FUND ACCOUNTING AND SERVICES AGREEMENT
Fund Accounting and Services Agreement (the "Agreement") made this __
day of December, 2004, between California Investment Trust and California
Investment Trust II, two trusts established under the laws of the State of
Massachusetts (collectively the "Trust") and ALPS Mutual Funds Services, Inc., a
Colorado corporation having its principal office at 0000 Xxxxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000 (the "Agent").
WHEREAS, the Trusts are open-end management investment companies
registered under the Investment Company Act of 1940, as amended, presently
consisting of 12 funds, with nine funds having two classes of shares and three
funds having one class of shares, listed in Appendix A attached hereto; each of
such investment funds and any additional investment funds that may be
established by the Trusts is referred to herein individually as a "Fund" and
collectively as the "Funds"; and
WHEREAS, the Agent provides certain fund accounting services to
investment companies; and
WHEREAS, Trusts desires to appoint the Agent as agent to perform
certain bookkeeping and pricing services for the Funds on behalf of the Trusts,
and the Agent has indicated its willingness to so act, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. Agent Appointed Bookkeeping and Pricing Agent. The Trusts hereby appoint the
Agent as bookkeeping and pricing agent for the Funds and the Agent agrees to
provide the fund accounting and other specified services to each of the Funds as
set forth in Appendix B, as may be amended from time to time, upon the terms and
conditions hereinafter set forth. The Agent accepts such appointment and agrees
to furnish such specified services.
2. Definitions. In this Agreement the terms below have the following meanings:
(a) Authorized Person. Authorized Person means any of the
persons duly authorized to giver Proper Instructions or otherwise act
on behalf of the Trusts by appropriate resolution of the Boards of
Trustees of the Trusts and listed on the Authorized Person Appendix
attached hereto and made a part hereof or any amendment thereto as may
be received by the Agent. The Trusts will at all times maintain on file
with the Agent certification, in such form as may be acceptable to the
Agent, of (i) the names and signatures of the Authorized Person(s) and
(ii) the names of the members of the Boards of Trustees of the Trusts,
it being understood that upon the occurrence of any change in the
information set forth in the most recent certification on file
(including without limitation any person named in the most recent
certification who is no longer an Authorized Person as designated
therein), the Trust will provide a new or amended certification setting
forth the change. An Authorized Person's scope of authority may be
limited by the Trust by setting forth such limitation in the Agent
certification. The Agent will be entitled to rely upon any Proper
Instruction (defined below) which has been signed by person(s) named in
the most recent certification.
(b) Proper Instructions. Proper Instructions means any request, instruction
or certification actually received by the Agent and signed by two or
more Authorized Persons. Oral instructions will be considered Proper
Instructions if the Agent reasonably believes them to have been given
by an Authorized Person and they are promptly confirmed in writing by
the Trusts to the address for notice, e-mail or facsimile set forth
below. If oral instructions vary from the written instructions which
purport to confirm them, the Agent shall notify the Trusts of such
variance. Once the variance is resolved, and if the Agent has not yet
acted, the agent may rely on oral instructions received from the Trust,
such oral instructions to be promptly confirmed in writing. Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices as agreed upon by the parties
hereto in writing.
3. Duties of the Agent. The Agent agrees to provide the services listed in
Appendix B attached hereto for the Trusts.
The Agent shall for all purposes be deemed to be an
independent contractor and shall, unless otherwise expressly authorized, have no
authority to act for or represent the Trusts in any way or otherwise be deemed
an agent of the Trust.
4. Instructions to the Agent. The Agent shall act only upon Proper Instructions,
except as otherwise provided in this Agreement. The Agent shall promptly take
all appropriate steps necessary to carry out or comply with any Proper
Instructions received from the Trusts.
5. Agent Compensation. In consideration for the services to be performed by the
Agent, the Agent shall be entitled to receive from the Trusts such compensation
and reimbursement for all reasonable out-of-pocket expenses as may be agreed
upon from time to time between the Agent and the Trusts in advance and in
writing. The Trusts agree to pay the Agent compensation as described in Appendix
C attached hereto. It is agreed that fees set forth in Appendix C may be
increased with not less than 60 days written notice upon written agreement of
the parties. In the event that Appendix B is amended such that significant
additional services as requested by the Trusts are required from the Agent on an
on-going basis, with the approval of the Trusts, additional fees may be charged.
The fee for the period from the day of the year this Agreement is entered into
until the end of that year shall be prorated according to the proportion that
such period bears to the full annual period.
6. Right to Receive Advice.
(a) Advice of the Trusts. If Agent is in doubt as to any
action it should or should not take, Agent shall request directions or
advice, including Proper Instructions, from the Trusts.
(b) Advice of Counsel. If Agent shall be in doubt as to any
question of law pertaining to any action it should or should not take,
Agent shall request advice from counsel of its own choosing at its own
expense.
(c) Conflicting Advice. In the event of a conflict between directions,
advice or Proper Instructions Agent receives from the Trusts and the
advice Agent receives from counsel, Agent shall inform the Trust of the
conflict and seek resolution.
(d) Nothing in this subsection shall excuse the Agent when an action or
omission on the part of the Agent constitutes willful misfeasance, lack
of good faith, negligence or reckless disregard by the Agent of any
duties, obligations or responsibilities set forth in this Agreement.
7. Liability of the Agent.
(a) The Agent may rely upon the written advice of counsel for
the Trusts and the Trust's independent accountants and without
negligence, the Agent shall not be liable for any actions reasonably
taken in good faith reliance upon such advice or statements. The Agent
may rely upon oral or written statements of the investment adviser(s)
to the Trusts and the Agent shall not be liable for any actions
reasonably taken in good faith reliance upon such advice or statements
and without negligence.
(b) Nothing herein contained shall be construed to protect the
Agent against any liability to the Trusts or its shareholders to which
the Agent would otherwise be subject by reason of willful misfeasance,
bad faith or negligence in the performance of its duties.
(c) Except as may otherwise be provided by applicable law,
neither the Agent nor its shareholders, officers, directors, employees
or agents shall be subject to, and the Trusts shall indemnify and hold
such persons harmless from and against, any liability for and any
damages, expenses or losses incurred by reason of the inaccuracy of
factual information furnished to the Agent by an Authorized Person of
the Trusts.
(d) The Agent shall ensure that it has and maintains Errors
and Omissions Insurance for the services rendered under this Agreement
of at least $1 million (provided the Boards of Trustees of the Trusts
may by resolution approve some lesser amount). The Agent will maintain
sufficient liquidity to cover any deductible amounts. The Agent shall
provide to the Trust annually upon request a certificate from the
appropriate errors and omissions insurance carrier(s) certifying that
such Errors and Omissions Insurance is in full force and effect.
(e) The Agent shall be obligated to exercise commercially reasonable care
and diligence in the performance of its duties hereunder, to act in
good faith and to use its best efforts, within reasonable limits, in
performing services provided for under this Agreement. The Agent shall
be liable for actual damages arising out of the Agent's failure to
perform its duties under this Agreement to the extent such damages
arise out of the Agent's willful misfeasance, lack of good faith,
negligence or reckless disregard of such duties.
(f) The Agent agrees to indemnify and hold harmless the Trusts from all
taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, liabilities arising under the
securities laws and any state or foreign securities and blue sky laws,
and amendments thereto), and expenses, including (without limitation)
reasonable attorneys' fees and disbursements arising from any action or
omission of the Agent's own willful misfeasance, lack of good faith,
negligence or reckless disregard of its duties and obligations under
this Agreement. For any legal proceeding giving rise to this
indemnification, the Agent shall be entitled to defend or prosecute any
claim in the name of the Trusts at the Agent's own expense through
counsel of its own choosing if it gives written notice to the Trust
within ten (10) business days of receiving notice of such claim.
8. Reports. Whenever, in the course of performing its duties under this
Agreement, the Agent determines, on the basis of information supplied
to the Agent by the Trust or its authorized agents, that a violation of
applicable law has occurred or that, to its knowledge, a possible
violation of applicable law may have occurred or, with the passage of
time, would occur, the Agent shall promptly notify the Trusts and their
counsel.
9. Activities of the Agent. The services of the Agent under this Agreement
are not to be deemed exclusive, and the Agent shall be free to render
similar services to others so long as its services hereunder are not
impaired thereby.
10. Accounts and Records. The accounts and records maintained by the Agent
shall be the property of the Trusts. Such accounts and records shall be
prepared, maintained and preserved as required by the Investment
Company Act and other applicable securities laws, rules and
regulations. Such accounts and records shall be surrendered to the
Trusts promptly upon receipt of Proper Instructions from the Trusts in
the form in which such accounts and records have been maintained or
preserved. The Trusts and Authorized Persons shall have access to such
accounts and records at all times during the Agent's normal business
hours. Upon the reasonable request of the Trusts, copies of any such
books and records shall be provided by the Agent to the Trusts or to an
Authorized Person, any out-of-pocket costs incurred by the Agent in
providing such books and records will be paid by the Trusts. The Agent
shall assist the Trusts, the Trusts' independent auditors, or, upon
approval of the Trust, any regulatory body, in any requested review of
the Trust's accounts and records, and reports by the Agent or its
independent accountants concerning its accounting system and internal
auditing controls will be open to such entities for audit or inspection
upon reasonable request.
11. Confidentiality. The Agent agrees that it will, on behalf of itself and
its officers and employees, treat all transactions contemplated by this
Agreement, and all other information germane thereto (past, present and
future), as confidential and not to be disclosed to any person except
as may be authorized by the Trusts in Proper Instructions in writing.
12. Compliance with Rules and Regulations. The Agent undertakes to comply
with all applicable requirements of the Investment Company Act and
other applicable securities laws, and any laws, rules and regulations
of governmental authorities having jurisdiction with respect to the
duties to be performed by the Agent hereunder. Except as specifically
set forth herein, the Agent assumes no responsibility for such
compliance by the Trusts or any Fund.
13. Business Interruption Plan. The Agent shall maintain in effect a
business interruption plan, and enter into any agreements necessary
with appropriate parties making reasonable provisions for emergency use
of electronic data processing equipment customary in the industry. In
the event of equipment failures, the Agent shall, at no additional
expense to the Trusts, take reasonable steps to minimize service
interruptions. The Agent shall have no liability with respect to the
loss of data or service interruptions caused by equipment failure
provided such loss or interruption is not caused by the Agent's own
willful misfeasance, lack of good faith, negligence or reckless
disregard of its duties or obligations under this Agreement.
Duration and Termination of this Agreement. The term of this Agreement shall be
from the date first above stated until June 30, 2008 ("Initial Term") from the
date first stated above until terminated for cause by either the Trusts or
Agent. After the Initial Term, this Agreement will renew automatically from year
to year (each such renewal year and the Initial Term, each a "Term"). After the
initial term, this Agreement may be terminated by either party upon at least
sixty (60) days' written notice to the other party. No later than one-hundred
and eighty (180) days before the expiration of each Term the Agent will provided
the Trusts with a proposed fee schedule. No later than ninety (90) days before
the expiration of each Term the parties to this Agreement will agree upon a Fee
Schedule for the upcoming Term.
Termination for "cause" shall mean:
(a) Willful misfeasance, bad faith, negligence, abandonment,
or reckless disregard on the part of the Agent with respect to its
obligations and duties hereunder;
(b) Regulatory, administrative, or judicial proceedings
against the Agent which result in a determination that it has violated
any rule, regulation, order, or law and which in the reasonable
judgment of the Trusts, substantially impairs the performance of
Agent's obligations and duties hereunder;
(c) Financial difficulties on the part of the Agent 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 in effect, or any applicable law other than said Title 11, of
any jurisdiction relating to the liquidation or reorganization of
debtors or to the modification or alteration of the rights of
creditors;
(d) The sale of substantially all assets of ALPS Mutual Funds Services,
Inc. to an unaffiliated entity;
(e) Any other circumstance which in the reasonable judgment of the Trusts,
substantially impairs the performance of the Agent's obligations and
duties hereunder.
Upon termination of this Agreement, the Agent shall deliver to
the Funds or as otherwise directed in Proper Instructions all records and other
documents made or accumulated in the performance of its duties for the Funds
hereunder. Expenses shall be limited to the out of pocket, third party costs of
the Agent and agreed to in writing, in advance of the Agent incurring such
expense. Agent represents that it will cooperate and support reasonable
activities and requests to help facilitate the transfer of such data to a new
service provider and that this cooperation will continue past the duration of
this agreement. In the event that such termination is for breach of this
agreement, Agent will be responsible for all costs, including third party
expenses.
14. Assignment. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trusts without the prior
written consent of the Agent, or by the Agent without the prior written consent
of the Trusts.
15. Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Colorado, and the 1940
Act and the rules thereunder. To the extent that the laws of the State of
Colorado conflict with the 1940 Act or such rules, the latter shall control.
16. Names. The obligations of "CIT Funds" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trusts personally, but bind
only the Trusts Property, and all persons dealing with any Fund of the Trusts
must look solely to the Trusts Property belonging to such fund for the
enforcement of any claims against the Trusts.
17. Force Majeure. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, and such party has acted without
negligence, bad faith or willful misconduct, such party shall not be liable for
damages to the other for any damages resulting from such failure to perform or
otherwise from such causes. In the event of a disaster rendering the Agent's
systems or facilities inoperable, the Agent will use all reasonable efforts to
continue to provide services to the Trusts in accordance with the Agent's then
current Business Contingency plan, which includes such general back-up
facilities as the Agent reasonably determines to be appropriate.
18. Amendments to this Agreement. This Agreement may only be amended by the
parties in writing.
19. Notices. All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when received or when sent by telex or
facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is given):
To the Agent:
ALPS Mutual Funds Services, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
To the Trusts:
California Investment Trust &
California Investment Trust II
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx
Fax: 000.000.0000
21. Counterparts. This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
22. Entire Agreement. This Agreement plus the documents in Appendixe D, attached
hereto, embodies the entire agreement and understanding among the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof, provided that the Trusts and the Agent may embody in one or more
separate documents their agreement, if any, with respect to delegated duties and
oral instructions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
CALIFORNIA INVESTMENT TRUST I
CALIFORNIA INVESTMENT TRUST II
By: ________________________________
Name: ______________________________
Title: ______________________________
ALPS MUTUAL FUNDS SERVICES, INC.
By: ________________________________
Name: ______________________________
Title: ______________________________
APPENDIX A
Fund List
CIT FUNDS
CALIFORNIA TAX-FREE INCOME FUND
Investor Class
CALIFORNIA INSURED INTERMEDIATE FUND
Investor Class
CALIFORNIA TAX-FREE MONEY MARKET FUND
Investor Class
S&P 500 INDEX FUND
Investor Class
Class K
S&P MIDCAP INDEX FUND
Investor Class
Class K
S&P SMALLCAP INDEX FUND
Investor Class
Class K
EQUITY INCOME FUND
Investor Class
Class K
NASDAQ-100 INDEX FUND
Investor Class
Class K
EUROPEAN GROWTH & INCOME FUND
Investor Class
Class K
U.S. GOVERNMENT SECURITIES FUND Investor Class
Class K
SHORT-TERM U.S. GOVT. BOND FUND
Investor Class
Class K
THE UNITED STATES TREASURY TRUST
Investor Class
Class K
APPENDIX B
SERVICES
Fund Accounting
o Maintain separate accounts for each Fund, all as directed from time to time by
Proper Instructions.
o Compute net asset value and, as appropriate, compute yields, expense
ratios, portfolio turnover rate and, if required, portfolio average
dollar-weighted maturity.
o Obtain security market quotes from independent pricing services, if
available, approved by the Trusts, or if such quotes are unavailable, then
obtain such prices pursuant to the Trusts' valuation policies and
procedures, and in either case calculate the market value of each Fund's
investments.
o Timely calculate and transmit to NASDAQ each Fund's daily net asset value
and public offering price (such determinations to be made in accordance
with the provisions of the Trusts' Declaration of Trust and the
then-current prospectuses and statements of additional information relating
to the Funds, and any applicable resolutions and policies and procedures of
the Board of Trustees of the Trust) and promptly communicate such values
and prices to the Trusts and the Trusts' transfer agent.
o Maintain and keep current all books and records of the Funds as required by
Section 31 of the Investment Company Act of 1940, as amended, and the rules
thereunder, in connection with the Agent's duties hereunder. The Agent
shall comply with all laws, rules and regulations applicable to the
performance of its obligations hereunder. Without limiting the generality
of the foregoing, the Agent will prepare and maintain the following records
upon receipt of information in proper form from Authorized Persons of the
Trusts:
(i) Cash receipts journal
(ii) Cash disbursements
journal
(iii) Dividend records
(iv) Purchase and sales - portfolio securities journals
(v) Subscription and redemption journals
(vi) Security ledgers
(vii) Broker ledger
(viii) General ledger
(ix) Daily expense accruals
(x) Daily income accruals
(xi) Foreign currency journals
(xii) Trial balances
(xiii) Historical tax lots for each security
o Verify investment buy/sell trade tickets when received from the investment
advisor to the Trusts and reconcile trades with the Trusts' custodian (the
"Custodian") for proper settlement;
o Instruct Custodian to make disbursements from a Fund into the DDA account
upon Written Instructions from the Trusts.
o Provide the Trusts with daily Fund values, net asset values and other
statistical data for each Fund as requested from time to time.
o Provide the Trusts with information necessary for the timely preparation of
the Trust's Federal, state and excise tax returns, prospectus updates, Rule
24f-2 filings, N-SAR filings, N-CSR filings, Form NQ filings, 13(f)
filings, proxy statements and any additional requirements as may be added
from time to time by regulatory or governmental agencies.
o Assist in the preparation of certain reports, audits of accounts, and other
matters of like nature, as reasonably requested from time to time by the
Trusts.
o Supply Fund data maintained on Agent's system in an electronic format on an
on-going basis, as agreed upon by the parties, and may be amended from time
to time.
APPENDIX C
FEES AND EXPENSES
Base Fee (calculated daily, payable monthly)
Annual fee of the greater of:
(1) $320,000, (allocated per Fund at a rate of $5,000 per Fund
with a single class of shares; $8,000 per Fund with two classes of
shares; and any remaining fees allocated to Funds based on relative net
assets);
OR
(2) $5,000 per Fund with a single class of shares and $8,000
per Fund with two classes of shares. Plus:
3.26 bp of the Funds'combined annual net assets between
$0-$500 million; 3.0 bp of the Funds' combined annual net
assets between $500 million - $1 billion; and 2.0 bp of
the Funds' combined annual net assets in excess of $1
billion
Out-of-Pocket Expenses
Including, but not limited to third party securities pricing fees
(Agent agrees to waive up to $2,000 per month in third party pricing
fees) , service auditor's report (calculated pro-rata per Fund) and
other expenses Agent may incur at the direction of the Trusts.
AUTHORIZED PERSONS APPENDIX
FUND ACCOUNTING AND SERVICES AGREEMENT
Name Signature
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Appendix D
[GRAPHIC OMITTED][GRAPHIC OMITTED]
September 28, 2004
Xx. Xxxx Xxxxxx, CPA ALPS Inc. 0000 Xxxxxxxx, Xxxxx 0000 Xxxxxx, XX 00000
Dear Xxxx,
I would like to thank you and everyone at ALPS for the time
and effort put forth in educating us on your systems and capabilities.
At this point, we have had numerous conference calls, meetings, and
demonstrations and have done our best to convey the services we desire
as well as understand the capabilities of your systems and operations.
We feel we have a fairly complete picture, but I would like to take
this opportunity to consolidate what we feel are the more significant
points, above what are generally regarded as standard Transfer Agent
and Fund Accounting duties (which I anticipate the contracts you
provide will cover). Attached is a list of services that we understand
ALPS will be able to provide under the fee proposals presented (not OOP
unless otherwise noted). Again, this is not meant to be a complete
list, but rather to cover some of the highlights we have so far
discussed. If you see something that is not accurate or that we forgot,
please make the appropriate amendments and return.
Sincerely,
Xxxx Xxxxx, COO
[GRAPHIC OMITTED][GRAPHIC OMITTED]
September 30, 2004
California Investment Trust
Mr. Xxxxx Xxxxxx & Mr. Xxxx Xxxxx
00 Xxxxxxxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Dear Xxxxx & Matt -
Included herein is a response to your letter received on September 29, 2004. I
have attempted to provide very specific responses to your statements and as a
result there may be some items which will require further discussion.
Additionally, we would like to ensure that there is a mutual understanding that
much of what ALPS represents in response to your statements is contingent upon
us receiving full cooperation and the appropriate data from US Bank during the
conversion process.
Kind Regards -
Xxxx X. Xxxxxx
National Sales Director
Services Provided:
1. Secure shareholder website that includes the abilities to view current
balances, view historical transactions, initiate purchases to and
redemptions from existing regular accounts (both transfers between
funds as well as to predetermined checking or savings accounts), obtain
copies of past statements. This site will have a look and feel
consistent with our existing system. It will have a "Conditions of Use"
and "User Authorization" screen prior to initial use. Lastly, ALPS will
integrate this portion into our existing site without downtime.
ALPS will work with CIT to create a secure shareholder website that
will include the items specified above. This website will be hosted on
our server, with a link from CIT's website. This website will be made
available to CIT's shareholders as soon as the converted data is fully
operational on our system.
2. Internet gateway to Transfer Agent system for CIT customer service use.
This will include the ability to view account detail, balances,
transaction history, maintenance history, blue-sky registration, access
to imaging interface, check detail, and other information maintained in
ALPS transfer agent system, as requested by CIT. Our expectation is
that the information available will match or exceed what is found on
the DST system we are currently using. No restrictions on number of
logins. This gateway will also be available to select broker/dealers to
access accounts associated with their dealer number (only).
ALPS will provide CIT with access to our Financial Intermediary
Interface which acts as a gateway to the information maintained within
the PowerAgent system. ALPS will work with CIT to develop a list of
registered users (including broker dealers) and their respective
security levels. ALPS has provided CIT with a demonstration of the
information available through the FI2 gateway and it is up to CIT to
determine if this system is comparable to what is currently available
through the DST system.
3. Single point of contact for CIT customer service representatives.
CIT will have a primary daily contact in both ALPS' Fund Accounting and
Transfer Agency departments.
4. Electronic delivery of shareholder statements, prospectus, annual, and
semi-annual reports using SEC/NASD compliant methodology and logging.
Historical statements will also be available to shareholders through
the shareholder website.
ALPS has the capability to develop and provide e-statements, along with
electronic delivery of other specified shareholder reports. Historical
statements for a specified period of time will be available to
shareholders on the website. Please note that there is an associated
cost with developing e-statements and providing them on an on-going
basis.
5. ALPS will be able to work with U.S. Bank DDA accounts for shareholder check
writing.
ALPS is willing to explore the possibility of using US Bank's DDA
account. We would like to come to a mutual agreement with CIT as to
whether using State Street's DDA (our current process) or US Bank's DDA
account is the best scenario for all parties involved.
6. AML compliance monitoring and OFAC testing. FinCEN search and compliance
representation.
ALPS' Transfer Agency services include AML compliance monitoring and
OFAC/FinCEN processes. We will provide CIT with the required
certifications/reporting for these procedures.
7. All expenses represented as OOP expenses are passed straight through with no
xxxx up.
All out-of-pocket expenses will be passed through at cost.
8. Ability to pull $10 annual service fee ($2.50 quarterly) from the
shareholders of the S&P MidCap and S&P 500 Funds and credit to Transfer
Agent Expense.
The PowerAgent system has the capability of recording a quarterly fee
from specified shareholder accounts.
9. In meetings involving at least one officer of CIT and at least two ALPS
employees, the utterance of the words "Agent," "Compliance,"
"Integration," or "Xxxxxxx" require Xxxxxx to do a shot. The "no
pointing" rule will be strictly enforced.
This could be a deal-breaker, but if I have to, I'll take one for the
team.
10. Check numbers for cleared checks will be included in shareholder
statements. Original copies of checks will be returned to CIT. CIT
shareholders will be able to utilize imaged check viewing through the
shareholder interface if/when ALPS develops capability.
CIT's shareholders will be able to receive original copies of cleared
checks and also will have the check numbers for such checks appear on
their statements.
11. Design and regular delivery of preformatted reports (daily, weekly,
monthly, or annually as requested by CIT) as well as customized reports
and data for download or FTP delivery. This will include, among others,
shareholder transaction reports by 5:50AM every morning. Queries (or
ability to query) of Transfer Agent and Fund Accounting data as needed.
For example, data concerning sales / shareholder balances by state,
address lists for shareholder mailings, general ledger and holdings
data dumps, etc... (formatted for use in Excel, PDF, ASCII or as needed
by CIT). Use of compliance reporting features on MFACT.
ALPS will work with CIT during the conversion phase to create an agreed
upon list of reports CIT will need on a daily/weekly/monthly basis. On
an ongoing basis, we will work with CIT to develop new reports that
will be prepared and delivered on a reasonably timely basis.
12. ALPS/MFACT can utilize and create reports using the Sector and Category
descriptions from Bloomberg.
ALPS will be able to provide Fund Accounting reports with Bloomberg's
sector/category descriptions.
13. Loading of back Transfer Agent data as provided by U.S. Bank / DST.
ALPS will load three years of historical data provided by US Bank onto
our PowerAgent system.
14. Monthly download to secure website or to DVD (or other mutually
agreeable media) all imaged documents (including statements) and
corresponding searchable fields, on a cumulative basis. This will be in
Adobe (.PDF) format or some other accessible and searchable format.
ALPS will provide a monthly download in the agreed upon format of all
imaged documents.
15. Lost shareholder search and escheatment services, daily valuation trades,
average cost reporting
ALPS provides these services as part of our core Transfer Agency
services. Any out-of-pocket costs associated with these transactions
will be passed through at cost.
16. AIP and EFT services.
Yes, the PowerAgent system has the capability of processing AIP and ACH
transactions.
17. Fixed XXX custodian fees of $10 per tax ID number (irrespective of
number of accounts) for life of contract. XXX custodial fees can be
taken from account, prepaid, or paid by the advisor. ALPS system has
the ability to query accounts, over a certain dollar amount, which will
be paid by the advisor. Shareholders will be charged by U.S. Bank for
the XXX custodial fee in October, which applies the 2004 tax year. Our
understanding is that the next XXX custodial charge will take place by
ALPS in October 2005 for the 2005 tax year.
ALPS can only commit to a $10 XXX fee if we continue to work with
Colorado State Bank & Trust as the XXX custodian. Fees would have to be
negotiated with any other XXX custodian. ALPS does have the ability to
deduct the XXX fee from shareholder accounts using criteria specified
by CIT. Please note that if ALPS will be providing 2004 tax reporting
to CIT's shareholders then we will expect to collect the 2004 XXX fees.
Our understanding is that US Bank would not be entitled to the 2004 fee
if they are not performing tax reporting for that year.
18. Form development. ALPS will provide templates of the XXX Disclosure
Form each year and can work with or help in creating other shareholder
documents such as applications, XXX rollover, registration changes, AIP
forms, and other forms commonly used in the industry.
ALPS utilizes a company called Bankers Systems to assist us in
preparation of XXX documents for our clients. Any out-of-pocket costs
associated with these forms will be passed through at cost.
19. Annual submission of SAS 70 reports for T/A and F/A as well as copy of
independent audit of AML compliance (maybe included in SAS 70) pursuant
to the USA PATRIOT Act. Annual copy of Summary of Critical Procedures.
ALPS will provide CIT with annual copies of the SAS 70 reports for our
Transfer Agency and Fund Accounting services. We will also provide a
copy of the annual AML compliance audit, along with other required
compliance certifications.
20. Cooperation and expedient document delivery with respect to audits by
both Funds' independent auditors as well as regulatory agencies.
ALPS will provide all reports required for audits in a timely manner.
21. Shareholder statements with similar look and feel of our current statements.
ALPS will utilize DMX to develop shareholder statements that look
similar to CIT's existing statements. There will likely be some
out-of-pocket expenses charged by DMX associated with this process.
22. Transfer Agent conversion to be completed by 12/11/04 - this is the
date DST exercises a deconversion freeze for year-end tax reporting.
Fund Accounting conversion completed by 11/30/04 for parallel run in
December. Billing to begin upon the cessation of U.S. Bank's billing.
For example, if they xxxx us through 12/31/04, ALPS will begin billing
the Trusts as of 1/1/05.
ALPS and CIT will work together to create a mutually acceptable
agreement regarding fees in the month of December.
23. Fund accounting conversion can be performed using the Fund Accounting
reports as previously provided to ALPS.
ALPS will work with CIT to perform the Fund Accounting conversion in
the most timely and cost efficient manner available.
