DGHM INVESTMENT TRUST
TRANSFER AGENCY AND SERVICES
AGREEMENT
COMMONWEALTH FUND SERVICES, INC.
TRANSFER AGENCY AND SERVICES AGREEMENT
This TRANSFER AGENCY AND SERVICES AGREEMENT is made as of this 1st day of
October, 2008, by and between DGHM Investment Trust (the "Trust"), a statutory
trust duly organized and existing under the laws of the State of Delaware, and
Commonwealth Fund Services, Inc. ("CFS"), a corporation duly organized and
existing under the laws of the Commonwealth of Virginia.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and may issue its shares of beneficial interest, with par value of $0.001 per
share, in separate series and classes; and
WHEREAS, the Trust intends to offer shares in various series (each such
series, together with all other series subsequently established by the Trust and
made subject to this Agreement in accordance with Section 18 being herein
referred to as a "Fund," and collectively as the "Funds") and the Trust may in
the future offer shares of various classes of each Fund (each such class
together with all other classes subsequently established by the Fund in a Fund
being herein referred to as a "Class," and collectively as the "Classes");
WHEREAS, the Trust desires that CFS serve as the transfer agent and
dividend disbursing agent for each Fund and CFS is willing to provide these
services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto, intending to be legally bound, agree as
follows:
Section 1. Appointment. The Trust hereby appoints CFS to act as, and CFS
agrees to act as, (i) transfer agent for the authorized and issued
shares of the Trust representing interests in each of the respective
Funds and Classes thereof ("Shares"), (ii) dividend disbursing agent
and (iii) agent in connection with any accumulation, open-account or
similar plans provided to the registered owners of Shares of any of
the Funds ("Shareholders") and set out in the currently effective
prospectus and statement of additional information of each Fund
(collectively, as currently in effect and as amended or supplemented,
the "Prospectus"), including, without limitation, any periodic
investment plan or periodic withdrawal program and CFS hereby accepts
such appointment.
Section 2. Delivery of Documents and Other Information. In connection
therewith, the Trust has delivered to CFS copies of (i) the Trust's
Agreement and Declaration of Trust and Bylaws (collectively, as
amended from time to time, "Organizational Documents"), (ii) the
Trust's Registration Statement and all amendments thereto filed with
the U.S. Securities and Exchange Commission ("SEC") pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), or the
1940 Act (the "Registration Statement"), (iii) each Fund's current
Prospectus, (iv) each current plan of distribution or similar
document adopted by the Trust under Rule 12b- 1 under the 1940 Act
("Plan") and each current shareholder service plan or similar
document adopted by the Fund ("Service Plan"), and (v) all applicable
procedures adopted by the Trust with respect to the Funds, and shall
promptly furnish CFS with all amendments of or supplements to the
foregoing. The Trust shall deliver to CFS a certified copy of the
resolution(s) of the Board of Trustees of the Trust (the "Board")
appointing CFS and authorizing the execution and delivery of this
Agreement.
Prior to the commencement of CFS's responsibilities under this
Agreement, if applicable, the Trust shall deliver or cause to be
delivered to CFS (i) an accurate list of Shareholders of the Trust,
showing each Shareholder's address of record, number of Shares owned
and whether such Shares are represented by outstanding share
certificates and (ii) all Shareholder records, files, and other
materials necessary or appropriate for proper performance of the
functions assumed by CFS under this Agreement (collectively referred
to as the "Materials").
Section 3. Duties. CFS agrees that in accordance with procedures established
from time to time by the Trust on behalf of each of the Funds, as
applicable, CFS shall perform the services set forth in Schedule A
hereto. CFS may, at its expense and, upon at least 60 days' advance
written notice to the Trust, subcontract with any entity or person
concerning the provision of the services contemplated hereunder;
provided, however, that CFS shall not be relieved of any of its
obligations under this Agreement by the appointment of such
subcontractor and provided further, that (i) CFS shall be
responsible, to the extent provided in Section 13 hereof, for all
acts of such subcontractor as if such acts were its own, and (ii) the
subcontractor shall be held, by contract, to standards no less
onerous than those contained in this Agreement.
Except with respect to CFS's duties as set forth in this Agreement
and except as otherwise specifically provided herein, the Trust
assumes all responsibility for ensuring that the Fund complies with
all applicable requirements of the Securities Act, the 1940 Act, the
USA PATRIOT Act of 2001 ("USA PATRIOT Act") and any other laws, rules
and regulations of governmental authorities with jurisdiction over
the Fund.
Section 4. Compensation and Expenses. The Trust agrees to pay CFS
compensation for its services provided pursuant to this Agreement, as
set forth in Schedule C hereto, or as shall be set forth in
amendments to such schedule approved by the Board of Trustees of the
Trust (the "Board") and CFS. Fees will begin to accrue for each Fund
on the latter of the date of this Agreement or the date of
commencement of operations of the applicable Fund. If fees begin to
accrue in the middle of a month or if this Agreement terminates
before the end of any month, all fees for the period from that date
to the end of that month or from the beginning of that month to the
date of termination, as the case may be, shall be prorated according
to the proportion that the period bears to the full month in which
the effectiveness or termination occurs. Upon the termination of this
Agreement with respect to a Fund, the Fund shall pay to CFS such
compensation as shall be payable prior to the effective date of
termination. The Fund acknowledges that CFS may from time to time
earn money on amounts in the deposit accounts maintained by CFS to
service the Funds (and other clients serviced by CFS).
In connection with the services provided by CFS pursuant to this
Agreement, the Trust, on behalf of each Fund, agrees to reimburse CFS
for the expenses set forth in Schedule C hereto. In addition, the
Trust, on behalf of the applicable Fund, shall reimburse CFS for all
reasonable expenses and employee time at 150% of salary attributable
to any review of the Trust's accounts and records by the Trust's
independent accountants or any regulatory body outside of routine and
normal periodic reviews.
All fees and reimbursements are payable in arrears on a monthly basis
and the Trust, on behalf of the applicable Fund, agrees to pay all
fees and reimbursable expenses within five (5) business days
following receipt of the respective billing notice.
Section 5. Recordkeeping. CFS shall create and maintain all records required
by applicable laws, rules and regulations, including but not limited
to records required by Section 31(a) of the 1940 Act and the rules
thereunder, as they may be amended from time to time, pertaining to
the various functions CFS performs under this Agreement and which are
not otherwise created or maintained by another party pursuant to
contract with the Trust. All such records shall be the property of
the Trust and will be preserved, maintained and made available in
accordance with Section 31 of the 1940 Act and the rules thereunder,
and will be surrendered promptly to the Fund on and in accordance
with the Trust's request. The Trust and the Trust's authorized
representatives shall have access to CFS's records relating to the
services to be performed under this Agreement at all times during
CFS's normal business hours. Upon the reasonable request of the
Trust, copies of any such records shall be provided promptly by CFS
to the Trust or the Trust's authorized representatives.
In case of any requests or demands for the inspection of the
Shareholder records of the Trust, CFS will endeavor to notify the
Trust and to secure instructions from an authorized officer of the
Trust as to such inspection. CFS shall abide by the Trust's
instructions for granting or denying the inspection; provided,
however, that CFS may grant the inspection regardless of the Trust's
instructions if CFS is advised by counsel to CFS that failure to do
so will result in liability to CFS.
Section 6. Issuance and Transfer of Shares. CFS shall make original issues of
Shares of each Fund and Class thereof in accordance with the Fund's
Prospectus only upon receipt of (i) instructions requesting the
issuance, (ii) a certified copy of a resolution of the Board
authorizing the issuance, (iii) necessary funds for the payment of
any original issue tax applicable to such Shares, and (iv) an opinion
of the Fund's counsel as to the legality and validity of the
issuance, which opinion may provide that it is contingent upon the
filing by the Fund of an appropriate notice with the SEC, as required
by Section 24 of the 1940 Act or the rules thereunder. If the opinion
described in (iv) above is contingent upon a filing under Section 24
of the 1940 Act, the Trust on behalf of the Fund shall indemnify CFS
for any liability arising from the failure of the Fund to comply with
that section or the rules thereunder.
Transfers of Shares of each Fund and Class thereof shall be
registered on the Shareholder records maintained by CFS. In
registering transfers of Shares, CFS may rely upon the Uniform
Commercial Code as in effect in the State of Delaware or any other
statutes that, in the opinion of CFS's counsel, protect CFS and the
Fund from liability arising from (i) not requiring complete
documentation, (ii) registering a transfer without an adverse claim
inquiry, (iii) delaying registration for purposes of such inquiry or
(iv) refusing registration whenever an adverse claim requires such
refusal. As transfer agent, CFS will be responsible for delivery to
the transferor and transferee of such documentation as is required by
the Uniform Commercial Code.
Section 7. Share Certificates. In accordance with the law under which the
Trust is organized, and in accordance with Article III Section 2 of
its Declaration of Trust, the Trust authorizes and directs CFS to
issue its Shares in non-certificated form. The Trust hereby confirms
to CFS that it will not issue certificated Shares, and that all
securities issued by the Trust will be non-certificated, and the
Trust hereby directs its counsel to provide CFS with any instructions
regarding practices or procedures necessary and appropriate to issue
non-certificated Shares. CFS is authorized and directed to maintain
such book-entry systems as are necessary and appropriate to track
non-certificated Shares and the ownership of such Shares.
In the event that the Trust determines to issue certificated Shares,
the Trust shall furnish to CFS a supply of blank share certificates
of each Fund and Class thereof and, from time to time, will renew
such supply upon CFS's request. Blank share certificates shall be
signed manually or by facsimile signatures of officers of the Trust
authorized to sign by the Organizational Documents of the Trust and,
if required by the Organizational Documents, shall bear the Trust's
seal or a facsimile thereof. Unless otherwise directed by the Trust,
CFS may issue or register share certificates reflecting the manual or
facsimile signature of an officer who has died, resigned or been
removed by the Trust.
In the event that the Trust determines to issue certificated Shares,
new share certificates shall be issued by CFS upon surrender of
outstanding share certificates in the form deemed by CFS to be
properly endorsed for transfer and satisfactory evidence of
compliance with all applicable laws relating to the payment or
collection of taxes. CFS shall forward share certificates in
"non-negotiable" form by first-class or registered mail, or by
whatever means CFS deems equally reliable and expeditious. CFS shall
not mail share certificates in "negotiable" form unless requested in
writing by the Trust and fully indemnified by the Trust to CFS's
satisfaction.
In the event that the Trust informs CFS that any Fund or Class
thereof does not issue share certificates, CFS shall not issue any
such share certificates and the provisions of this Agreement relating
to share certificates shall not be applicable with respect to those
Funds or Classes thereof.
Section 8. Share Purchases. Shares shall be issued in
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accordance with the terms of the Prospectus after CFS
or its agent receives either:
(i) (A) an instruction directing investment in a Fund or Class, (B)
a check (other than a third party check) or a wire or other
electronic payment in the amount designated in the instruction
and (C) in the case of an initial purchase, a completed account
application; or
(ii) the information required for purchases pursuant to a selected
dealer agreement processing organization agreement, or a similar
contract with a financial intermediary.
Section 9. Eligibility to Receive Redemptions. Shares issued in a Fund after
receipt of a completed purchase (which, for purposes of this
Agreement shall be deemed to be an order to purchase shares that is
in "good order" and on which the Trust has received final payment as
provided in the registration statement of the Trust) shall be
eligible to receive distributions of the Fund at the time specified
in the Prospectus pursuant to which the Shares are offered and
collected no later than on the day indicated below unless other times
are noted in the Prospectus of the applicable Class or Fund:
(i) for a wire received, at the time of the receipt of the wire;
(ii) for a check drawn on a member bank of the Federal Reserve
System, on the next Fund business day following receipt of the
check; and
(iii) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as CFS is credited with
Federal Funds with respect to that check.
Section 10. Representations and Warranties of CFS. CFS
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represents and warrants to the Trust that:
(i) It is a corporation duly organized and existing and in good
standing under the laws of the Commonwealth of Virginia;
(ii) It is duly qualified to carry on its business in the
Commonwealth of Virginia;
(iii) It is empowered under applicable laws and by its By-Laws to
enter into this Agreement and perform its duties under this
Agreement;
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement and perform its duties under
this Agreement;
(v) It has access to the necessary facilities, equipment, and
personnel to perform its duties and obligations under this
Agreement;
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of CFS, enforceable against
CFS in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and
secured parties; and
(vii) It is registered as a transfer agent under Section 17A of the
1934 Act.
Section 11. Representations and Warranties of the Trust. The
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Trust represents and warrants to CFS that:
(i) It is a statutory trust duly organized and existing and in good
standing under the laws of the state of Delaware;
(ii) It is empowered under applicable laws and by its Organizational
Documents to enter into this Agreement and perform its duties
under this Agreement;
(iii) All requisite corporate proceedings have been taken to
authorize it to enter into this Agreement and perform its duties
under this Agreement;
(iv) It is an open-end management investment company registered under
the 1940 Act;
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of
creditors and secured parties; and
(vi) A registration statement under the Securities Act has been filed
(and once the registration statement becomes effective the Trust
intends to take all necessary actions to ensure that the
registration statement remains effective), and appropriate state
securities law filings have been made and will continue to be
made, with respect to all Shares of the Funds and any Classes
thereof being offered for sale. Notwithstanding the foregoing,
the Trust agrees to promptly notify CFS upon the effectiveness
of the registration statement and to immediately notify CFS in
the event the Trust's registration statement is suspended or is
no longer effective.
Section 12. Proprietary Information; Record Retention; Confidentiality. The
Trust acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals maintained by CFS on databases under the
control and ownership of CFS or a third party constitute copyrighted,
trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to CFS or the third
party. The Trust agrees to treat all Proprietary Information as
proprietary to CFS and further agrees that it shall not divulge any
Proprietary Information to any person or organization except as may
be provided under this Agreement.
CFS shall keep and maintain on behalf of the Trust all books and
records which the Trust and CFS are, or may be, required to keep and
maintain pursuant to any applicable statutes, rules and regulations,
including without limitation Rules 31a-1 and 31a-2 under the 1940
Act, relating to the maintenance of books and records in connection
with the services to be provided hereunder. CFS further agrees that
all such books and records shall be the property of the Trust and to
make originals or copies of such books and records available for
inspection by the Trust or by the SEC at reasonable times.
CFS agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the
Trust and its shareholders received by CFS in connection with this
Agreement, including any non-public personal information as defined
by Regulation S-P, and that it shall not use or disclose any such
information except for the purpose of carrying out the terms of this
Agreement; provided, however, that CFS may disclose such information
as required by law or in connection with any requested disclosure to
a regulatory authority with appropriate jurisdiction after prior
notification to and approval of the Trust so that the Trust can seek
an appropriate protective order.
Upon termination of this Agreement, each party shall return to the
other party all copies of confidential or Proprietary Information
received from such other party hereunder, other than materials or
information required or permitted to be retained by such party under
applicable laws or regulations. Each party hereby agrees to properly
dispose of any "consumer report information," as such term is defined
in Regulation S-P. To the extent CFS is required by applicable laws
or regulations to maintain originals or copies of any record relating
to the business of the Trust, CFS (at the expense of the Trust) shall
provide the Trust with a list of such materials, and with copies of
such materials unless required by law to refrain from providing such
copies. If CFS wishes to retain a copy of any record relating to the
business of the Trust that is not required by law or regulation to be
so maintained, it shall identify to the Trust the information to be
retained, and shall deliver to the Trust a certification that such
information will not be released or used for any purpose other than
to comply with legal process, or to establish a defense in any matter
to which the information relates.
Section 13. Indemnification.
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(i) CFS shall not be responsible for, and the Fund shall indemnify
and hold CFS harmless from and against, any and all losses,
damages, costs, charges, reasonable counsel fees (including the
defense of any law suit in which CFS or its affiliate is a named
party), payments, expenses and liability arising out of or
attributable to:
(A) All actions of CFS or its agents or subcontractors required
to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without gross
negligence, reckless disregard or willful misconduct;
(B) The lack of good faith, gross negligence or willful
misconduct of the Trust;
(C) The reliance upon, and any subsequent use of or action
taken or omitted, by CFS, or its agents or subcontractors
on: (1) the Materials or any other information, records,
documents, data, stock certificates or services, which are
received by CFS or its agents or subcontractors by machine
readable input, facsimile, CRT data entry, electronic
instructions or other similar means authorized by the Fund,
and which have been prepared, maintained or performed by
the Trust or any other person or firm on behalf of the
Trust; (2) any instructions or requests of the Trust or any
of its officers; (3) any instructions or opinions of legal
counsel with respect to any matter arising in connection
with the services to be performed by CFS under this
Agreement which are provided to CFS after consultation with
such legal counsel; or (4) any paper or document,
reasonably believed to be genuine, authentic, or signed by
the proper person or persons;
(D) The offer or sale of Shares in violation of federal or
state securities laws or regulations requiring that such
Shares be registered or in violation of any stop order or
other determination or ruling by any federal or any state
agency with respect to the offer or sale of such Shares;
(E) The processing of any checks or wires, including without
limitation for deposit into the Trust's demand deposit
account maintained by CFS; or
(F) The breach of any representation or warranty set forth in
Section 11 above.
(ii) The Trust shall not be responsible for, and CFS shall indemnify
and hold the Fund, its Board, officers, employees and agents,
harmless from and against any losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liability
arising directly out of or attributable to any action or failure
of CFS to act as a result of CFS's lack of good faith, gross
negligence or willful misconduct in the performance of its
services hereunder or the breach of any representation or
warranty set forth in Section 10 above.
(iii)In order that the indemnification provisions contained in this
Section 13 shall apply, upon the assertion of an indemnification
claim, the party seeking the indemnification shall promptly
notify the other party of such assertion, and shall keep the
other party advised with respect to all developments concerning
such claim. The indemnifying party shall have the option to
participate with the indemnified party in the defense of such
claim or to defend against said claim in its own name or that of
the indemnified party. The party seeking indemnification shall
in no case confess any claim or make any compromise in any case
in which the other party may be required to indemnify it except
with the indemnifying party's written consent, which consent
shall not be unreasonably withheld.
(iv)Notwithstanding anything to the contrary herein, CFS shall not be
entitled to such indemnification to the extent that CFS collects
reimbursement or indemnification for such losses under any
liability insurance policy described in this Agreement or
otherwise.
Section 14. Standard of Care/Limitation of Liability.
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(i) CFS shall be under no duty to take any action on behalf of the
Trust except as necessary to fulfill its duties and obligations
as specifically set forth herein or as may be specifically
agreed to by CFS in writing. CFS shall at all times act in good
faith and agrees to use its best efforts within reasonable
limits to ensure the accuracy of all services performed under
this Agreement, but assumes no responsibility for any loss
arising out of any act or omission in carrying out its duties
hereunder, except a loss resulting from CFS's, its employees' or
its agents' willful misfeasance, bad faith or gross negligence
in the performance of CFS's duties under this Agreement, or by
reason of reckless disregard of CFS's, its employees' or its
agents' obligations and duties hereunder. Notwithstanding the
foregoing, the limitation on CFS's liability shall not apply to
the extent any loss or damage results from any fraud committed
by CFS or any intentionally bad or malicious acts (that is, acts
or breaches undertaken purposefully under circumstances in which
the person acting knows or has reason to believe that such act
or breach violates such person's obligations under this
Agreement or can cause danger or harm) of CFS.
(ii) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (A) CFS shall not be liable for
losses beyond its control, provided that CFS has acted in
accordance with the standard of care set forth above; and (B)
CFS shall not be liable for (1) the validity or invalidity or
authority or lack thereof of any oral or written instructions
provided by the Trust, notice or other instrument which conforms
to the applicable requirements of this Agreement, and which CFS
reasonably believes to be genuine; or (2) subject to Section 21,
delays or errors or loss of data occurring by reason of
circumstances beyond CFS's control, including fire, flood,
catastrophe, acts of God, insurrection, war, riots or failure of
the mails, transportation, communication or power supply.
(iii)With respect to a Fund that does not value its assets in
accordance with Rule 2a-7 under the 1940 Act (a money market
fund), notwithstanding anything to the contrary in this
Agreement, CFS shall not be liable to the Trust or any
shareholder of the Trust for (A) any loss to the Trust if a NAV
Difference (defined below) for which CFS would otherwise be
liable under this Agreement is less than $0.01 per Fund share or
(B) any loss to a shareholder of the Trust if the NAV Difference
for which CFS would otherwise be liable under this Agreement is
less than or equal to 0.005 (1/2 of 1%) or if the loss in the
shareholder's account with the Trust is less than or equal to
$10. Any loss for which CFS is determined to be liable hereunder
shall be reduced by the amount of gain which inures to
shareholders, whether to be collected by the Trust or not.
(iv) For purposes of this Agreement: (A) the NAV Difference shall
mean the difference between the NAV at which a shareholder
purchase or redemption should have been effected ("Recalculated
NAV") and the NAV at which the purchase or redemption is
effected; (B) NAV Differences and any CFS or other responsible
party liability therefrom are to be calculated each time a
Fund's (or class's) NAV is calculated; (C) in calculating any
NAV Difference for which CFS would otherwise be liable under
this Agreement for a particular NAV error, Fund losses and gains
shall be netted; and (D) in calculating any NAV Difference for
which CFS would otherwise be liable under this Agreement for a
particular NAV error that continues for a period covering more
than one NAV determination, Fund losses and gains for the fund's
fiscal year shall be netted.
Section 15. Effectiveness. This Agreement shall become effective with respect
to each Fund or Class on the earlier of the date on which the Fund's
Registration Statement relating to the Shares of the Fund or Class
becomes effective or the date of the commencement of operations of
the applicable Fund or Class. Upon effectiveness of this Agreement,
it shall supersede all previous agreements between the parties hereto
covering the subject matter hereof insofar as such Agreement may have
been deemed to relate to the Funds.
Section 16. Holidays. Except as required by laws and regulations governing
investment companies, nothing contained in this Agreement is intended
to or shall require CFS, in any capacity hereunder, to perform any
functions or duties on any holiday or other day of special observance
on which CFS is closed. Functions or duties normally scheduled to be
performed on such days shall be performed on, and as of, the next
business day on which both the Trust and CFS are open. CFS will be
open for business on days when the Trust is open for business and/or
as otherwise set forth in each Fund's prospectus(es) and Statement(s)
of Additional Information.
Section 17. Termination. This Agreement shall continue in effect with respect
to each Fund until terminated; provided, that continuance is
specifically approved at least annually (i) by the Board or by a vote
of a majority of the outstanding voting securities of the Fund and
(ii) by a vote of a majority of Trustees of the Fund who are not
parties to this Agreement or interested persons of any such party
(other than as Trustees of the Fund).
This Agreement may be terminated by either party at any time, without
the payment of a penalty upon sixty (60) days' written notice to
other party. Any termination shall be effective as of the date
specified in the notice or upon such later date as may be mutually
agreed upon by the parties. Upon notice of termination of this
Agreement by either party, CFS shall promptly transfer to the
successor transfer agent the original or copies of all books and
records maintained by CFS under this Agreement including, in the case
of records maintained on computer systems, copies of such records in
machine-readable form, and shall cooperate with, and provide
reasonable assistance to, the successor transfer agent in the
establishment of the books and records necessary to carry out the
successor transfer agent's responsibilities. If this Agreement is
terminated by the Trust, the Trust shall be responsible for all
out-of-pocket expenses or costs associated with the movement of
records and materials to the successor transfer agent and providing
assistance to any successor person in the establishment of the
accounts and records necessary to carry out the successor's
responsibilities. Additionally, CFS reserves the right to charge for
any other reasonable expenses associated with such termination.
Section 18. Survival. The obligations of Sections 4, 5, 9, 10, 11, 12, 13,
19, 20, 21, 22, 24, 27, 29 and 32 shall survive any termination of
this Agreement.
Section 19. Additional Funds and Classes. In the event that the Trust
establishes one or more series of Shares or one or more classes of
Shares after the effectiveness of this Agreement, such series or
classes, as the case may be, shall become Funds and Classes under
this Agreement. CFS or the Trust may elect not to make any such
series or classes subject to this Agreement.
Section 20. Assignment; Third Party Beneficiaries. 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 either party without the written
consent of the other party. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective permitted
successors and assigns. For the avoidance of doubt, a transaction
involving a merger or sale of substantially all of the assets of a
Fund shall not require the written consent of CFS.
Section 21. Force Majeure. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
acts of war or terrorism, strikes, equipment or transmission failure
or damage reasonably beyond its control, or other causes reasonably
beyond its control, 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. CFS shall use commercially reasonable
best efforts to limit such damages. Notwithstanding the foregoing,
this provision shall not imply that CFS is excused from maintaining
reasonable business continuity plans to address potential service
outages.
Section 22. Limited Recourse. CFS hereby acknowledges that the Funds'
obligations hereunder with respect to the Shares are binding only on
the assets and property belonging to the Funds. The obligations of
the parties hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Funds
personally, but shall bind only the property of the Funds. The
execution and delivery of this agreement by such officers shall not
be deemed to have been made by any of them individually or to impose
any liability on any of them personally, but shall bind only the
Funds' property.
Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Fund of the Trust are
separate and distinct from the assets and liabilities of each other
Fund and that no Fund shall be liable or shall be charged for any
debt, obligation or liability of any other Fund, whether arising
under this Agreement or otherwise.
Section 23. Taxes. CFS shall not be liable for any taxes, assessments or
governmental charges that may be levied or assessed on any basis
whatsoever in connection with the Trust or any Shareholder or any
purchase of Shares, excluding taxes assessed against CFS for
compensation received by it under this Agreement.
Section 24. Consequential Damages. Notwithstanding anything in this Agreement
to the contrary, neither party shall be liable to the other party for
incidental, consequential, exemplary, special or indirect losses or
damages under any provision of this Agreement, whether or not the
likelihood of such losses or damages was known by either party.
Section 25. Amendments. This Agreement may be amended from time to time by a
writing executed by the Trust and CFS.
Section 26. Governing Law. This Agreement shall be governed by and construed
to be in accordance with the laws of the State of Delaware, without
reference to choice of law principles thereof, and in accordance with
the applicable provisions of the 1940 Act. To the extent that the
applicable laws of the State of Delaware, or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
Section 27. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements,
understandings and arrangements with respect to the subject matter
hereof.
Section 28. Execution in Counterparts. This Agreement may be executed in two
or more counterparts, each of which, when so executed, shall be
deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
Section 29. Severability. If any part, term or provision of this Agreement is
held to be illegal, in conflict with any law or otherwise invalid,
the remaining portion or portions shall be considered severable and
not be affected, and the rights and obligations of the parties shall
be construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
Section 30. Services Not Exclusive. The services of CFS to the Trust are not
deemed exclusive, and CFS shall be free to render similar services to
others, to the extent that such service does not affect CFS's ability
to perform its duties and obligations hereunder.
Section 31. Headings; Syntax. All Section headings contained in this
Agreement are for convenience of reference only, do not form a part
of this Agreement and will not affect in any way the meaning or
interpretation of this Agreement. Words used herein, regardless of
the number and gender specifically used, will be deemed and construed
to include any other number, singular or plural, and any other
gender, masculine, feminine, or neuter, as the contract requires.
Section 32. Waiver. Any term or provision of this Agreement may be waived at
any time by the party entitled to the benefit thereof by written
instrument executed by such party. No failure of either party hereto
to exercise any power or right granted hereunder, or to insist upon
strict compliance with any obligation hereunder, and no custom or
practice of the parties with regard to the terms of performance
hereof, will constitute a waiver of the rights of such party to
demand full and exact compliance with the terms of this Agreement.
Section 33. Notice. Any notice or other communication required by or
permitted to be given in connection with this Agreement shall be in
writing, and shall be delivered in person or sent by first-class
mail, postage prepaid, to the respective parties at their last known
address. Notices to the Trust shall be directed to 0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Mr. Xxxx
Xxxxx, III, with a copy to 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxx, XX 00000, Attention: Mr. Xxxxxx Xxxxxx; and notices to CFS
shall be directed to: 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Mr. Xxxx Xxxxx, III.
Section 34. Insurance. CFS shall furnish the Trust with pertinent information
concerning the liability insurance coverage that it maintains. Such
information shall include the identity of the insurance carrier(s),
coverage levels and deductible amounts. CFS shall notify the Trust
should any of its insurance coverage be canceled or reduced. Such
notification shall include the date of change and the reasons
therefor. CFS shall notify the Trust of any material claims against
it with respect to services performed under this Agreement, whether
or not they may be covered by insurance, and shall notify the Trust
at any time when a material amount of coverage is subject to other
claims as may be appropriate of the total outstanding claims made by
CFS under its insurance coverage. For purposes of the foregoing
sentence, the amount of coverage subject to other claims shall be
considered material if such claims amount to fifty percent (50%) or
more of the liability insurance coverage maintained by CFS.
Notwithstanding the foregoing, CFS shall be responsible for notifying
the Trust of any claims to the extent such other claims may otherwise
be considered material.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their duly authorized officers as of the day and year first above written.
DGHM INVESTMENT TRUST
By: __________________________
Xxxxxx Xxxxxx
Treasurer, Chief Compliance
Officer
COMMONWEALTH FUND SERVICES, INC.
By: __________________________
Xxxx Xxxxx, III
President
A-3Transfer Agency and Services Agreement
Schedule A
to the
Transfer Agency and Services Agreement
between
DGHM Investment Trust (the "Trust") and
Commonwealth Fund Services, Inc. ("CFS")
Dated as of October 1, 2008
Services to be Provided by CFS:
------------------------------
(a) CFS agrees that in accordance with procedures established from time to
time by agreement between the Trust on behalf of each of the Funds, as
applicable, and CFS, CFS will perform the following services:
(i) provide the services of a transfer agent, dividend disbursing agent
and, as relevant, agent in connection with accumulation, open-account or
similar plans (including without limitation any periodic investment plan
or periodic withdrawal program) that are customary for open-end management
investment companies including: (A) maintaining all Shareholder accounts,
(B) preparing Shareholder meeting lists, (C) mailing proxies and related
materials to Shareholders, (D) mailing Shareholder reports and
prospectuses to current Shareholders, (E) withholding taxes on U.S.
resident and non-resident alien accounts, (F) preparing and filing U.S.
Treasury Department Forms 1099 and other appropriate forms required by
federal authorities with respect to distributions for Shareholders, (G)
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other
confirmable transactions in Shareholder accounts, (H) preparing and
mailing activity statements for Shareholders, and (I) providing
Shareholder account information;
(ii) receive for acceptance orders for the purchase of Shares and promptly
deliver payment and appropriate documentation therefore to the custodian
of the applicable Fund (the "Custodian") or, in the case of Funds
operating in a master-feeder or fund of funds structure, to the transfer
agent or interestholder recordkeeper for the master portfolios in which
the Fund invests;
(iii) pursuant to purchase orders, issue the appropriate number of Shares
and hold such Shares in the appropriate Shareholder account;
(iv) receive for acceptance redemption requests and deliver the
appropriate documentation therefore to the Custodian or, in the case of
Funds operating in a masterfeeder structure, to the transfer agent or
interestholder recordkeeper for the master fund in which the Fund invests;
(v) as and when it receives monies paid to it by the Custodian with
respect to any redemption, pay the redemption proceeds as required by the
Prospectus pursuant to which the redeemed Shares were offered and as
instructed by the redeeming Shareholders;
(vi) effect transfers of Shares upon receipt of appropriate instructions
from Shareholders;
(vii) prepare and transmit to Shareholders (or credit the appropriate
Shareholder accounts) payments for all distributions declared by the Fund
with respect to Shares;
(viii) issue share certificates and replacement share certificates for
those share certificates alleged to have been lost, stolen, or destroyed
upon receipt by CFS of indemnification satisfactory to CFS and protecting
CFS and the Fund and, at the option of CFS, issue replacement certificates
in place of mutilated share certificates upon presentation thereof without
requiring indemnification;
(ix) receive from Shareholders or debit Shareholder accounts for sales
commissions, including contingent deferred, deferred and other sales
charges, and service fees (i.e., wire redemption charges) and prepare and
transmit payments, as appropriate, to the underwriter for commissions and
service fees received;
(x) track shareholder accounts by financial intermediary source and
otherwise as reasonably requested by the Fund and provide periodic
reporting to the Fund or its administrator or other agent;
(xi) maintain records of account for and provide reports and statements to
the Trust and Shareholders as to the foregoing;
(xii) record the issuance of Shares of each Fund and maintain pursuant to
Rule 17Ad-10(e) under the Securities Exchange Act of 1934, as amended
("1934 Act") a record of the total number of Shares of the Trust, each
Fund and each Class thereof, that are authorized, based upon data provided
to it by the Trust, and are issued and outstanding and provide the Trust
on a regular basis a report of the total number of Shares that are
authorized and the total number of Shares that are issued and outstanding;
(xiii) provide a system that will enable the Fund to calculate the total
number of Shares of each Fund and Class thereof sold in each State;
(xiv) provide necessary information to the Trust to enable the Trust to
monitor and make appropriate filings with respect to the escheatment laws
of the various states and territories of the United States;
(xv) oversee the activities of proxy solicitation firms, if requested by
the Trust;
(xvi)monitor transactions in each Fund for market timing activity in
accordance with the Trust's policies and procedures, which may be amended
from time to time; and
(xvii) account for and administer all shareholder account fees as provided
in each Fund's Prospectus.
(b) CFS shall receive and tabulate proxy votes, coordinate the tabulation
of proxy and shareholder meeting votes and perform such other additional
services as may be specified from time to time by the Fund, all pursuant
to mutually acceptable compensation and implementation agreements.
(c) The Trust or its administrator or other agent (i) shall identify to
CFS in writing those transactions and assets to be treated as exempt from
reporting for each state and territory of the United States and for each foreign
jurisdiction (collectively "States") and (ii) shall monitor the sales activity
with respect to Shareholders domiciled or resident in each State. The
responsibility of CFS for the Trust's state registration status is solely
limited to the reporting of transactions to the Trust, and CFS shall have no
obligation, when recording the issuance of Shares, to monitor the issuance of
such Shares or to take cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole responsibility of the Trust or
its administrator or other agent.
(d) CFS shall establish and maintain facilities and procedures reasonably
acceptable to the Trust for the safekeeping, control, preparation and use of
share certificates, check forms, and facsimile signature imprinting devices. CFS
shall establish and maintain facilities and procedures reasonably acceptable to
the Trust for safekeeping of all records maintained by CFS pursuant to this
Agreement.
(e) CFS shall cooperate with each Fund's independent public accountants
and shall take reasonable action to make all necessary information available to
the accountants for the performance of the accountants' duties.
(f) Anti-Money Laundering ("AML") Delegation. The Trust has elected to
delegate to CFS certain AML duties under this Agreement and the parties have
agreed to such duties and terms as stated in the attached schedule (Schedule B
entitled "AML Delegation"), which may be changed from time to time subject to
mutual written agreement between the parties. CFS has adopted the necessary
policies and procedures, which are reasonably designed to carryout the AML
Delegation, and will provide a copy of such policies and procedures to the Trust
prior to the commencement of this Agreement and will promptly provide the Trust
with any material amendments thereto. CFS will strictly adhere to its anti-money
laundering procedures and controls.
B-4Transfer Agency and Services Agreement
Schedule B
to the
Transfer Agency and Services Agreement
between
DGHM Investment Trust (the "Trust") and
Commonwealth Fund Services, Inc. ("CFS")
Dated as of October 1, 2008
AML DELEGATION
1. Delegation.
Subject to the terms and conditions set forth in this Agreement, the Trust
hereby delegates to CFS those aspects of the Trust's Anti-Money Laundering
Program (the "AML Program") that are set forth in Section 4 below (the
"Delegated Duties"). The Delegated Duties set forth in Section 4 may be amended,
from time to time, by mutual agreement of the Trust and CFS upon the execution
by such parties of a revised Schedule B bearing a later date than the date
hereof.
1.2 CFS agrees to perform such Delegated Duties, with respect to the Fund
shareholders for which CFS maintains the applicable shareholder
information, subject to and in accordance with the terms and conditions of
this Agreement.
2. Consent to Examination. In connection with the performance
------------------------
by CFS of the Delegated Duties, CFS understands and
acknowledges that the Fund remains responsible for assuring
compliance with the USA PATRIOT Act of 2001 ("USA PATRIOT
Act") and the laws implementing the USA PATRIOT Act and that
the records CFS maintains for the Fund relating to the AML
Program may be subject, from time to time, to examination
and/or inspection by federal regulators in order that the
regulators may evaluate such compliance. CFS hereby
consents to such examination and/or inspection and agrees to
cooperate with such federal regulators in connection with
their review. For purposes of such examination and/or
inspection, CFS will use its best efforts to make available,
during normal business hours and on reasonable notice, all
required records and information for review by such
regulators.
3. Limitation on Delegation. The Fund acknowledges and agrees
-------------------------
that in accepting the delegation hereunder, CFS is agreeing
to perform only the Delegated Duties, as may be amended from
time to time, and is not undertaking and shall not be
responsible for any other aspect of the AML Program or for
the overall compliance by the Fund with the USA PATRIOT Act
or for any other matters that have not been delegated
hereunder. Additionally, the parties acknowledge and agree
that CFS shall only be responsible for performing the
Delegated Duties with respect to the accounts for which CFS
maintains the applicable shareholder information.
4. Delegated Duties.
4.1 Consistent with the services provided by CFS and with respect to the
applicable shareholder information maintained by CFS, CFS shall:
(a) Provide an individual, subject to approval by the Trust's Boarod of
Trustees, to serve as the Trust's anti-money laundering officer, who will
be responsible for managing the AML Program.
(b) Submit all new account and registration maintenance transactions
through the Office of Foreign Assets Control ("OFAC") database and such
other lists or databases of trade restricted individuals or entities as
may be required from time to time by applicable regulatory authorities;
(c) Submit special payee checks through OFAC database;
(d) Review redemption transactions that occur within thirty (30) days of
account establishment or maintenance;
(e) Review wires sent pursuant to instructions other than those already on
file with CFS;
(f) Review accounts with small balances followed by large purchases;
(g) Review accounts with frequent activity within a specified date range
followed by a large redemption;
(h) On a daily basis, review purchase and redemption activity per tax
identification number ("TIN") within each Fund to determine if activity
for that TIN exceeded the $100,000 threshold on any given day;
(i) Compare all new accounts and registration maintenance through the
Known Offenders database and notify the Trust of any match.
(j) Monitor and track cash equivalents under $10,000 for a rolling
twelve-month period and file any required reports with the IRS and issue
the Shareholder notices required by the IRS;
(k) Determine when a suspicious activity report ("SAR") should be filed as
required by regulations applicable to mutual funds and prepare and file
the SAR. Provide the Trust with a copy of the SAR within a reasonable time
after filing; notify the Trust if any further communication is received
from U.S. Department of the Treasury or other law enforcement agencies
regarding the SAR;
(l) Compare account information to any FinCEN request received by the
Trust and provided to CFS pursuant to USA PATRIOT Act Sec. 314(a). Provide
the Trust with documents/information necessary to respond to requests
under USA PATRIOT Act Sec. 314(a) within required time frames;
(m) (i) Verify the identity of any person seeking to open an account with
each Fund, (ii) maintain records of the information used to verify the
person's identity in accordance with applicable regulations, (iii)
determine whether the person appears on any lists of known or suspected
terrorists or terrorist organizations provided to the Trust by any
government agency, and (iv) perform enhanced due diligence with respect to
any investor that CFS has reason to believe presents high risk factors
with regard to money laundering or terrorist financing, prior to accepting
an investment from such investor; and
(n) (i) Monitor for any suspected money laundering activity with respect
to correspondent accounts for foreign financial institutions and private
banking accounts and report any such conduct required by applicable
regulations, and (ii) conduct due diligence on private banking accounts in
the event that one or more Funds changes its line of business in a manner
that would involve the establishment or maintenance of such accounts.
4.2 In the event that CFS detects activity as a result of the foregoing
procedures, CFS shall timely file any required reports, promptly notify
appropriate government agencies and also immediately notify the Fund,
unless prohibited by applicable law.
4.3 Recordkeeping. CFS shall keep all records relating to the Delegated Duties
for an appropriate period of time and, at a minimum, the period of time
required by applicable law or regulation. CFS will provide the Trust with
access to such records upon reasonable request.
4.4 AML Reporting to the Fund
(a) On a quarterly basis, CFS shall provide a report to the Fund
on its performance of the AML Delegated Duties, among
other compliance items, which report shall include
information regarding the number of: (i) potential
incidents involving cash and cash equivalents or unusual
or suspicious activity, (ii) any required reports or
forms that have been filed on behalf of the Fund, (iii)
outstanding customer verification items, (iv) potential
and confirmed matches against the known offender and
OFAC databases and (v) potential and confirmed matches
in connection with FinCen requests. Notwithstanding
anything in this Section 4.3(a) to the contrary, CFS
reserves the right to amend and update the form of its
AML reporting from time to time to comply with new or
amended requirements of applicable law.
(b) At least annually, CFS will arrange for independent testing
(an audit) of the AML services it provides to its
clients on an organization-wide basis by a qualified
independent auditing firm. CFS will provide the AML
compliance officer of the Fund with the results of the
audit and testing, including any material deficiencies
or weaknesses identified and any remedial steps that
will be taken or have been taken by CFS to address such
material deficiencies or weaknesses.
(c) On an annual basis, CFS will provide the Fund with a written
certification that, among other things, it has implemented its AML
Program and has performed the Delegated Duties.
Schedule C
to the
Transfer Agency and Services Agreement
between
DGHM Investment Trust (the "Trust") and
Commonwealth Fund Services, Inc. ("CFS")
Dated as of October 1, 2008
FEE SCHEDULE
DGHM All-Cap Value Fund
The greater of 6 basis points on assets up to $50 million and 4 basis points on
assets over $50 million per year, or an annual maintenance fee of $16.00 per
open account and $3.00 per closed account; subject to a $10,000 annual minimum.
For the purposes of this Agreement, an open account is an account that has
assets or that has had assets for the current tax reporting period. For example,
an account opened and funded on Jaunary 2, 2006 which is redeemed in full on May
31, 2006 would continue to be billable as an open account until April 15, 2007
because it needs to be maintained through the tax reporting cycle of the year
following the full redemption. On April 16, 2007, the account would be billable
as an closed account. Unfunded accounts, that is accounts that have never been
funded, are not billable. A closed account has a zero balance and no activity in
the current tax reporting cycle.
Internet access for shareholder account look-up and broker account access will
be available to those portfolios wishing to provide the service to their
shareholders and/or brokers.
Out-of-pocket expenses will be passed through as incurred, with no xxxx-up or
set-off. Out-of-pocket expenses include, but are not limited to:
Postage Forms
Telephone (Long Distance/800 Service) Mailing House
Expenses
Telephone (Dedicated circuits) Proxy Solicitation
Express Charges Storage Fees
Fund/SERV & Networking Fees Bank Account
Maintenance Fees
FedWire/ACH/Swift Fees Custom Programming
Costs
Special Reports Conversion/Deconversion
Costs*
Special Training requested by Fund SAS 70
Reporting
Annual AML Review 22c-2 Compliance
Labor costs associated with items covered under out-of-pocket provisions will be
based on the following schedule:
Principal/Officer $250.00/hr
Manager/Supervisor $175.00/hr
Programmer/Technical $150.00/hr
Administrative $75.00/hr
*Conversion costs will be based on vendor per-account charges plus labor, billed
at the rates noted above.
