ADMINISTRATIVE AGENCY AGREEMENT
THIS AGREEMENT is made as of June 22, 2007, 2007 by and among XXXXX
BROTHERS XXXXXXXX & CO., a limited partnership organized under the laws of the
State of New York (the "Administrator"), AMERISTOCK ETF TRUST, a Delaware
statutory trust duly registered with the U.S. Securities and Exchange Commission
(the "Trust") on behalf of a number of separate investment portfolios listed on
Schedule A hereto (each a Fund and collectively, the Funds), and AMERISTOCK
CORPORATION, a California corporation registered with the Securities and
Exchange Commission under the Investment Advisers Act of 1940 (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is registered with the United States Securities and
Exchange Commission as a management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, under an Investment Advisory Agreement between the Trust and
Adviser, the Adviser serves as the investment adviser for the Funds, and has
agreed to pay most operating expenses of the Funds, including custodial
expenses; and
WHEREAS, the Trust and Adviser desire to retain the Administrator to
render certain services to the Trust and the Funds and the Administrator is
willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Appointment of Administrator. The Trust and Adviser hereby employ and appoint
the Administrator to act as administrative agent on the terms set forth in this
Agreement, and the Administrator accepts such appointment.
2. Delivery of Documents. The Trust will on a continuing basis provide the
Administrator with:
2.1 properly certified or authenticated copies of resolutions of the Board
of Trustees of the Trust authorizing the appointment of the Administrator
as administrative agent of the Trust and each Fund and approving this
Agreement;
2.2 a copy of the Trust's most recent combined registration statement
under the Securities Act of 1933 and the Investment Company Act of 1940,
as amended;
2.3 copies of all agreements between the Trust and its service providers,
including without limitation, advisory and distribution agreements;
2.4 a copy of the Funds' valuation procedures;
2.5 a copy of the Declaration of Trust dated June 5, 2006, as may be
amended from time to time;
2.6 any other documents or resolutions (including, but not limited to
directions or resolutions of the Board of Trustees and/or Audit Committee)
which relate to or affect the Administrator's performance of its duties
hereunder or which the Administrator may at any time reasonably request;
and
2.7 copies of any and all amendments or supplements to the foregoing.
3. Duties as Administrator. Subject to the supervision and direction of the
Trust, the Administrator will perform the administrative services described in
Appendix A hereto. Additional services may be provided by the Administrator upon
the request of the Trust as mutually agreed from time to time. In performing its
duties and obligations hereunder, the Administrator will act in accordance with
Trust or an Authorized Person's instructions as defined in Section 5
("Instructions"). It is agreed and understood that the Administrator shall not
be responsible for a Fund's compliance with any applicable documents, laws or
regulations, or for losses, costs or expenses arising out of the Fund's failure
to comply with said documents, laws or regulations or the Fund's failure or
inability to correct any non-compliance therewith. The Administrator shall in no
event be required to take any action, which is in contravention of any
applicable law, rule or regulation or any order or judgment of any court of
competent jurisdiction.
3.1 Records. The Administrator will maintain and retain such records as
required by the Investment Company Act of 1940, as amended and other
applicable federal securities laws and created pursuant to the performance
of the Administrator's obligations under this Agreement. The Administrator
will maintain such other records as requested by the Trust and received by
the Administrator. The Administrator shall not be responsible for the
accuracy and completeness of any records not created by the Administrator.
The Administrator acknowledges that the records maintained and preserved
by the Administrator pursuant to this Agreement are the property of the
Trust and will be, at the Trust's expense, surrendered promptly upon
request. In performing its obligations under this Section, the
Administrator may utilize micrographic and electronic storage media as
well as independent third party storage facilities.
4. Duties of the Trust. The Trust shall notify the Administrator promptly of any
matter affecting the performance by the Administrator of its services under this
Agreement. Where the Administrator is providing fund accounting services
pursuant to this Agreement, the Trust or an Authorized Person shall promptly
notify the Administrator as to the accrual of liabilities of any Fund and of
liabilities of any Fund not appearing on the books of account kept by the
Administrator, as well as to the existence, status and proper treatment of
reserves, if any, authorized by the Trust or an Authorized Person. Where the
Administrator is providing portfolio compliance monitoring services pursuant to
this Agreement, the Trust agrees to notify the Administrator in the event the
Trust or Authorized Person or any officer, employee or agent of the Trust
detects a possible non-compliance of any Fund with its investment restrictions,
policies and limitations. The Trust agrees to provide such information to the
Administrator as may be requested under the banking and securities laws of the
United States or other jurisdictions relating to "Know Your Customer" and money
laundering prevention rules and regulations (collectively, the "KYC
Requirements"). For purposes of this subsection, and in connection with all
applicable KYC Requirements, the Trust and each Fund is the "client" or
"customer" of the Administrator. The Trust further represent that it has and
will perform, or has taken and will take reasonable steps to cause its agents to
perform, all obligations required under applicable KYC Requirements with respect
to all "Authorized Purchasers" of the Funds. In its capacity as Administrator,
the Administrator is under no such similar obligations with respect to the
Authorized Purchasers of the Funds.
5. Instructions.
5.1 The Administrator shall not be liable for, and shall be indemnified by
the Trust out of the assets of the applicable Fund against any and all
losses, costs, damages or expenses arising from or as a result of, any
action taken or omitted in reliance upon Instructions or upon any other
written notice, request, direction, instruction, certificate or other
instrument reasonably believed by it to be genuine and signed or
authorized by the proper party or parties. A list of persons so authorized
by the Board of Trustees ("Authorized Persons") is attached hereto as
Appendix B and upon which the Administrator may conclusively rely until
its receipt of notification to the contrary by the Trust.
5.2 Instructions shall include a written request, direction, instruction
or certification signed or initialed on behalf of the Funds by one or more
Authorized Persons. Authorized Persons may be identified by the Trust by
name, title or position and will include at least one officer empowered by
the Board of Trustees to name other individuals who are authorized to give
Instructions on behalf of the Funds.
5.3 Telephonic or other oral instructions or instructions given by telefax
transmission may be given by any one of the above persons and will also be
considered Instructions if the Administrator
reasonably believes them to have been given by a person authorized to give
such Instructions with respect to the transaction involved.
5.4 With respect to telefax transmissions, the Trust hereby acknowledges
that (i) receipt of legible instructions cannot be assured, (ii) the
Administrator cannot verify that authorized signatures on telefax
instructions are original, and (iii) the Administrator shall not be
responsible for losses or expenses incurred through actions taken in
reliance on inaccurately stated, illegible or unauthorized telefax
instructions.
5.5 Instructions given orally will not be confirmed in writing and the
lack of such confirmation shall in no way affect any action taken by the
Administrator in reliance upon such oral Instructions. The Trust
authorizes the Administrator to tape record any and all telephonic or
other oral Instructions given to the Administrator by or on behalf of the
Fund (including any of the Trust's officers, directors, trustees,
employees or agents or any investment manager or adviser or person or
entity with similar responsibilities which is authorized to give
Instructions on behalf of the Trust to the Administrator.)
6. Expenses and Compensation. For the services to be rendered and the facilities
to be furnished by the Administrator as provided for in this Agreement, the
Adviser shall pay the Administrator for its services rendered pursuant to this
Agreement a fee based on such fee schedule as may from time to time be agreed
upon in writing among the Adviser and the Administrator. Additional services
performed by the Administrator as requested by the Trust shall be subject to
additional fees as mutually agreed from time to time. In addition to any such
fees, the Administrator shall xxxx the Adviser separately for any out-of-pocket
disbursements of the Administrator based on an out-of-pocket disbursement
schedule as may from time to time be agreed upon in writing among the Trust and
the Administrator. The initial fee schedule and out of pocket disbursement
schedule are attached as Appendix D-l and D-2 to this Agreement. The foregoing
fees and disbursements shall be billed to the Adviser by the Administrator and
shall be paid promptly by wire transfer or other appropriate means to the
Administrator.
7. Standard of Care. The Administrator shall be held to the exercise of
reasonable care and diligence in carrying out the provisions of this Agreement,
provided that the Administrator shall not thereby be required to take any action
which is in contravention of any applicable law, rule or regulation or any order
or judgment of any court of competent jurisdiction.
8. General Limitations on Liability. The Administrator shall incur no liability
with respect to any telecommunications, equipment or power failures except to
the extent any loss or damage to a Fund was
caused by Administator's failure to take commercially reasonable steps to
minimize the amount of loss or damage sustained by the Fund as a result of such
telecommunications, equipment or power failure. The Administrator shall incur no
liability with respect to or any failures to perform or delays in performance by
postal or courier services or third-party information providers (including,
without limitation those listed on Appendix C), provided that any decision of
Administrator to use such postal or courier service or third-party information
provider was reasonable under the circumstances.
8.1 The Administrator shall also incur no liability under this Agreement
if the Administrator or any agent or entity utilized by the Administrator
shall be prevented, forbidden or delayed from performing, or omits to
perform, any act or thing which this Agreement provides shall be performed
or omitted to be performed, by reason of causes or events beyond its
control, including but not limited to:
8.1.1 any Sovereign Event. A "Sovereign Event" shall mean any
nationalization; expropriation; devaluation; revaluation;
confiscation; seizure; cancellation; destruction; strike; act of
war, terrorism, insurrection or revolution; or any other act or
event beyond the Administrator's control;
8.1.2 any provision of any present or future law, regulation
or order of the United States or any state thereof, or of any
foreign country or political subdivision thereof, or of any
securities depository or clearing agency; and
8.1.3 any provision of any order or judgment of any court of
competent jurisdiction
except to the extent any loss or damage to a Fund was caused by
Administrator's failure to take commercially reasonable steps to minimize
the amount of loss or damage sustained by the Fund as a result of such
causes of events.
8.2 The Administrator shall not be held accountable or liable for any
losses, damages or expenses the Trust or a Fund or any shareholder or
former shareholder of the Fund or any other person may suffer or incur
arising from acts, omissions, errors or delays of the Administrator in the
performance of its obligations and duties as provided in Section 3 hereof,
including without limitation any error of judgment or mistake of law,
except a damage, loss or expense directly resulting from the
Administrator's willful malfeasance, bad faith or negligence in the
performance of such Administrator's obligations and duties.
8.3 In no event and under no circumstances shall the Administrator be held
liable for consequential or indirect damages, loss of profits, damage to
reputation or business or any other
special or punitive damages arising under or by reason of any provision of
this Agreement or for any act or omissions hereunder, even if the
Administrator has been advised of the possibility of such damages or
losses.
9. Specific Limitations on Liability. In addition to, and without limiting
the application of the general limitations on liability contained in
Section 8, above, the following specific limitations on the
Administrator's liability shall apply to the particular administrative
services set forth on Appendix A hereto.
9.1 Portfolio Compliance Monitoring. The compliance monitoring of the
investments of the Trust and/or each Fund with respect to investment
restrictions and policies is subject to parameters that may vary over time
and which may be beyond the control or knowledge of the Administrator.
Consequently, the results of the monitoring as notified by the
Administrator to the Trust or its duly appointed agent are to be
considered merely as an indication of possible non-compliance with the
investment restrictions and policies of the Trust or Funds rather than an
affirmative statement as to non-compliance with the investment
restrictions and policies. Moreover, the Administrator may not detect a
breach and consequently might not notify the Trust thereof if information
or data in its possession are inaccurate, incomplete or ambiguous. The
Trust shall remain responsible for ensuring compliance of the investments
of the Trust and Funds with their investment restrictions and policies and
the services provided by the Administrator in monitoring investment
restrictions and policies shall not be deemed to be a delegation of the
Trust's responsibility to the Administrator.
9.2 Liability for Fund Accounting Services. Without limiting the
provisions in Section 8 hereof, the Administrator's liability for acts,
omissions, errors or delays relating to its fund accounting obligations
and duties shall be limited to the amount of any expenses associated with
a required recalculation of net asset value per unit ("NAV") or any direct
damages suffered by shareholders in connection with such recalculation.
The Administrator's liability or accountability for such acts, omissions,
errors or delays shall be further subject to clauses 9.2.1 through 9.2.4
below.
9.2.1 The parties hereto acknowledge that the Administrator's
causing an error or delay in the determination of NAV may, but does
not in and of itself, constitute negligence or reckless or willful
misconduct. The parties further acknowledge that in accordance with
industry practice the liability of the Administrator for fund
accounting services shall accrue and the recalculation of NAV shall
be performed in accordance with this Section 9.1 only with regard to
errors in the calculation of the NAV that are (i) greater than or
equal to $.01 per unit of the Fund or (ii) greater than or equal to
1/2% of the total net assets of the Fund.
9.2.2 In no event shall the Administrator be liable or
responsible to the Trust or any present or former shareholder of a
Fund, or any other person for any error or delay that continued or
was undetected after the date of an audit performed by the certified
public accountants employed by or on behalf of the Fund if, in the
exercise of reasonable care in accordance with generally accepted
accounting standards, such accountants should have become aware of
such error or delay in the course of performing such audit.
9.2.3 The Administrator shall not be held accountable or
liable to the Trust, any shareholder or former shareholder of a
Fund, or any other person for any delays or losses, damages or
expenses any of them may suffer or incur resulting from (i) the
Administrator's usage of a third party service provider for the
purpose of storing records delivered to the Administrator by or on
behalf of the Fund and which the Administrator did not create in the
performance of its obligations hereunder, provided that such usage
of a third party by the Administrator was reasonable under the
circumstances; (ii) the Administrator's failure to receive timely
and suitable notification concerning quotations or corporate actions
relating to or affecting portfolio securities of the Fund; or (iii)
any errors in the computation of NAV based upon or arising out of
quotations or information as to corporate actions if received by the
Administrator either (a) from a source which the Administrator was
authorized to rely upon (including those sources listed on Appendix
C), or (b) from a source which in the Administrator's reasonable
judgment was as reliable a source for such quotations or information
as such authorized sources; or (iv) any errors in the computation of
NAV as a result of relevant information known to the Trust or any of
the Funds' other service providers which would impact the
calculation of NAV, but was not communicated to the Administrator.
For purposes of clause (ii) above, receipt by the Administrator in
its capacity as custodian of Fund assets shall constitute receipt by
the Administrator. To the extent that Fund assets are not in the
custody of the Administrator, the Administrator may conclusively
rely on any reporting in connection with such assets provided to the
Administrator by a third party on behalf of the Fund.
9.2.4 In the event of any error or delay in the determination
of such NAV for which the Administrator may be liable, the Trust and
the Administrator will consult and make good faith efforts to reach
agreement on what actions should be taken in order to mitigate any
loss suffered by a Fund or its present or former shareholders, in
order that the Administrator's exposure to liability shall be
reduced to the extent possible after taking into account all
relevant factors and alternatives. It is understood that in
attempting to reach agreement on the actions to be taken or the
amount of the loss which should appropriately be borne by the
Administrator, the Trust and the Administrator will consider such
relevant factors as the amount of the loss involved, the Trust's
desire to avoid loss of shareholder goodwill, the fact that other
persons or entities could have been reasonably expected to have
detected the error sooner than the time it was actually discovered,
the appropriateness of limiting or eliminating the benefit which
unitholders or former unitholders might have obtained by reason of
the error, and the possibility that other parties providing services
to the Fund might be induced to absorb a portion of the loss
incurred.
10. Indemnification.
10.1 The Trust and Adviser hereby agree to indemnify and hold harmless the
Administrator, its partners, stockholders, members, directors, officers and
employees and any subsidiary or affiliate of the foregoing ("Affiliate"), and
the successors and assigns of all of the foregoing persons, against any and all
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) resulting from any act, omission, error or delay or any
claim, demand, action or suit, in connection with or arising out of performance
of its obligations and duties under this Agreement, not resulting from the
willful malfeasance, bad faith or negligence of the Administrator in the
performance of such obligations and duties. The provisions of this Section 10
shall survive the termination of this Agreement.
10.1.1 If any action, suit or proceeding (each, a "Proceeding") is
brought against the Administrator or any such person in respect of which
indemnity may be sought against the Trust or Adviser pursuant to the foregoing
paragraph, the Administrator or such person shall promptly notify the Trust and
Adviser in writing of the institution of such Proceeding and the Trust and/or
Adviser may elect to assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify the Trust and Adviser shall not relieve the Trust or Adviser from any
liability which they may have to the Administrator or any such person except to
the extent that it has been materially prejudiced by such failure and has not
otherwise learned of such Proceeding. The Administrator or such person shall
have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Administrator or of
such person unless the employment of such counsel shall have been authorized in
writing by the Trust or Adviser in connection with the defense of such
Proceeding or the Trust or Adviser shall not have, within a reasonable period of
time in light of the circumstances, employed counsel to have charge of the
defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from, additional to or in conflict with those available to the
Trust and Adviser (in which case neither the Trust nor the Adviser shall have
the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Trust or Adviser and paid as incurred (it being understood, however, that the
neither the Trust nor Adviser shall be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding).
10.1.2 Neither the Trust nor the Adviser shall be liable for any
settlement of any Proceeding effected without either the Trust's or the
Adviser's written consent but if settled with the Trust's or Adviser's written
consent, the Trust and Adviser agree to indemnify and hold harmless the
Administrator and any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of paragraph 10.1.1, then the indemnifying parties agree
that they shall be liable for any settlement of any Proceeding effected without
their written consent if (i) such settlement is entered into more than 60
Business Days after receipt by such indemnifying parties of the aforesaid
request, (ii) such indemnifying parties shall not have fully reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
parties at least 30 Business Days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such Proceeding and does not include an
admission of fault, culpability or a failure to act, by or on behalf of such
indemnified party.
10.2 Subject to Sections 7, 8 and 9 of this Agreement, the Administrator
agrees to indemnify and hold harmless the Trust, a particular Fund, and the
Adviser, their partners, stockholders, members, directors, trustees, officers
and employees and any Affiliate of the foregoing, and the successors and assigns
of all of the foregoing persons, against any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any act, omission, error or delay or any claim, demand, action or
suit, in connection with or arising out of performance of its obligations and
duties under this Agreement, resulting from the willful malfeasance, bad faith
or negligence of the Administrator in the performance of such obligations and
duties. The provisions of this Section 10 shall survive the termination of this
Agreement.
10.2.1 If any Proceeding is brought against the Trust or Adviser or
any such person in respect of which indemnity may be sought against the
Administrator pursuant to the foregoing paragraph, the Trust, Adviser or such
person shall promptly notify the Administrator in writing of the institution of
such
Proceeding and the Administrator may elect to assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Administrator shall not relieve the Administrator
from any liability which they may have to the Trust, Adviser or any such person
except to the extent that it has been materially prejudiced by such failure and
has not otherwise learned of such Proceeding. The Trust, Adviser or such person
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of the Trust,
Adviser or of such person unless the employment of such counsel shall have been
authorized in writing by the Administrator in connection with the defense of
such Proceeding or the Administrator shall not have, within a reasonable period
of time in light of the circumstances, employed counsel to have charge of the
defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from, additional to or in conflict with those available to the
Administrator (in which case the Trust or Adviser shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Administrator and paid as incurred (it being understood, however, that the
Administrator shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding).
10.2.2 The Administrator shall not be liable for any settlement of
any Proceeding effected without the Administrator's written consent but if
settled with the Administrator's written consent, the Administrator agrees to
indemnify and hold harmless the Trust, Adviser and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of paragraph 10.2.1, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 Business Days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 Business Days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that
are the subject matter of such Proceeding and does not include an admission of
fault, culpability or a failure to act, by or on behalf of such indemnified
party.
11. Reliance by the Administrator on Opinions of Counsel and Opinions of
Certified Public Accountants.
The Administrator may consult with counsel regularly retained by the
Administrator in respect of such matters or the Trust's counsel in any case
where so doing appears to the Administrator to be necessary or desirable. The
Administrator shall not be considered to have engaged in any misconduct or to
have acted negligently and shall be without liability in acting upon the advice
of such counsel.
The Administrator may consult with a certified public accountant retained
by the Administrator in respect of such matters or the Fund's Treasurer (or
persons performing such function) in any case where so doing appears to the
Administrator to be necessary or desirable. The Administrator shall not be
considered to have engaged in any misconduct or to have acted negligently and
shall be without liability in acting upon the advice of such certified public
accountant or of the Fund's Treasurer or persons performing such function.
12. Termination of Agreement. This Agreement may be terminated by either party
in accordance with the provisions of this Section 12.
12.1 This Agreement shall have an initial term of two (2) years from the
date hereof. Thereafter, this Agreement shall automatically renew for
successive one (1) year periods unless any party terminates this Agreement
by written notice effective no sooner than seventy-five (75) days
following the date that notice to such effect shall be delivered to the
other parties at the addresses set forth herein. Notwithstanding the
foregoing provisions, the Fund or the Adviser (together, the "Fund
Parties") or the Administrator may terminate this Agreement at any time
(a) for cause, which is a material breach of the Agreement not cured
within sixty (60) days, in which case termination shall be effective upon
written receipt of notice by the breaching party, (b) upon thirty (30)
days written notice by the Administrator to the Fund Parties in the event
that a Fund Party is adjudged bankrupt or insolvent, or there shall be
commenced against such Fund Party a case under any applicable bankruptcy,
insolvency, or other similar law now or hereafter in effect, or (c) upon
thirty (30) days written notice by a Fund Party to the Administrator in
the event that the Administrator is adjudged bankrupt or insolvent, or
there shall be commenced against the Administrator a case under any
applicable bankruptcy, insolvency, or other similar law now or hereafter
in effect. The Administrator shall be responsible for completing all
actions in progress when such termination notice is given unless otherwise
agreed.
12.2. Upon termination of the Agreement in accordance with this Section
12, the Trust may request the Administrator to promptly deliver to the
Trust or to any designated third party all records created and maintained
by the Administrator pursuant to Section 3.1 of this Agreement, as well as
any Fund records maintained but not created by the Administrator. If such
request is provided in writing by the Trust to the Administrator within
seventy-five (75) days of the date of termination of the Agreement, the
Administrator shall provide to the Trust a certification that all records
created by the Administrator pursuant to its obligations under Section 3.1
of this Agreement are accurate and complete. After seventy-five (75) days
of the date of termination of this Agreement, no such certification will
be provided to the Trust by the Administrator and the Administrator is
under no further obligation to ensure that records created by the
Administrator pursuant to Section 3.1 of this Agreement are maintained in
a form that is accurate or complete.
13. Confidentiality and Privacy.
13.1 The parties hereto agree that each shall treat confidentially the
terms and conditions of this Agreement and all information provided by each
party to the other regarding its business and operations. All confidential
information provided by a party hereto shall be used by any other party hereto
solely for the purpose of rendering or obtaining services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required to be disclosed by or to
any Regulatory Authority, any auditor of the parties hereto, or by judicial or
administrative process or otherwise by Applicable Law.
13.2 In the course of carrying out its obligations under this Agreement,
Administrator shall maintain physical, procedural and electronic safeguards to
protect information regarding the Funds and their investors that Administrator
has obtained or to which the Administrator has gained access.
14. Tape-recording. The parties consent to recording of any and all telephonic
or other oral instructions. This authorization will remain in effect until and
unless revoked by the Trust or the Administrator in writing. The parties further
agree to solicit valid written or other consent from any of its employees,
officers, directors or agents with respect to telephone communications to the
extent such consent is required by applicable law.
15. Procedures. Procedures applicable to the Administrator services to be
performed hereunder may be established from time to time by agreement between
the Trust and the Administrator. The Administrator shall
have the right to utilize any shareholder accounting and recordkeeping systems
that, in its reasonable opinion, enables it to perform properly any services to
be performed hereunder.
16. Entire Agreement; Amendment. This Agreement constitutes the entire
understanding and agreement of the parties hereto and supersedes any other oral
or written agreements heretofore in effect between the parties with respect to
the subject matter hereof. No provision of this Agreement may be amended or
terminated except by a statement in writing signed by the party against which
enforcement of the amendment or termination is sought.
17. Severability. In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
18. Headings. The section headings in this Agreement are for the convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions thereof.
19. Governing Law. This Agreement shall be governed by and construed according
to the laws of the State of New York without giving effect to conflicts of law
provisions thereof and each of the parties hereto irrevocably consents to the
exclusive jurisdiction of the United States District Court for the Southern
District of New York or if that court lacks or declines to exercise subject
matter jurisdiction, the Supreme Court of the State of New York, New York
County. The Trust irrevocably waives any objection each may now or hereafter
have to the laying of venue of any action or proceeding in any of the aforesaid
courts and any claim that any such action or proceeding has been brought in an
inconvenient forum. Furthermore, each party hereto irrevocably waives any right
that it may have to trial by jury in any action, proceeding or counterclaim
arising out of or related to this Agreement or the services contemplated hereby.
20. Notices. Notices and other writings delivered or mailed postage prepaid to
the Trust or Adviser shall be addressed to the Trust/Adviser c/o Xxxxxxxx X.
Xxxxxx at 0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, or such other
address as the Trust or Adviser may have designated to the Administrator in
writing, or to the Administrator at 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000,
Attention: Manager, Fund Administration Department, or to such other address as
the Administrator may have designated to the Trust and Adviser in writing, shall
be deemed to have been properly delivered or given hereunder to the respective
addressee.
21. Binding Effect; Assignment This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
provided that no party hereto may assign this Agreement or any of its rights or
obligations hereunder without the written consent of the other parties. Each
party agrees that only the parties to this Agreement and/or their successors in
interest shall have a right to enforce the terms of this Agreement. Accordingly,
no shareholder of a Fund or other third party shall have any rights under this
Agreement and such rights are explicitly disclaimed by the parties.
22. Counterparts. This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original. This Agreement shall become
effective when one or more counterparts have been signed and delivered by each
of the parties. A photocopy or telefax of the Agreement shall be acceptable
evidence of the existence of the Agreement and the Administrator shall be
protected in relying on the photocopy or telefax until the Administrator has
received the original of the Agreement.
23. Exclusivity. The services furnished by the Administrator hereunder are not
to be deemed exclusive, and the Administrator shall be free to furnish similar
services to others.
24. Authorization. Each party hereby represents and warrants that it has
authorized the execution and delivery of this Agreement and that authorized
persons of such party have signed this Agreement, Appendices A, B and C and the
fee schedule hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
The undersigned acknowledges that (I/we) have received a copy of this document.
XXXXX BROTHERS XXXXXXXX & CO.
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
Date: June 22, 2007
AMERISTOCK ETF TRUST
By: /s/ Xxxxxx Xxx
-----------------------------------
Name: Xxxxxx Xxx
Title: Secretary & Chief Compliance Officer
Date: June 22, 2007
AMERISTOCK CORPORATION
By: /s/ Xxxxxx Xxx
-----------------------------------
Name: Xxxxxx Xxx
Title: Director
Date: June 22, 2007
APPENDIX A
TO ADMINISTRATIVE AGENCY AGREEMENT
Dated as of June 22, 2007
Fund Accounting Services
The Administrator will provide the following fund accounting services to each
Fund each day that the New York Stock Exchange ("NYSE") is open for business
(each a "Business Day"): transaction processing and review, custodial
reconciliation, securities pricing and investment accounting.
Transaction Processing and Review. The Administrator shall input and reconcile
the Fund's investment activity including with respect to:
o Investment taxlots
o Income
o Dividends
o Principal paydowns
o Capital activity
o Expense accruals
o Cash activity
o Corporate Reorganizations
Custodial Reconciliation. The Administrator shall reconcile the following
positions of the Fund against the records of the Custodian:
o Holdings of securities and other financial instruments
o Cash including cash transfers, fees assessed and other investment
related cash transactions
o Trade settlements
Securities Pricing. The Administrator shall update each security position of
each Fund as to the following:
o Market prices obtained from approved sources including those listed
on Appendix C or Fair Valuations obtained from an Authorized Person
of the Fund
o Xxxx to market of non-base receivables/payables utilizing approved
foreign exchange quotations as quoted in Appendix C
o Xxxx to market of non-base currency positions utilizing the approved
sources quoted in Appendix C or Fair Valuations obtained from an
Authorized Person of the Fund
Investment Accounting. The Administrator shall provide the following investment
accounting services to each Fund:
o Amortization/accretion at the individual tax lot level
o General ledger entries
o Book value calculations
o Trade Date + 1 accounting
o Calculation of Net Asset Value Per Unit ("NAV") as of the close of
regular trading in the U.S. Government securities markets (normally
3:00 p.m. Eastern time)
Portfolio Compliance Monitoring Services
The Administrator shall perform the following compliance monitoring services
with respect to the investments of each Fund on each Business Day unless
otherwise specified ("Compliance Monitoring Services"):
o Trade date plus one monitoring of each Fund's investments with
respect to the investment restrictions, policies and limitations as
described in the current prospectus and statement of additional
information, which shall be provided to the Administrator by the
Trust, and agreed to by the Administrator and the Trust
o Monitoring of policies, restrictions and limitations with
respect to certain derivative investments is performed monthly
(or as requested)
o Trade date plus one monitoring of each Fund's investments with
respect to the 1940 Act requirements and rules thereunder (including
Rule 2a-7 if applicable) and applicable Internal Revenue Code rules
and regulations
o Rule 17g-l monitoring shall be performed monthly as requested
o Qualifying income monitoring with respect to Subchapter M
compliance shall be performed monthly
o Trade date plus one monitoring of other fund investment
restrictions, policies and limitations at such times as may be
agreed in writing by the Trust and Administrator
o The Administrator shall notify the Trust's Chief Compliance Officer
("CCO") or such other Authorized Person as may be agreed to by the
Trust in the event and at such times as the Administrator detects
possible non-compliance with a Fund's investment restrictions,
policies and limitations ("Daily Exception Reporting")
o Provide the Trust's CCO or such other Authorized Person as may be
agreed to by the Fund a monthly report summarizing the results of
the Fund Compliance Monitoring Services ("Monthly Summary
Reporting")
o Provide the Trust's Board of Trustees a quarterly report summarizing
the results of the Fund Compliance Monitoring Services ("Quarterly
Board Summary Reporting")
o Assist the Fund in producing quarterly brokerage-related reports for
the Trust's Board of Trustees as requested by the Trust and agreed
to by the Administrator
The Administrator shall perform the following additional compliance monitoring
services with respect to each Fund once each Business Day:
o Provide the Trust's CCO or such other Authorized Person as may be
agreed to by the Trust a daily portfolio compliance summary report
("Daily Summary Reporting")
Financial Reporting Services
o The Administrator shall accumulate information for and prepare
o Within a 60-day production cycle, [one] annual and [one]
semi-annual shareholder report for each Fund per fiscal year,
such preparation includes the coordination of all printer and
author edits, the review of printer drafts, the coordination
of the audit of the Fund by its independent public auditor
(e.g. manage open items lists, host weekly audit meeting,
etc.), and the coordination of the mailing of the reports
o [one] annual report and [one] semi-annual report on Form N-SAR
o [one] first fiscal quarter report and [one] third fiscal
quarter report on Form N-Q
o [one] annual report and [one] semi-annual report on Form N-CSR
o [one] annual Rule 24f-2 Notice
o Upon acceptance of each above-mentioned report by the Fund's
Treasurer and/or Chief Financial Officer, the Administrator shall
edgarize and file such reports as required, including any applicable
executed officer certifications or other exhibits
The Administrator shall provide the following additional services as requested
by the Trust:
o Quarterly calculation and reporting of each Fund's portfolio
turnover
o Preparation of a Monthly and/or Quarterly "Survey" for each survey
company identified by the Fund
o Preparation of the following quarterly reports for the Trust's Board
of Trustees (in BBH Reporting Format or such other format as agreed
to between the Administrator and the Fund): Summary Schedule of
Investments and Net Asset Roll Forward
o Preparation of the following additional quarterly reports for the
Trust's Board of Trustees/Directors (in BBH Reporting Format or such
other format as agreed to between the Administrator and the Fund):
Statements of Assets and Liabilities, Statements of Operations,
Statements of Changes in Net Assets, Financial Highlights, Schedules
of Investments, Top Five Industry, Country and Holdings Reports and
Sector, Industry and Bond Rating Analyses
o Publish on an ongoing basis through AMEX and/or the Trust's website
the list of securities to be received in connection with the Funds'
sale of Creation Units, the list of securities to be provided in
connection with the Funds' redemption of Creation Units, the daily
net asset value of each Fund, appropriate performance data for the
Funds, and such other information as may be agreed upon between the
Trust and Administrator from time to time
Assistant Treasurer Services
The Administrator shall perform the following services as requested by the
Fund's Treasurer (or person performing such function):
o Prepare and obtain authorization of Fund expense invoices on a
bi-monthly basis
o Prepare the Fund's quarterly budget and make recommendations for
adjustments as appropriate
o Prepare a monthly expense pro forma for the Fund
o Provide an "Assistant Treasurer" who may be approved as an officer
of the Trust by the Board of Trustees
o Provide consultative services with respect to financial matters of
the Fund as may be requested and agreed to by the Fund and
Administrator from time to time
The Administrator shall perform the following additional services as requested
by the Fund's Treasurer:
o Prepare Form 1099 reporting for Fund's independent Trustees
o Prepare budgets and expense pro formas for new series, Funds or
classes and/or with respect to mergers, acquisitions and
restructurings, as may be requested and agreed to between the Trust
and Administrator
Tax Support Services
The Administrator shall provide the following tax support services to the Fund:
o Prepare fiscal year end and excise tax distribution calculations;
o Calculate and prepare monthly, quarterly and annual income
distributions as described in each Fund's prospectus
o Calculate and repare annual capital gain distribution(s) including
spillback amounts as required
o Prepare tax-related ROCSOP entries for fund accounting purposes
o Review required tax disclosures (such as tax cost, long term capital
gain and tax exempt designation, foreign tax credits, dividend
received deductions and qualified dividend income pass throughs) in
the Fund's financial statements
o Prepare and file federal, state and local (if any) income tax
returns, including tax return extension requests
o Prepare shareholder year-end tax information
o Calculate the amounts and characterizations of distributions
declared during the calendar year for Form 1099/DIV reporting
o Consult with the Fund's Authorized Persons regarding potential
passive foreign investment companies ("PFICs")
o Prepare wash sales calculations and other differences required for
tax purposes
o Consult with the Fund's Authorized Persons on various tax issues as
requested and with the Fund's independent public accountant when
appropriate
o Provide tax research as requested
The Administrator shall provide the following additional tax support services to
the Fund:
o Prepare and maintain tax accruals for convertible preferred stock
investments
o Prepare available tax equalization schedules
Corporate Secretarial Services
The Administrator shall perform the following secretarial services:
o Monitor good standing of the Fund in its state of organization as
may be required
o Provide an "Assistant Secretary" who may be approved as an officer
of the Trust by the Board of Trustees
o Maintain calendar for Board matters/approvals
o Prepare quarterly Board and Audit Committee meeting materials,
including notices, scripts, agendas, resolutions, memoranda,
minutes, and mail to Board of Trustees and such other persons as
instructed by the Trust
o Attend quarterly Board and Audit Committee meetings, take minutes of
the meetings, make presentations as required and follow up on
matters raised at the meetings
o In accordance with Rule 31a-2 under the 1940 Act, maintain those
records received or created by the Administrator, which are required
to be maintained by Rule 3la-1(b)(4) under the 1940 Act
Regulatory Support Services
The Administrator shall perform the following regulatory services for the Fund:
o Maintain calendar for all regulatory matters
o Prepare one annual update to the Fund's registration statement and
file the same with the SEC (includes coordination of the update with
Fund personnel, Fund counsel and independent auditors)
o Prepare up to four supplements ("Stickers") to the Fund's
registration statement per calendar year
o Coordinate the printing and mailing of prospectuses and supplements
provided that the printing and mailing services will be performed by
a third party selected and paid for by the Fund
o File the fidelity bond with the SEC
o Assist the Fund in preparing one annual Form N-PX filing per
calendar year and file the same with the SEC
o Review and comment on any portions of the annual and semi-annual
shareholder reports not prepared by Administrator pursuant to this
Appendix (see Financial Reporting Services above)
o Assist in monitoring regulatory proposals and changes that may
affect the Fund
The Administrator shall perform the following additional regulatory services for
the Fund:
o In the event a shareholder meeting is called for the Fund, file
proxy materials with the SEC, coordinate the printing and mailing of
such materials, coordinate with the Fund's solicitor in monitoring
the shareholder vote solicitation and tabulation
o Prepare "off cycle" amendments to the Fund's registration statement,
including those for new series, Portfolios or classes, changes in
advisory relationships, mergers and restructurings, as may be
requested and agreed to between the Fund and Administrator
o Review and comment on advertising and sales literature as requested
by the Fund
"Blue Sky" Support Services
If state filings are necessary, the Administrator shall select and monitor an
independent third party service provider to provide for reasonable and necessary
services for compliance with the securities regulations of the fifty states of
the United States ("Blue Sky Compliance") on such terms as the Fund shall
direct, or in the absence of such direction, as the Administrator shall
reasonably deem appropriate, provided, however, that such arrangement shall
require that such service provider act with reasonable care in discharging its
duties. The Administrator shall deliver to the Fund, or cause to be delivered to
the Fund, regular reports and notices with respect to Blue Sky Compliance and
shall be responsible to use reasonable care to enforce the terms of its
agreement with the service provider on the Fund's behalf. The Fund shall be
responsible for providing copies of each Portfolio's current prospectus and
other relevant documents and information relating to the Fund as may be
reasonably required for Blue Sky Compliance.
Transfer Agency Services
The Administrator shall perform the following transfer agency services:
I. Issuance and Redemption of Fund Units. It is agreed and understood that each
Fund, and the Administrator on each Fund's behalf, shall issue and redeem Units
of each Fund in blocks of 100,000 Units
("Creation Baskets" and "Redemption Baskets," respectively) to and from such
persons as are identified by the Fund as "Authorized Purchasers" or "Authorized
Participants."
A. Pursuant to such purchase orders that the Administrator as the Index
Receipt Agent shall receive from the ALPS Distributors, Inc.
("Distributor") and pursuant to the procedures set forth in the
Authorized Purchaser Agreement with respect to the Trust,
Administrator shall transfer appropriate trade instructions to the
Fund's custodian, Xxxxx Brothers Xxxxxxxx & Co. ("Custodian") and
pursuant to such orders register the appropriate number of book
entry only Fund Units in the name of The Depository Trust Company
("DTC") or its nominee as a unitholder (each a "Unitholder") of the
Fund.
B. Pursuant to such redemption orders that Index Receipt Agent shall
receive from the Marketing Agent, pursuant to the procedures set
forth in the Authorized Purchaser Agreement entered into by the
Fund, Administrator shall transfer appropriate trade instructions to
the Custodian and, pursuant to such orders, redeem the appropriate
number of Fund Units that are delivered to the designated DTC
Participant Account of the Custodian for redemption and debit such
Units from the account of the Unitholder on the register of the
Fund.
C. On behalf of the Fund, Administrator shall issue Fund Units in
Creation Baskets for settlement with purchasers through DTC as the
purchaser is authorized to receive. Beneficial ownership of Fund
Units shall be shown on the records of DTC and DTC Participants and
not on any records maintained by the Administrator. In issuing Fund
Units through DTC to an Authorized Purchaser, Administrator shall be
entitled to rely upon the latest Instructions that are received from
the Distributor by the Administrator as Index Receipt Agent
concerning the issuance and delivery of such Units for settlement.
D. Administrator shall not issue on behalf of a Fund any Fund Units
where it has received an Instruction from the Trust or an Authorized
Person or Distributor or written notification from any federal or
state authority that the sale of the Fund Units has been suspended
or discontinued, and Administrator shall be entitled to rely upon
such Instructions or written notification.
E. Upon the issuance of Fund Units as provided herein, Administrator
shall not be responsible for the payment of any original issue or
other taxes, if any, required to be paid by the Fund, the Trust or
the Authorized Purchaser in connection with such issuance.
F. Fund Units may be redeemed in accordance with the procedures set
forth in the relevant Authorized Purchaser Agreement and
Administrator shall duly process all redemption requests.
G. Administrator will act only upon Instruction from the Trust or an
Authorized Person in addressing any failure in the delivery of cash,
treasuries and/or Shares in connection with the issuance and
redemption of Fund Units.
II. Payment of Dividends and Distributions on Fund Units.
A. As instructed by the Trust, the Administrator shall prepare and make
payments for dividends and distributions declared by the Trust.
B. The Trust shall promptly after the declaration of any dividend or
distribution furnish to the Administrator a statement signed by an
Authorized Person: (i) indicating that dividends have been declared
on a specific periodic basis and Instructions for determining the
date of the declaration of such dividend or distribution, the date
of payment thereof, the record date as of
which unitholders shall be entitled to payment, the total amount
payable to the unitholders and the total amount payable to
Administrator as transfer agent on the payment date; or (ii) setting
forth the date of the declaration of any dividend or distribution,
the date of payment thereof, the record date as of which the
unitholders are entitled to payment, and the amount payable per unit
to each unitholder as of that date and the total amount payable to
Administrator as transfer agent on the payment date.
C. When dividends or distributions have been declared on a specific
periodic basis, the Administrator shall calculate the total dollar
amount of the dividend or distribution and notify the Trust of this
amount. When instructed by the Trust, the Administrator shall direct
the Custodian to place in a separate cash account maintained by the
Administrator funds equal to the total cash amount of the dividend
or distribution to be paid out. Should the Custodian determine that
it does not have sufficient cash in the Custody Account to pay the
total amount of the dividend or distribution to the Administrator,
the Administrator shall advise the Trust and/or the Trust shall
either adjust the rate of the dividend or distribution or provide
additional cash directly to the Custodian for credit to the separate
cash account maintained by the Custodian. When instructed by the
Trust, the Administrator shall direct the Custodian to make payment
of such dividend or distribution to the account of each unitholder.
D. Should the Administrator or the Custodian not receive from the Fund
sufficient cash to make payment as provided in the immediately
preceding Subsection, the Administrator shall notify the Trust, and
the Administrator shall withhold payment to the unitholders until
sufficient cash is provided to the Custodian and the Administrator
shall not be liable for any claim arising out of such withholding.
III. Recordkeeping.
A. The Administrator shall record the issuance of Fund Creation Baskets
and maintain, pursuant to Rule 17Ad-14(e) under the Securities
Exchange Act of 1934, as amended, a record of the total number of
Fund Creation Baskets that are authorized, based upon data provided
to Administrator by the Trust, issued and outstanding. The
Administrator shall also provide the Trust on a regular basis with
the total number of Fund Units authorized, issued and outstanding;
provided however that the Administrator shall not be responsible for
monitoring the issuance of such Units or compliance with any laws
relating to the validity of the issuance or the legality of the sale
of such Units.
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
Date: June 22, 2007
By: /s/ Xxxxxx Xxx
---------------------------------
Name: Xxxxxx Xxx
Title: Secretary & Chief Compliance Officer
Date: June 22, 0000
XXXXXXXX X
ADMINISTRATIVE AGENCY AGREEMENT
List of Authorized Persons
1. All Authorized Purchasers.
2. The Trust
3. Ameristock Corporation
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
Date: June 22, 2007
By: /s/ Xxxxxx Xxx
---------------------------------
Name: Xxxxxx Xxx
Title: Secretary & Chief Compliance Officer
Date: June 22, 2007
APPENDIX C TO
ADMINISTRATIVE AGENCY AGREEMENT
AUTHORIZED SOURCES
The Trust hereby acknowledge that the Administrator is authorized to use the
following authorized sources for financial reporting, pricing (including
corporate actions, dividends and rights offering), and foreign exchange
quotations, to assist it in fulfilling its obligations under the aforementioned
Agreement.
BLOOMBERG
EXTEL (LONDON)
FUTURES COMMISSION MERCHANTS
FUND MANAGERS
INTERACTIVE DATA CORPORATION
BROKERS
REUTERS
SUBCUSTODIAN BANKS
TELEKURS
VALORINFORM (GENEVA)
REPUTABLE FINANCIAL PUBLICATIONS
STOCK EXCHANGES
FINANCIAL INFORMATION INC. CARD
XX XXXXX
FRI CORPORATION
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
Date: June 22, 2007
By: /s/ Xxxxxx Xxx
---------------------------------
Name: Xxxxxx Xxx
Title: Secretary & Chief Compliance Officer
Date: June 22, 0000
XXXXXXXX X
BBH Pricing Policies
