i-COMPLIANCE SERVICES AGREEMENT
AGREEMENT dated as of October 5, 2004 among The Appleton Funds (the
"Trust"), an Ohio business trust, Appleton Partners, Inc. (the "Adviser"), a
Massachusetts corporation, an Ohio corporation, and Integrated Fund Services,
Inc. ("Integrated"), an Ohio corporation.
WHEREAS, the Trust is a management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 and is the investment adviser to the Trust;
WHEREAS, shares of beneficial interest in the Trust are divided into
separate series (each, along with any series which may in the future be
established, a "Fund," collectively, the "Funds"); and
WHEREAS, the Trust and the Adviser wish to employ Integrated to provide
certain compliance services on behalf of the Trust; and
WHEREAS, Integrated wishes to provide such services to the Trust under the
conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust, the Adviser and Integrated agree as
follows:
1. APPOINTMENT
The Trust and the Adviser hereby employ Integrated to perform those
compliance services described in this Agreement and the Exhibits attached hereto
for the Trust. Integrated shall act under such appointment and perform the
obligations thereof in accordance with the Trust's current registration
statement and as required by applicable federal laws and regulations upon the
terms and conditions hereinafter set forth. The appointment shall begin at a
time mutually agreed upon by the parties.
2. COMPLIANCE SERVICES
Subject to the direction and control of the Trustees of the Trust,
Integrated shall perform the compliance services for the Trust detailed in
Exhibits A-B. Integrated shall perform such other services for the Trust and the
Funds that are mutually agreed upon by the parties from time to time, for which
the Trust will pay Integrated the amounts agreed upon between them.
3. ASSUMPTIONS
The Trust is ultimately responsible for each Fund's compliance
program and its compliance with applicable federal securities laws, including
Rule 38a-1 under the 1940 Act. In addition, the management of each Fund and the
management of the Funds' service providers are responsible for implementation
and execution of their compliance programs.
4. CONFIDENTIALITY
A. Without the prior consent of the other party, no party shall
disclose Confidential Information (as defined below) of any other party received
in connection with the services provided under this Agreement. The receiving
party shall use the same degree of care as it uses to protect its own
confidential information of like nature, but no less than a reasonable degree of
care, to maintain in confidence the confidential information of the disclosing
party. The foregoing provisions shall not apply to any information that (i) is,
at the time of disclosure, or thereafter becomes, part of the public domain
through a source other than the receiving party, (ii) is subsequently learned
from a third party that, to the knowledge of the receiving party, is not under
an obligation of confidentiality to the disclosing party, (iii) was known to the
receiving party at the time of disclosure, or (iv) is generated independently by
the receiving party, or (v) is disclosed pursuant to applicable law, subpoena,
applicable professional standards or other process.
B. For the purpose of this Section 4, Confidential Information shall
mean Technical Elements (as defined below), or any information identified by
either party as "Confidential" and/or "Proprietary" or which, under all of the
circumstances, ought reasonably to be treated as confidential and/or
proprietary. Integrated retains the right to use its knowledge, experience, and
know-how, including processes, ideas, concepts and techniques developed in the
course of performing the services.
C. In connection with performing its services under this Agreement,
Integrated may use certain data, modules, components, designs, utilities,
subsets, objects, program listings, tools, models, methodologies, programs,
systems, analysis frameworks, leading practices, data bases, screen formats,
report formats, interactive design technologies, documentation manuals and
specifications ("Technical Elements"). Certain Technical Elements were owned or
developed by Integrated prior to, or independently from, its engagement
hereunder and are the sole and exclusive property of Integrated and Integrated
retains all rights thereto; and certain other Technical Elements consist of
third party works and products which Integrated has acquired the right to use.
Neither the Trust nor the Adviser shall have any rights in the Technical
Elements. The Trust and the Adviser each agree to treat all Technical Elements
as Confidential Information.
5. SPECIAL SERVICES AND REPORTS
Integrated may provide special services and reports as may be
reasonably requested by the Trust or the Adviser, which may result in an
additional charge, the amount of which shall be mutually agreed upon by the
parties.
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6. SUBCONTRACTING
Integrated may, at its expense, and, upon prior written approval
from the Trust or the Adviser, as applicable, subcontract with any entity or
person concerning the provision of the services contemplated hereunder;
provided, however, that Integrated shall not be relieved of any of its
obligations under this Agreement by the appointment of such subcontractor and
provided further, that Integrated shall be responsible for all acts of such
subcontractor as if such acts were its own.
7. COMPENSATION
For performing its services under this Agreement, the Trust or the
Adviser shall pay Integrated a fee in accordance with Exhibit C attached hereto.
8. EXPENSES
Integrated shall furnish, at its expense and without cost to the
Trust or the Adviser, the services of its personnel to the extent that such
services are required to carry out its obligations under this Agreement. All
costs and expenses not expressly assumed by Integrated under this Paragraph
shall be paid by the Trust or the Adviser. A list of typical expenses is set
forth in Exhibit D; this list is not all inclusive.
9. REFERENCES TO INTEGRATED, THE ADVISER OR THE TRUST
A. Neither the Trust nor the Adviser nor their agents shall
circulate any printed matter which contains any reference to Integrated or use
Integrated's name, or any of its trademarks, service marks or logos, including
"i-Compliance", without the prior written approval of Integrated as applicable.
The Trust or the Adviser will submit printed matter requiring approval to
Integrated in draft form, allowing sufficient time for review by Integrated and
its counsel prior to any deadline for printing.
B. Integrated shall not circulate any printed matter that contains
any reference to the Trust or the Adviser without the prior written approval of
the Trust or the Adviser as applicable, excepting solely such printed matter as
merely identifies the Trust or the Adviser as a client of Integrated. Integrated
will submit printed matter requiring approval to the Trust in draft form,
allowing sufficient time for review by the Trust or the Adviser and its counsel
prior to any deadline for printing.
10. INDEMNIFICATION OF INTEGRATED
A. Integrated may rely on information reasonably believed by it to
be accurate and reliable. Except as may otherwise be required by the 1940 Act
and the rules thereunder, neither Integrated nor its directors, officers,
employees, shareholders, agents, control persons or affiliates of any thereof
shall be subject to any liability for, or any damages, including consequential
damages, expenses or losses incurred by the Trust or the Adviser in connection
with, any error of judgment, mistake of law, any act or omission connected with
or arising out of any services rendered under or payments made pursuant to this
Agreement or any other matter to which this Agreement relates, except by reason
of willful misfeasance, bad faith or gross negligence on the part of any such
persons in the performance of the duties of Integrated under this Agreement or
by reason of reckless disregard by any of such persons of the obligations and
duties of Integrated under this Agreement. Integrated may apply to the Trust or
the Adviser at any time for instructions and may consult counsel for the Trust
or the Adviser, or its own counsel, and with accountants and other experts with
respect to any matter arising in connection with its duties hereunder, and
Integrated shall not be liable or accountable for any action taken or omitted by
it in good faith in accordance with such instruction, or with the opinion of
such counsel, accountants, or other experts. Integrated shall not be held to
have notice of any change of authority of any officers, employees, or agents of
the Trust until receipt of written notice thereof have been received by
Integrated from the Trust.
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B. Any person, even though also a director, officer, employee,
shareholder or agent of Integrated, or any of its affiliates, who may be or
become an officer, trustee, employee or agent of the Trust, shall be deemed,
when rendering services to the Trust or acting on any business of the Trust, to
be rendering such services to or acting solely as an officer, trustee, employee
or agent of the Trust and not as a director, officer, employee, shareholder or
agent of or one under the control or direction of Integrated or any of its
affiliates, even though paid by one of these entities.
C. Notwithstanding any other provision of this Agreement, the Trust
and the Adviser shall each indemnify and hold harmless Integrated, its
directors, officers, employees, shareholders, agents, control persons and
affiliates of any thereof from and against any and all losses, damages, claims,
suits, actions, demands, expenses and liabilities (whether with or without basis
in fact or law), including legal fees and expenses and investigation expenses,
of any and every nature which Integrated may sustain or incur or which may be
asserted against Integrated by any person by reason of, or as a result of: (i)
any action taken or omitted to be taken by Integrated in good faith in reliance
upon any oral or written instructions of an authorized person of the Trust or
the Adviser or upon the opinion of legal counsel for the Trust or the Adviser or
its own counsel; (ii) any action taken or omitted to be taken by Integrated in
connection with its appointment in good faith in reliance upon any law, act,
regulation or interpretation of the same even though the same may thereafter
have been altered, changed, amended or repealed; or (iii) any action taken or
omitted to be taken by Integrated on its own initiative, in good faith and in
accordance with the standard of care set forth in this Agreement. However,
indemnification under this subparagraph shall not apply to actions or omissions
of either Integrated or its directors, officers, employees, shareholders,
agents, control persons or affiliates in cases of its or their own gross
negligence, willful misconduct, bad faith, or reckless disregard of its or their
own duties hereunder.
D. Notwithstanding anything to the contrary in this Agreement, in no
event shall Integrated be liable to the Trust or the Adviser or any third party
for any special, consequential, punitive or incidental damages, or any other
damages not measured by the prevailing party's actual damages even if advised of
the possibility of such damages.
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11. TERMINATION
A. With respect to the Compliance Program Administration Services,
the provisions of this Agreement shall be effective on the date first above
written, shall continue in effect for a period of one year ("Initial Term") from
that date and shall continue in force for successive one year terms thereafter
("Renewal Term"), unless otherwise terminated as provided herein. With respect
to the Compliance Program Development and Implementation and Annual Review
Services, the provisions of this Agreement shall be effective on the date first
above written and shall terminate upon completion of the services, as mutually
agreed upon by the parties.
B. Any party may terminate this Agreement at the end of the Initial
Term, or at the end of any subsequent Renewal Term, by giving the other parties
at least one hundred eighty (180) days' prior written notice of such termination
specifying the date fixed therefore. In the event this Agreement is terminated
by the Trust or the Adviser prior to the end of the Initial Term or any
subsequent Renewal Term, the Trust or the Adviser shall make a one-time cash
payment to Integrated in consideration of services provided under this
Agreement, and not as a penalty, equal to the remaining balance of the fees
payable to Integrated under this Agreement through the end of the Initial Term
or Renewal Term, as applicable. The Trust or the Adviser shall likewise
reimburse Integrated for any out-of-pocket expenses and disbursements
("out-of-pocket expenses") reasonably incurred by Integrated in connection with
the services provided under this Agreement within 30 days of notification to the
Trust or the Adviser of such out-of-pocket expenses regardless of whether such
out-of-pocket expenses were incurred before or after the termination of this
Agreement.
Notwithstanding the foregoing, following any such termination, in
the event that Integrated in fact continues to perform any one or more of the
services contemplated by this Agreement (or any Schedule or Exhibit hereto) with
the consent of the Trust or the Adviser, the provisions of this Agreement,
including without limitation the provisions dealing with compensation and
indemnification, shall continue in full force and effect. Fees and out-of-pocket
expenses incurred by Integrated but unpaid by the Trust or the Adviser upon such
termination shall be immediately due and payable upon and notwithstanding such
termination.
C. If a party materially fails to perform its duties and obligations
hereunder (a "Defaulting Party") resulting in a material loss to another party
or parties, such other party or parties (the "Non-Defaulting Party") may give
written notice thereof to the Defaulting Party, which such notice shall set
forth with sufficient detail the nature of the breach. The Defaulting Party
shall have ninety (90) days from its receipt of notice to cure the breach. If
such material breach shall not have been remedied to commercially reasonable
operating standards, the Non-Defaulting Party may terminate this Agreement by
giving sixty (60) days written notice of such termination to the Defaulting
Party. If Integrated is the Non-Defaulting Party, its termination of this
Agreement shall not constitute a waiver of any rights or remedies with respect
to services it performed prior to such termination, or the right of Integrated
to receive such compensation as may be due as of the date of termination or to
be reimbursed for all reasonable out-of-pocket expenses. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against a Defaulting Party.
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D. In the case of the following transactions, not in the ordinary
course of business, namely, the merger of the Trust, or a Fund, into or the
consolidation of the Trust, or a Fund, with another investment company, the sale
by the Trust, or a Fund, of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Trust, or a Fund,
and distribution of its assets, or any similar transaction or any other form of
business transaction involving the Trust or a Fund, this Agreement will
terminate with respect to the applicable Fund or Funds and Integrated shall be
released from any and all obligations hereunder upon the payment of the fees,
disbursements and expenses due to Integrated through the end of the then current
term of this Agreement. The parties acknowledge and agree that the damages
provision set forth above in paragraph B shall be applicable in those instances
in which Integrated are not retained to provide compliance services subsequent
to the transactions listed above.
E. Integrated will be entitled to collect from the Trust or the
Adviser all reasonable expenses incurred in conjunction with termination of this
Agreement, including but not limited to out-of-pocket expenses, employee time,
system fees and fees charged by third parties with whom Integrated has
contracted.
12. SERVICES FOR OTHERS
Nothing in this Agreement shall prevent Integrated or any of its
affiliates (as defined in the 0000 Xxx) from providing services for any other
person, firm or corporation (including other investment companies); provided,
however, that Integrated expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the performance of its
obligations to the Trust or the Adviser under this Agreement.
13. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS
The parties hereto acknowledge and agree that nothing contained
herein shall be construed to require Integrated to perform any services for the
Trust which services could cause Integrated to be deemed an "investment adviser"
of the Trust within the meaning of Section 2(a)(20) of the 1940 Act or to
supersede or contravene the Trust's prospectus or statement of additional
information or any provisions of the 1940 Act and the rules thereunder. Except
as otherwise provided in this Agreement, the Trust assumes full responsibility
for complying with all applicable requirements of the 1940 Act, the Securities
Act of 1933, as amended, and any other laws, rules and regulations of
governmental authorities having jurisdiction.
14. LIMITATION OF LIABILITY.
A. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the trust
property of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by an officer of the Trust,
acting as such, and neither such authorization by such 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.
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B. Standard of Care; Uncontrollable Events; Limitation of Liability.
Integrated shall use reasonable professional diligence to ensure the accuracy of
all services performed under this Agreement, but shall not be liable to the
Trust or the Adviser for any action taken or omitted by Integrated in the
absence of bad faith, willful misfeasance, negligence or reckless disregard by
Integrated of its obligations and duties. The duties of Integrated shall be
confined to those expressly set forth herein, and no implied duties are assumed
by or may be asserted against Integrated hereunder.
Integrated shall provide the Trust or the Adviser , at such times as
each may reasonably require, copies of reports rendered by independent public
accountants on the internal controls and procedures of Integrated relating to
the services provided by Integrated under this Agreement.
C. Representations and Warranties of the Trust. The Trust represents
and warrants to Integrated that:
(i) It is a Trust duly incorporated and validly existing under
the laws of the jurisdiction of its formation, and has full capacity and
authority to enter into this agreement and to carry out its obligations
hereunder;
(ii) It has all necessary authorizations, licenses and permits
to carry out its business as currently conducted;
(iii) It has been in, and shall continue to be in compliance
in all material respects with all laws and regulations applicable to its
business and operations;
(iv) This Agreement has been duly authorized by the Trust and,
when executed and delivered by the Trust, 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 right and remedies of
creditors and secured parties.
15. SEVERABILITY.
In the event any provision of this Agreement is determined to be
void or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
16. QUESTIONS OF INTERPRETATION.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States Courts or in the absence of any controlling decision of any such court,
by rules, regulations or orders of the SEC issued pursuant to said 1940 Act. In
addition, where the effect of a requirement of the 1940 Act, reflected in any
provision of this Agreement, is revised by rule, regulation or order of the SEC,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
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17. CONFIDENTIALITY
A. All parties hereto agree that any nonpublic information obtained
hereunder concerning another party is confidential and may not be disclosed
without the consent of the other party, except as may be required by applicable
law or at the request of a governmental agency. The parties further agree that a
breach of this provision would irreparably damage the other party and
accordingly agree that each of them is entitled, in addition to all other
remedies at law or in equity to an injunction or injunctions without bond or
other security to prevent breaches of this provision.
B. All parties hereto agree that nonpublic personal shareholder
information shall remain the sole property of the Trust. Such information shall
not be disclosed or used for any purpose except in connection with the
performance of the duties and responsibilities described herein or as required
or permitted by law. The provisions of this Section shall survive the
termination of this Agreement. The parties agree to comply with any and all
regulations promulgated by the SEC or other applicable laws regarding the
confidentiality of shareholder information.
18. NOTICES.
All notices required or permitted under this Agreement shall be in
writing (including telex and telegraphic communication) and shall be (as elected
by the person giving such notice) hand delivered by messenger or courier
service, telecommunicated, or mailed (airmail if international) by registered or
certified mail (postage prepaid), return receipt requested, addressed to:
To the Trust: The Appleton Funds
00 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
To the Adviser: Appleton Partners, Inc.
00 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
To Integrated: Integrated Fund Services, Inc.
000 Xxxx 0xx Xxxxxx, Xxx 000
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
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or to such other address as any party may designate by notice complying with the
terms of this Paragraph. Each such notice shall be deemed delivered (a) on the
date delivered if by personal delivery; (b) on the date telecommunicated if by
telegraph; (c) on the date of transmission with confirmed answer back if by
telex, telefax or other telegraphic method or e-mail; and (d) on the date upon
which the return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the case may be, if
mailed.
19. AMENDMENT.
This Agreement may not be amended or modified except by a written
agreement executed by all affected parties.
20. BINDING EFFECT.
Each of the undersigned expressly warrants and represents that he or
she has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his or her signature will operate to bind the party
indicated to the foregoing terms.
21. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
22. FORCE MAJEURE.
Integrated assumes no responsibility hereunder, and shall not be
liable, for any damage, loss of data, interruption, delay or any loss whatsoever
caused by events beyond its control, including and without limitation, acts of
God, interruption or failure of power or other utility, transportation, mail, or
communication services, equipment failure, acts of civil or military authority,
sabotages, war, insurrection, riots, national emergencies, explosion, flood,
accident, earthquake or other catastrophe, fire, natural disasters, strike or
other labor problems, legal action, present or future law, governmental order or
decree, rule or regulation, or shortages of suitable parts, materials, labor or
transportation.
23. MISCELLANEOUS.
The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE APPLETON FUNDS
By: __________________________
Xxxxx X. Xxxxx
Its: President
APPLETON PARTNERS, INC.
By: __________________________
Xxxxxxx X. Xxxxxxxxxxx
Its: President
INTEGRATED FUND SERVICES, INC.
By: __________________________
Xxxxx X. Xxxxxxxxx
Its: President
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