EXHIBIT EX99.h2a
COMMONWEALTH FUND SERVICES, INC.
TRANSFER AGENCY AND SERVICES AGREEMENT
This TRANSFER AGENCY AND SERVICES AGREEMENT is made as of this 30th day
of July, 2008, by and between World Funds 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 no par value, 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 19 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 By-Laws (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 subcontract with third parties to perform certain of the services required
to be performed by CFS hereunder, provided, however, that CFS shall remain
principally responsible to the Trust for the acts and omissions of such other
entities.
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 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
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
Virginia 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. 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.
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 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 order shall be eligible to receive
distributions of the Fund at the time specified in the Prospectus pursuant to
which the Shares are offered.
Shareholder payments shall be considered Federal Funds 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 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 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 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 Funds
and any Classes thereof being offered for sale.
Section 12. Proprietary Information; 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 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.
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 to be
retained by such party under applicable laws or regulations. Each party hereby
agrees to dispose of any "consumer report information," as such term is defined
in Regulation S-P.
Section 13. Indemnification. 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 the Transfer Agent or 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: (i) 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; (ii) any
instructions or requests of the Trust or any of its officers; (iii) 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 (iv) 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
(h) The breach of any representation or warranty set forth in Section 11 above.
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.
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 Trust shall have the option to participate with CFS in the
defense of such claim or to defend against said claim in its own name or that of
CFS. 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.
Section 14. Standard of Care/Limitation of Liability.
(a) 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 effect 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.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) 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 (ii) CFS shall not be liable for (A) 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 (B)
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.
(c) 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 (i) any loss to the Trust if a NAV
Difference for which CFS would otherwise be liable under this Agreement is less
than $0.01 per Fund share or (ii) 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.
For purposes of this Agreement: (i) 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; (ii) 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; (iii) 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 (iv) 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 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, 10, 11, 12, 13,
14, 20, 21, 22, 24, 26, 27, 29 and 32 shall survive any termination of this
Agreement.
Section 11. 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.
(a) 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; provided,
however, that 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
consequential, 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. 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 Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000, Attention:
Xx. Xxxxx Xxxxx; and notices to CFS shall be directed to: 0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxx. Xxxxx X. Xxxxx.
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.
WORLD FUNDS TRUST
By: /s/ Xxxxxxxx X. Xxxxx, III
--------------------------
Xxxxxxxx X. Xxxxx, III
Chairman
COMMONWEALTH FUND SERVICES, INC.
By: /s/ Xxxx Xxxxx, III
--------------------------
Xxxx Xxxxx, III
President
Schedule A
to the
Transfer Agency and Services Agreement
between
World Funds Trust (the "Trust") and
Commonwealth Fund Services, Inc. ("CFS")
Dated as of July 30th, 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 Trust 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.
Schedule B
to the
Transfer Agency and Services Agreement
between
World Funds Trust (the "Trust") and
Commonwealth Fund Services, Inc. ("CFS")
Dated as of July 30th, 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) 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;
(b) Submit special payee checks through OFAC database;
(c) Review redemption transactions that occur within thirty (30) days of account
establishment or maintenance;
(d) Review wires sent pursuant to instructions other than those already on file
with CFS;
(e) Review accounts with small balances followed by large purchases;
(f) Review accounts with frequent activity within a specified date range
followed by a large redemption;
(g) 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;
(h) Compare all new accounts and registration maintenance through the Known
Offenders database and notify the Trust of any match.
(i) 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;
(j) 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;
(k) 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;
(l) (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
(m) (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
World Funds Trust (the "Trust") and
Commonwealth Fund Services, Inc. ("CFS")
Dated as of July 30th, 2008
Commonwealth Quantitative Fund
The base fee for a portfolio is 6 basis points per year with an $18,000 minimum.
In addition, there will be an annual maintenance fee of $16.00 per open account
and $3.00 per closed account. These per account fees will be charged in addition
to the base fee.
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 January 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. $16.00 per account and 0.06% on assets
Internet access for shareholder account look-up and broker account access, as
well as VRU (Voice Response Unit) access, will be available to those
portfolios/classes wishing to provide the service to their shareholders and/or
brokers for an annual fee of $9,000 per fund.
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.
Schedule C
to the
Transfer Agency and Services Agreement
between
World Funds Trust (the "Trust") and
Commonwealth Fund Services, Inc. ("CFS")
Dated as of July 30th, 2008
Commonwealth Small Cap Fund
The base fee for a portfolio is 6 basis points per year with an $18,000 minimum.
In addition, there will be an annual maintenance fee of $16.00 per open account
and $3.00 per closed account. These per account fees will be charged in addition
to the base fee.
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 January 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. $16.00 per account and 0.06% on assets
Internet access for shareholder account look-up and broker account access, as
well as VRU (Voice Response Unit) access, will be available to those
portfolios/classes wishing to provide the service to their shareholders and/or
brokers for an annual fee of $9,000 per fund.
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.
