Exhibit No. EX-99.h.1
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the ______ day of February, 2008, by and between
RevenueShares ETF Trust (the "Trust") and each Series listed on Appendix I
hereto (each such Series hereinafter a "Fund"), and THE BANK OF NEW YORK, a New
York banking company having its principal office and place of business at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Bank").
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
WHEREAS, the Trust will ordinarily issue for purchase and redeem shares of
funds of the Funds (the "Shares") only in aggregations of Shares known as
"Creation Units" (currently 50,000 shares) (each a "Creation Unit") principally
in kind;
WHEREAS, The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York ("DTC"), or its nominee (Cede
& Co.), will be the registered owner (the "Shareholder") of all Shares; and
WHEREAS, the Trust desires to appoint the Bank as its transfer agent,
dividend disbursing agent, and agent in connection with certain other
activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement, the
Trust, on behalf of the Funds, hereby employs and appoints the Bank to act as,
and the Bank agrees to act as, its transfer agent for the authorized and issued
shares of beneficial interest of the Trust ("Shares"), and as the Trust's
dividend disbursing agent.
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with the terms and conditions of the form of Participant
Agreement prepared by the Distributor, a copy of which is attached hereto as
Exhibit A, the Bank shall:
(i) Perform and facilitate the performance of purchases and redemption of
Creation Units;
(ii) Prepare and transmit by means of DTC's book-entry system payments for
dividends and distributions declared by the Trust on behalf of the applicable
Fund;
(iii) Maintain the record of the name and address of the Shareholder and
the number of Shares issued by the Trust and held by the Shareholder;
(iv) Record the issuance of Shares of the Trust and maintain a record of
the total number of Shares of the Trust which are outstanding, and, based upon
data provided to it by the Trust, the total number of authorized Shares. The
Bank 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.
(v) Prepare and transmit to the Trust and the Trust's administrator and to
any applicable securities exchange (as specified to the Bank by the Trust or its
administrator) information with respect to purchases and redemptions of Shares;
(vi) On days that the Trust may accept orders for purchases or redemptions,
calculate and transmit to Bank, the Trust's administrator the number of
outstanding Shares for each Fund;
(vii) On days that the Trust may accept orders for purchases or redemptions
(pursuant to the Participant Agreement), transmit to the Bank, the Trust and DTC
the amount of Shares purchased on such day;
(viii) Confirm to DTC the number of Shares issued to the Shareholder, as
DTC may reasonably request;
(ix) Prepare and deliver other reports, information and documents to DTC as
DTC may reasonably request;
(x) Extend the voting rights of the Shareholder for extension by DTC to DTC
participants and the beneficial owners of Shares in accordance with policies and
procedures of DTC for book-entry only securities;
(xi) Create and maintain those books and records of the Trust required by
the 1940 Act and specified by the Trust in Schedule A attached hereto;
(xii) Prepare a monthly report of all purchases and redemptions of Shares
during such month on a gross transaction basis, and identify on a daily basis
the net number of Shares either redeemed or purchased on such Business Day and
with respect to each Authorized Participant purchasing or redeeming Shares, the
amount of Shares purchased or redeemed;
(xiii) Receive from the Distributor (as defined in the Participant
Agreement) or from its agent purchase orders from Authorized Participants (as
defined in the Participant Agreement) for Creation Unit Aggregations of Shares
received in good form and accepted by or on behalf of the Trust by the
Distributor, promptly transmit appropriate trade instructions to the National
Securities Clearance Corporation or DTC, as applicable, and pursuant to such
orders issue the appropriate number of Shares of the applicable Fund and hold
such Shares in the account of the Shareholder for each of the respective Funds
of the Trust;
(xiv) Receive from the Authorized Participants redemption requests, deliver
the appropriate documentation thereof to The Bank of New York as custodian for
the Trust, generate and transmit or cause to be generated and transmitted
confirmation of receipt of such redemption requests to the Authorized
Participants submitting the same; transmit appropriate trade instructions to the
National Securities Clearance Corporation or DTC, as applicable; and redeem the
appropriate number of Creation Unit Aggregations of Shares held in the account
of the Shareholder;
(xv) Confirm the name, U.S taxpayer identification number, and principle
place of business of each Authorized Participant; and
(xvi) Implement the Trust's Anti-Money Laundering ("AML") program.
(b) In addition to the services set forth in the above sub-section 1.2(a),
the Bank shall: perform the customary services of a transfer agent and dividend
disbursing agent including, but not limited to, maintaining the account of the
Shareholder, obtaining at the request of the Trust from the Shareholder a list
of DTC participants holding interests in the Global Certificate, and those
services set forth on Schedule A attached hereto.
(c) The following shall be delivered by the Bank to DTC as the Shareholder
for delivery to DTC participants and beneficial owners in accordance with the
procedures for book-entry only securities of DTC:
(i) Annual and semi-annual reports of the Trust;
(ii) Fund proxies, proxy statements and other proxy soliciting materials;
(iii) Fund prospectus and amendments and supplements thereto, including
stickers; and
(iv) Other communications as the Trust may from time to time identify as
required by law or as the Trust may reasonably request
(d) The Bank shall provide additional services, if any, as may be agreed
upon in writing by the Trust and the Bank.
(e) The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner required by applicable laws, rules, and
regulations, and to the extent required by Section 31 of the 1940 Act and the
rules thereunder (the "Rules"). All such books and records shall be the property
of the Trust, will be preserved, maintained and made available in accordance
with such Section and Rules, and will be surrendered promptly to the Trust on
and in accordance with its request.
2. Fees and Expenses
2.1 The Bank shall receive from the Trust such compensation for the
Transfer Agent's services provided pursuant to this Agreement as may be agreed
to from time to time in a written fee schedule approved by the parties. The fees
are accrued daily and billed monthly and shall be due and payable upon receipt
of the invoice. Upon the termination of this Agreement before the end of any
month, the fee for the part of the month before such termination shall be
prorated according to the proportion which such part bears to the full monthly
period and shall be payable upon the date of termination of this Agreement.
2.2 In addition to the fee paid under Section 2.1 above, the Trust agrees
to reimburse the Bank for reasonable out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by the
Bank for the items set out in the fee schedule attached hereto or relating to
dividend distributions and reports (whereas all expenses related to creations
and redemptions of Trust Shares shall be borne by the relevant authorized
participant in such creations and redemptions). In addition, any other expenses
incurred by the Bank at the request or with the consent of the Trust, will be
reimbursed by the Trust on behalf of the applicable Fund.
2.3 The Trust agrees to pay all fees and reimbursable expenses within
thirty (30) business days following the receipt of the respective billing notice
accompanied by supporting documentation, as appropriate. Postage for mailing of
dividends, proxies, Trust reports and other mailings to all shareholder accounts
shall be advanced to the Bank by the Trust at least seven (7) days prior to the
mailing date of such materials.
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Trust that:
(a) It is a banking company duly organized and existing and in good
standing under the laws of the State of New York.
(b) It is duly qualified to carry on its business in the State of New York.
(c) It is empowered under applicable laws and by its Charter and By-Laws to
act as transfer agent and dividend disbursing agent, and to enter into and
perform its obligations under this Agreement.
(d) All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
(e) It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
(f) It is registered with the U.S. Securities and Exchange Commission as a
transfer agent under Section 17A of the Securities Exchange Act of 1934, as
amended, or is exempt from registration thereunder in accordance with the terms
thereof.
4. Representations and Warranties of the Trust
The Trust represents and warrants to the Bank that:
(a) It is duly organized and existing and in good standing under the laws
of the State of Delaware.
(b) It is empowered under applicable laws and by its Declaration of Trust
and By-Laws to enter into and perform this Agreement.
(c) All corporate proceedings required by said Articles of Incorporation
and By-Laws have been taken to authorize it to enter into, and perform its
obligations under, this Agreement.
(d) It is an open-end management investment company registered under the
1940 Act.
(e) A registration statement under the Securities Act of 1933, as amended,
has been filed on behalf of each of the Funds and will be effective as of this
date that the Bank begins to provide services hereunder, and appropriate state
securities law filings have been made and will continue to be made, with respect
to all Shares of the Trust being offered for sale.
5. Indemnification
5.1 The Bank shall not be responsible for, and the Trust shall indemnify
and hold the Bank harmless from and against, any and all losses, damages, costs,
charges, counsel fees, including, without limitation, those incurred by the Bank
in a successful defense of any claims by the Trust, payments, expenses and
liability ("Losses") which the Bank may sustain or incur or which may be
asserted against the Bank in connection with or relating to this Agreement or
the Bank's actions or omissions with respect to this Agreement, except for any
Losses for which the Bank has accepted liability pursuant to Article 6 of this
Agreement.
5.2 At any time the Bank may apply to any officer of the Trust for
instructions, and may consult with legal counsel of their choosing with respect
to any matter arising in connection with the services to be performed by the
Bank under this Agreement, and the Bank and its agents or subcontractors shall
not be liable for any action taken or omitted by it in reliance upon such
instructions received from the Trust and shall promptly advise the Trust of such
advice or opinion (except for actions or omissions by the Bank taken with bad
faith, negligence, willful misconduct, or reckless disregard of its duties
hereunder). The Bank, its agents and subcontractors may act upon any paper or
document, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data, records or
documents provided to the Bank or its agents or subcontractors by or on behalf
of the Trust by machine readable input, telex, CRT data entry or other similar
means authorized by the Trust, and shall not be held to have notice of any
change of authority of any person until receipt of written notice thereof from
the Trust.
5.3 This indemnification provision shall apply to actions taken pursuant to
this Agreement and the Participant Agreement.
6. Standard of Care and Limitation of Liability
The Bank shall have no responsibility and shall not be liable for any
Losses, except that the Bank shall be liable to the Trust for direct money
damages caused by its own or its employees' bad faith, negligence, willful
misconduct or reckless disregard of its or their duties hereunder, or its breach
of any of its representations and warranties. In no event shall the Bank be
liable for special, indirect or consequential damages, regardless of the form of
action and even if the same were foreseeable. For purposes of this Agreement,
none of the foregoing shall be or be deemed bad faith, negligence, willful
misconduct or reckless disregard:
(a) The conclusive reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services that (i) are
received by the Bank or its agents or subcontractors, and (ii) have been
prepared, maintained or performed by the Trust or any other person or firm on
behalf of the Trust including but not limited to any previous transfer agent or
registrar, except where such other person or firm is the Bank or an affiliate or
agent of the Bank.
(b) The conclusive reliance on, or the carrying out by the Bank or its
agents or subcontractors of, any instructions or requests of the Trust or
instructions or requests on behalf of the Trust.
(c) The offer or sale of Shares by or for the Trust in violation of any
requirement under the federal securities laws or regulations, or the securities
laws or regulations of any state that such Shares be registered in such state,
or any violation of any stop order or other determination or ruling by any
federal agency, or by any state with respect to the offer or sale of Shares in
such state.
7. Concerning the Bank
7.1 (a) The Bank may employ agents or attorneys-in-fact that are not
affiliates of the Bank with the prior written consent of the Trust (which
consent shall not be unreasonably withheld), and shall not be liable for any
loss or expense arising out of, or in connection with, the actions or omissions
to act of such agents or attorneys-in-fact, provided that the Bank acts in good
faith and with reasonable care in the selection and retention of such agents or
attorneys-in-fact.
(b) The Bank may, without the prior consent of the Trust, enter into
subcontracts, agreements and understandings with any Bank affiliate, whenever
and on such terms and conditions as it deems necessary or appropriate to perform
its services hereunder. No such subcontract, agreement or understanding shall
discharge Bank from its obligations hereunder.
7.2 The Bank shall be entitled to conclusively rely upon any written or
oral instruction actually received by the Bank and reasonably believed by the
Bank to be duly authorized and delivered. The Trust agrees to forward to the
Bank written instructions confirming oral instructions by the close of business
of the same day that such oral instructions are given to the Bank. The Trust
agrees that the fact that such confirming written instructions are not received
or that contrary written instructions are received by the Bank shall in no way
affect the validity or enforceability of transactions authorized by such oral
instructions and effected by the Bank. If the Trust elects to transmit written
instructions through an on-line communication system offered by the Bank, the
Trust's use thereof shall be subject to the terms and conditions attached hereto
as Appendix A.
7.3 The Bank shall establish and maintain a disaster recovery plan and
back-up system satisfying the requirements of its regulators (the "Disaster
Recovery Plan and Back-Up System"). The Bank shall not be responsible or liable
for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its control which are not a result of its negligence, including without
limitation, acts of God; earthquakes; fires; floods; wars; civil or military
disturbances; sabotage; epidemics; riots; interruption, loss or malfunctions of
transportation, computer (hardware or software) or communication services; labor
disputes; acts of civil or military authority; governmental actions; or
inability to obtain labor, material, equipment or transportation, provided that
the Bank has established and is maintaining the Disaster Recovery Plan and
Back-Up System, or if not, that such delay or failure would have occurred even
if the Bank had established and was maintaining the Disaster Recovery Plan and
Back-Up System. Upon the occurrence of any such delay or failure the Bank shall
use commercially reasonable best efforts to resume performance as soon as
practicable under the circumstances.
7.4 The Bank shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this Agreement
and the Participation Agreement, and no covenant or obligation shall be implied
against the Bank in connection with this Agreement, except as set forth in this
Agreement and the Participation Agreement.
7.5 At any time the Bank may apply to an officer of the Trust for written
instructions with respect to any matter arising in connection with the Bank's
duties and obligations under this Agreement, and the Bank shall not be liable
for any action taken or omitted to be taken by the Bank in good faith in
accordance with such instructions. Such application by the Bank for instructions
from an officer of the Trust may, at the option of the Bank, set forth in
writing any action proposed to be taken or omitted to be taken by the Bank with
respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken, and the Bank shall not be liable for any
action taken or omitted to be taken in accordance with a proposal included in
any such application on or after the date specified therein unless, prior to
taking or omitting to take any such action, the Bank has received written or
oral instructions in response to such application specifying the action to be
taken or omitted.
7.6 Notwithstanding any provisions of this Agreement to the contrary, the
Bank shall be under no duty or obligation to inquire into, and shall not be
liable for:
(a) The legality of the issue, sale or transfer of any Shares, the
sufficiency of the amount to be received in connection therewith, or the
authority of the Trust to request such issuance, sale or transfer;
(b) The legality of the purchase of any Shares, the sufficiency of the
amount to be paid in connection therewith, or the authority of the Trust to
request such purchase;
(c) The legality of the declaration of any dividend by the Trust, or the
legality of the issue of any Shares in payment of any stock dividend; or
(d) The legality of any recapitalization or readjustment of the Shares.
8. Providing of Documents by the Trust and Transfers of Shares
8.1 The Trust shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the sole Board of Trustees of the
Trust authorizing the appointment of the Bank and the execution and delivery of
this Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Trust, and all
amendments thereto.
8.2 In the event that DTC ceases to be the Shareholder, the Bank shall
re-register the Shares in the name of the successor to DTC as Shareholder upon
receipt by the Bank of such documentation and assurances as it may reasonably
require.
8.3 Except as specifically provided herein, the Bank shall have no
responsibility whatsoever with respect to any beneficial interest in any of the
Shares owned by the Shareholder.
8.4 The Trust shall deliver to the Bank the following documents on or
before the effective date of any increase, decrease or other change in the total
number of Shares authorized to be issued:
(a) An opinion of counsel for the Trust, in a form satisfactory to the
Bank, with respect to (i) the validity of the Shares, the obtaining of all
necessary governmental consents, whether such Shares are fully paid and
non-assessable and the status of such Shares under the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, and any other
applicable federal law or regulations (i.e., if subject to registration, that
they have been registered and that the Registration Statement has become
effective or, if exempt, the specific grounds therefore), (ii) the status of the
Fund with regard to the 1940 Act, and (iii) the due and proper listing of the
Shares on all applicable securities exchanges; and
(b) In the case of an increase, if the appointment of the Bank was
theretofore expressly limited, a certified copy of a resolution of the Board of
Trustees of the Trust increasing the authority of the Bank.
8.5 RESERVED
8.6 The Bank agrees that all records prepared or maintained by the Bank
relating to the services to be performed by the Bank hereunder are the property
of the Trust and will be preserved, maintained and made available upon
reasonable request, and will be surrendered promptly to the Trust on and in
accordance with its request.
8.7 The Bank and the Trust agree that all books, records, confidential,
non-public, or proprietary information and data pertaining to the business of
the other party which are exchanged or received pursuant to the negotiation or
the carrying out of this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except as may be, or may become
required by law, by administrative or judicial order or by rule. Nothing in this
Agreement shall be deemed to authorize the Bank to waive attorney-client, work
product or other legal privilege by or on behalf of the Trust or its investment
adviser.
8.8 In case of any requests or demands for the inspection of Shareholder
records of the Trust, the Bank will promptly employ reasonable commercial
efforts to notify the Trust and secure instructions from an authorized officer
of the Trust as to such inspection. The Bank reserves the right, however, to
exhibit the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to exhibit the Shareholder
records to such person.
9. Termination of Agreement
9.1 The term of this Agreement shall be one year commencing upon the date
hereof (the "Initial Term") and shall automatically renew for additional
one-year terms (each a "Subsequent Term") unless either party provides written
notice of termination at least ninety (90) days prior to the end of any one year
term, or unless earlier terminated as provided below:
(a) Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term in the event the other party breaches any
material provision of this Agreement, including, without limitation in the case
of the Trust, its obligations under Section 2.1, provided that the non-breaching
party gives written notice of such breach to the breaching party and the
breaching party does not cure such violation within 90 days of receipt of such
notice.
(b) The Trust may terminate this Agreement at any time upon ninety (90)
days' prior written notice.
9.2 Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Trust.
9.3 The terms of Article 2 (with respect to fees and expenses incurred
prior to termination), and of Article 5 shall survive any termination of this
Agreement.
10. Additional Funds
In the event that the Trust establishes one or more additional series of
Shares with respect to which it desires to have the Bank render services as
transfer agent under the terms hereof, it shall so notify the Bank in writing,
and if the Bank agrees in writing to provide such services, such additional
issuance shall become Shares hereunder.
11. Assignment
11.1 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other party.
11.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
12. Severability and Beneficiaries
12.1 In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
thereby, provided that the obligation of the Trust to pay fees and expenses
hereunder is conditioned upon the provision of services to it by the Bank.
13.2 This Agreement is solely for the benefit of the Bank and the Trust,
including each Fund, and none of any Participant (as defined in the
Participation Agreement), the Distributor, any Shareholder or beneficial owner
of any Shares shall be or be deemed a third party beneficiary of this Agreement.
13. Amendment
This Agreement may be amended or modified only by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Trustees of the Trust.
14. New York Law to Apply
This Agreement shall be construed in accordance with the substantive laws
of the State of New York, without regard to conflicts of laws principles
thereof. The Trust and the Bank hereby consent to the jurisdiction of a state or
federal court situated in the Borough of Manhattan, New York City, New York in
connection with any dispute arising hereunder. The Trust hereby irrevocably
waives, to the fullest extent permitted by applicable law, any objection which
it may now or hereafter have to the laying of venue of any such proceeding
brought in such a court and any claim that such proceeding brought in such a
court has been brought in an inconvenient forum. The Trust and the Bank each
hereby irrevocably waives any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
15. Merger of Agreement
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof
whether oral or written.
16. Counterparts
This Agreement may be executed by the parties hereto in any number of
counterparts, each of which shall be deemed an original and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
17. Trust Liability
The Bank acknowledges and agrees that the obligations of the Trust
hereunder shall not be binding upon any of the shareholders, Trustees, officers,
employees or agents of the Trust personally, but shall bind only the trust
property of the Trust, as provided in its Agreement and Declaration of Trust.
The execution and delivery of this Agreement has been authorized by the Trustees
of the Trust and signed by an officer of the Trust, acting as such, and neither
such authorization by the Trustees nor such execution and delivery by such
officer shall 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 trust
property of the Trust as provided in its Agreement and Declaration of Trust.
18. Several Obligations of the Series
This Agreement is an agreement entered into between the Bank and the Trust
with respect to each Series. With respect to any obligation of the Trust on
behalf of any Series arising out of this Agreement, the Bank shall look for
payment or satisfaction of such obligation solely to the assets of the Series to
which such obligation relates as though the Bank had separately contracted with
the Trust by separate written instrument with respect to each Series.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
REVENUESHARES ETF TRUST
By: _______________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
THE BANK OF NEW YORK
By: _______________________________________
Name:
Title:
SCHEDULE A
BOOKS AND RECORDS TO BE MAINTAINED BY THE BANK
Source Documents requesting Creations and Redemptions
Correspondence/AP Inquiries
Reconciliations, bank statements, copies of canceled checks, cash proofs
Daily/Monthly reconciliation of outstanding Shares between the Trust and DTC
Dividend Records
Year-end Statements and Tax Forms
Exhibit A
Form of Authorized Participant Agreement
Appendix A
Instructions for Electronic Transmission of Instructions
