Exhibit (h)
MUTUAL FUND SERVICES AGREEMENT
THIS AGREEMENT is made as of this 30th day of September, 2002, by and
between THE HOMESTATE GROUP (the "Trust"), an unincorporated business trust
having its principal place of business at 0000 Xxxxxx Xxxx, X.X. Xxx 00000,
Xxxxxxxxx, XX 00000-0000 and CITCO-QUAKER FUND SERVICES, INC. ("CQFS"), a
corporation organized under the laws of the State of Delaware and having its
principal place of business at 0000 Xxxxxx Xxxxx Xxxx, Xxxxx 00, Xxxxxx Xxxxx,
XX 00000.
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust is authorized by its Declaration of Trust and
by-laws to issue separate Portfolios of shares representing interests in
separate investment portfolios (the "Portfolios") and to further divide such
Portfolios into separate share classes, and
WHEREAS, The Trust has authorized the issuance of shares of beneficial
interest in the Portfolios, and share classes thereof, listed on Schedule A to
this Agreement, attached hereto and made part of this Agreement, as such
Schedule A may be amended from time to time (each series individually referred
to herein as a "Portfolio" and collectively as the "Portfolios"), and;
WHEREAS, the Trust desires that CQFS perform certain transfer agent,
accounting, and administrative services for each Portfolio of the Trust listed
on Schedule A, and such Portfolios as may be added to Schedule A from time to
time; and
WHEREAS, CQFS is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. RETENTION OF CQFS.
The Trust hereby retains CQFS to act as Transfer Agent, Fund Accountant
and Fund Administrator to each Portfolio of the Trust and to furnish the Trust
with the services set forth in Schedule B to this Agreement, attached hereto and
made part of this Agreement, as such Schedule B may be amended from time to
time. CQFS hereby accepts such employment to perform such duties.
2. SUBCONTRACTING.
CQFS may, at its expense and, upon written notice to the Trust,
subcontract with any entity or person concerning the provision of the services
contemplated hereunder; provided, however, that CQFS shall not be relieved of
any of its obligations under this Agreement by the appointment of such
subcontractor and provided further, that CQFS shall be responsible, to the
extent provided in Section 7 hereof, for all acts of such subcontractor as if
such acts were its own.
3. COMPENSATION.
The Trust shall pay for the services to be provided by CQFS under this
Agreement in accordance with, and in the manner set forth in, Schedule C
attached hereto, as such Schedule C may be amended from time to time by
agreement of the parties.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, CQFS's compensation for that
part of the month in which the Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above. Payment
of CQFS's compensation for the preceding month shall be made promptly.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying CQFS the fees described in Schedule C attached
hereto, the Trust agrees to reimburse CQFS for its reasonable out-of-pocket
expenses in providing services hereunder, including without limitation the
following:
(a) All freight, delivery and bonding charges incurred by CQFS in
delivering materials to and from the Trust;
(b) All direct telephone, telephone transmission and telecopy or other
electronic transmission expenses incurred by CQFS in communications
with the Trust, an adviser or sub-adviser to the Trust, the Trust's
custodian, dealers or others as required for CQFS to perform the
services to be provided hereunder;
(c) The Trust's proportionate costs of obtaining security market quotes;
(d) All expenses incurred in connection with any custom programming or
systems modifications required to provide any special reports or
services requested by the Trust;
(e) Any expenses CQFS shall incur at the written direction of an officer
of the Trust thereunto duly authorized other than an employee or
other affiliated person of CQFS who may otherwise be named as an
authorized representative of the Trust for certain purposes; and
(f) Any additional expenses reasonably incurred by CQFS in the
performance of its duties and obligations under this Agreement and
approved in advance by the Trust.
5. EFFECTIVE DATE.
This Agreement shall become effective with respect to a Portfolio as of
the date first written above (or, if a particular Portfolio is not in existence
on that date, on the date such Portfolio commences operation) (the "Effective
Date").
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6. TERM OF THIS AGREEMENT.
The term of this Agreement shall continue in effect, unless earlier
terminated by any party hereto as provided hereunder, for a period of five
years. Thereafter, unless otherwise terminated as provided herein, this
Agreement shall be renewed automatically for additional periods of one year.
This Agreement may be terminated without penalty: (i) by the Trust or
CQFS upon ninety (90) days' written notice; or (ii) by the Trust for "cause" (as
defined below) upon the provision of sixty (60) days' advance written notice by
the party alleging cause.
For purposes of this Agreement, "cause" shall mean:
(i) a material breach of this Agreement that has not been remedied
within thirty (30) days following written notice of such
breach from the non-breaching party;
(ii) an act or omission of a party to this Agreement involving
gross negligence, willful malfeasance or intentional
wrongdoing;
(iii) a series of negligent acts, omissions or breaches of this
Agreement which, in the aggregate, constitute in the
reasonable judgment of the Trust, a serious, unremedied and
ongoing failure to perform satisfactorily CQFS's obligations
hereunder;
(iv) a final, non-appealable judicial, regulatory or administrative
ruling or order in which the party to be terminated has been
found guilty of criminal or unethical behavior in the conduct
of its business; or
(v) financial difficulties on the part of the party to be
terminated which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer,
consent or acquiescence in, a voluntary or involuntary case
under Title 11 of the United States Code, as from time to time
is in effect, or any applicable law other than said Title 11,
of any jurisdiction relating to the liquidation or
reorganization of debtors or the modification or alteration of
the rights of creditors.
Notwithstanding the foregoing, in the event this Agreement is
terminated and for any reason CQFS, with the written consent of the Trust, in
fact continues to perform any one or more of the services contemplated by this
Agreement or any schedule or exhibit hereto, the provisions of this Agreement,
including without limitation the provisions dealing with indemnification, shall
continue in full force and effect. Compensation due CQFS and unpaid by the Trust
upon such termination shall be immediately due and payable upon and
notwithstanding such termination. CQFS shall be entitled to collect from the
Trust, in addition to the compensation described in Schedule C, the amount of
all of CQFS's cash disbursements for services in connection with CQFS's
activities in effecting such termination, including without limitation, the
delivery to the Trust and/or its designees of the Trust's property, records,
instruments and documents.
7. STANDARD OF CARE.
The duties of CQFS shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against CQFS
hereunder. CQFS shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith in performing the
services provided for under this Agreement. CQFS shall be liable for any damages
arising directly or indirectly out of CQFS's failure to perform its duties under
this Agreement to the extent such damages arise directly or indirectly out of
CQFS's willful misfeasance, bad faith, negligence in the performance of its
duties, or reckless disregard of it obligations and duties hereunder. (As used
in this Article 7, the term "CQFS" shall include directors, officers, employees
and other agents of CQFS as well as CQFS itself).
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Without limiting the generality of the foregoing or any other provision
of this Agreement, CQFS shall not be liable for the validity or invalidity or
authority or lack thereof of any instruction, notice or other instrument that
CQFS reasonably believes to be genuine and to have been signed or presented by a
duly authorized representative of the Trust (other than an employee or other
affiliated persons of CQFS who may otherwise be named as an authorized
representative of the Trust for certain purposes).
CQFS may apply to the Trust at any time for instructions and may
consult with counsel for the Trust or its own counsel, and with accountants and
other experts with respect to any matter arising in connection with CQFS' duties
hereunder, and CQFS shall not be liable or accountable for any action taken or
omitted by it in good faith in accordance with such instruction or with the
reasonable opinion of such counsel, accountants or other experts qualified to
render such opinion.
8. INDEMNIFICATION.
The Trust agrees to indemnify and hold harmless CQFS from and against
any and all actions, suits, claims, losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) (collectively, "Losses") to which CQFS may
become liable arising directly or indirectly out of any action or omission to
act which CQFS takes (i) at any request or on the direction of or in reliance on
the reasonable advice of the Trust, (ii) upon any instruction, notice or other
instrument that CQFS reasonably believes to be genuine and to have been signed
or presented by a duly authorized representative of the Trust (other than an
employee or other affiliated person of CQFS who may otherwise be named as an
authorized representative of the Trust for certain purposes) or (iii) on its own
initiative, in good faith and in accordance with the standard of care set forth
in Article 7 above, in connection with the performance of its duties or
obligations hereunder; provided, however that the Trust shall have no obligation
to indemnify or reimburse CQFS under this Article 8 to the extent that CQFS is
entitled to reimbursement or indemnification for such Losses under any liability
insurance policy described in this Agreement or otherwise. Further, CQFS shall
not be indemnified against or held harmless from any Losses arising directly or
indirectly out of CQFS' own willful misfeasance, bad faith, negligence in the
performance of its duties, or reckless disregard of its obligations and duties
hereunder. (As used in this Article 8, the term "CQFS" shall include Trustees,
officers, employees and other agents of CQFS as well as CQFS itself).
CQFS agrees to indemnify and hold harmless the Trust from and against
any and all actions, suits, claims, losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) (collectively, "Losses") to which the Trust
may become liable arising directly or indirectly out of CQFS's own willful
misfeasance, bad faith, negligence in the performance of its duties, or reckless
disregard of its obligations and duties as set forth in this Agreement. (As used
in this Article 8, the term "CQFS" shall include Trustees, officers, employees
and other agents of CQFS as well as CQFS itself.).
If a claim is made against any party to this Agreement as to which that
party may seek indemnity under this Article 8 from the other party, the party
seeking indemnification shall notify the other party within ten (10) days after
receipt of any written assertion of such claim threatening to institute an
action or proceeding or service of summons or other legal process. Failure to
notify a party of a claim for indemnification will relieve the party from whom
indemnification is sought from any liability which it may have on account of the
indemnity provisions set forth under this Article 8 unless the party seeking
indemnification can demonstrate to the reasonable satisfaction of the other
party that such party has not been prejudiced in any material respect by such
failure to so notify.
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The parties to this Agreement will cooperate in the control of the
defense of any action, suit or proceeding in a party is involved and for which
indemnity is being provided by the other party. Any party from whom
indemnification is sought may negotiate the settlement of any action, suit or
proceeding subject to the other party's approval, which approval will not be
unreasonably withheld. The party seeking indemnification reserves the right, but
not the obligation, to participate in the defense or settlement of a claim,
action or proceeding with its own counsel. Costs or expenses incurred by a party
to whom indemnification is being provided in connection with, or as a result of
such participation, will be borne solely by that party unless:
- the party seeking indemnification has received an opinion of
counsel from counsel to the other party stating that the use
of common counsel would present an impermissible conflict of
interest;
- the defendants in, or targets of, any such action or
proceeding include both CQFS and the Trust, and legal counsel
to either party has reasonably concluded that there are legal
defenses available to a party which are different from or
additional to those available to the other party or which may
be adverse to or inconsistent with defenses available to a
party; or
- the party from whom indemnification is sought authorizes the
other party to employ separate counsel at the expense of the
indemnifying party.
- The terms of this Article 8 will survive the termination of
this Agreement.
9. RECORD RETENTION AND CONFIDENTIALITY.
CQFS shall keep and maintain on behalf of the Trust all books and
records which the Trust and CQFS is, or may be, required to keep and maintain
pursuant to any applicable statutes, rules and regulations, including without
limitation Rules 31a-1 and 31a-2 under the 1940 Act, relating to the maintenance
of books and records in connection with the services to be provided hereunder.
CQFS further agrees that all such books and records shall be the property of the
Trust and to make such books and records available for inspection by the Trust
or by the SEC at reasonable times and otherwise to keep confidential all books
and records and other information relative to the Trust and its shareholders;
except when requested to divulge such information by duly-constituted
authorities or court process.
10. FORCE MAJEURE.
CQFS assumes no responsibility hereunder, and shall not be liable, for
any damage, loss of data, delay or any other loss whatsoever caused by acts of
civil or military authority, national emergencies, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply. However, CQFS will maintain disaster recovery
facilities sufficient to enable CQFS to maintain uninterrupted services in the
event of normally foreseeable events.
11. RIGHTS OF OWNERSHIP; RETURN OF RECORDS.
All records and other data except computer programs and procedures
developed to perform services required to be provided by CQFS are the exclusive
property of the Trust and all such records and data will be furnished to the
Trust in appropriate form as soon as practicable after termination of this
Agreement for any reason. CQFS may at its option at any time, and shall promptly
upon the Trust's demand, turn over to the Trust and cease to retain CQFS's
files, records and documents created and maintained by CQFS pursuant to this
Agreement which are no longer
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needed by CQFS in the performance of its services or for its legal protection.
If not so turned over to the Trust, such documents and records will be retained
by CQFS for six years from the year of creation. At the end of such six-year
period, such records and documents will be turned over to the Trust unless the
Trust authorizes in writing the destruction of such records and documents. If
destruction of documents is authorized by the Trust, CQFS shall provide
reasonable proof of such destruction to the Trust.
12. REPRESENTATIONS OF THE TRUST.
The Trust certifies to CQFS that: (1) as of the close of business on
the Effective Date, each Portfolio that is in existence as of the Effective Date
has authorized an indefinite number of shares, and (2) this Agreement has been
duly authorized by the Trust and, when executed and delivered by the Trust, will
constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust 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.
13. REPRESENTATIONS OF CQFS.
CQFS represents and warrants that: (1) the various procedures and
systems which CQFS has implemented with regard to safeguarding from loss or
damage attributable to fire, theft, or any other cause the records, and other
data of the Trust and CQFS' records, data, equipment facilities and other
property used in the performance of its obligations hereunder are adequate and
that it will make such changes therein from time to time as are required for the
secure performance of its obligations hereunder, (2) this Agreement has been
duly authorized by CQFS and, when executed and delivered by CQFS, will
constitute a legal, valid and binding obligation of CQFS, enforceable against
CQFS 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, (3) it is duly registered
with the appropriate regulatory agency as a transfer agent and such registration
will remain in full force and effect for the duration of this Agreement, and (4)
it has and will continue to have access to the necessary facilities, equipment
and personnel to perform its duties and obligations under this Agreement.
14. INSURANCE.
CQFS shall furnish the Trust with pertinent information concerning
the professional liability insurance coverage that it maintains. Such
information shall include the identity of its insurance carrier(s), coverage
levels and deductible amounts. CQFS shall notify the Trust within ten (10) days
should any of its insurance coverage be canceled or reduced. Such notification
shall include the date of change and the reasons therefore. CQFS shall notify
the Trust within ten (10) of any material claims against it with respect to
services performed under this Agreement, whether or not they may be covered by
insurance, and shall notify the Trust from time to time as may be appropriate of
the total outstanding claims made by CQFS under its insurance coverage. Any
failure on the part of CQFS to notify the Trust of changes to CQFS's insurance
coverage as set forth in this Article 14 shall constitute a material breach of
this Agreement, and the Trust shall be entitled to terminate this Agreement
immediately in the event of such a breach.
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15. INFORMATION TO BE FURNISHED BY THE TRUST.
The Trust has furnished to CQFS, or will furnish prior to the Effective
Date, the following:
(a) Copies of the following documents:
1. Copies of the Trust's Declaration of Trust and of any
amendments thereto, certified by the proper official
of the state in which such document has been filed.
2. The Trust's Bylaws and any amendments thereto; and
3. Copies of resolutions of the Trustees covering the
approval of this Agreement, authorization of a
specified officer of the Trust to execute and deliver
this Agreement and authorization for specified
officers of the Trust to instruct CQFS thereunder.
(b) A list of all the officers of the Trust, together with
specimen signatures of those officers who are authorized to
instruct CQFS in all matters.
(c) Copies of the Prospectus and Statement of Additional
Information for each Portfolio.
16. AMENDMENTS TO AGREEMENT.
This Agreement, or any term thereof, may be changed or waived only by
written amendment signed by the party against whom enforcement of such change or
waiver is sought.
For special cases, the parties hereto may amend such procedures set
forth herein as may be appropriate or practical under the circumstances, and
CQFS may conclusively assume that any special procedure which has been approved
by the Trust does not conflict with or violate any requirements of its CQFS of
Trust or then current prospectuses, or any rule, regulation or requirement of
any regulatory body.
17. COMPLIANCE WITH LAW.
Except for the obligations of CQFS otherwise set forth herein, the
Trust assumes full responsibility for the preparation, contents and distribution
of each prospectus of the Trust as to compliance with all applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the 1940 Act and any other laws, rules and regulations of governmental
authorities having jurisdiction. The Trust represents and warrants that no
shares of the Trust will be offered to the public until the Trust's registration
statement under the Securities Act and the 1940 Act has been declared or becomes
effective.
18. NOTICES.
Any notice provided hereunder shall be sufficiently given when sent
by registered or certified mail to the party required to be served with such
notice, at the following address: if to CQFS, at 0000 Xxxxxx Xxxxx Xxxx, Xxxxx
00, Xxxxxx Xxxxx, XX 00000, Attn: Mr. Xxxxx Xxxxx; and if to the Trust, at 0000
Xxxxxx Xxxx, X.X. Xxx 00000, Xxxxxxxxx, XX 00000-0000, Attn: Xx. Xxxxx Xxxx; or
at such other address as such party may from time to time specify in writing to
the other party pursuant to this Article.
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19. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable by any party hereto except by the specific written consent of the
other party. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and permitted
assigns.
20. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of Pennsylvania and the applicable provisions of the 1940 Act. To the
extent that the applicable laws of the Commonwealth of Pennsylvania, or any of
the provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control.
21. MULTIPLE ORIGINALS.
This Agreement may be executed in 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
duly executed all as of the day and year first above written.
THE HOMESTATE GROUP ATTEST
___________________________________ _________________________________
By: Xxxxx Xxxx By: ____________________________
President Secretary
CITCO-QUAKER FUND SERVICES, INC. ATTEST
By:________________________________ _________________________________
Xxxxx X. Xxxxx By: Xxxxxx X. Xxxx, Xx.
President Secretary
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SCHEDULE A
TO THE
MUTUAL FUND SERVICES AGREEMENT
BETWEEN
THE HOMESTATE GROUP
AND
CITCO-QUAKER FUND SERVICES, INC.
DATED SEPTEMBER 30, 2002
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PORTFOLIOS CLASS A CLASS B CLASS C
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The Emerald Growth Fund X X
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The Emerald Select Banking & Finance Fund X X
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The Emerald Select Technology Fund X X
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SCHEDULE B
TO THE
MUTUAL FUND SERVICES AGREEMENT
BETWEEN
THE HOMESTATE GROUP
AND
CITCO-QUAKER FUND SERVICES, INC.
DATED SEPTEMBER 30, 2002
ACCOUNTING SERVICES TO BE PROVIDED BY CITCO-QUAKER FUND SERVICES, INC. FOR THE
PORTFOLIOS OF THE HOMESTATE GROUP AS SET FORTH ON SCHEDULE A ABOVE
(a) Maintenance of Books And Records.
CQFS shall maintain and keep current the accounts, books,
records and other documents relating to the Trust's financial
and portfolio transactions as may be required by the rules and
regulations of the Securities and Exchange Commission (the
"SEC") adopted under Section 31(a) of the 1940 Act. CQFS shall
cause the subject records of the Trust to be maintained and
preserved pursuant to the requirements of the 1940 Act.
(b) Performance Of Daily Accounting Services.
In addition to the maintenance of the books and records
specified above, CQFS shall perform the following accounting
services daily for each Portfolio:
(i) Calculate the net asset value per share
utilizing prices obtained from the sources
described in subsection 1(b)(ii) below;
(ii) Obtain security prices from independent
pricing services, or if such quotes are
unavailable, then obtain such prices from
each Portfolio's investment adviser or its
designee as approved by the Trust's Board of
Trustees (hereafter referred to as
"Trustees");
(iii) Verify and reconcile with the Portfolios'
custodian all daily trade activity;
(iv) Compute, as appropriate, each Portfolio's
net income and capital gains, dividend
payables, dividend factors, yields, and
weighted average portfolio maturity;
(v) Review daily the net asset value calculation
and dividend factor (if any) for each
Portfolio prior to release to shareholders,
check and confirm the net asset values and
dividend factors for reasonableness and
deviations, and distribute net asset values
and yields to NASDAQ or such other exchange
or reporting entity as is approved by the
Trustees;
(vi) Determine unrealized appreciation and
depreciation on securities held by the
Portfolios;
(vii) Amortize premiums and accrete discounts on
securities purchased at a price other than
face value, if requested by the Trust;
(viii) Update Trust accounting system to reflect
rate changes, as received from a Portfolio's
investment adviser or designee, on variable
interest rate instruments;
(ix) Post Portfolio transactions to appropriate
categories;
(x) Accrue expenses of each Portfolio according
to instructions received from the Trust's
administrator;
(xi) Determine the outstanding receivables and
payables for all (1) security trades, (2)
Portfolio share transactions and (3) income
and expense accounts;
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(xii) Provide accounting reports in connection
with the Trust's regular annual audit and
other audits and examinations by regulatory
agencies; and
(xiii) Provide such periodic reports as the parties
shall agree upon.
(c) Special Reports And Services.
(i) CQFS may provide additional special reports
upon the request of the Trust or a
Portfolio's investment adviser or designee,
which may result in additional charges, the
amount of which shall be agreed upon between
the parties prior to the provision of such
special report.
(ii) CQFS may provide such other similar services
with respect to a Portfolio as may be
reasonably requested by the Trust, which may
result in an additional charge, the amount
of which shall be agreed upon between the
parties prior to the provision of such
service.
(d) Additional Accounting Services.
CQFS shall also perform the following additional accounting
services for each Portfolio:
(i) Provide monthly (or as frequently as may
reasonably be requested by the Trust or a
Portfolio's investment adviser) a set of
financial statements for each Portfolio as
described below, upon request of the Trust:
(1) Statement of Assets and Liabilities (2)
Statement of Operations (3) Statement of
Changes in Net Assets (4) Security Purchases
and Sales Journals (5) Portfolio Holdings
Reports
(ii) Provide accounting information for the
following:
(A) federal and state income tax
returns and federal excise tax
returns;
(B) the Trust's semi-annual reports
with the SEC on Form N-SAR;
(C) the Trust's annual, semi-annual and
quarterly (if any) shareholder
reports;
(D) registration statements on Form
N-1A and other filings relating to
the registration of shares;
(E) CQFS's monitoring of the Trust's
status as a regulated investment
company under Subchapter M of the
Internal Revenue Code, as amended;
(F) annual audit by the Trust's
auditors; and
(G) examinations performed by the SEC.
ADMINISTRATIVE SERVICES TO BE PROVIDED BY CITCO-QUAKER FUND SERVICES, INC. FOR
THE PORTFOLIOS OF THE HOMESTATE GROUP AS SET FORTH ON SCHEDULE A ABOVE
CQFS shall provide the Trust with regulatory reporting services; shall
provide all necessary office space, equipment, personnel, compensation and
facilities for handling the affairs of the Trust; and shall provide such other
services as the Trust may request that CQFS perform consistent with its
obligations under this Agreement. Without limiting the generality of the
foregoing, CQFS shall:
(a) calculate Trust expenses and administer all disbursements for
the Trust, and as appropriate compute the Trust's yields,
total return, expense ratios and portfolio turnover rate;
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(b) cooperate, in consultation with the Trust and Trust counsel,
in the preparation of prospectuses, statements of additional
information, registration statements and proxy materials;
(c) prepare such reports, notice filing forms and other documents
(including reports regarding the sale and redemption of shares
of the Trust as may be required in order to comply with
federal and state securities law) as may be necessary or
desirable to make notice filings relating to the Trust's
shares with state securities authorities, monitor the sale of
Trust shares for compliance with state securities laws, and
file with the appropriate state securities authorities
compliance filings as may be necessary or convenient to enable
the Trust to make a continuous offering of its shares;
(d) develop and prepare, with the assistance of the Trust,
communications to shareholders, including the annual report to
shareholders, coordinate the mailing of prospectuses, notices,
proxy statements, proxies and other reports to Trust
shareholders, and supervise and facilitate the proxy
solicitation process for all shareholder meetings, including
the tabulation of shareholder votes;
(e) administer contracts on behalf of the Trust with, among
others, the Trust's investment adviser, sub-advisers,
distributor, custodian, and other service providers;
(f) supervise the Trust's transfer agent with respect to the
payment of dividends and other distributions to shareholders;
(g) calculate performance data of the Trust for dissemination to
information services covering the Mutual Fund industry;
(h) assist with the layout and printing of prospectuses and
supplements thereto, and assist with and coordinate layout and
printing of the Trust's semi-annual and annual reports to
shareholders;
(i) provide individuals reasonably acceptable to the Trustees to
serve as officers of the Trust, who will be responsible for
the management of certain of the Trust's affairs as determined
by the Trustees;
(j) advise the Trust and its Trustees on matters concerning the
Trust and its affairs including making recommendations
regarding dividends and distributions;
(k) obtain and keep in effect fidelity bonds and Trustees and
officers/errors and omissions insurance policies for the Trust
in accordance with the requirements of the 1940 Act and as
such bonds and policies are approved by the Trustees;
(l) monitor and advise the Trust and its Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986;
(m) monitor and advise the Trust and its Portfolios on compliance
with applicable limitations as imposed by the 1940 Act and the
rules and regulations thereunder or set forth in the Trust's
or any Portfolio's then current Prospectus or Statement of
Additional Information;
(n) provide coordination of meetings and preparation of materials
for the quarterly and special meetings of the Trustees and
meetings of the Trust's shareholders;
(o) cooperate with, and take all reasonable actions in the
performance of its duties under this Agreement to ensure that
all necessary information is made available to the Trust's
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independent public accountants in connection with the
preparation of any audit or report requested by the Trust;
(p) cooperate with, and take all reasonable actions in the
performance of its duties under this Agreement to ensure that
the necessary information is made available to the Securities
and Exchange Commission (the "SEC") or any other regulatory
authority in connection with any regulatory audit of the
Trust;
(q) perform all administrative services and functions of the Trust
to the extent administrative services and functions are not
provided to the Trust by other agents of the Trust;
(r) prepare and file with the SEC the semi-annual report for the
Trust on Form N-SAR and all required notices pursuant to Rule
24f-2 under the 1940 Act; and
(s) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Trust as the Trust,
and CQFS shall determine desirable.
TRANSFER AGENCY SERVICES TO BE PROVIDED BY CITCO-QUAKER FUND SERVICES, INC. FOR
THE PORTFOLIOS OF THE HOMESTATE GROUP AS SET FORTH ON SCHEDULE A ABOVE
(a) Shareholder Transactions
(i) Process shareholder purchase and redemption orders in
accordance with conditions set forth in the Trust's
prospectus.
(ii) Set up account information, including address,
dividend option, taxpayer identification numbers and
wire instructions.
(iii) Issue confirmations in compliance with Rule 10b-10
under the Securities Exchange Act of 1934, as amended
(the "1934 Act").
(iv) Issue periodic statements for shareholders.
(v) Process transfers and exchanges.
(vi) Act as a service agent and process dividend payments,
including the purchase of new shares, through
dividend reimbursement.
(vii) Record the issuance of shares and maintain pursuant
to Rule 17Ad-10(e) of the 1934 Act a record of the
total number of shares of each Portfolio which are
authorized, based upon data provided to it by the
Trust, and issued and outstanding.
(viii) Perform such services as are required to comply with
Rules 17a-24 and 17Ad-17 of the 1934 Act (the "Lost
Shareholder Rules").
(ix) Administer and/or perform all other customary
services of a transfer agent.
(b) Shareholder Information Services
(i) Make information available to shareholder servicing
units and other remote access units regarding trade
date, share price, current holdings, yields, and
dividend information.
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(ii) Produce detailed history of transactions through
duplicate or special order statements upon request.
(iii) Provide mailing labels for distribution of financial
reports, prospectuses, proxy statements or marketing
material to current shareholders.
(iv) Respond as appropriate to all inquiries and
communications from shareholders relating to
shareholder accounts.
(c) Compliance Reporting
(i) Provide reports to the Securities and Exchange
Commission and the states in which the Portfolios are
registered.
(ii) Prepare and distribute appropriate Internal Revenue
Service forms for shareholder income and capital
gains.
(iii) Issue tax withholding reports to the Internal Revenue
Service.
(d) Dealer/Load Processing (if applicable)
(i) Provide reports for tracking rights of accumulation
and purchases made under a Letter of Intent.
(ii) Account for separation of shareholder investments
from transaction sale charges for purchase of
Portfolio shares.
(iii) Calculate fees due under 12b-1 plans for distribution
and marketing expenses.
(iv) Track sales and commission statistics by dealer and
provide for payment of commissions on direct
shareholder purchases in a load Portfolio.
(e) Shareholder Account Maintenance
(i) Maintain all shareholder records for each account in
each Portfolio.
(ii) Issue customer statements on scheduled cycle,
providing duplicate second and third party copies if
required.
(iii) Record shareholder account information changes.
(iv) Maintain account documentation files for each
shareholder.
CQFS shall perform such other services for the Trust that are mutually
agreed upon by the parties from time to time either at no additional fees or for
such reasonable and customary fees as are mutually agreed upon by the parties;
provided, however that the Trust may retain third parties to perform such other
services. Such services may include performing internal audit examination;
mailing the annual reports of the Portfolios; preparing an annual list of
shareholders; and mailing notices of shareholders' meetings, proxies and proxy
statements, for all of which the Trust will pay CQFS's out-of-pocket expenses.
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SCHEDULE C
TO THE
MUTUAL FUND SERVICES AGREEMENT
BETWEEN
THE HOMESTATE GROUP
AND
CITCO-QUAKER FUND SERVICES, INC.
DATED SEPTEMBER 30, 2002
FEE SCHEDULE
FOR ADMINISTRATION SERVICES
CITCO-Quaker Fund Services will provide all of the services described in
Schedule B herein for the following fees:
--------------------------------------------------------------------------------
AVERAGE DAILY NET ASSETS ANNUALIZED FEES
--------------------------------------------------------------------------------
On The First $100 Million in Assets 0.35%
--------------------------------------------------------------------------------
On Assets Above $100 Million but less than $200 Million 0.25%
--------------------------------------------------------------------------------
On Assets Above $200 Million but less than $300 Million 0.20%
--------------------------------------------------------------------------------
On Assets Above $300 Million but less than $500 Million 0.15%
--------------------------------------------------------------------------------
On All Assets In Excess of $500 Million 0.10%
--------------------------------------------------------------------------------
The above fees include 100 portfolio trades per month, per Portfolio (exclusive
of daily cash investments). Portfolios executing more than 100 portfolio trades
per month will be charged $5 per trade for each trade in excess of 100.
In addition to the above fees, each Portfolio will reimburse CITCO-Quaker for
the costs of the daily portfolio price quotation services utilized by the
Portfolio(s).
OUT-OF-POCKET EXPENSES:
In addition to the above fees, the Trust will reimburse CQFS or pay directly
certain out-of-pocket expenses incurred on the Portfolio's behalf, including but
not limited to; postage, confirmations, statements, printing, telephone lines,
internet access fees, DST FanMail or other similar reporting services, bank
service charges, associated fees of NSCC trading, other industry standard
transfer agency expenses, travel expenses and any other expenses approved by the
Portfolio(s) or an Adviser thereto. Each Portfolio will also be responsible for
its normal operating expenses, such as federal and state filing fees, insurance
premiums, typesetting and printing of the Portfolio's public documents, and fees
and expenses of each Portfolio's other vendors and providers.
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