February 1, 1996
Cash Reserve Consulting, Inc.
00000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Re: CONSULTING AGREEMENT
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Gentlemen:
Midwest Group Financial Services, Inc. (hereinafter referred
to as "Midwest") herewith confirms our agreement with Cash Reserve
Consulting, Inc. (hereinafter referred to as "CRC").
Midwest provides investment advice to a family of mutual
funds, including the Government Housing Tax-Exempt Fund, a series
of Midwest Group Tax Free Trust (hereinafter referred to as the
"Fund"). Midwest wishes to retain CRC to provide consulting
services as described below.
1. Consulting Services CRC will be available, at the
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reasonable request of Midwest during normal business hours, to
consult with Midwest regarding HUD regulatory requirements and the
use of the Fund by mortgage service companies, state and local
housing authorities, HUD management agents, HUD developers and such
other entities which may use the Fund. In addition, CRC will
provide Midwest with such other advice and services with respect to
the Fund as Midwest may from time to time reasonably request,
including additional development of new products and services for
the Fund and the preparation of information and marketing materials
for use in distributing shares of the Fund. Midwest will not
request CRC to furnish, and CRC will not furnish, advice or
recommendations regarding the purchase or sale of specific
securities. Services of CRC may be supplied by CRC through any
employee of CRC.
2. Compensation For the services to be rendered by you,
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Midwest will pay you a monthly fee equal to an annual rate of .25%
of the Fund's average daily net assets up to $500 million; .225% of
such assets from $500 million to $1 billion; and .2% of such assets
in excess of $ 1 billion. The Fund's net assets on any day will be
valued as of the close of business on such day, or if such day is
not a business day of the Trust, at the close of business on the
business day immediately preceding such day. The fee with respect
to any month shall be payable to CRC within ten days following the
end of such month. If Midwest waives or reimburses any portion of
its advisory fee in order to reduce the operating expenses of the
Fund, then the fee payable by Midwest to you for such month will be
reduced by an amount equal to fifty percent (50%) of such wavier or
reimbursement. In the event Midwest's waives or reimburses other
Fund expenses (i.e., any expenses other than advisory fees) with
respect to any month, CRC and Midwest will share in this waiver
and/or reimbursement of expenses equally and CRC will promptly
reimburse Midwest for its proportionate share of such amount.
CRC will pay the compensation of any persons rendering any
services to the Fund who are officers, directors or employees of
CRC.
3. Effective Date and Termination This Agreement shall be
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effective as of the date hereof for a period of two (2) years.
This Agreement may be terminated thereafter by either party hereto,
without the payment of any penalty, upon sixty (60) days' written
notice to the other. Notwithstanding the termination of this
Agreement for any reason, CRC will continue to receive, for as long
as the Fund shall remain in existence, a monthly fee at the annual
rate set forth in Section 2 hereof applied only to the average
daily balance of those shareholder accounts which CRC solicited for
investment in the Fund prior to termination or within one year
thereafter, which accounts shall include the clients of mortgage
servicing companies who CRC solicited on behalf of the Fund.
4. Limitation of Liability CRC agrees to indemnify and hold
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harmless Midwest (including its directors, officers, employees,
control persons and affiliates) for any and all losses, claims,
damages, liabilities or litigation (including legal and other
expenses) to which Midwest or any such person may become subject
which (1) may be based upon any wrongful act or omission by CRC or
any person acting on behalf of CRC or (2) may be based upon any
untrue statement or alleged untrue statement of a material fact
contained in a registration statement covering the shares of the
Fund or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, if such a statement or
omission was made in reliance upon information furnished by CRC.
Midwest will indemnify and hold harmless CRC (including its
directors, officers, employees, control persons and affiliates) for
any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses) arising from any act or
omission of Midwest, except a loss resulting from negligence,
willful misfeasance or bad faith of CRC or any person acting on
behalf of CRC in the performance of its duties or from the reckless
disregard by CRC or any such person of its obligations and duties
under this Agreement. For all purposes herein, CRC shall be deemed
to be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Fund in any way or otherwise
be deemed an agent of the Fund.
5. Use of Name It is expressly understood that the names
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"Midwest," "Midwest Group" and "Midwest Group of Funds" are
property rights of Midwest and/or its affiliates. CRC shall not
circulate any printed matter which contains any reference to
Midwest or the Fund without the prior written approval of Midwest.
CRC will submit printed matter requiring approval to Midwest in
draft form, allowing sufficient time for review by Midwest and its
counsel prior to any deadline for printing.
6. Resolution of Disputes It is the intention of the
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parties to the extent possible to resolve disputes without recourse
to the judicial system. The parties agree that as a condition
precedent to the filing of any claim the parties and their
attorneys must confer in person at least twice, once in Cincinnati
and once in Cleveland, in an effort to resolve or narrow any
dispute. Such conferences must be held within one month receipt of
notice of a dispute. Should such efforts not be successful, any
dispute between the parties must be heard by a Court of competent
jurisdiction in the State of Ohio.
7. Miscellaneous CRC shall not assign its rights or duties
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hereunder without the prior written consent of Midwest. This
Agreement may not be modified orally but only by an agreement in
writing signed by Midwest and CRC. To the extent that state law
has not been preempted by the provisions of any law of the United
States heretofore or hereafter enacted, as the same may be amended
from time to time, this Agreement shall be administered, construed
and enforced according to the laws of the State of Ohio.
If you are in agreement with the foregoing, please sign the
form of acceptance below and return it to me, whereupon, this
letter shall become a binding contract upon the date hereon.
Very truly yours,
MIDWEST GROUP FINANCIAL SERVICES, INC.
By:---------------------------------
Xxxxxx X. Xxxxxxx, Chairman
ACCEPTANCE
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The foregoing Agreement is hereby accepted.
CASH RESERVE CONSULTING, INC.
By:------------------------------
