordance with such section, and will be surrendered
promptly to the Trust on and in accordance with the Trust's request.
4.3 In case of any requests or demands for the inspection of
Shareholder records of the Trust, Investor Services Group will endeavor to
notify the Trust of such request and secure Written Instructions as to the
handling of such request. Investor Services Group reserves the right, however,
to exhibit the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to comply with such request.
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Article 5 Trust Instructions.
5.1 Investor Services Group will have no liability when acting upon
Written or Oral Instructions believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice of
any change of authority of any person until receipt of a Written Instruction
thereof from the Trust. Investor Services Group will also have no liability when
processing Share certificates which it reasonably believes to bear the proper
manual or facsimile signatures of the officers of the Trust and the proper
countersignature of Investor Services Group.
5.2 At any time, Investor Services Group may request Written
Instructions from the Trust and may seek advice from legal counsel for the
Trust, or its own legal counsel, with respect to any matter arising in
connection with this Agreement, and it shall not be liable for any action taken
or not taken or suffered by it in good faith in accordance with such Written
Instructions or in accordance with the opinion of counsel for the Trust or for
Investor Services Group. Written Instructions requested by Investor Services
Group will be provided by the Trust within a reasonable period of time.
5.3 Investor Services Group, its officers, agents or employees, shall
accept Oral Instructions or Written Instructions given to them by any person
representing or acting on behalf of the Trust only if said representative is an
Authorized Person. The Trust agrees that all Oral Instructions shall be followed
within one business day by confirming Written Instructions, and that the Trust's
failure to so confirm shall not impair in any respect Investor Services Group's
right to rely on Oral Instructions.
Article 6 Compensation.
6.1 The Trust on behalf of each of the Portfolios will compensate
Investor Services Group for the performance of its obligations hereunder in
accordance with the fees and other charges set forth in the written Fee Schedule
annexed hereto as Schedule C and incorporated herein. Out of the Custody
Administration fees received by it under Section 1(d) of Schedule C, Investor
Services Group agrees to pay all compensation and expenses of the Trust's
custodian promptly upon receipt of statements thereon. This reflects Article XI
Section9 of the Custody Agreement. In the event that Investor Services Group
fails to meet certain Performance Standards as set forth in Exhibit 1 to
Schedule B, the Trust shall have the right to reduce the fees owed to Investor
Services Group as set forth in Exhibit 1 to Schedule B; provided, however, that
the Trust's right to reduce fee under this Section 6.1, shall not become
effective until ninety (90) days following the Commencement Date.
6.2 In addition to those fees set forth in Section 6.1 above, the Trust
on behalf of each of the Portfolios agrees to pay, and will be billed separately
for, out-of-pocket expenses incurred by Investor Services Group in the
performance of its duties hereunder. Out-of-pocket expenses shall include, but
shall not be limited to, the items specified in the written schedule of
out-of-pocket charges annexed hereto as Schedule D and incorporated herein.
Schedule D may be modified by written agreement between the parties. Unspecified
out-of-pocket expenses shall
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be limited to those out-of-pocket expenses reasonably incurred by Investor
Services Group in the performance of its obligations hereunder.
6.3 The Trust on behalf of each of the Portfolios hereby authorizes
Investor Services Group to collect its fees, other charges and related
out-of-pocket expenses by debiting the Trust's or Portfolio's custody account
for invoices which are rendered for the services performed for the applicable
function. Invoices for the services performed will be sent to the Trust after
such debiting with an indication that payment has been made.
6.4 Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule C, a revised Fee Schedule executed and dated by
the parties hereto.
6.5 The Trust acknowledges that the fees and charges that Investor
Services Group charges the Trust under this Agreement reflect the allocation of
risk between the parties, including the disclaimer of warranties in Section 9.3
and the limitations on liability and exclusion of remedies in Section 11.2 and
Article 12. Modifying the allocation of risk from what is stated here would
affect the fees that Investor Services Group charges, and in consideration of
those fees, the Trust agrees to the stated allocation of risk.
6.6 Investor Services Group will from time to time employ or associate
with itself such person or persons as Investor Services Group may believe to be
particularly suited to assist it in performing services under this Agreement.
Such person or persons may be officers and employees who are employed by both
Investor Services Group and the Trust. The compensation of such person or
persons shall be paid by Investor Services Group and no obligation shall be
incurred on behalf of the Trust in such respect.
6.7 Investor Services Group shall not be required to pay any of the
following expenses incurred by the Trust: membership dues in the Investment
Company Institute or any similar organization; investment advisory expenses;
costs of printing and mailing stock certificates, prospectuses, reports and
notices; interest on borrowed money; brokerage commissions; stock exchange
listing fees; taxes and fees payable to Federal, state and other governmental
agencies; fees of Board Members of the Trust who are not affiliated with
Investor Services Group; outside auditing expenses; outside legal expenses; Blue
Sky registration or filing fees; or other expenses not specified in this Section
6.7 which are properly payable by the Trust. Investor Services Group shall not
be required to pay any Blue Sky registration or filing fees unless and until it
has received the amount of such fees from the Trust.
Article 7 Investor Services Group System.
7.1 Investor Services Group shall retain title to and ownership of any
and all proprietary data bases, computer programs, screen formats, report
formats, interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise, patents,
copyrights, trade secrets, and other related legal rights utilized by Investor
Services Group in connection with the services provided by Investor Services
Group to the Trust herein (the "Investor Services Group System").
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7.2 Investor Services Group hereby grants to the Trust a limited
license to the Investor Services Group System for the sole and limited purpose
of having Investor Services Group provide the services contemplated hereunder
and nothing contained in this Agreement shall be construed or interpreted
otherwise and such license shall immediately terminate with the termination of
this Agreement.
7.3 In the event that the Trust, including any affiliate or agent of
the Trust or any third party acting on behalf of the Trust is provided with
direct access to the Investor Services Group System for either account inquiry
or to transmit transaction information, including but not limited to
maintenance, exchanges, purchases and redemptions, such direct access capability
shall be limited to direct entry to the Investor Services Group System by means
of on-line mainframe terminal entry or PC emulation of such mainframe terminal
entry and any other non-conforming method of transmission of information to the
Investor Services Group System is strictly prohibited without the prior written
consent of Investor Services Group.
Article 8 Representations and Warranties.
8.1 Investor Services Group represents and warrants to the Trust that:
(a) it is a corporation duly organized, existing and in good
standing under the laws of the Commonwealth of Massachusetts;
(b) it is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement;
(c) all requisite corporate proceedings have been taken to
authorize it to enter into this Agreement;
(d) it is duly registered with its appropriate regulatory
agency as a transfer agent and such registration will remain in effect
for the duration of this Agreement; and
(e) it has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
8.2 THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, INVESTOR SERVICES GROUP DISCLAIMS ALL OTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, MADE TO THE TRUST OR ANY OTHER PERSON,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE (IRRESPECTIVE OF
ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) OF ANY SERVICES OR ANY GOODS
PROVIDED INCIDENTAL TO SERVICES PROVIDED UNDER THIS AGREEMENT. INVESTOR SERVICES
GROUP DISCLAIMS ANY WARRANTY OF TITLE OR NON-INFRINGEMENT EXCEPT AS OTHERWISE
SET FORTH IN THIS AGREEMENT.
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Article 9 Indemnification.
9.1 Investor Services Group shall not be responsible for and the Trust
on behalf of each Portfolio shall indemnify and hold Investor Services Group
harmless from and against any and all claims, costs, expenses (including
reasonable attorneys' fees), losses, damages, charges, payments and liabilities
of any sort or kind which may be asserted against Investor Services Group or for
which Investor Services Group may be held to be liable (a "Claim") arising out
of or attributable to any of the following:
(a) any actions of Investor Services Group required to be
taken pursuant to this Agreement unless such Claim resulted from a
negligent act or omission to act or bad faith by Investor Services
Group in the performance of its duties hereunder;
(b) Investor Services Group's reasonable reliance on, or
reasonable use of information, data, records and documents (including
but not limited to magnetic tapes, computer printouts, hard copies and
microfilm copies) received by Investor Services Group from the Trust,
or any authorized third party acting on behalf of the Trust, including
but not limited to the prior transfer agent for the Trust, in the
performance of Investor Services Group's duties and obligations
hereunder;
(c) the reliance on, or the implementation of, any Written or
Oral Instructions or any other instructions or requests of the Trust on
behalf of the applicable Portfolio; and
(d) the Trust's refusal or failure to comply with the terms of
this Agreement, or any Claim which arises out of the Trust's negligence
or misconduct or the breach of any representation or warranty of the
Trust made herein.
9.2 In any case in which the Trust may be asked to indemnify
or hold Investor Services Group harmless, Investor Services Group will notify
the Trust promptly after identifying any situation which it believes presents or
appears likely to present a claim for indemnification against the Trust although
the failure to do so shall not prevent recovery by Investor Services Group and
shall keep the Trust advised with respect to all developments concerning such
situation. The Trust shall have the option to defend Investor Services Group
against any Claim which may be the subject of this indemnification, and, in the
event that the Trust so elects, such defense shall be conducted by counsel
chosen by the Trust and reasonably satisfactory to Investor Services Group, and
thereupon the Trust shall take over complete defense of the Claim and Investor
Services Group shall sustain no further legal or other expenses in respect of
such Claim. Investor Services Group will not confess any Claim or make any
compromise in any case in which the Trust will be asked to provide
indemnification, except with the Trust's prior written consent. The obligations
of the parties hereto under this Article 10 shall survive the termination of
this Agreement.
9.3 Any claim for indemnification under this Agreement must be made
prior to the earlier of:
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(a) one year after the Investor Services Group becomes aware
of the event for which indemnification is claimed; or
(b) one year after the earlier of the termination of this
Agreement or the expiration of the term of this Agreement.
9.4 Except for remedies that cannot be waived as a matter of law (and
injunctive or provisional relief), the provisions of this Article 9 shall be
Investor Services Group's sole and exclusive remedy for claims or other actions
or proceedings to which the Trust's indemnification obligations pursuant to this
Article 9 may apply.
Article 10 Standard of Care.
10.1 Investor Services Group shall at all times act in good faith and
agrees to use its best efforts within commercially reasonable limits to ensure
the accuracy of all services performed under this Agreement, but assumes no
responsibility for loss or damage to the Trust unless said errors are caused by
Investor Services Group's own negligence, bad faith or willful misconduct or
that of its employees.
10.2 Notwithstanding any provision in this Agreement to the contrary,
Investor Services Group's cumulative liability (to the Trust) for all losses,
claims, suits, controversies, breaches, or damages for any cause whatsoever
arising out of or related to this Agreement and regardless of the form of action
or legal theory shall not exceed the lesser of (i) $500,000 or (ii) the fees
received by Investor Services Group for services provided under this Agreement
during the twelve months immediately prior to the date of such loss or damage.
Trust understands the limitation on Investor Services Group's damages to be a
reasonable allocation of risk and Trust expressly consents with respect to such
allocation of risk.
10.3 Neither party may assert any cause of action against the other
party under this Agreement that accrued more than two (2) years prior to the
filing of the suit (or commencement of arbitration proceedings) alleging such
cause of action.
10.4 Each party shall have the duty to mitigate damages for which the
other party may become responsible.
Article 11 Consequential Damages.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL INVESTOR SERVICES GROUP, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE UNDER ANY THEORY OF
TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST
PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES
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REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR
ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Article 12 Term and Termination.
12.1 This Agreement shall be effective on the date first written above
and shall continue for a period of five (5) years (the "Initial Term").
12.2 Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of three (3) years ("Renewal Terms")
each, unless the Trust or Investor Services Group provides written notice to the
other of its intent not to renew. Such notice must be received not less than
ninety (90) days and not more than one-hundred eighty (180) days prior to the
expiration of the Initial Term or the then current Renewal Term.
12.3 In the event a termination notice is given by the Trust, all
expenses associated with movement of records and materials and conversion
thereof to a successor transfer agent will be borne by the Trust.
12.4 If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. In all cases, termination by the Non-Defaulting Party
shall not constitute a waiver by the Non-Defaulting Party of any other rights it
might have under this Agreement or otherwise against the Defaulting Party.
12.5 In the event that Investor Services Group has failed to meet a
Priority A Performance Standard as set forth and for the periods of time
described in Exhibit 1 of Schedule B (a "Termination Event"), the Trust may
terminate this Agreement. The Trust will provide Investor Services Group with
sixty (60) days notice in writing if the Trust intends to exercise its option
under this Section 12.5; provided that such notice must be given to Investor
Services Group no later than ninety (90) days following notification of the
Termination Event. Notwithstanding the foregoing, the Trust's rights under this
Section 12.5, shall not become effective until ninety (90) days following the
Commencement Date.
12.6 Notwithstanding anything contained in this Agreement to the
contrary, in the event that the Board of Directors decide to liquidate or
dissolve the Trust prior to the end of the Initial Term and the Trust is not
merged into or acquired by a successor fund, the Trust shall have the right to
terminate this Agreement upon ninety (90) days written notice to Investor
Services Group provided that, prior to the effective date of such termination,
the Trust shall pay to Investor Services Group a penalty in an amount equal to
$55,000.
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12.7 Notwithstanding anything contained in this Agreement to the
contrary and except as provided in Sections 12.4, 12.5 and 12.6 hereof, should
the Trust desire to move any of the services provided by Investor Services Group
hereunder to a successor service provider prior to the expiration of the then
current Initial or Renewal Term, or should the Trust or any of its affiliates
take any action which would result in Investor Services Group ceasing to provide
transfer agency, administration or fund accounting services to the Trust prior
to the expiration of the Initial or any Renewal Term, Investor Services Group
shall make a good faith effort to facilitate the conversion on such prior date,
however, there can be no guarantee that Investor Services Group will be able to
facilitate a conversion of services on such prior date. In connection with the
foregoing, should services be converted to a successor service provider or
should the Trust or any of its affiliates take any action which would result in
Investor Services Group ceasing to provide transfer agency, administration or
fund accounting services to the Trust prior to the expiration of the Initial or
any Renewal Term, the payment of fees to Investor Services Group as set forth
herein shall be accelerated to a date prior to the conversion or termination of
services and calculated as if the services had remained with Investor Services
Group until the expiration of the then current Initial or Renewal Term and
calculated at the asset and/or Shareholder account levels, as the case may be,
on the date notice of termination was given to Investor Services Group.
Article 13 Additional Portfolios
13.1 In the event that the Trust establishes one or more Portfolios in
addition to those identified in Schedule A, with respect to which the Trust
desires to have Investor Services Group render services under the terms hereof,
the Trust shall so notify Investor Services Group in writing, and if Investor
Services Group agrees in writing to provide such services, Schedule A shall be
amended to include such additional Portfolios.
Article 14 Confidentiality.
14.1 The parties agree that the Confidential Information (defined
below) is confidential information of the parties and their respective
licensors. The Trust and Investor Services Group shall exercise at least the
same degree of care, but not less than reasonable care, to safeguard the
confidentiality of the Confidential Information of the other as it would
exercise to protect its own confidential information of a similar nature. The
Trust and Investor Services Group shall not duplicate, sell or disclose to
others the Confidential Information of the other, in whole or in part, without
the prior written permission of the other party. The Trust and Investor Services
Group may, however, disclose Confidential Information to their respective parent
corporation, their respective affiliates, their subsidiaries and affiliated
companies and employees and their independent contractors, auditors and
professional advisors, provided that each shall use reasonable efforts to ensure
that the Confidential Information is not duplicated or disclosed in breach of
this Agreement. Notwithstanding the previous sentence, in no event shall either
the Trust or Investor Services Group disclose the Confidential Information to
any competitor of the other without specific, prior written consent.
14.2 Confidential Information means:
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(a) any data or information that is competitively sensitive
material, and not generally known to the public, including, but not
limited to, information about product plans, marketing strategies,
finance, operations, customer relationships, customer profiles, sales
estimates, business plans, and internal performance results relating to
the past, present or future business activities of the Trust or
Investor Services Group, their respective subsidiaries and affiliated
companies and the customers, clients and suppliers of any of them;
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and
secret in the sense that its confidentiality affords the Trust or
Investor Services Group a competitive advantage over its competitors;
and
(c) all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code, object
code, flow charts, databases, inventions, know-how, show-how and trade
secrets, whether or not patentable or copyrightable.
14.3 Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment, prototypes and
models, and any other tangible manifestation of the foregoing of either party
which now exist or come into the control or possession of the other.
14.4 The obligations of confidentiality and restriction on use herein
shall not apply to any Confidential Information that a party proves:
(a) Was in the public domain prior to the date of this
Agreement or subsequently came into the public domain through no fault
of such party; or
(b) Was lawfully received by the party from a third party free
of any obligation of confidence to such third party; or
(c) Was already in the possession of the party prior to
receipt thereof, directly or indirectly, from the other party; or
(d) Is required to be disclosed in a judicial or
administrative proceeding after all reasonable legal remedies for
maintaining such information in confidence have been exhausted
including, but not limited to, giving the other party as much advance
notice of the possibility of such disclosure as practical so the other
party may attempt to stop such disclosure or obtain a protective order
concerning such disclosure; or
(f) Is subsequently and independently developed by employees,
consultants or agents of the party without reference to the
Confidential Information disclosed under this Agreement.
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Article 15 Force Majeure.
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default or delay
is caused, directly or indirectly, by (i) fire, flood, elements of nature or
other acts of God; (ii) any outbreak or escalation of hostilities, war, riots or
civil disorders in any country; (iii) any act or omission of the other party or
any governmental authority; (iv) any labor disputes (whether or not the
employees' demands are reasonable or within the party's power to satisfy); or
(v) nonperformance by a third party or any similar cause beyond the reasonable
control of such party, including without limitation, failures or fluctuations in
telecommunications or other equipment. In any such event, the non-performing
party shall be excused from any further performance and observance of the
obligations so affected only for as long as such circumstances prevail and such
party continues to use commercially reasonable efforts to recommence performance
or observance as soon as practicable.
Article 16 Assignment and Subcontracting.
This Agreement, its benefits and obligations shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned or otherwise transferred
by either party hereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that
Investor Services Group may, in its sole discretion, assign all its right, title
and interest in this Agreement to an affiliate, parent or subsidiary, or to the
purchaser of substantially all of its business. Investor Services Group may, in
its sole discretion, engage subcontractors to perform any of the obligations
contained in this Agreement to be performed by Investor Services Group.
Article 17 Arbitration.
17.1 Any claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in Boston, Massachusetts in accordance with its
applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply.
17.2 The parties hereby agree that judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
17.3 The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Article 17.
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Article 18 Notice.
Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Trust or Investor Services Group, shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Trust:
Kelmoore Strategic Trust
0000 Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Kelmon
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To Investor Services Group:
First Data Investor Services Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to Investor Services Group's General Counsel
Article 19 Governing Law/Venue.
The laws of the Commonwealth of Massachusetts, excluding the laws on
conflicts of laws, shall govern the interpretation, validity, and enforcement of
this Agreement. All actions arising from or related to this Agreement shall be
brought in the state and federal courts sitting in the City of Boston, and
Investor Services Group and the Trust hereby submit themselves to the exclusive
jurisdiction of those courts.
Article 20 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
Article 21 Captions.
The captions of 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.
Article 22 Publicity.
Neither Investor Services Group nor the Trust shall release or publish
news releases, public announcements, advertising or other publicity relating to
this Agreement or to the transactions contemplated by it without the prior
review and written approval of the other party; provided, however, that either
party may make such disclosures as are required by legal, accounting or
regulatory requirements after making reasonable efforts in the circumstances to
consult in advance with the other party.
Article 23 Relationship of Parties/Non-Solicitation.
23.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
23.2 During the term of this Agreement and for one (1) year afterward,
the Trust shall not recruit, solicit, employ or engage, for the Trust or others,
Investor Services Group's employees.
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Article 24 Entire Agreement; Severability.
24.1 This Agreement, including Schedules, constitutes the entire
Agreement between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous proposals, agreements, contracts,
representations, and understandings, whether written or oral, between the
parties with respect to the subject matter hereof. No change, termination,
modification, or waiver of any term or condition of the Agreement shall be valid
unless in writing signed by each party. No such writing shall be effective as
against Investor Services Group unless said writing is executed by a Senior Vice
President, Executive Vice President, or President of Investor Services Group. A
party's waiver of a breach of any term or condition in the Agreement shall not
be deemed a waiver of any subsequent breach of the same or another term or
condition.
24.2 The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
Article 25 Miscellaneous.
The Trust and Investor Services Group agree that the obligations of the
Trust under the Agreement shall not be binding upon any of the Board Members,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Trust individually, but are binding only upon the assets and
property of the Trust, as provided in the Articles of Incorporation. The
execution and delivery of this Agreement have been authorized by the Board
Members of the Trust, and signed by an authorized officer of the Trust, acting
as such, and neither such authorization by such Board Members nor such execution
and delivery by such officer shall be deemed to have been made by any of them or
any shareholder of the Trust individually or to impose any liability on any of
them or any shareholder of the Trust personally, but shall bind only the assets
and property of the Trust as provided in the Articles of Incorporation.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
KELMOORE STRATEGIC TRUST
By: \s\Xxxxxxx Kelmon
----------------------------
Title: President
----------------------------
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/Xxxxxxx X. Xxxxx
----------------------------
Title: Senior Vice President
----------------------------
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SCHEDULE A
LIST OF PORTFOLIOS
Kelmoore Strategy Covered Option Fund
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SCHEDULE B
DUTIES OF INVESTOR SERVICES GROUP
I. TRANSFER AGENCY AND SHAREHOLDER SERVICES
(a) Shareholder Information. Investor Services Group shall maintain a
record of the number of Shares held by each Shareholder of record which shall
include name, address, taxpayer identification and which shall indicate whether
such Shares are held in certificates or uncertificated form.
(b) Shareholder Services. Investor Services Group shall respond as
appropriate to all inquiries and communications from Shareholders relating to
Shareholder accounts with respect to its duties hereunder and as may be from
time to time mutually agreed upon between Investor Services Group and the Trust.
(c) Share Certificates.
- At the expense of the Trust, the Trust shall supply Investor
Services Group with an adequate supply of blank share
certificates to meet Investor Services Group requirements
therefor. Such Share certificates shall be properly signed by
facsimile. The Trust agrees that, notwithstanding the death,
resignation, or removal of any officer of the Trust whose
signature appears on such certificates, Investor Services
Group or its agent may continue to countersign certificates
which bear such signatures until otherwise directed by Written
Instructions.
- Investor Services Group shall issue replacement Share
certificates in lieu of certificates which have been lost,
stolen or destroyed, upon receipt by Investor Services Group
of properly executed affidavits and lost certificate bonds, in
form satisfactory to Investor Services Group, with the Trust
and Investor Services Group as obligees under the bond.
Investor Services Group shall further maintain a stop transfer
record on lost and/or replaced certificates
(d) Mailing Communications to Shareholders; Proxy Materials. Investor
Services Group will address and mail to Shareholders of the Trust, all reports
to Shareholders, dividend and distribution notices and proxy material for the
Trust's meetings of Shareholders. In connection with meetings of Shareholders,
Investor Services Group will prepare Shareholder lists, mail and certify as to
the mailing of proxy materials, process and tabulate returned proxy cards,
report on proxies voted prior to meetings, act as inspector of election at
meetings and certify Shares voted at meetings.
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(e) Sales of Shares.
- Investor Services Group shall not be required to issue any
Shares of the Trust where it has received a Written
Instruction from the Trust or official notice from any
appropriate authority that the sale of the Shares of the Trust
has been suspended or discontinued. The existence of such
Written Instructions or such official notice shall be
conclusive evidence of the right of Investor Services Group to
rely on such Written Instructions or official notice.
- In the event that any check or other order for the payment of
money is returned unpaid for any reason, Investor Services
Group will endeavor to: (i) give prompt notice of such return
to the Trust or its designee; (ii) place a stop transfer order
against all Shares issued as a result of such check or order;
and (iii) take such other actions as Investor Services Group
and the Fund may from time to time deem appropriate.
(f) Transfer and Repurchase.
- Investor Services Group shall process all requests to transfer
or redeem Shares in accordance with the transfer or repurchase
procedures set forth in the Trust's Prospectus.
- Investor Services Group will transfer or repurchase Shares
upon receipt of Oral or Written Instructions or otherwise
pursuant to the Prospectus and Share certificates, if any,
properly endorsed for transfer or redemption, accompanied by
such documents as Investor Services Group reasonably may deem
necessary.
- Investor Services Group reserves the right to refuse to
transfer or repurchase Shares until it is reasonably satisfied
that the endorsement on the instructions is valid and genuine.
Investor Services Group also reserves the right to refuse to
transfer or repurchase Shares until it is reasonably satisfied
that the requested transfer or repurchase is legally
authorized, and it shall incur no liability for the refusal,
in good faith, to make transfers or repurchases which Investor
Services Group, in its good judgement, deems improper or
unauthorized, or until it is reasonably satisfied that there
is no basis to any claims adverse to such transfer or
repurchase.
- When Shares are redeemed, Investor Services Group shall, upon
receipt of the instructions and documents in proper form,
deliver to the Custodian and the Trust or its designee a
notification setting forth the number of Shares to be
repurchased. Such repurchased shares shall be reflected on
appropriate accounts maintained by Investor Services Group
reflecting outstanding Shares of the Trust and Shares
attributed to individual accounts.
- Investor Services Group shall upon receipt of the monies
provided to it by the Custodian for the repurchase of Shares,
pay such monies as are received from the Custodian, all in
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accordance with the procedures described in Oral or Written
Instructions received by Investor Services Group from the
Trust or otherwise pursuant to the Prospectus.
- Investor Services Group shall not process or effect any
repurchase with respect to Shares of the Trust after receipt
by Investor Services Group or its agent of notification of the
suspension of the determination of the net asset value of the
Trust.
(g) Dividends.
- Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of the Trust with
respect to Shares of the Trust, the Trust shall furnish or
cause to be furnished to Investor Services Group Written
Instructions setting forth the date of the declaration of such
dividend or distribution, the ex-dividend date, the date of
payment thereof, the record date as of which Shareholders
entitled to payment shall be determined, the amount payable
per Share to the Shareholders of record as of that date, the
total amount payable on the payment date and whether such
dividend or distribution is to be paid in Shares at net asset
value.
- On or before the payment date specified in such resolution of
the Board of Directors, the Trust will provide Investor
Services Group with sufficient cash to make payment to the
Shareholders of record as of such payment date.
- If Investor Services Group does not receive sufficient cash
from the Trust to make total dividend and/or distribution
payments to all Shareholders of the Trust as of the record
date, Investor Services Group will, upon notifying the Trust,
withhold payment to all Shareholders of record as of the
record date until sufficient cash is provided to Investor
Services Group.
(h) Retirement Plans. In connection with the individual retirement
account, simplified employee pension plan, rollover individual retirement plan,
educational XXX and XXXX individual retirement account (each hereinafter
referred to as an "XXX" and, collectively, the "IRAs") within the meaning of
Section 408 of the Internal Revenue Code of 1986, as amended (the "Code")
offered by the Trust, Investor Services Group shall provide the following
administrative services in addition to those services described herein:
- Establish a record of types and reasons for distributions
(i.e., attainment of age 59-1/2, disability, death, return of
excess contributions, etc.);
- Record method of distribution requested and/or made;
- Receive and process designation of the beneficiary forms;
- Examine and process requests for direct transfers between
custodians/trustees, transfer and pay over to the successor
assets in the account and records pertaining thereto as
requested;
- Prepare any annual reports or returns required to be prepared
and/or filed by a custodian of an XXX, including, but not
limited to, an annual fair market value report,
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Forms 1099R and 5498 and file with the IRS and provide to
Participant/Beneficiary; and
- Perform applicable federal withholding and send
Participants/Beneficiaries an annual TEFRA notice regarding
required federal tax withholding.
(i) Cash Management Services. Funds received by Investor Services Group
in the course of performing its services hereunder will be held in demand
deposit bank accounts or money market fund accounts in the name of Investor
Services Group (or its nominee) as agent for the Trust. Investor Services Group
shall be entitled to retain any excess interest, dividends, balance credits or
fee reductions or other concessions or benefits earned or generated by or
associated with such accounts or made available by the institution at which such
accounts are maintained after such benefits are first applied towards banking
service fees charged to the Trust by such institution.
(j) Lost Shareholders. Investor Services Group shall perform such
services as are required in order to comply with Rules 17a-24 and 17Ad-17 of the
34 Act (the "Lost Shareholder Rules"), including, but not limited to those set
forth below. Investor Services Group may, in its sole discretion, use the
services of a third party to perform the some or all such services.
- documentation of electronic search policies and procedures;
- execution of required searches;
- creation and mailing of confirmation letters;
- taking receipt of returned verification forms;
- providing confirmed address corrections in batch via
electronic media;
- tracking results and maintaining data sufficient to comply
with the Lost Shareholder Rules; and
- preparation and submission of data required under the Lost
Shareholder Rules.
II. ADMINISTRATION SERVICES
(a) Maintaining office facilities (which may be in the offices of
Investor Services Group or a corporate affiliate) and furnishing corporate
officers for the Trust;
(b) Furnishing data processing services, clerical services, and
executive and administrative services and standard stationery and office
supplies;
(c) Performing all functions ordinarily performed by the office of a
corporate treasurer, and furnishing the services and facilities ordinarily
incident thereto, including:
- Expense Accrual Monitoring
- Determination of Dividends
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- Preparation of materials for review by the Board, e.g., Rules
2a-7,10f-3, 17a-7, 17e-1 and 144A
- Tax and Financial Counsel
- Creation of expense pro formas for new Portfolios/classes
- Reporting to investment company reporting agencies (i.e.,
Lipper)
- Compliance Testing including Section 817(h) (daily, weekly or
monthly)
(d) Preparing reports to the Trust's Shareholders and the SEC
including, but not necessarily limited to, Annual Reports and Semi-Annual
Reports on Form N-SAR;
(e) Preparing and filing the Trust's tax returns and providing
shareholder tax information to the Trust's transfer agent;
(f) Assisting the Adviser, at the Adviser's request, in monitoring and
developing compliance procedures for the Trust which will include, among other
matters, procedures to assist the Adviser in monitoring compliance with each
Portfolio's investment objective, policies, restrictions, tax matters and
applicable laws and regulations;
(g) Performing "Blue Sky" compliance functions, as follows:
Effecting and maintaining, as the case may be, the registration or notification
of Shares of the Trust for sale under the securities laws of the jurisdictions
listed in the Written Instructions of the Trust, which instructions will include
the amount of Shares to be registered as well as the warning threshold to be
maintained. Any Written Instructions not received at least 45 days prior to the
date the Trust intends to offer or sell its Shares cannot be guaranteed a timely
notification to the states.
- Filing with each appropriate jurisdiction the appropriate
materials relating to the Trust.
- Providing to the Trust quarterly reports of sales activity in
each jurisdiction in accordance with the Written Instructions
of the Trust. Sales will be reported by shareholder residence.
NSCC trades and order clearance will be reported by the state
provided by the dealer at the point of sale. Trades by omnibus
accounts will be reported by trustee state of residence in
accordance with the Written Instructions of the Trust
outlining the entities which are permitted to maintain omnibus
positions with the Trust.
- In the event sales of Shares in a particular jurisdiction
reach or exceed the warning levels provided in the Written
Instructions of the Trust, Investor Services Group will
promptly notify the Trust with a recommendation of the amount
of Shares to be registered in such jurisdiction and the fee
for such registration. Investor Services Group will not
register
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additional Shares in such jurisdiction unless and until
Investor Services Group shall have received Written
Instructions from the Trust to do so.
If Investor Services Group is instructed by the Trust not to register Shares in
a particular jurisdiction, Investor Services Group will use its best efforts to
cause any sales in such jurisdictions to be blocked.
(h) Performing corporate secretarial services including the following:
- Assist in maintaining corporate records and good standing
status of Trust in its state of organization
- Develop and maintain calendar of annual and quarterly board
approvals and regulatory filings
- Prepare notice, agenda, memoranda, resolutions and background
materials for legal approvals at quarterly board meetings and
committee meetings; attend meetings; make presentations where
appropriate; prepare minutes; follow up on issues
- Provide support for one special in person board meeting per
year and written consent votes where needed
(i) Performing the following legal and other services:
- Prepare and file annual Post-Effective Amendment
- Prepare and file Rule 24f-2 Notice
- Review and file Form N-SAR
- Review, Edgarize and file Annual and Semi-Annual Financial
Reports
- Communicate significant regulatory or legislative developments
to Trust management and directors and provide related planning
assistance where needed
- Consult with Trust management regarding portfolio compliance
and Trust corporate and regulatory issues as needed
- Maintain effective communication with outside counsel and
review legal bills of outside counsel
- Coordinate the printing and mailing process with outside
printers for all shareholder publications
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- Arrange D&O/E&O insurance and fidelity bond coverage for Trust
- Assist in monitoring Trust Code of Ethics reporting and
provide such reports to the person designated under the
Trust's Code
(j) Performing, in accordance with the Written Instructions of the
Trust, the following Special Legal Services in accordance with the additional
pricing structure listed on the Fee Schedule attached to this Agreement as
Schedule C:
- Assist in managing SEC audit of the Trust at the Adviser's
principal place of business
- Review sales material and advertising for Trust Prospectus and
legal compliance
- Assist in new Portfolio start-up (to the extent requested)
Coordinate time and responsibility schedules Prepare Trust
corporate documents Draft/file registration statement
(including investment objectives/policies and prospectuses)
Respond to and negotiate SEC comments Draft notice, agenda and
resolutions for organizational meeting; attend board meeting;
make presentations where appropriate; prepare minutes and
follow up on issues
- Assist in developing compliance guidelines and procedures to
improve overall compliance by Trust and service providers
- Prepare notice, agenda, memoranda and background materials for
special board meetings, make presentations where appropriate,
prepare minutes and follow up on issues
- Prepare proxy material for special meetings (including fund
merger documents)
- Prepare Post-Effective Amendments for special purposes (e.g.,
new funds or classes, changes in advisory relationships,
mergers, restructurings)
- Prepare special Prospectus supplements where needed
- Assist in extraordinary non-recurring projects, including
providing consultative legal services, e.g.,
Arrange CDSC financial programs
Profile prospectuses
Exemptive order applications
III. FUND ACCOUNTING SERVICES
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Performing fund accounting and bookkeeping services (including the
maintenance of such accounts, books and records of the Trust as may be required
by Section 31(a) of the 0000 Xxx) as follows:
- Daily, Weekly, and Monthly Reporting
- Portfolio and General Ledger Accounting
- Daily Valuation of all Portfolio Securities
- Daily NAV Calculation
- Comparison of NAV to market movement
- Review research of price tolerance/fluctuation report to
market movements and events
- Research of items appearing on the price exception report
- Security trade processing
- Daily cash and position reconciliation with the custodian bank
- Daily updating of price and distribution rate information to
the Transfer Agent/Insurance Agent
- Daily support and report delivery to Portfolio Management
- Daily calculation of Portfolio adviser fees and waivers
- Daily calculation of distribution rates
- Daily investable cash call
- Monitor and research aged receivables
- Collect aged income items and perform reclaims
- Update NASDAQ reporting
- Daily maintenance of each Portfolio's general ledger including
expense accruals
- Daily NAV per share notification to other vendors as required
- Calculation of 30-day SEC yields and total returns
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- Preparation of month-end reconciliation package
- Monthly reconciliation of Portfolio expense records
- Application of monthly pay down gain/loss
- Preparation of all annual and semi-annual audit work papers
IV. CUSTODY ADMINISTRATION SERVICES
Performing custody administration services as follows:
- Assign a custody administrator to accept, control and process
the Trust's daily portfolio transactions through direct
computer link with the Custodian
- Match and review DTC eligible ID's and trade information with
the Trust's instructions for accuracy and coordinating with
the Custodian and the Trust's accounting agent for recording
and affirmation processing with the depository
- Systematically settle all depository eligible issues.
Transactions requiring physical delivery will be settled
through the Custodian's New York office.
- Assist the Trust in placing cash management trades through the
Custodian, such as commercial paper, CD's and repurchase
agreements
- Provide the Adviser with daily custodian statements reflecting
all prior day cash activity on behalf of each Portfolio by
8:30 a.m. Eastern time. Complete description 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 systems.
- Provide monthly activity statements combining both cash
changes and security trades, and a full portfolio listing.
- Communicate to the Trust 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 complete.
- Coordinate and resolve unsettled dividends, interest, paydowns
and capital changes. Assist in resolution of failed
transactions and any settlement problems.
- Provide broker interface ensuring trade settlement with failed
trade follow-up.
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- Provide the Fund's auditor with trade documentation to help
expedite the Trust's audit.
- Investor Services Group shall be entitled to retain any excess
balance credits or fee reductions or other concessions or
benefits earned or generated by or associated with the Fund's
custodial accounts or made available by the institution at
which such accounts are maintained after such benefits are
first applied towards banking service fees charged to the
Trust by such institution.
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EXHIBIT 1 TO SCHEDULE B
PERFORMANCE STANDARDS
STANDARDS:
Fund Accounting/Custody Administration
The following standards will be met 95% of the time.
- NAV's calculated accurately, provided all information from
external vendors or fund manager is correct*
- Information to NASDAQ is reported within timeframes*
- Daily bulletin is released by 7:00 p.m., EST, provided all
information from external vendors or fund managers is received
in a timely basis
Fund Administration/Tax and Compliance
The following standard will be met 100% of the time.
- All SEC and IRS regulatory requirements will be met*
Processing:
The following standards will be met 95% of the time measured on a quarterly
basis, minimum of 50 items per standard measured.
- New accounts in good order will be established on the Transfer
Agent System on the same day received*
- Shareholder transactions in good order will be processed on
the Transfer Agent System on the same day received*
- Correspondence will be completed within five (5) business days
of receipt
- Fulfillment requests will be mailed within 48 hours of
receipt.
- Maintenance items will be completed within five (5) business
days of receipt
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Print/Mail:
The following standards will be met 95% of the time measured on a quarterly
basis, minimum of 50 items per standard measured.
- Daily confirmations will be mailed to shareholders on Trade
Date plus two (2) business days*
- Check requests will be mailed to shareholders on Trade Date
plus two (2) business day
- Quarterly Statements will be mailed to shareholders within
five (5) business days from quarter end
*Priority A Standards. All other measurements are considered Priority B
Standards.
MEASUREMENT:
Measurement of the Performance Standards shall not become effective until 90
days following the Commencement Date.
PENALTIES:
Penalties for Priority A Standards:
- The penalty for missing the same Performance Standard in one
(1) quarter is written notice.
- The penalty for missing the same Performance Standard two (2)
quarters in succession is termination of this Agreement in
accordance with Section 12.5 hereof.
Penalties for Priority B Standards:
- The penalty for missing the same Performance Standard in one
(1) quarter is written notice.
- The penalty for missing the same Performance Standard two (2)
quarters in succession is a 10% reduction in the quarterly fee
for such service for the second quarter.
- The penalty for missing the same Performance Standard three
(3) quarters in a rolling six (6) quarter period is a 20%
reduction in the quarterly fee for such service for the third
quarter.
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SCHEDULE C
FEE SCHEDULE
1. Standard Fees
(a) Administration Fees:
First $50 million of average net assets .0015
Next $50 million of average net assets .0010
Over $100 million average net assets .0005
Annual minimum fees $55,000 for first Portfolio
$12,000 for each additional
domestic Portfolio or class
(b) Transfer Agency and Shareholder Servicing Fees:
Transfer Agency and Shareholder Services $20.00 per account
per year per Portfolio $24,000 annual minimum fee per
no-load Portfolio
IRA's, 403(b) Plans, Defined Contribution/Benefit Plans
Annual Maintenance Fee - $12.00 per account per year
FUND/SERV Processing (if applicable)
$1,000 one time set-up charge
$50.00 per month/per Portfolio monthly maintenance fee
Networking Processing (if applicable)
$1,000 one time set-up charge
$75.00 per month/per Portfolio monthly maintenance fee
(c) Fund Accounting Fees:
(Per Domestic Portfolio)
Minimum to $20 million of average net assets $30,000
Next $30 million of average net assets .0003
Next $50 million of average net assets .0002
Over $100 million of average net assets .0001
Each additional class is $12,000 minimum per year
(d) Custody Administration Fees:
Domestic Securities and ADRs (Per Portfolio)
First $50 million of average net assets .0002
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Next $150 million of average net assets .00015
Over $200 million of average net assets .000125
Minimum monthly fee: $500
Custody Domestic Securities Transaction Charge:
Book Entry, DTC, Federal Book Entry, PTC $12.00
Physical Securities, Options/Futures $20.00
RIC's $24.50
P & I Paydowns $7.00
Wires $7.00
Check Request $6.00
Eurodollar CD's $45.00
Euro/TD's $15.00
A transaction includes buys, sells, maturities or
free security movements.
Cedel/Euroclear
4 bps safekeeping charge, $20.00 transaction charge
Fee expressed in basis points per annum based upon
month end market value
Global Network Fee
$500 per Portfolio per month, includes Cedel trades
Note: To the extent the Trust commences using foreign
(non USD) securities, additional fees will apply per country,
plus global network fee per month. At least two (2) weeks
advance notice is required to complete documentation and
establish accounts in the foreign countries.
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.
Custody Miscellaneous Fees
Administrative fees incurred in certain local markets will be
passed on to the Trust 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.
Investor Services Group agrees that a portion of its custody
administration fee will be used to pay on behalf of the Trust
the Custodian for its services rendered to the Trust under the
Custody Agreement.
2. Lost Shareholder Search/Reporting: $2.75 per account search*
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* The per account search fee shall be waived until June 2000
so long as the Trust retains Xxxxx Tracers, Inc. ("KTI") to
provide the Trust with KTI's "In-Depth Research Program"
services.
3. Print/Mail Fees.
Implementation Fee: $ 5000.00 - WAIVED
$150.00/hr. Multi-check and non-standard
Testing Application or
Data Requirements: $3.00/fax
Work Order: $15.00 per workorder
Daily Work (Confirms):
Hand: $71/K with $20.00 minimum (includes 1 insert)
$0.07/each additional insert
Machine: $42/K with $15.00 minimum (includes 1 insert)
$0.01/each additional insert
Daily Checks*:
Hand: $91/K with $30.00 minimum daily (includes 1 insert)
$0.08/each additional insert
Machine: $52/K with $20.00 minimum (includes 1 insert)
$0.01/each additional insert
* There is a $3.00 charge for each 3606 Form sent.
Statements:
Hand: $78/K with $20.00 minimum (includes 1 insert)
$0.08/each additional insert
$125/K for intelligent inserting
Machine: $52/K with $20.00 minimum (includes 1 insert)
$0.01 each additional insert
$58/K for intelligent inserting
Periodic Checks:
Hand: $91/K with $30.00 minimum (includes 1 insert)
$0.08/each additional insert
Machine: $52/K with $30.00 minimum (includes 1 insert)
$0.01/each additional insert
12B1/Dealer Commission
Checks/Statements: $0.78/each envelope with
$30.00 minimum
Spac Reports/Group
Statements: $78/K with $20.00 minimum
Listbills: $0.78 per envelope with $20.00 minimum
Printing Charges: (price ranges dependent on volumes)
$0.08/per confirm/statement/page
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$0.115/per check
Folding (Machine): $18/K
Folding (Hand): $.12 each
Presort Charge: postage rate
$0.035 per piece
Courier Charge: $25.00 for each on call courier trip/or
actual cost for on demand
Overnight Charge: $3.50 per package service charge plus
Federal Express/Airborne charge
Inventory Storage: $20.00 for each inventory location as of the
15th of the month
Inventory Receipt: $20.00 for each SKU / Shipment
Hourly work; special projects, opening envelopes, etc...: $24.00 per hour
Special Pulls: $2.50 per account pull
Boxes/Envelopes: Shipping boxes $0.85 each
Oversized Envelopes $0.45 each
Forms Development/Programming Fee: $100/hr
Systems Testing: $110/hr
Cutting Charges: $10.00/K
4. Investor Services Group shall be entitled to the following fee for the
performance of any Special Legal Services as described in Schedule B in
accordance with the Written Instructions of the Trust: $185 per hour subject to
certain project caps as may be agreed to by Investor Services Group and the
Trust. Services and charges may vary based on volume.
5. Miscellaneous Charges. The Trust shall be charged for the following products
and services as applicable:
- Ad hoc reports
- Ad hoc SQL time
- COLD Storage
- Digital Recording
- Banking Services, including incoming and outgoing wire charges
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Manual Pricing
- Pre-Printed Stock, including business forms, certificates,
envelopes, checks and stationary
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6. Fee Adjustments. After the one year anniversary of the effective date of this
Agreement, Investor Services Group may adjust the fees described in the above
sections once per calendar year, upon thirty (30) days prior written notice in
an amount not to exceed the cumulative percentage increase in the Consumer Price
Index for All Urban Consumers (CPI-U) U.S. City Average, All items (unadjusted)
- (1982-84=100), published by the U.S. Department of Labor since the last such
adjustment in the Client's monthly fees (or the Effective Date absent a prior
such adjustment).
7. Programming Costs. The following programming rates are subject to an annual
5% increase after the one year anniversary of the effective date of this
Agreement.
(a) Dedicated Team: Programmer: $100,000 per annum
BSA: $ 85,000 per annum
Tester: $ 65,000 per annum
(b) System Enhancements (Non Dedicated Team): $150.00 per/hr per programmer
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SCHEDULE D
OUT-OF-POCKET EXPENSES
The Trust shall reimburse Investor Services Group monthly for reasonable
out-of-pocket expenses incurred on behalf of the Trust, including, but not
limited to the following items:
- Postage - direct pass through to the Trust
- Telephone and telecommunication costs, including all lease,
maintenance and line costs
- Proxy solicitations, mailings and tabulations
- Shipping, Certified and Overnight mail and insurance
- Terminals, communication lines, printers and other equipment
and any expenses incurred in connection with such terminals
and lines
- Duplicating services
- Distribution and Redemption Check Issuance
- Courier services
- Federal Reserve charges for check clearance
- Overtime, as approved by the Trust
- Temporary staff, as approved by the Trust
- Travel and entertainment, as approved by the Trust
- Record retention, retrieval and destruction costs, including,
but not limited to exit fees charged by third party record
keeping vendors
- Third party audit reviews
- Insurance
- Pricing services (or services used to determine Trust NAV)
- Vendor set-up charges for Blue Sky and other services
- Blue Sky filing or registration fees
- XXXXX filing fees
- Vendor pricing comparison
- Such other expenses as are agreed to by Investor Services
Group and the Trust
The Trust agrees that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with Investor Services Group. In addition,
the Trust will promptly reimburse Investor Services Group for any other
unscheduled expenses incurred by Investor Services Group whenever the Trust and
Investor Services Group mutually agree that such expenses are not otherwise
properly borne by Investor Services Group as part of its duties and obligations
under the Agreement.
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