SERVICING AGREEMENT
AGREEMENT effective as of the 8th day of May, 1995 by and among FREEDOM
MUTUAL FUND-Freedom Cash Management Fund (the "Fund") and FUNDMANAGER TRUST
("FundManager"), registered investment companies and Massachusetts and Delaware
business trusts, respectively, and INVESTORS BANK & TRUST COMPANY, a
Massachusetts trust company (the "Bank").
WITNESSETH:
WHEREAS, the Bank serves currently as the shareholder servicing agent
for FundManager Trust;
WHEREAS, another firm, Xxxx Xxxxxxx Fund Services, Inc., serves
currently as the Transfer Agent, shareholder servicing agent and dividend
disbursing agent for the Fund (the Transfer Agent");
WHEREAS, the Fund and FundManager desire to appoint the Bank as a
servicing agent for certain shareholders who maintain accounts in both the Fund
and FundManager and are clients of the M.D. Xxxxxx Division of Freedom Capital
Management Corporation, the investment adviser for both the Fund and
FundManager.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the Fund and the Bank agree as follows:
ARTICLE 1. TERMS OF APPOINTMENT; DUTIES OF THE BANK
1.01 Subject to the terms and conditions set forth in this Agreement, the Fund
and FundManager hereby employ and appoint the Bank to act as, and the Bank
agrees to act as, servicing agent for those shareholders of the Fund who are
also shareholders in FundManager and clients of the M.D. Xxxxxx Division of
Freedom Capital Management Corporation ("Shareholders") with respect to the
shares of the Fund owned by such Shareholders (the "Shares").
1.02 The Bank agrees that it will perform the following services:
(a) In connection with procedures established from time to time by
agreement between the Fund and the Bank, the Bank shall:
(i) Receive and transmit orders and payment therefor for the
purchase of Shares from or on behalf of Shareholders to the Transfer Agent to be
held on the books of the Transfer Agent in an account for the Bank as agent for
Shareholders;
(ii) Pursuant to purchase orders, obtain from the Transfer
Agent the appropriate number of Shares and hold such shares in the appropriate
Shareholder account;
(iii) Receive and transmit redemption requests and redemption
directions and deliver the appropriate documentation therefor to the Transfer
Agent;
(iv) At the appropriate time as and when it receives monies
paid to it by or at the direction of the Transfer Agent with respect to any
redemption, pay over or cause to be paid over in the appropriate manner such
monies as instructed by the redeeming Shareholders;
(v) Facilitate transfers and exchanges of Shares by
Shareholders upon receipt of appropriate instructions;
(vi) Receive dividends and distributions declared by the Fund
and pay over or cause to be paid over to the Shareholders in the appropriate
manner, such monies as instructed by the Shareholders or the Fund;
(vii) Create and maintain all necessary records including
those specified in Article 9 hereof, in accordance with all applicable laws,
rules and regulations, including but not limited to records required by Section
31(a) of the Investment Fund Act of 1940, as amended (the "1940 Act"), and those
records pertaining to the various functions performed by it thereunder. All
records shall be available for inspection and for use by the Fund. Where
applicable, such records shall be maintained by the Bank for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
(viii) Make available during regular business hours all
records and other data created and maintained pursuant to the Agreement for
reasonable audit and inspection by the Fund, or any person retained by the Fund.
Upon reasonable notice by the Fund, the Bank shall make available during regular
business hours its facilities and premises employed in connection with its
performance of this Agreement for reasonable visitation by the Fund, or any
person retained by the Fund.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a) or in any Schedule hereto, the Bank shall: perform all of
the customary services of a shareholder servicing agent, including but not
limited to, maintaining all Shareholder accounts, forwarding proxies, receiving,
tabulating and forwarding to the Fund proxies received from Shareholders with
respect to annual and special meetings of shareholders, forwarding Shareholder
reports and prospectuses to current Shareholders, withholding taxes on all
Shareholder accounts as required, including nonresident alien accounts,
preparing and filing U.S. Treasury Department Forms 1099 and other appropriate
forms required with respect to dividends and distributions by federal
authorities for all Shareholders, 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, responding to
Shareholder telephone calls and shareholder correspondence, preparing and
mailing activity statements for Shareholders, and providing Shareholder account
information.
ARTICLE 2. SALE OF SHARES
2.01 The Fund shall use its best efforts to cause its Distributors to deliver or
cause to be delivered to the Bank with respect to any Shares of the Fund sold by
the Distributors to or for the account of a Shareholder, a document duly
specifying: (i) the name of the Fund whose Shares were sold; (ii) the number of
Shares sold, trade date, and price, (iii) the amount of money to be delivered to
the Transfer Agent for the sale of such Shares and specifically allocated to the
Fund; and (iv) in the case of a new account, a new account application or
sufficient information to establish an account.
2.02 The Bank will, upon receipt by it of a check or other payment identified by
it as an investment in Shares of the Fund on behalf of a Shareholder and drawn
or endorsed to the Fund, or identified as being for the account of, the Fund on
behalf of a Shareholder, promptly transmit payment to the Transfer Agent.
2.03 Under procedures as established by mutual agreement between the Fund and
the Bank, the Bank shall hold on behalf of the Shareholder or his authorized
agent such Shares, computed to the nearest three decimal points, as he is
entitled to receive, based on the appropriate net asset value of the Fund is
Shares, determined in accordance with the Prospectus (as defined in Section
14.01(e) hereof) and applicable Federal law or regulation. The Bank shall be
entitled to rely upon the latest directions, if any, previously received by the
Bank from the Shareholder or his authorized agent concerning the delivery of
such Shares.
2.04 The Bank shall not be required to obtain any Shares of the Fund where it
has received a written instruction from the Fund or written notification from
any appropriate Federal or State authority that the sale of the Shares of the
Fund in question has been suspended or discontinued, and the Bank shall be
entitled to rely upon such written instructions or written notification.
ARTICLE 3. RETURNED CHECKS
3.01 In the event that any check or other order for the transfer of money
payable to or to the order of the Bank is returned unpaid for any reason, or in
the event that the Transfer Agent notifies the Bank of any such returned check
or other order, the Bank will (a) give prompt notice of such event to the Fund
and/or the Transfer Agent, (b) place a stop transfer order on the Bank's records
against all Shares with respect to such check or order or (c) take such other
steps as the Bank may, in its discretion, deem appropriate. Provided that these
procedures, and any others as may be agreed upon from time to time, between the
Fund and the Bank, regarding purchases and redemptions of Shares, are adhered to
by the Bank, the Bank shall not be liable for any loss suffered as a result of
returned or unpaid purchase or redemption transactions. Legal or other expenses
incurred to collect amounts owed as a consequence of returned or unpaid purchase
or redemption transactions shall be an expense of the Fund.
ARTICLE 4. REDEMPTIONS
4.01 Shares of the Fund may be redeemed in accordance with the procedures set
forth in the Prospectus of the Fund as defined in Section 14.01(e) hereof, and
the Bank will duly forward all redemption requests to the Transfer Agent.
ARTICLE 5. TRANSFERS AND EXCHANGES
5.01 The Bank is authorized to review and transfer to the Transfer Agent any
requests for exchanges between the Fund and any other fund for which exchanges
are permitted in accordance with the requirements set forth in the Prospectus of
the Fund, as defined in Section 14.01(e) hereof.
ARTICLE 6. DISTRIBUTIONS
6.01 The Bank shall accept from the Transfer Agent funds equal to the cash
amount of any dividend or distribution to be paid out. The Bank will calculate,
prepare and mail checks to (at the address as it appears on the records of the
Bank), or (where appropriate) credit such dividend or distribution to the
account of, Shareholders, and maintain and safeguard all underlying records.
6.02 The Bank will replace lost checks at its discretion and in conformity with
regular business practices.
6.03 The Bank will maintain all records necessary to reflect the crediting of
dividends which are reinvested in Shares of the Fund, including without
limitation daily dividends.
6.04 If the Bank shall not receive from the Transfer Agent sufficient cash to
make payment to all Shareholders as of the record date, the Bank shall, upon
notifying the Fund, withhold payment to all Shareholders of record as of the
record date until such sufficient cash is provided to the Bank.
ARTICLE 7. OTHER DUTIES
7.01 The Bank shall be responsible only for the performance of the duties
expressly provided for herein or for the performance of such other duties and
functions as may from time to time be agreed to in writing. Without limiting the
foregoing, the Bank shall have no duty or obligation in the performance of its
duties hereunder to monitor the issuance of the 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 Fund.
ARTICLE 8. TAXES
8.01 It is understood that the Bank shall file such appropriate information
returns concerning the payment of dividends and capital gain distributions and
tax withholding with the proper Federal, State and local authorities as are
required by law to be filed by the Fund on behalf of the Shareholders and shall
withhold such sums as are required to be withheld by applicable law.
ARTICLE 9. BOOKS AND RECORDS
9.01 The Bank shall maintain confidential records showing for each Shareholder's
account the following: (i) names, addresses and tax identification numbers; (ii)
numbers of Shares held; (iii) historical information regarding the account of
each Shareholder, including dividends paid and date and price of all
transactions on a Shareholder's account; (iv) any stop or restraining order
placed against a Shareholder's account; (v) information with respect to
withholdings; (vi) any capital gain or dividend reinvestment order, plan
application, dividend address and correspondence relating the current
maintenance of a Shareholder's account; (vii) any information required in order
for the Bank to perform the calculations contemplated or required by this
Agreement; and (viii) such other information and data as may be required by
applicable law.
9.02 Any records required to be maintained by Rule 31a-1 under the 1940 Act will
be preserved for the periods prescribed in Rule 31a-2 under the 1940 Act. Such
records may be inspected by the Fund at reasonable times. The Bank may, at its
option at any time, and shall forthwith upon the Fund's demand, turn over to the
Fund and cease to retain in the Bank's files, records and documents created and
maintained by the Bank in performance of its service or for its protection. At
the end of the six-year retention period, such periods and documents will either
be turned over to the Fund, or destroyed in accordance with the Fund's
authorization.
9.03 Procedures applicable to the services to be performed hereunder may be
established from time to time by agreement between the Fund and the Bank. The
Bank shall have the right to utilize any shareholder accounting and
recordkeeping systems which, in its opinion, qualifies to perform any services
to be performed hereunder. The Bank shall keep records relating to the services
performed hereunder, in the form and manner as it may deem advisable.
ARTICLE 10. FEES AND EXPENSES
10.01 For performance by the Bank pursuant to this Agreement, the Bank will be
paid by the Fund and FundManager an annual maintenance fee as set out in
Schedule A which is attached hereto. Such fees and out-of-pocket expenses and
advances identified under Section 10.02 below may be changed from time to time.
10.02 In addition to the fee paid under Section 10.01 above, the Bank will be
reimbursed for out-of-pocket expenses or advances incurred by the Bank for the
items set out in Schedule A. In addition, any other expenses incurred by the
Bank at the request or with the consent of the Fund and FundManager including,
without limitation, any equipment or supplies specifically ordered or required
to be purchased, will be reimbursed by the Fund and FundManager
10.03 The Bank will be reimbursed for expenses within thirty days following the
mailing of the respective billing notice. Postage for mailing of dividends,
proxies, Fund reports and other mailings to all shareholder accounts shall be
advanced to the Bank at least seven (7) days prior to the mailing date of such
material.
ARTICLE 11. REPRESENTATIONS AND WARRANTIES OF THE BANK
THE BANK REPRESENTS AND WARRANTS TO THE FUND AND FUNDMANAGER THAT:
11.01 It is a trust company duly organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts.
11.02 It is empowered under applicable laws and by its charter and by-laws to
enter into and perform this Agreement.
11.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
11.04 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
ARTICLE 12. REPRESENTATIONS AND WARRANTIES OF THE FUND AND FUNDMANAGER
THE FUND AND FUNDMANAGER REPRESENTS AND WARRANTS TO THE BANK THAT:
12.01 The Fund and FundManager are business trusts duly organized and existing
and in good standing under the laws of Massachusetts and Delaware, respectively.
12.02 They are empowered under applicable laws and by its charter documents and
by-laws to enter into and perform this Agreement.
12.03 All proceedings required by said charter documents and by-laws have been
taken to authorize them to enter into and perform this Agreement.
12.04 A registration statement on Form N-1A (including a prospectus and
statement of additional information) under the Securities Act of 1933 and the
1940 Act is currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with respect
to all Shares of the Fund being offered for sale.
12.05 When Shares are hereafter issued in accordance with the terms of the
Prospectus as defined in Section 14.01 (e) hereof, such Shares shall be validly
issued, fully paid and nonassessable by the Fund.
ARTICLE 13. INDEMNIFICATION
13.01 Except as set forth in subparagraph (e) hereof, the Bank shall not be
responsible for, and the Fund and FundManager shall indemnify and hold the Bank
harmless from and against, any and all losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions taken or omitted to be taken by the Bank in good faith
in reliance on or use by the Bank of information, records and documents which
(i) are received by the Bank and furnished to it by or on behalf of the Fund or
FundManager, (ii) have been prepared and/or maintained by the Fund or
FundManager, or any other person or firm on behalf of the Fund or FundManager,
and (iii) were received by the Bank from the Transfer Agent.
(b) Any action taken or omitted to be taken by the Bank 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.
(c) Either the Fund's or FundManager's refusal or failure to comply
with the terms of this Agreement, or which arise out of such parties' lack of
good faith, negligence or willful misconduct or which arise out of the breach of
any representation or warranty of such parties hereunder.
(d) The reliance in good faith on, or the carrying out by the Bank of,
any instructions or requests, whether written or oral, of the Fund or
FundManager, or the acting upon any paper or document furnished by or on behalf
of the Fund or FundManager, 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 the Bank by machine readable input, telex,
CRT data entry or other similar means authorized by the Fund or FundManager, and
the Bank shall not be held to have notice of any change of authority of any
person, until receipt of written notice thereof from the Fund or FundManager.
13.02 The Bank shall indemnify and hold the Fund and FundManager harmless from
and against any and all losses, damages, costs, charges, reasonable counsel
fees, payments, expenses and liability arising out of or attributed to any
action or failure or omission to act by the Bank as a result of the Bank's lack
of good faith, negligence, willful misconduct, knowing violation of law or
fraud.
13.03 At any time any parties hereto may consult with legal counsel with respect
to any matter arising in connection with the services to be performed under this
Agreement, and such party shall not be liable and shall be indemnified for any
action taken or omitted by it in good faith reliance upon the opinion of such
counsel except for a knowing violation of law.
13.04 In the event any party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, interruption of
electrical power or other utilities, equipment or transmission failure or damage
reasonably beyond its control, or other causes reasonably beyond its control,
such party shall not be liable to the other for any damages resulting from such
failure to perform or otherwise from such causes.
13.05 No party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any act or
failure to act hereunder as contemplated by this Agreement.
13.06 In any case in which any party may be asked to identify or hold the other
party harmless the identifying party shall be advised of all pertinent facts
concerning the situation in question.
The indemnified party shall notify the indemnifying party promptly after
identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the indemnifying party, although
failure to do so shall not prevent recovery by the indemnified party. In the
event of any such claim, the indemnifying party will be entitled to participate
therein and, to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from the
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to the indemnified party, unless the indemnified party in good
faith believes that its financial condition or business would be materially
impaired thereby, and provided further that if the defendants in any such action
include both the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it which are
different from or additional to those available to the indemnifying party, the
indemnified party shall have the right to select separate counsel at the expense
of the indemnifying party to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of the indemnified party. No
settlement of any action or claim shall be effected without the written consent
of the parties, which consent shall not be unreasonably withheld. The
obligations of the parties hereto under this Section shall survive the
termination of this Agreement.
ARTICLE 14. COVENANTS OF THE PARTIES
14.01 The Fund and FundManager shall promptly furnish to the Bank the following:
(a) A certified copy of the resolutions of the Trustees of the Fund and
FundManager authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) copies of each vote of the Trustees designating authorized persons
to give instructions to the Bank, and a Certificate providing specimen
signatures for such authorized persons.
(c) Certificates as to any change in any officer or Trustee of the Fund
and FundManager.
(d) All account application forms and other documents relating to
shareholder accounts or relating to any plan, program or service offered by the
Fund and FundManager.
(e) copies of the registration statements on Form N-lA as amended and
declared effective by the Securities and Exchange Commission and all
post-effective amendments thereto and copies of the current prospectus of the
Fund and FundManager as may be updated, supplemented or stickered from time to
time, such current prospectus referred to herein as the "Prospectus."
(f) Such other certificates, documents or opinions as may mutually be
deemed necessary or appropriate for the Bank in the proper performance of its
duties.
14.02 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act and the Rules thereunder, the Bank agrees
that all such records prepared or maintained by the Bank relating to the
services to be performed by the Bank hereunder are the confidential property of
the Fund and FundManager and will be preserved, maintained and made available in
accordance with such Section and Rules, and will be surrendered to the company
on and in accordance with its request.
14.03 The Bank and the Fund and FundManager agree that all books, records,
information and data pertaining to the business of the other parties 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 required by law.
14.04 In case of any requests or demands for the inspection of the Shareholder
records of the Fund, the Bank will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such instruction. 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.
ARTICLE 15. TERM OF AGREEMENT
15.01 This Agreement shall be effective on the date hereof (the "Effective
Date") and shall continue in effect from year to year provided that this
Agreement may be terminated by either party at any time without payment of any
penalty upon ninety (90) days written notice to the other parties .
15.02 Should the Fund and FundManager exercise their right to terminate, all
out-of-pocket expenses associated with the movement of records and material will
be borne by the Fund and FundManager. Additionally, the Bank reserves the right
to charge for any other reasonable expenses associated with such termination.
ARTICLE 16. ADDITIONAL FUNDS
16.01 In the event that the Fund establishes one or more series of Shares or
desires to have the Bank act as shareholder servicing agent for other existing
series under the terms hereof, it shall so notify the Bank in writing, and if
the Bank agrees in writing to provide such services, such series of Shares shall
become a Fund hereunder.
ARTICLE 17. ASSIGNMENT
17.01 Except as provided in Section 17.03 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
17.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
17.03 The Bank, may without further consent on the part of the Fund and
FundManager, subcontract for the performance of any of the services to be
provided hereunder to third parties, including any affiliate of the Bank,
provided that all actions of such subcontractors or agents appointed hereunder
shall be deemed for the purposes of this Agreement to be actions of the Bank
hereunder, and the appointment of any such subcontractor or agent shall not
relieve the bank of its responsibilities or liabilities hereunder, provided
however that the Bank shall be indemnified and held harmless by the Fund and
FundManager for any acts or omissions of any such sub-contractors or agents as
if such acts or omissions were performed by the Bank.
ARTICLE 18. AMENDMENT
18.01 This Agreement may be amended or modified by a written agreement executed
by both parties.
ARTICLE 19. MASSACHUSETTS LAW TO APPLY
19.01 This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts.
ARTICLE 20. MERGER OF AGREEMENT AND SEVERABILITY
20.01 This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
20.02 In the event any provision of this Agreement shall be held unenforceable
or invalid for any reason, the remainder of the Agreement shall remain in full
force and effect.
20.03 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall together,
constitute only one instrument.
ARTICLE 21. NOTICES
21.01 Any notice of other instrument in writing authorized or required by this
Agreement to be given to either party hereto will be sufficiently given if
addressed to such party and mailed or delivered to it at its office at the
address set forth below:
FOR THE FUND AND FUNDMANAGER: FREEDOM CAPITAL MANAGEMENT CORP.
XXX XXXXXX XXXXXX
XXXXXX, XX 00000
ATTN: XXXX X. XXXXXXX
FOR THE BANK: INVESTORS BANK & TRUST FUND
00 XXXXX XXXXXX
XXXXXX, XX 00000
ATTN: XXXXXXX XXXXX
ARTICLE 22. USE OF NAME
22.01 Neither the Fund nor FundManager shall use the name of the Bank or any of
its affiliates in any prospectus, sales literature or other material relating to
such parties in a manner not approved by the Bank prior thereto in writing;
provided, however, that the approval of the Bank shall not be required for any
use of its name which merely refers in accurate and factual terms to its
appointment hereunder or which is required by the Securities and Exchange
Commission or any state securities authority or any other appropriate
regulatory, governmental, or judicial authority; provided, further, that in no
event shall such approval be unreasonably withheld or delayed.
ARTICLE 23. LIMITATION ON LIABILITY
23.01 The Master Trust Agreements establishing the Fund and FundManager provide
that all persons extending credit to, contracting with or having any claim
against either the Fund or FundManager shall look only to the assets of the Fund
or FundManager, respectively, and neither the shareholders nor the Trustees, nor
any of the officers, employees or agents of the Fund or FundManager shall be
personally liable therefore.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and the year first above written.
FREEDOM CASH MANAGEMENT FUND
Name: Xxxx Xxxxxxx
Title: President
FUNDMANAGER TRUST
Name: Xxxx Xxxxxxx
Title: President
INVESTORS BANK & TRUST COMPANY
Name: Xxxxx X. Xxxxx
Title: Director
DATE: May 8, 1995
SCHEDULE A
FEES AND EXPENSES
FREEDOM CASH MANAGEMENT FUND
FUNDMANAGER TRUST
SERVICING FEE SCHEDULE
MAY 8, 1995
A. ACCOUNT MAINTENANCE ANNUAL ACCOUNT FEE
MONEY MARKET / DAILY DIVIDEND FUNDS $18.25
(OPEN AND CLOSED ACCOUNTS)
MINIMUM ANNUAL FEE $25,000.00
CHECK CLEARING FEE $ 5.00 / CHECK
WIRES $ 8.00 / IN
$ 10.00 / OUT
B. OUT-OF-POCKET EXPENSES
THESE CHARGES INCLUDE, BUT ARE NOT LIMITED TO:
o TELEPHONE o FORMS AND SUPPLIES
o CUSTOMIZED PROGRAMMING o PROXY TABULATION
o RETURNED CHECK-INSUFFICIENT FUNDS o AD-HOC REPORTING
o PRINTING, DELIVERY & POSTAGE
