MUTUAL FUND SERVICE AGREEMENT
This Mutual Fund Service Agreement (the "Agreement") is entered into as of
this __ day of ________, 2009, between ________________________________
("Intermediary") and Ultimus Fund Distributors, LLC (the "Fund Company"), on its
own behalf and on behalf of the investment companies listed on Exhibit A hereto,
as amended from time to time.
WHEREAS, each such investment company (listed as part of Exhibit A) is
registered with the Securities and Exchange Commission (the "SEC") as an
open-end management investment company under the Investment Company Act of 1940
(the "1940 Act") and offers for sale shares of beneficial interest, which may
include shares issued in separate series or classes (individually, a "Fund" and
collectively, the "Funds"); and
WHEREAS, the Fund Company is the principal underwriter for the Funds and
wishes to make shares of the Funds available to customers of Intermediary; and
WHEREAS, Intermediary wishes to make Fund shares available to its
customers through Intermediary brokerage accounts and has entered into a
separate written agreement with the Funds' transfer, shareholder servicing
and/or other agent to facilitate the transmission of information regarding such
accounts through the NETWORKING system of the National Securities Clearing
Corporation ("NSCC") (that agreement and any exhibits thereto, the "NETWORKING
Agreement"); and
WHEREAS, the NETWORKING Agreement contemplates that Intermediary will
provide certain services to its customers in accordance with the matrix levels
established by NSCC, and Intermediary is willing to provide those and related
services;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
herein contained, the parties agree as follows:
1. CERTAIN DEFINED TERMS: As used in this Agreement, the term
"Prospectus" means a Fund's current statutory prospectus and the term "Statement
of Additional Information" or "SAI" means a Fund's current statement of
additional information, whether in paper format or electronic format, each as
included in the Fund's currently effective registration statement (or
post-effective amendment thereto) filed with the SEC pursuant to the Securities
Act of 1933 (the "1933 Act"). The terms "Prospectus" and "SAI" include any
information that the Fund files with the SEC under the 1933 Act as a supplement
to such prospectus or statement of additional information, respectively.
2. AVAILABILITY OF FUND SHARES TO CUSTOMERS:
(a) Intermediary agrees to make Fund shares available to its
customers pursuant to the policies and procedures set forth in this Agreement,
the NETWORKING Agreement, applicable NSCC rules and procedures (including those
governing the processing and settlement of purchase, exchange, and redemption
orders through the NSCC's Fund/Serv system), and any other procedures that the
parties may agree upon from time to time. Intermediary may determine to make
shares of a Fund available to, and to perform any services for, only those
Intermediary customers who, in order to participate in Intermediary's mutual
fund service, have transferred shares of that Fund (or, for customers who wish
to exchange into a Fund, another Fund that is distributed by the Fund Company
and has exchange privileges with
the Fund) into their brokerage accounts. With regard to each transaction in
shares of a Fund for, and any services provided to, Intermediary customers
pursuant to this Agreement: (i) Intermediary will act solely as agent for its
customer; in no circumstances will Intermediary be authorized by this Agreement
to act as agent for the Fund Company or for any Fund; (ii) Intermediary will
initiate transactions only upon its customer's orders; (iii) the Fund Company
will execute transactions only upon receiving instructions from Intermediary as
agent for its customer; (iv) as between Intermediary and its customer, the
customer will have full beneficial ownership of all Fund shares; and (v) each
transaction will be for the customer's account and not for Intermediary's own
account. Except as provided in Section 9 (relating to Indemnification), each
transaction will be without recourse to Intermediary.
(b) Intermediary agrees to make Fund shares available to its
customers only at the public offering price, as determined in accordance with
the Fund's Prospectus and SAI. Intermediary assumes no responsibility or
liability for the determination of such price. Intermediary agrees to deliver or
cause to be delivered to each customer, at or prior to the time of any purchase
of shares of a Fund, a copy of the Prospectus of the Fund, unless such
Prospectus already has been furnished to the customer. Intermediary agrees to
deliver or cause to be delivered, upon request by a customer, a copy of the SAI
of the Fund.
(c) Intermediary agrees to place orders for Fund shares only to
cover purchase orders that Intermediary has received from its customers.
Intermediary certifies that all orders for purchases and redemptions of Fund
shares delivered to the Fund or its agent on any business day of the Fund shall
have been received by Intermediary from its customers by the close of the
regular session of trading (generally 4:00 p.m., Eastern time) on the New York
Stock Exchange (the "Close of Trading") on such business day, and that any
orders for purchases and redemptions received by it after the Close of Trading
on any given business day will be transmitted to Fund or its agent on the next
business day. Intermediary further certifies that all such orders received by it
from customers by the Close of Trading on any business day will be delivered to
the Fund or its agent on such business day.
(d) Intermediary shall date and time stamp all orders received from
its customers and shall promptly transmit such orders to the Fund Company or its
designee so that such order may be executed at the net asset value next
determined after receipt of such order by Intermediary, in accordance with the
Prospectus of the applicable Fund. Intermediary will not withhold placing
customers' orders so as to profit itself as a result of such withholding (for
example, by a change in a Fund's net asset value from that used in determining
the offering or redemption price to Intermediary's customers). Intermediary
agrees to maintain records of all orders for the purchase and sale of Fund
shares and to furnish to the Fund Company or its designee copies of such records
upon request.
(e) The Fund Company will not accept conditional orders for Fund
shares. All orders are subject to acceptance or rejection by the Fund Company or
the Fund in either's sole discretion. The Fund Company or any Fund may, without
notice, suspend sales or withdraw the offering of Fund shares or make a limited
offering of Fund shares.
(f) It is hereby agreed that the Fund may apply a redemption fee for
any short-term redemption of shares purchased within specified time frames set
forth in the Fund's Prospectus. Any such fees shall be imposed in such a manner
as to make it clear to the redeeming shareholder that the fee is being charged
by the Fund.
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(g) Notwithstanding any other provision of this Agreement,
Intermediary may assess a transaction fee against its customers upon the
purchase, exchange, or redemption of Fund shares for the execution of such
orders. Any such fees shall be imposed in such manner as to make it clear to
Intermediary's customer that the fee is not being charged by the Fund.
(h) The Fund Company will advise Intermediary in writing of the
states and jurisdictions in which shares of each Fund are registered or
qualified for sale under, or exempt from the requirements of, applicable laws.
Intermediary agrees to make Fund shares available only to its customers who
reside in such states and jurisdictions. The Fund Company immediately will
advise Intermediary in writing if any such registration or qualification is
terminated or if the Fund Company wishes to prevent Intermediary from placing
purchase orders on behalf of its customers who reside in a particular state or
jurisdiction. Intermediary may rely solely on the Fund Company's representations
regarding the registration or qualification of Fund shares.
(i) Unless required by the Prospectus or by any applicable federal
or state law, rule, or regulation, certificates evidencing Fund shares will not
be available, and any transaction in Fund shares will be effected and evidenced
by book-entry on the records maintained by the Fund's transfer agent.
(j) Nothing in this Agreement will be deemed or construed to make
Intermediary a partner, employee, representative, or agent of the Fund Company
or any Fund or to create a partnership, joint venture, syndicate, or association
between or among said parties. Neither this Agreement nor the performance of the
services of the parties hereunder will be considered to constitute an exclusive
arrangement by either party hereto.
3. SERVICES TO BE PROVIDED BY INTERMEDIARY:
(a) Brokerage accounts in which Intermediary customers hold Fund
shares will be governed by this Agreement, the NETWORKING Agreement, applicable
NSCC rules and procedures, and any other arrangement between Intermediary and
the Fund Company (or an affiliate) relating to the subject matter hereof.
Intermediary agrees to provide the services assigned to it pursuant to that
matrix level ("NETWORKING services") and such other services as Intermediary
deems necessary and desirable for the operation of its mutual fund service.
(b) In addition to the assigned NETWORKING services, Intermediary
will, in its discretion, perform certain other services intended to facilitate
the maintenance of brokerage accounts in which Intermediary customers hold Fund
shares.
(c) Intermediary will render or cause to be rendered on-going
personal services to its customers who hold Fund shares through Intermediary
brokerage accounts as agreed between Intermediary and customer.
(d) The Fund Company will rely on the performance of Intermediary
with respect to obtaining, verifying, and recording information that identifies
customers of Intermediary. Intermediary agrees that it is responsible for
complying with all applicable money laundering laws, regulations, and government
guidance, including cash and suspicious activity reporting, customer
identification and verification programs and recordkeeping requirements
(collectively, "applicable AML laws"), for all of its customers, and
Intermediary represents that it has adequate policies, procedures and internal
controls in place to ensure compliance.
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Intermediary will provide the Fund Company or its designee, upon request and
within a reasonable time, an annual certification that it has complied with all
applicable AML laws. Any such request for information shall not in any way be
construed or impose any obligation upon the Fund Company to review and ensure
the accuracy or adequacy of any of Intermediary's policies or procedures.
(e) To the extent permitted by applicable federal or state law,
rule, or regulation, Intermediary may delegate any of its responsibilities
hereunder to a third party ("Service Provider"); provided, however, that (i)
Intermediary will supervise the activities of such Service Provider to ensure
that they comply with the terms of this Agreement; and (ii) Intermediary will
remain responsible for the acts and omissions of such Service Provider.
4. STATUS AS REGISTERED BROKER/DEALER: Intermediary hereby represents
and warrants that it is duly registered as a broker/dealer under the Securities
Exchange Act of 1934 (the "1934 Act"); that it is qualified to act as a
broker/dealer in the states and jurisdictions where it transacts business; and
that, to its knowledge, it is a member in good standing of the Financial
Industry Regulatory Authority ("FINRA"). Intermediary agrees to maintain its
broker/dealer registration and qualifications and its FINRA membership in good
standing throughout the term of this Agreement. Intermediary agrees to notify
the Fund Company promptly in the event that it ceases to be a member in good
standing of FINRA or to be registered as a broker/dealer under the 1934 Act.
Intermediary agrees to abide by all of the rules and regulations of FINRA.
5. DISTRIBUTION/SERVICE FEES: In consideration for the services
provided by Intermediary pursuant to this Agreement, each Fund shall pay
Intermediary the fees set forth in EXHIBIT A to this Agreement. The parties
agree that the fees are solely for shareholder servicing and other
administrative services provided by Intermediary and do not constitute payment
in any manner for investment advisory, distribution, trustee, or custodial
services.
6. INFORMATION RELATING TO THE FUNDS:
(a) No person is authorized to make any representations concerning
shares of a Fund that are inconsistent with the Fund's currently effective
registration statement, including exhibits thereto, or in the offering
documents, sales literature, and marketing materials described in paragraph 6(b)
below. Intermediary assumes no responsibility or liability for the
representations contained in such registration statement or other materials
provided by the Fund or the Fund Company to Intermediary for its use in
accordance with the terms of this Agreement.
(b) Without obtaining prior approval of the Fund Company,
Intermediary will not use any offering documents, sales literature, or marketing
materials (including material disseminated through radio, television, or other
electronic media) concerning Fund shares, other than printed or electronic
information provided by the Fund Company or a Fund. Intermediary will use its
best efforts to ensure that any information provided by the Fund Company or a
Fund that is marked confidential or otherwise indicates that it is intended for
internal use only is not distributed or made available to investors.
7. COMPLIANCE WITH REGISTRATION REQUIREMENTS: The Fund Company hereby
represents and warrants that each Fund's shares have been registered or
qualified for sale under the federal securities laws and the securities laws of
those states and jurisdictions in which the Fund Company or the Fund has advised
Intermediary that such shares have been so registered or qualified, and that
each Fund's registration statement complies in all material respects with
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applicable regulatory and disclosure requirements. The Fund Company will
indemnify and hold harmless Intermediary, each director, officer, employee, and
agent of Intermediary, and each person who is or may be deemed to be
controlling, controlled by or under common control with Intermediary from and
against any and all direct and indirect claims, damages, losses, liabilities, or
expenses (including the reasonable costs of investigation and reasonable
attorney's fees) resulting from (a) any violation of any law, rule, or
regulation relating to the registration or qualification of shares of a Fund,
except to the extent such violation results from the willful misconduct or
negligence of Intermediary; and (b) any untrue statement of a material fact
contained in any Fund's registration statement or any offering documents, sales
literature, or marketing materials provided to Intermediary, or any omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. Such right of indemnification will survive
the termination of this Agreement.
8. USE OF PARTIES' NAMES: Neither party will use the name of the other
party in any manner without the other party's written consent, except that
advertising, promotional, and other written materials relating to the
availability of Fund shares through Intermediary may include the names of
particular Funds that are available to Intermediary customers or may indicate
generally that Intermediary makes available to its customers certain funds
distributed by the Fund Company and except as required by any applicable federal
or state law, rule, or regulation.
9. INDEMNIFICATION:
(a) The Fund Company will indemnify and hold harmless Intermediary,
each director, officer, employee, and agent of Intermediary, and each person who
is or may be deemed to be controlling, controlled by or under common control
with Intermediary from and against any and all direct and indirect claims,
damages, losses, liabilities, or expenses (including the reasonable costs of
investigation and reasonable attorney's fees) resulting from the willful
misconduct or negligence of Fund Company, its agents and employees in the
performance of, or failure to perform, its obligations under this Agreement;
PROVIDED, HOWEVER, that the Fund Company will not be liable for indemnification
hereunder to the extent that any claim, damage, loss, liability, or expense
results from the willful misconduct or gross negligence of Intermediary or its
affiliates. Such right of indemnification will survive the termination of this
Agreement.
(b) Intermediary will indemnify and hold harmless the Fund Company
and each director, officer, employee, and agent of the Fund Company, and each
person who is or may be deemed to be controlling, controlled by or under common
control with the Fund Company from and against any and all direct and indirect
claims, damages, losses, liabilities, or expenses (including the reasonable
costs of investigation and reasonable attorney's fees) resulting from any
misrepresentations or statements contrary to fact by Intermediary in this
Agreement or otherwise, or resulting from the willful misconduct or negligence
of Intermediary, its agents and employees in the performance of, or failure to
perform, its obligations under this Agreement; PROVIDED, HOWEVER, that
Intermediary will not be liable for indemnification hereunder to the extent that
any claim, damage, loss, liability, or expense results from the willful
misconduct or gross negligence of the Fund Company or its affiliates. Such right
of indemnification will survive the termination of this Agreement.
(c) If any action, suit, or proceeding is initiated against any
party indemnified hereunder ("Indemnified Party") with respect to which such
party intends to seek indemnification, the Indemnified Party will notify the
other party ("Indemnifying Party") of such action, suit, or proceeding promptly
after service of the summons or other first legal process.
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Such notice will be given by a means of prompt delivery that provides
confirmation of receipt, as provided for in paragraph 12 below. The failure of
the Indemnified Party so to notify the Indemnifying Party will relieve the
Indemnifying Party of its indemnity obligation with respect to that action,
suit, or proceeding to the extent that such omission results in the forfeiture
of substantive rights or defenses by the Indemnifying Party; failure to give
prompt notice will not relieve the Indemnifying Party of any liability that it
otherwise may have to the Indemnified Party. The Indemnifying Party will be
entitled to assume the defense of such action, suit, or proceeding. If the
Indemnifying Party elects to assume the defense thereof and retains counsel, the
Indemnified Party will bear the fees and expenses of any additional counsel
retained by it. The Indemnifying Party will keep the Indemnified Party informed
of all material developments and events relating to such action, suit, or
proceeding. If the Indemnifying Party does not elect to assume the defense, the
Indemnifying Party will reimburse the Indemnified Party for the reasonable fees
and expenses of any counsel retained by it, which fees and expenses will be
payable to the Indemnified Party at such intervals as the parties may determine
or upon the Indemnifying Party's receipt of a xxxx related thereto.
10. AMENDMENTS: This Agreement may be amended only by an instrument in
writing signed by each party.
11. DURATION AND TERMINATION OF AGREEMENT:
(a) This Agreement will continue in effect unless terminated as
provided herein. Either party may terminate this Agreement without cause by
giving the other party at least sixty (60) days' written notice of its intention
to terminate. This Agreement will terminate effective immediately upon notice by
either party in the event that the NETWORKING Agreement is terminated. The
termination of this Agreement with respect to any given Fund will not cause its
termination with respect to any other Fund.
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970 is filed
against a party; (ii) a party files a petition in bankruptcy or a petition
seeking similar relief under any bankruptcy, insolvency, or similar law, or a
proceeding is commenced against a party seeking such relief; or (iii) a party is
found by the SEC, FINRA, or any other federal or state regulatory agency or
authority to have violated any applicable federal or state law, rule, or
regulation arising out of its activities in connection with this Agreement, this
Agreement will terminate effective immediately upon notice of termination by the
other party. Each party agrees to notify the other promptly in the event of any
such filing or finding of violation.
12. NOTICES: Except as otherwise specifically provided in this
Agreement, all notices required or permitted to be given under this Agreement
will be given in writing and delivered by personal service, by postage prepaid
mail - return receipt requested, or by facsimile machine or a similar means of
same day delivery which provides evidence of receipt. All notices to Fund
Company will be given or sent to the address specified below. All notices to
Intermediary will be given or sent to Intermediary at its offices at:
_______________________________
_______________________________
_______________________________
_______________________________
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Each party may change the address to which notices will be sent by giving notice
to the other party in accordance with this paragraph 12.
13. MISCELLANEOUS:
(a) In the event of any conflict between this Agreement and the
NETWORKING Agreement, the NETWORKING Agreement will prevail.
(b) This Agreement will be governed by and construed in accordance
with the laws of the State of Ohio, without giving effect to principles of
choice of laws.
(c) If any provision of this Agreement is held or made invalid by a
court or regulatory agency decision, statute, rule or otherwise, the remainder
of the Agreement will continue to be valid and enforceable.
(d) Each party agrees that any Non-Public Personal Information, as
the term is defined in Securities and Exchange Commission S-P ("Reg S-P"), may
be disclosed by a party hereunder only for the specific purpose of permitting
the other party to perform services set forth in this Agreement. Each party
agrees that with respect to such information, it will comply with Reg S-P and
any other applicable regulations and that it will not disclose any Non-Public
Personal Information received in connection with this Agreement to any party
except to the extent required to carry out the services set forth in this
Agreement or as required by law.
(e) The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions of this
Agreement or otherwise affect their meaning or interpretation.
14. RULE 22C-2: The following provisions apply to any Intermediary that
has established an account with a Fund and submits trades on behalf of its
customers through an omnibus account. In such instances the Fund will not
administer its frequent trading policies or redemption fee policies (if
applicable) at the Fund account level.
(a). AGREEMENT TO PROVIDE INFORMATION. Intermediary agrees to
provide the Fund, upon written request, the taxpayer identification number
("TIN"), the Individual/International Taxpayer Identification Number ("ITIN"),
or other government-issued identifier ("GII"), if known, of any or all
Shareholder(s) who have purchased, redeemed, transferred or exchanged shares of
the Fund through an account with Intermediary during the period covered by the
request.
(i). PERIOD COVERED BY REQUEST. Requests must set forth a specific
period, not to exceed 90 calendar days from the date of the request,
for which transaction information is sought. The Fund may request
transaction information older than 90 calendar days from the date of
the request as it deems necessary to investigate compliance with
policies established by the Fund for the purpose of eliminating or
reducing any dilution of the value of the outstanding shares issued
by the Fund. The Fund acknowledges, however, that requests for
transaction information older than 90 calendar days from the date of
the Fund's request may require a longer response time.
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(ii). FORM AND TIMING OF RESPONSE. Intermediary agrees to transmit
the requested information specified in Item 14(a) that is on its
books and records to the Fund or its designee promptly, but in any
event not later than 10 business days, after receipt of a request.
If Intermediary holds shares for the account of an indirect
intermediary, Intermediary agrees to: (i) provide or arrange to
provide (as defined below) to the Fund the requested information
regarding Shareholders who hold an account with one of its indirect
intermediaries or (ii) restrict or prohibit the indirect
intermediary from purchasing, in nominee name on behalf of other
persons, Shares of the Fund. Intermediary additionally agrees to
inform the Fund whether it plans to perform (i) or (ii). Responses
required by this paragraph must be communicated in writing and in a
format mutually agreed upon by the parties. To the extent
practicable, the format for any transaction information provided to
the Fund should be consistent with the NSCC Standardized Data
Reporting Format. For purposes of this provision, an "indirect
intermediary" has the same meaning as in SEC Rule 22c-2 under the
Investment Company Act.
(iii). LIMITATIONS ON USE OF INFORMATION. The Fund, its affiliates
and agents shall not use the information received for marketing,
competitive analysis, or any other similar purpose without the prior
written consent of the Intermediary. Each party will comply with all
applicable federal and state laws, rules and regulations governing
the privacy and confidentiality of Shareholder information disclosed
pursuant to Rule 22c-2.
(b). AGREEMENT TO RESTRICT TRADING. Intermediary agrees to execute
written instructions from the Fund to restrict or prohibit further purchases or
exchanges of Shares by a Shareholder for accounts on the Intermediary's books
and records that have been identified by the Fund as having engaged in
transactions in the Fund's Shares (directly or indirectly through the
Intermediary's account) that violate policies established by the Fund for the
purpose of eliminating or reducing any dilution of the value of the outstanding
Shares issued by the Fund.
(i). FORM OF INSTRUCTIONS. Instructions must include the TIN, ITIN,
or GII, if known, and the specific restriction(s) to be executed. If
the TIN, ITIN, or GII is not known, the instructions must include an
equivalent identifying number of the Shareholder(s) or account(s) or
other agreed upon information to which the instruction relates.
(ii). TIMING OF RESPONSE. Intermediary agrees to execute
instructions as soon as reasonably practicable, but not later than 5
business days after receipt of the instructions by the Intermediary.
(iii). CONFIRMATION BY INTERMEDIARY. Intermediary must provide
written confirmation to the Fund that instructions have been
executed. Intermediary agrees to provide confirmation as soon as
reasonably practicable, but not later than 10 business days after
the instructions have been executed.
(c). DEFINITIONS. For purposes of this section:
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(i). The term "Funds" includes the Fund Agent and the Funds'
transfer agent. The term does not include any "excepted funds" as
defined in SEC Rule 22c-2(b) under the Investment Company Act of
1940.
(ii). The term "provide or arrange to provide" means if the record
keeping is not done on the books and records of Intermediary,
Intermediary will provide the information request to its indirect
intermediary and will use its best efforts to assist the Fund or
Fund Company in obtaining the requested information from its
indirect intermediary.
(iii). The term "Shares" means the interests of Shareholders
corresponding to the redeemable securities of record issued by the
Fund under the Investment Company Act of 1940 that are held by the
Intermediary.
(iv). The term "Shareholder" means the beneficial owner of Shares,
whether the Shares are held directly or by the Intermediary in
nominee name.
(v). The term "written" includes electronic writings and facsimile
transmissions.
(vi). The term "purchase" does not include the automatic
reinvestment of dividends.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
set forth above by a duly authorized representative of the parties hereto.
ULTIMUS FUND DISTRIBUTORS, LLC
Address: 000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
By: ______________________________________
Authorized Representative
Printed:____________________________________
____________________________________________
Intermediary Name
By: ______________________________________
Authorized Representative
Printed:____________________________________
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EXHIBIT A
The Fund Company is the principal underwriter for each of the following Fund(s):
FEES (AS A
PERCENTAGE
OF AVERAGE
FUND NAME TICKER CUSIP ACCOUNT BALANCES)
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The Chesapeake Core Growth Fund CHCGX 00000X000 0.25% per annum
The Chesapeake Growth Fund - Class A CHEAX 00000X000 0.25% per annum
The Chesapeake Growth Fund - Institutional CHESX 00000X000 None
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