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EXHIBIT 99.B6-3
Services Agreement
with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
SERVICES AGREEMENT
This Agreement is made as of June 20, 1997, between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Co., Inc. ("Schwab"), a California corporation, each registered investment
company ("Fund Company") executing this Agreement, on its own behalf and on
behalf of each of its series or classes of shares listed on Schedule I, as
amended from time to time (such series or classes being referred to as the
"Fund(s)"), and Fund Affiliate (defined below) that has executed this Agreement.
Fund Company and Fund Affiliate are collectively referred to herein as "Fund
Parties." In the event that there are no series or classes of shares listed on
Schedule I, the term "Fund(s)" shall mean "Fund Company".
WHEREAS Fund Affiliate is either (i) an investment adviser to or
administrator for the Funds or (ii) the principle underwriter or distributor for
the Funds.
WHEREAS Fund Parties wish to have Schwab perform certain recordkeeping,
shareholder communication, and other services for each Fund; and
WHEREAS Schwab is willing to perform such services on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises set forth below, the parties agree as follows:
1. Services
a. During the term of this Agreement, Schwab shall perform the
services set forth on Exhibit A hereto, as such exhibit may be amended from time
to time by mutual consent of the parties (the "Services").
b. The parties agree that the Operating Agreement, dated as of
June 20, 1997, between Schwab and Fund Company, as amended from time to time
("Operating Agreement"), is incorporated herein by this reference. In processing
purchase, redemption, transfer and exchange orders placed by Schwab on behalf of
its customers, and in order to facilitate ▇▇▇▇▇▇'▇ performance of Services, all
terms and conditions of the Operating Agreement shall be binding as between
Schwab and Fund Parties, and the references to Fund Company therein shall be
deemed to mean Fund Parties for the purposes of this Agreement. In the event of
any inconsistency between the Operating Agreement and this Agreement, this
Agreement shall control.
2. Fees
For the Services, Schwab shall receive a fee (the "Fee") which
shall be calculated and paid in accordance with Exhibit B hereto. Schedule II
reflects the portion of the Fee that each Fund Party has agreed, as between
them, to pay. Should Exhibit A be amended to revise the Services, the parties
shall also amend Exhibit B and Schedule II, if necessary, in order to reflect
any changes in the Fee.
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3. Transaction Charges
The parties acknowledge and agree that Schwab may collect transaction
fees from certain customers (including "Active Traders," as Schwab may define
that term) for certain services and from other customers upon such other
customers' redemption of certain shares.
4. Indemnification
▇. ▇▇▇▇▇▇ shall indemnify and hold harmless Fund Parties and
their directors, officers, employees, and agents ("Indemnified Parties") from
and against any and all losses, claims, liabilities and expenses (including
reasonable attorney's fees) ("Losses") incurred by any of them arising out of
(i) ▇▇▇▇▇▇'▇ dissemination of information regarding Fund Parties or a Fund that
contains an untrue statement of material fact or any omission of a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading and that was not published or
provided to Schwab by or on behalf of Fund Company or its affiliated persons
("Affiliates") as defined under the Investment Company Act of 1940, as amended
(the "1940 Act"), or accurately derived from information published or provided
by or on behalf of Fund Company or any Affiliate, (ii) any breach by Schwab of
any representation, warranty or agreement contained in this Agreement, or (iii)
any willful misconduct or negligence by Schwab in the performance of, or failure
to perform, its obligations under this Agreement, except to the extent such
Losses are caused by Fund Company or Fund's breach of this Agreement or Fund
Company or Fund's willful misconduct or negligence in the performance, or
failure to perform, its obligations under this Agreement. This Section 4(a)
shall survive termination of this Agreement.
b. In any event, no party shall be liable for any special,
consequential or incidental damages.
5. Role and Relationship of Schwab
The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related services only
and are not the services of an underwriter or a principal underwriter of any
Fund within the meaning of the Securities Act of 1933, as amended, or the 1940
Act. This Agreement does not ▇▇▇▇▇ ▇▇▇▇▇▇ any right to purchase shares from any
Fund (although it does not preclude Schwab from purchasing any such shares), nor
does it constitute Schwab an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent Schwab is
involved in the purchase of shares of any Fund by ▇▇▇▇▇▇'▇ customers, such
involvement will be as agent of such customer only.
6. Information to be Provided
Fund Parties shall provide to Schwab prior to the effectiveness
of this Agreement or as soon thereafter as practicable, two (2) copies of the
then-current
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prospectus and statement of additional information of each Fund.
Fund Party shall provide Schwab with written copies of any amendments to or
changes in the Fund's prospectus or statement of additional information
immediately upon their effective date.
7. Representations and Warranties
a. Each Fund Party represents and warrants that it has obtained
certified resolutions of its board of directors authorizing such Fund Party to
enter into this Agreement.
b. Each Fund Party represents and warrants that the person
signing this Agreement on its behalf is an officer authorized to execute this
Agreement on behalf of such Fund Party.
8. Notices
All notices required by this Agreement (excluding the Operating
Agreement) shall be in writing and delivered personally or sent by first class
mail. Such notices will be deemed to have been received as of the earlier of
actual physical receipt or three (3) days after deposit, first class postage
prepaid, in the United States mail. All such notices shall be made:
if to Schwab, to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President/Mutual Funds
with a copy to: General Counsel, at the same address;
if to Fund Party, to the address given below in the signature
block.
9. Nonexclusivity
Each Party acknowledges that the other may enter into agreements
similar to this Agreement with other parties for the performance of services
similar to those to be provided under this Agreement, unless otherwise agreed to
in writing by the parties.
10. Assignablity
This Agreement is not assignable by any party without the other
parties' prior written consents and any attempted assignment in contravention
hereof shall be null and void; provided, however, that Schwab may, without the
consent of Fund Parties, assign its rights and obligations under this Agreement
to any Affiliate.
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11. Exhibits and Schedules; Entire Agreement
All Exhibits and Schedules to this Agreement, as they may be
amended from time to time, are by this reference incorporated into and made a
part of this Agreement. This Agreement (including the Exhibits and Schedules
hereto), together with the Operating Agreement, constitute the entire agreement
between the parties as to the subject matter hereof and supersede any and all
agreements, representations and warranties, written or oral, regarding such
subject matter made prior to the time at which this Agreement has been executed
and delivered by Schwab and Fund Parties.
12. No Waiver
The failure of either party to insist upon exercising any right
under this Agreement shall not be construed as a waiver or relinquishment to any
extent of such party's right to assert or rely upon such provision or right in
any other instance.
13. Amendment
This Agreement and the Exhibits and Schedules hereto may be
amended only by a writing executed by each party hereto that is to be bound by
such amendment.
14. Governing Law
This Agreement shall be governed by and interpreted under the
laws of the State of California, applicable to contracts between California
residents entered into and to be performed entirely within the state.
15. Counterparts
This Agreement may be executed in one or more counterparts, each
of which will be deemed an original, but all of which together shall constitute
one and the same instrument.
16. Effectiveness of Agreement; Termination
a. Upon ▇▇▇▇▇▇'▇ acceptance of Schedule I, as amended from time
to time, the effective date of this Agreement as to any Fund shall be the later
of the date on which this Agreement is made or the date set forth opposite the
name of the Fund on Schedule I.
b. This Agreement may be terminated as to a Fund by any party
(i) upon ninety (90) days' written notice to the other parties or (ii) upon such
shorter notice as is required by law, order, or instruction by a court of
competent jurisdiction or a regulatory body or self-regulatory organization with
jurisdiction over the terminating party or (iii) immediately, effective on the
day following the termination of any plan of distribution/shareholder servicing
("Rule 12b-1 Plan") adopted and maintained pursuant
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to Rule 12b-1 under the 1940 Act by any Fund that has a Rule 12b-1 Plan in
effect as of the effective date of this Agreement, provided that a portion of
the Fee is paid pursuant to the Rule 12b-1 Plan.
c. After the date of termination as to a Fund, Fund Parties will
not be obligated to pay the Fee with respect to any shares of the Fund that are
first held in Schwab customer accounts after the date of such termination.
However, notwithstanding any such termination, Fund Parties will remain
obligated to pay Schwab the Fee as to each share of the Fund that was considered
in the calculation of the Fee as of the date of termination (a "Pre-Termination
Share"), for so long as such Pre-Termination Share is held in any Schwab
brokerage account and Schwab continues to perform substantially all of the
Services as to such Pre-Termination Share. Further, for so long as Schwab
continues to perform the Services as to any Pre-Termination Shares, this
Agreement will otherwise remain in full force and effect as to such
Pre-Termination Shares. Fund Parties shall reimburse Schwab promptly for any
reasonable expenses Schwab incurs in effecting any termination of this
Agreement, including delivery to a Fund Party of any records, instruments, or
documents reasonably requested by the Fund Party.
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IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC. THE HAVEN CAPITAL MANAGEMENT TRUST,
on its own behalf and on behalf of each
Fund listed on Schedule I hereto
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President/Mutual Funds ----------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Date: July 28, 1997
---------------------------------- Title: President
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Date: July 11, 1997
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Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇. - 19th FL
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attn:
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Haven Capital Management, Inc.
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Name of Fund Affiliate
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Chairman
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Date: July 11, 1997
--------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇
-----------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------
Attn:
--------------------------------
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EXHIBIT A
SERVICES
1. Record Maintenance
Schwab shall maintain the following records with respect to a
Fund for each customer who holds Fund shares in a Schwab brokerage account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions
(including dividend reinvestments) and dates and amounts of dividends paid for
at least the current year to date;
c. Name and address of the customer, including zip codes
and social security numbers or taxpayers identification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. Shareholder Communications
Schwab shall:
a. Provide to a shareholder mailing agent for the purpose of
mailing certain Fund-related materials the names and addresses of all Schwab
customers who hold shares of such Fund in their Schwab brokerage accounts. The
shareholder mailing agent shall be a person or entity with whom the Fund has
arranged for the distribution of certain Fund-related material in accordance
with the Operating Agreement. The Fund-related materials shall consist of
updated prospectuses and any supplements and amendments thereto, annual and
other periodic reports, proxy or information statements and other appropriate
shareholder communications. In the alternative, in accordance with the Operating
Agreement, Schwab may distribute the Fund-related materials to its customers.
b. Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request and, as
applicable, with confirmation statements;
c. Mail statements to customers on a monthly basis (or, as to
accounts in which there has been no activity in a particular month, no less
frequently than quarterly) showing, among other things, the number of shares of
each Fund owned by such customer and the net asset value of such Fund as of a
recent date;
d. Produce and mail to customers confirmation statements
reflecting purchases and redemptions of shares of each Fund in Schwab brokerage
accounts;
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e. Respond to customer inquiries regarding, among other things,
share prices, account balances, dividend amounts and dividend payment dates; and
f. With respect to Fund shares purchased by customers after the
effective date of this Agreement, provide average cost basis reporting to the
customers to assist them in preparation of income tax returns.
3. Transactional Services
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from its
customers. Schwab shall also communicate, as to shares of each Fund, mergers,
splits and other reorganization activities.
4. Tax Information Returns and Reports
Schwab shall prepare and file with the appropriate governmental
agencies, such information, returns and reports as are required to be so filed
for reporting (i) dividends and other distributions made, (ii) amounts withheld
on dividends and other distributions and payments under applicable federal and
state laws, rules and regulations, and (iii) gross proceeds of sales
transactions as required.
5. Fund Communications
Schwab shall, on a daily basis and for each Fund, report the
number of shares on which the Fee is to be paid pursuant to this Agreement and
the number of shares on which no such Fee is to be paid. Schwab shall also
provide each Fund with monthly summaries of reports. Such summaries shall be
expressed in both shares and dollar amounts.
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EXHIBIT B
CALCULATION OF FEE
1. The Fee shall be calculated by multiplying the Daily Value of
Qualifying Shares (defined below) times 35 basis points per annum. The Fee shall
be computed daily and paid monthly in arrears.
2. The Daily Value of Qualifying Shares is the aggregate daily
value of all shares of the Fund held in Schwab brokerage accounts, subject to
the following exclusions ("Qualifying Shares"). There shall be excluded from the
shares (i) shares held in a Schwab brokerage account prior to the effective date
of this Agreement as to the Fund and (ii) shares first held in a Schwab
brokerage account after the termination of this Agreement as to the Fund.
3. For purposes of this Exhibit, the daily value of the shares
of each Fund will be the net asset value reported by such Fund to the National
Association of Securities Dealers, Inc. Automated Quotation System. No
adjustments will be made to the net asset values to correct errors in the net
asset values so reported for any day unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the first business day after the day to which the
error relates.
4. At the request of Fund Parties, Schwab shall provide, on each
business day, a statement detailing the calculation for each Fund and the
aggregate value of the Qualifying Shares of each Fund. As soon as practicable
after the end of the month, Schwab shall also provide to Fund Parties an invoice
for the amount of the Fee due for each Fund. In the calculation of such Fee,
▇▇▇▇▇▇'▇ records shall govern unless an error can be shown in the number of
shares used in such calculation.
5. Fund Parties shall pay Schwab the Fee within thirty (30) days
after Fund Parties' receipt of such statement. Such payment shall be by wire
transfer, unless the amount thereof is less than $250. Such wire transfers shall
be separate from wire transfers of redemption proceeds or distributions under
the Operating Agreement. Amounts less than $250 may, at Fund Parties'
discretion, be paid by check.
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SCHEDULE I
TO THE SERVICES AGREEMENT
Fund Company/Fund(s) Effective Date
The Haven Capital Management Trust
The Haven Fund* 6/20/97
* Indicates that Fund is a "no load" or "no sales charge" Fund as defined in
Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc.
SI Indicates that the Fund is available only to Schwab Institutional customers.
Accepted by: THE HAVEN CAPITAL MANAGEMENT
TRUST, on its own behalf and on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC. each Fund Company listed on this
Schedule I
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------- ---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President/Mutual Funds Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Date: July 28, 1997 Title: President
----------------------------- ----------------------------
Date: July 11, 1997
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Acknowledged by:
Haven Capital Management, Inc.
------------------------------------
Name of Fund Affiliate
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Title: Chairman
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Date: July 11, 1997
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SCHEDULE II
TO THE SERVICES AGREEMENT
Fund Company
The Haven Capital Management Trust 0.25%
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(name)
Fund Affiliate
Haven Capital Management, Inc. 0.10%
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(name)
Fee Rate Percentage Per Annum on
All Qualifying Shares 0.35%
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OPERATING AGREEMENT
This Agreement is made as of June 20, 1997, between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
("Schwab"), a California corporation, and each registered investment company
executing this Agreement ("Fund Company"), on its own behalf and on behalf of
each of its series or classes of shares listed on Schedule I, as amended from
time to time (such series or classes being referred to as "Fund(s)"). In the
event there are no series or classes of shares listed on Schedule I, then the
term "Fund(s)" shall mean "Fund Company."
WHEREAS, Fund Company wishes to have shares of the Fund(s) available for
purchase and redemption by ▇▇▇▇▇▇'▇ brokerage customers through ▇▇▇▇▇▇'▇ Mutual
Fund Marketplace(R) ("MFMP");
WHEREAS, certain policies, procedures and information are necessary to
enable the Fund(s) to participate in the MFMP; and
WHEREAS, Schwab is willing to permit the Fund(s) to participate in its
MFMP pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Operating Procedures
Schwab will open an omnibus account (the "Account") with each Fund
through which it will purchase and redeem shares, settle transactions,
reconcile transactions, obtain pricing, reinvest distributions and maintain
records in accordance with the Operating Procedures set forth in Exhibit A
hereto. In addition, the parties agree to transfer accounts, communicate with
Fund shareholders and perform other obligations in accordance with the
Operating Procedures.
2. Qualification Requirements
▇. ▇▇▇▇▇▇ will only place purchase orders for shares of a Fund
on behalf of a customer whose account address recorded on ▇▇▇▇▇▇'▇ books
is in a state or other jurisdiction in which Fund Company has advised
Schwab that such Fund has qualified its shares for sale under applicable law.
Fund Company shall advise Schwab immediately if any such qualification is
terminated or if it wishes Schwab not to place purchase orders for a Fund on
behalf of its customers who reside in a particular state or other jurisdiction.
▇. ▇▇▇▇▇▇ will, upon request, (i) furnish Fund Company with
monthly written statements of the number of shares of each Fund purchased on
behalf of Schwab customers resident in one or more states or other
jurisdictions indicated by Fund Company or (ii) on a daily basis, transmit
to an electronic database provider with whom Schwab has established effective
systems interfaces information regarding the number of shares of each Fund sold
in each state for
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retrieval by Fund Company. Fund Company shall be responsible for all
reasonable fees and other reasonable charges of such database provider in
connection with ▇▇▇▇▇▇'▇ transmission of such information to and Fund Company's
retrieval of such information from such database provider.
c. Fund Company agrees that any rescission offer that is made
to shareholders who own shares directly with a Fund will also be made to Schwab
customers who would be entitled to such rescission offer if they owned
shares directly with the Fund. Fund Company will provide Schwab with a letter
on Fund Company letterhead containing the terms of any such rescission offer,
and Schwab may send this writing, or any derivation thereof, to the affected
Schwab customers. To assist Fund Company in effecting any such rescission
offer, Schwab agrees to provide Fund Company with relevant information
regarding any affected Schwab customer, including the account number, the
number of shares purchased and redeemed, if any, the dates of the purchase(s)
and redemption(s), if any, and the dollar amount of such transactions.
3. Compliance Responsibilities
a. Fund Company is responsible for (i) the compliance of each
prospectus, registration statement, annual or other periodic report,
proxy statement and item of advertising or marketing material of or relating to
each Fund with all applicable laws, rules and regulations (except for
advertising or marketing material prepared by Schwab that was not published or
provided to Schwab by or on behalf of Fund Company or any Affiliate (defined
below) or accurately derived from information published or provided by or on
behalf of Fund Company or any Affiliate), (ii) the distribution and tabulation
of proxies in accordance with all applicable laws, rules and regulations
(except for such proxy related services provided by ▇▇▇▇▇▇'▇ mailing agent),
(iii) the registration or qualification of the shares of each Fund under all
applicable laws, rules and regulations, and (iv) the compliance by Fund Company
and each Affiliate of Fund Company, as that term is defined below, with all
applicable laws, rules and regulations (including the Investment Company Act of
1940, as amended (the "1940 Act"), and the Investment Advisers Act of 1940, as
amended), and the rules and regulations of each self-regulatory organization
with jurisdiction over Fund Company or Affiliate, except to the extent that the
failure to so comply by Fund Company or any Affiliate is caused by ▇▇▇▇▇▇'▇
breach of this Agreement. An "Affiliate" of a person means (i) any person
directly or indirectly controlling, controlled by, or under common control
with, such person, (ii) any officer, director, partner, corporation, or
employee of such person, and (iii) if such person is an investment company, any
investment advisor thereof or any member of the advisory board thereof.
b. In the event that the Account holds five percent (5%) or
more of the outstanding Fund shares, Fund Company will be responsible for
requesting Schwab to confirm its status as shareholder of record and to confirm
whether any Schwab customer beneficially owns five percent (5%) or more of
the outstanding Fund shares through its Schwab brokerage account. For this
purpose, Fund Company shall indicate in its inquiry the number of Fund shares
that equal five percent (5%) of outstanding Fund shares. Schwab shall promptly
reply to any such inquiries.
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▇. ▇▇▇▇▇▇ is responsible for ▇▇▇▇▇▇'▇ compliance with all applicable
laws, rules and regulations governing ▇▇▇▇▇▇'▇ performance under this
Agreement, except to the extent that ▇▇▇▇▇▇'▇ failure to comply with any law,
rule or regulation is caused by Fund Company's breach of this Agreement, or
its willful misconduct or negligence in the performance or failure to perform
its obligations under this Agreement.
d. Except as set forth in this Agreement or as otherwise agreed upon
in writing by the parties, any communication, instruction or notice made
pursuant to this Agreement shall be made orally, provided that such
oral communication is on a recorded telephone line or is promptly confirmed in
writing by facsimile transmission. Schwab is entitled to rely on any
communications, instructions or notices which it reasonably believes were
provided to it by Fund Company, any Affiliate or their agents authorized to
provide such communications, instructions or notices to Schwab, and on
communications, instructions or notices provided to it by its customers. Fund
Company is entitled to rely on any communications, instructions or notices it
reasonably believes were provided to it by Schwab, or its agents authorized to
provide such communications, instructions or notices to Fund Company.
e. Except to the extent otherwise expressly provided in this
Agreement, neither party assumes any responsibility hereunder, or will
be liable to the other, for any damage, loss of data, delay or any other loss
whatsoever caused by events beyond its reasonable control.
f. Fund Company and each Fund shall indemnify and hold harmless Schwab
and each director, officer, employee and agent of Schwab from and
against any and all losses, claims, liabilities and expenses (including
reasonable attorneys' fees) ("Losses") incurred by any of them arising out of
(i) any untrue statement of material fact or any omission of a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading in any prospectus, registration
statement, annual or other periodic report or proxy statement of the Fund or in
any advertising or promotional material published or provided to Schwab by or
on behalf of Fund Company or any Affiliate or accurately derived from
information published or provided by or on behalf of Fund Company or any
Affiliate, (ii) any violation of any law, rule or regulation relating to the
registration or qualification of shares of the Fund, (iii) any breach by Fund
Company of any representation, warranty or agreement contained in this
Agreement, or (iv) any willful misconduct or negligence by Fund Company or a
Fund in the performance of, or failure to perform, its obligations under this
Agreement, except to the extent such Losses are caused by ▇▇▇▇▇▇'▇ breach of
this Agreement or its willful misconduct or negligence in the performance, or
failure to perform, its obligations under this Agreement. This Section 3(f)
shall survive termination of this Agreement.
4. Account Establishment and Maintenance Fees
Fund Company shall pay to Schwab such fees as are set forth on
Schedule II hereto to reimburse Schwab for its costs in establishing and
maintaining Account(s) for each Fund. Fees attributable to establishment of
the Account(s) for a Fund shall be paid prior to establishment of the
Account(s) for the Fund. Fees attributable to maintaining the Account(s) for
each Fund shall be billed on an annual basis on December 31 and paid promptly,
in no event later than thirty (30)
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days after billing. Such payment shall be by wire transfer. Such wire
transfers shall be separate from wire transfers of redemption proceeds or
distributions under this Agreement.
5. Representations and Warranties
a. Fund Company represents and warrants to Schwab that each Fund is in
compliance with the conditions and qualifications set forth in Rule 2830 of the
Conduct Rules of the National Association of Securities Dealers, Inc. ("NASD"),
as amended from time to time ("Rule 2830"), which enable an NASD member to
offer or sell shares in the Fund. Fund Company represents and warrants that
each Fund marked with an asterisk on Schedule I is a "no load" or "no sales
charge" Fund as defined in Rule 2830. If a Fund, for any reason, fails to
satisfy the terms and conditions of Rule 2830, Fund Company will notify Schwab
immediately of the Fund's disqualification and the reason therefor.
▇. ▇▇▇▇▇▇ represents and warrants that Schwab is a member of
the NASD.
6. Use of Parties' Names
a. Without ▇▇▇▇▇▇'▇ prior written consent, Fund Company will not cause
or permit the use, description, or reference to Schwab, or to the
relationship contemplated by this Agreement in any advertisement or promotional
materials or activities.
b. Fund Company authorizes Schwab to use the names or other
identifying marks of Fund Company and Fund in connection with the operation of
the MFMP. Fund Company may withdraw this authorization as to any
particular use of any such name or identifying marks at any time (i) upon Fund
Company's reasonable determination that such use would have a material adverse
effect on the reputation or marketing efforts of Fund Company or such Fund, or
(ii) if any of the Funds cease to be available through the MFMP; provided,
however, that Schwab may, in its discretion, continue to use materials prepared
or printed prior to the withdrawal of such authorization or in the process of
being prepared or printed at the time of such withdrawal.
7. Proprietary Information
Each party hereto acknowledges that the identities of the other party's
customers, information maintained by such other party regarding those
customers, and all computer programs and procedures developed by such other
party or such other party's Affiliates or agents in connection with such other
party's performance of its duties hereunder constitute the valuable property of
such other party. Each party agrees that should it come into possession of any
list or compilation of the identities of or other information about the other
party's customers, or any other property of such party, pursuant to this
Agreement or any other agreement related to services under this Agreement, the
party who acquired such information or property shall use its best efforts to
hold such information or property in confidence and refrain from using,
disclosing, or distributing any of such information or other property, except
(i) with the other party's prior written consent, or (ii) as required by law or
judicial process. Each party acknowledges that any breach of the foregoing
agreements as to another party would result in immediate and irreparable harm
to such other party for which there would be no adequate remedy at law and
agrees that in
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the event of such a breach such other party will be entitled to equitable
relief by way of temporary and permanent injunctions, as well as such other
relief as any court of competent jurisdiction deems appropriate.
8. Assignability
This Agreement is not assignable by either party without the other
party's prior written consent, and any attempted assignment in contravention
hereof shall be null and void and not merely voidable; provided, however, that
Schwab may, without the consent of Fund Company, assign its rights and
obligations under this Agreement to any Affiliate.
9. Exhibits and Schedules; Entire Agreement
All Exhibits and Schedules to this Agreement, as they may be
amended from time to time, are by this reference incorporated into and made a
part of this Agreement. This Agreement (including the Exhibits and Schedule
hereto) constitutes the entire agreement between the parties as to the subject
matter hereof and supersedes any and all agreements, representations and
warranties, written or oral, regarding such subject matter made prior to the
date on which this Agreement has been executed and delivered by Schwab and Fund
Company.
10. Amendment
This Agreement may be amended only by a writing executed by
each party hereto that is to be bound by such amendment, except as provided in
this Section 10. Exhibit A and Schedule II may each be amended by Schwab on
forty (40) days' written notice to Fund Company or such earlier time as shall
be agreed to by the parties. Exhibits B and C shall be amended by Fund Company
in the event of any change to the information contained therein.
11. Governing Law
This Agreement shall be governed by and interpreted under the
laws of the State of California, applicable to contracts between California
residents entered into and to be performed entirely within the state.
12. Counterparts
This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which together shall
constitute one and the same instrument.
13. Effectiveness and Termination
a. Upon ▇▇▇▇▇▇'▇ acceptance of Schedule I, as amended from time to
time, the effective date of this Agreement as to any Fund shall be the
later of the date on which this Agreement is made or the date set forth
opposite the name of the Fund on Schedule I.
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b. This Agreement may be terminated as to any Fund by Schwab
immediately upon written notice to Fund Company. This Agreement may be
terminated as to any Fund by Fund Company upon thirty (30) days' written notice
to Schwab.
c. Upon the termination date for any Fund, Schwab will no longer make
the Fund shares available for purchase by ▇▇▇▇▇▇'▇ customers through the MFMP.
Schwab reserves the right to transfer the Fund shares of its customers out of
the Account. If Schwab continues to hold the Fund shares on behalf of its
customers in the Account, the parties agree to be obligated under, and act in
accordance with, the terms and conditions of this Agreement with respect to
such shares.
IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized
representative of the parties hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC. THE HAVEN CAPITAL MANAGEMENT TRUST, on
its own behalf and on behalf of each
Fund listed on Schedule I hereto, as
amended from time to time
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- ----------------------
▇▇▇▇ ▇▇▇▇▇
Vice President/Mutual Funds
Operations Administration Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Date: 7/29/97 Title: President
-------------- ----------------------
Date: 7/11/97
----------------------
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SCHEDULE I
TO THE OPERATING AGREEMENT
Fund Company(ies)/Fund(s) Effective Date
------------------------- --------------
The Haven Capital Management Trust
The Haven Fund* 6/20/97
* Indicates that Fund is a "no-load" or "no sales charge" Fund as defined
in Rule 2830 of the Conduct Rules of National Association of Securities
Dealers, Inc.
SI Indicates that Fund is available only to Schwab Institutitional customers.
THE HAVEN CAPITAL MANAGEMENT
Accepted by: TRUST, on its own behalf and on
behalf of each Fund listed on this
Schedule I, as amended from
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC. time to time
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------- ----------------------
▇▇▇▇ ▇▇▇▇▇
Vice President/Mutual Funds
Operations Administration Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Date: 7/29/97 Title: President
-------------- ----------------------
Date: 7/11/97
----------------------
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SCHEDULE II
TO THE OPERATING AGREEMENT
Fees to Establish and Maintain Account(s) for a Fund
ESTABLISHMENT FEES
The Establishment Fee shall be $12,000 for the Account(s) for the initial
Fund established on ▇▇▇▇▇▇'▇ system, and $4,500 for the Account(s) for each
additional Fund, whether added at the same time or subsequent to the initial
Fund.
MAINTENANCE FEE
a. The Maintenance Fee as to the Account(s) for each Fund shall be charged
in advance, annually, on December 31 ("Assessment Date") commencing on the
first Assessment Date after the establishment of the Account(s) for the Fund on
the Schwab system. The Maintenance Fee as to the Account(s) of a Fund shall
not be prorated in the event of termination of this Agreement as to such Fund
prior to the end of a calendar year for which such Maintenance Fee has been
charged.
b. The Maintenance Fee as to the Account(s) for each Fund shall be
determined based on the aggregate value of all shares of a Fund contained in
all Account(s) at the Fund on the Assessment Date. The Maintenance Fees are as
follows:
Aggregate Value of All Shares Maintenance Fee
----------------------------- ---------------
Up to and including $2.5 million $4,500
Over $2.5 million and up to and including $5 million $3,000
Over $5 million $0
c. For purposes of this calculation, the value of the shares of each Fund
will be the net asset value reported by such Fund to the National Association
of Securities Dealers, Inc. Automated Quotation System. No adjustments will be
made to the net asset values to correct errors in the net asset values so
reported for any Assessment Date unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the next business day after the Assessment Date to
which the error relates.
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EXHIBIT A
OPERATING PROCEDURES
1. The Account
▇. ▇▇▇▇▇▇ will open an Account with each Fund. The Account shall be
registered:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
Special Custody Account for the Exclusive Benefit of Customers
Attention: Mutual Funds
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The Account will be set up for the reinvestment of capital gains and
dividend distributions.
b. The Fund shall designate the Account with account numbers. Account
numbers will be the means of identification when the parties are transacting in
the Account.
c. The parties acknowledge that the Account is an omnibus account in
▇▇▇▇▇▇'▇ name with shares held by any number of beneficial owners. Schwab
represents that the shares in the Account are customer securities and are
segregated from ▇▇▇▇▇▇'▇ own assets. Fund Company represents that the shares
in the Account are carried free of any charge, lien or payment of any kind in
favor of the Fund or any person claiming through the Fund.
d. The Account shall be kept open on the Fund's books regardless of a lack
of activity or small position size, except to the extent that Schwab takes
specific action to close the Account, or to the extent the Fund's prospectus
reserves the right to close accounts that are inactive. In the latter case,
Fund Company will give prior notice to Schwab before closing any Account.
▇. ▇▇▇▇▇▇ has the right to open additional accounts from time to time to
accommodate other investment options and features, and to consolidate existing
accounts if and when appropriate to meet the needs of the MFMP. In the event
that it is necessary for Schwab to open an account with a Fund for the payment
of distributions in cash, the term "Account" shall mean both the account for
the reinvestment of capital gains and dividend distributions and the account
for the payment of distributions in cash.
▇. ▇▇▇▇▇▇ reserves the right to issue instructions to each Fund to move
shares between the Account and any other account Schwab may open.
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2. Purchase and Redemption Orders
For each day on which any Schwab customer places with Schwab a purchase or
redemption order for shares of a Fund, Schwab shall aggregate all such purchase
orders and aggregate all such redemption orders and communicate to the Fund an
aggregate purchase order and an aggregate redemption order. Schwab will accept
orders to purchase and redeem Fund shares from its customers no later than 4:00
p.m. Eastern Time (market close). Schwab will communicate the order to the
Fund prior to a mutually agreed upon time.
3. Settlement of Transactions
▇. ▇▇▇▇▇▇ will transmit the purchase price of the aggregate purchase order
to the Fund by wire transfer on the next business day after the trade date.
For purposes of this Agreement, a "business day" is any day the New York Stock
Exchange is open for trading.
b. For each business day on which Schwab places a redemption order for a
Fund within the time designated by the Fund, Fund Company will cause the
Fund(s) to send to Schwab the aggregate proceeds of all redemption orders for
the Fund(s) placed by Schwab on that day. Such redemption proceeds will be
sent by wire transfer on the next business day following the trade date for the
redemption orders; provided that Fund Company may, in its discretion, send such
proceeds by check if the aggregate amount is less than $250. Wire transfers of
redemption proceeds shall be separate from wire transfers for other purposes.
c. Each wire transfer of redemption proceeds shall indicate, on the Fed
Funds wire system, the amount thereof attributable to each Fund; provided,
however, that if the number of entries would be too great to be transmitted
through the Fed Funds wire system, Fund Company shall, on the day the wire is
sent, notify Schwab of such entries. The cost of the wire transfer is the
responsibility of the party sending the wire. The interest cost associated
with any delayed wire is the responsibility of the party sending the wire.
d. Should a Fund need to extend settlement on a trade, Fund Company must
contact Schwab on trade date to discuss the extension. For purposes of
determining the length of settlement, Fund Company agrees to treat shareholders
that hold Fund shares through the Account the same as it treats shareholders
that hold Fund shares directly with the Fund.
e. In the event that a Fund cannot verify redemption proceeds, Fund
Company will settle trades and forward redemption proceeds in accordance with
this Agreement based on the information provided by Schwab. Schwab will be
responsible for the accuracy of all trade information provided by it.
f. Fund Company represents that each Fund that has reserved the right to
redeem in kind has filed Form N-18F-1 with the Securities and Exchange
Commission. For purposes of complying with the Fund's election on Form
N-18F-1, Fund Company agrees that it will treat as a "shareholder" each
shareholder that holds Fund shares through the Account, provided that Schwab
provides to Fund Company, upon request, the name or account number, number of
Fund shares and other relevant information for each such shareholder. Fund
Company acknowledges
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that treatment of Schwab as the sole shareholder of Fund shares held in the
Account for purposes of applying the limits in Rule 18f-1 under the 1940 Act
would be inconsistent with the intent of Rule 18f-1 and the Fund's election on
Form N-18F-1 and could unfairly prejudice shareholders that hold Fund shares
through the Account.
4. Account Reconciliation Requirements
▇. ▇▇▇▇▇▇ shall verify, on a next day basis, orders placed for the Account
with each Fund. All activity in the Account must be reflected. Therefore, any
"as of" activity must be shown with its corresponding "as of" dates.
▇. ▇▇▇▇▇▇ must receive statements on or before the eighth business day of
each month, even if there has been no activity in the Account during the
period, unless Schwab can verify transactions by direct or indirect systems
access.
c. The parties agree to notify each other and correct any error in the
Account with any Fund upon discovery. If an error is not corrected by the day
following discovery, each party agrees to make best efforts to avoid this from
hindering any routine daily operational activity.
5. Pricing
Every business day on which there is a transaction in the Account and for
each month-end business day, Fund Company will provide to Schwab prior to 7:00
p.m., Eastern Time, each Fund's closing net asset value and public offering
price (if applicable) for that day and/or notification of no price for that
day. Fund Company shall provide such information on a best efforts basis
taking into consideration any extraordinary circumstances arising at the Fund
(e.g. natural disasters, etc.).
6. Distributions
a. Fund Company shall provide distribution information to Schwab in a
timely manner to enable Schwab to pay distributions to its customers on or as
close to payable date as practicable. As to each Fund, Fund Company or such
Fund shall provide Schwab with (i) the record date, ex-dividend date, and
payable date with respect to a Fund as soon as practicable after it is
announced, but no later than three (3) business days prior to record date, (ii)
the record date share balance in the Account and the distribution rate per
share on the first business day after record date, and (iii) the reinvest price
per share as soon as it is available. Other distribution information required
by Schwab from time to time for payment of distributions to its customers shall
be provided by Fund Company on such dates as are agreed upon between Schwab and
Fund Company, but no later than payable date.
b. For purposes of effecting cash distributions for customers who have
elected to receive their capital gains distributions and/or dividends in cash,
prior to 10:00 a.m., Eastern Time, on the next business day following receipt
of the reinvest price per share as provided in paragraph 6(a)(iii) above,
Schwab shall notify Fund Company of the aggregate number of Fund shares with
respect to which the purchase is required to be voided. Fund Company agrees
that the purchase
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of such aggregate number of Fund shares may be voided. Fund Company or such
Fund shall wire the proceeds of such voided transaction from the Fund to Schwab
on the same business day. Schwab shall use such voided transaction proceeds to
pay the distribution in cash to Schwab customers who have elected to receive
such distributions in cash.
c. For each Fund that pays daily dividends, Fund Company shall provide on
a daily basis, the following record date information: daily rate, account
share balance, account accrual dividend amount (for that day), account accrual
dividend amount (for period to date), and account transfers and period-to-date
accrual amounts.
d. In the event that Schwab maintains an Account with a Fund for the
payment of distributions in cash, Fund Company shall wire, on payable date, any
cash distribution from the Fund to Schwab.
e. For each Fund that pays daily dividends, each Fund shall accrue
dividends, commencing on the settlement date for the purchase of Fund shares
and terminating on the trade date for the redemption of Fund shares.
f. For annual tax reporting purposes, Fund Company shall inform Schwab of
the portion of each Fund's distributions that include any of the following:
foreign source income, tax exempt income by state of origin or return of
capital.
g. In conformance with its status as a broker/dealer holding its customers
securities in street name, Schwab shall prepare and file with the appropriate
governmental agencies, such information, returns and reports as are required to
be so filed for reporting (i) dividends and other distributions made, (ii)
amounts withheld on dividends and other distributions and payments under
applicable federal and state laws, rules and regulations and (iii) gross
proceeds of sales transactions as required.
h. Upon notice from Fund Company, Schwab shall effect mergers, splits and
other reorganization activities of a Fund for its customers.
7. Price and Distribution Rate Errors
a. In the event adjustments are required to correct any error in the
computation of the net asset value or public offering price of a Fund's shares
or in the distribution rate for a Fund's shares, Fund Company shall notify
Schwab upon discovering the need for such adjustments. Notification can be
made orally, but must be confirmed in writing.
▇. ▇▇▇▇▇▇ and Fund Company shall agree promptly and in good faith to a
resolution of the error, and no adjustment for the error shall be taken in the
Account until such agreement is reached. Following resolution, upon request by
Schwab, Fund Company shall provide Schwab with written notification of the
resolution. The letter shall be written on Fund Company letterhead and must
state for each day on which an error occurred the incorrect price or rate, the
correct price or rate, and the reason for the price or rate change. Fund
Company agrees that
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Schwab may send this writing, or derivation thereof, to ▇▇▇▇▇▇'▇ customers
whose accounts are affected by the price or rate change.
c. If a Schwab customer has received cash in excess of what he is
entitled, Schwab will, when requested by Fund Company, and to the extent
practicable and permitted by law, debit the customer's brokerage account in the
amount of such excess, but only to the extent of any cash in the account, and
repay it to the Fund. In no event, however, shall Schwab be liable to Fund
Company or the Fund for any such amounts. Upon the request of Fund Company,
Schwab shall provide Fund Company with the name of ▇▇▇▇▇▇'▇ customer and other
relevant information concerning the customer's brokerage account to assist Fund
Company in the collection from ▇▇▇▇▇▇'▇ customer of any such excess amount not
repaid to the Fund.
d. If adjustment is necessary to correct an error which has caused
▇▇▇▇▇▇'▇ customers to receive dollars or shares less than that to which they
are entitled, the Fund shall, as appropriate and as mutually agreed by the
parties pursuant to 7(b) above, make all necessary adjustments to the number of
shares owned in the Account and/or distribute to Schwab any and all amounts of
the underpayment. Schwab will credit the appropriate amount of such shares or
payment to each Schwab customer.
e. For purposes of making adjustments, including the collection of
overpayments, Fund Company agrees to treat shareholders that hold Fund shares
through the Account the same as it treats shareholders that hold Fund shares
directly with the Fund. When making adjustments for an error, a Fund shall not
net transactions for that day in the Account.
8. Record Maintenance
▇. ▇▇▇▇▇▇ shall maintain records for each of its customers who holds Fund
shares through the Account, which records shall include:
i. Number of shares;
ii. Date, price and amount of purchases and redemptions
(including dividend reinvestments) and date and amounts of
dividends paid for at least the current year to date;
iii. Name and address of each of its customers, including zip codes and
social security numbers or taxpayer identification numbers;
iv. Records of distributions and dividend payments;
v. Any transfers of shares; and
vi. Overall control records.
▇. ▇▇▇▇▇▇ will be responsible for accurately posting transactions in Fund
shares to its customers' brokerage accounts.
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9. Transfer of Accounts
a. Fund Company agrees to transfer shares between accounts for Schwab
customers or other street name brokers held directly with a Fund and the
Account on the Fund's records. For the purpose of expediting direct transfers
from accounts for Schwab customers, Fund Company will accept by facsimile
transmission a summary sheet of information ("Summary Sheet") indicating the
customers' names, account numbers, the Fund affected and the number of shares
to be re-registered. For record keeping purposes, actual copies of transfer
forms will be forwarded to a Fund upon its request for such forms.
▇. ▇▇▇▇▇▇ represents and warrants that for each transfer indicated in the
Summary Sheet, it holds each underlying instruction for re-registration signed
by its customer, and that its customer's signature on such instruction is
signature guaranteed by Schwab pursuant to the New York Stock Exchange's
Medallion Signature Program. Schwab will retain these documents for the period
required by any applicable law rule or regulation.
▇. ▇▇▇▇▇▇ agrees to indemnify and hold harmless Fund Company, the Fund
and each director, officer, employee and agent of Fund Company ("indemnified
person") from and against any and all Losses incurred by any of them arising
out of the impropriety of any transfer effected by the Fund in reliance on the
Summary Sheet to the same extent as provided under the New York Stock
Exchange's Medallion Signature Program, except to the extent such Losses arise
out of the failure of any indemnified person to comply with the instructions on
the summary sheet of information.
d. Fund Company shall process all transfer requests into the appropriate
Account. Schwab as custodian is qualified to accept in the Accounts shares
from Fund ▇▇▇, ▇▇▇▇▇ or 401(k) accounts. At no time shall any Fund establish
separate accounts registered to Schwab for the benefit of individual
shareholders. In the event any such account is mistakenly opened, Schwab
reserves the right to instruct such Fund to move Fund shares to the Account.
e. Fund Company must confirm to Schwab the completion of each transfer on
the day it occurs. The confirming information shall include the number of
shares, date("as of" date if unavoidable delay), transaction date, account
number of the customer and the Account, registration, accrued dividends and
account type (i.e., ▇▇▇, ▇▇▇▇▇, 401(k), etc.).
f. Transfer processing after record date but prior to payable date will
include all accrued dividends. Each Fund is responsible for monitoring all
completed full transfers for "trailing" dividends. Should a "trailing"
dividend appear in an account, a Fund shall send such dividend to Schwab within
five (5) business days, along with a specific written notification thereof.
Notification shall include details of the dividend and customer, including the
customer's social security number or taxpayer identification number, and/or the
account number for the Account to which the transfer was made.
g. If Schwab customers submit share certificates for transfer into their
Schwab brokerage accounts, Schwab will send such certificates, properly
endorsed to the applicable
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Fund, for transfer into the Account with such Fund. Upon ▇▇▇▇▇▇'▇ request,
Fund Company agrees to provide the status of said certificates and book share
balances.
10. Shareholder Communication
a. Fund Company shall arrange with Schwab, or a mailing agent designated
or approved by Schwab, for the distribution of the materials listed below to
all of ▇▇▇▇▇▇'▇ customers who hold Fund shares, which distribution shall be so
arranged by Fund Company as to occur immediately upon the effective date of the
materials:
i. All proxy or information statements prepared for
circulation to shareholders of record of such Fund;
ii. Annual reports;
iii. Semi-annual reports;
iv. Quarterly reports (if applicable); and
v. All updated prospectuses, supplements and amendments
thereto.
Fund Company shall be responsible for providing the materials and for Schwab or
the mailing agent's fees in connection with this service as well as for timely
distribution. Fund Company agrees to have Schwab or the mailing agent
consolidate mailings of material to shareholders of more than one Fund if the
mailing is identical for all Funds in the Fund Company family.
b. In addition to the materials listed above, Fund Company agrees to
provide directly to Schwab all prospectuses, statements of additional
information and supplements and amendments thereto, and annual and other
periodic reports for each Fund in amounts reasonably requested by Schwab for
distribution to its customers. Fund Company is obligated to supply these
materials to Schwab in a timely manner so as to allow Schwab, at its own
expense, to send current prospectuses and statements of additional information
and periodic reports, immediately upon their effective dates, to customers and
prospective customers requesting them through Schwab. Schwab will also send a
current Fund prospectus with purchase trade confirmations for the initial
purchase of a Fund. Fund Company shall notify Schwab immediately of any change
to a Fund's prospectus.
c. If Schwab acts as clearing broker in an omnibus relationship with a
correspondent bank or broker ("Correspondent"), upon the request of Schwab,
Fund Company shall also provide to Schwab, in a timely manner, sufficient
supplies of Fund materials identified in Sections 10(a) and 10(b) for Schwab to
give to Correspondent for the distribution of such materials to Correspondent's
customers who hold Fund shares.
d. Fund Company shall ensure that the prospectus of each of its Funds
discloses that a broker may charge transaction fees on the purchase and/or sale
of Fund shares. Fund Company shall also ensure that either the prospectus, or
the statement of additional information if the statement of additional
information is incorporated in the prospectus, of each of its Funds discloses
(i) that the performance of the Fund may be compared in publications to the
performance of various indices and investments for which reliable performance
data is available, (ii) that the performance of the Fund may be compared in
publications to averages, performance
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rankings, or other information prepared by recognized mutual fund statistical
services, and (iii) that the annual report contains additional performance
information and will be made available to investors upon request and without
charge.
▇. ▇▇▇▇▇▇ shall mail statements to its customers on a monthly basis (or as
to accounts in which there has been no activity in a particular month, no less
frequently than quarterly) showing, among other things, the number of shares of
each Fund owned by such customer and the net asset value of each such Fund as
of a recent date.
▇. ▇▇▇▇▇▇ shall respond to customer inquiries regarding, among other
things, share prices, account balances, dividend amounts and dividend payment
dates. With respect to Fund shares purchased by customers after the effective
date of this Agreement, Schwab shall provide average cost basis reporting to
assist customers in the preparation of income tax returns.
11. New Processing Systems
Fund Company agrees to cooperate to the extent possible with Schwab as
Schwab develops and seeks to implement new processing systems for the MFMP.
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RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT
This Retirement Plan Order Processing Amendment is made as of June 20, 1997, by
and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc. ("Schwab"), a California corporation;
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company ("CSTC"), a California banking corporation;
and each registered investment company ("Fund Company") listed on Schedule I
hereto, executing this Amendment on its own behalf and on behalf of each of its
series or classes of shares ("Fund(s)"), which are parties to an Operating
Agreement with Schwab, made as of June 20, 1997, as amended thereafter
("Operating Agreement"), including such Funds as are listed on Schedule II
hereto, which are excluded from participation in retirement plan order
processing under this Amendment ("Excluded Funds"). This Amendment amends the
Operating Agreement. In the event that there are no Funds, then the term
"Fund(s)" shall mean "Fund Company."
WHEREAS, Schwab and Fund Company, on its own behalf and on behalf of the Funds,
have entered into the Operating Agreement pursuant to which shares of the Funds
are made available for purchase and redemption by ▇▇▇▇▇▇'▇ brokerage customers
through ▇▇▇▇▇▇'▇ Mutual Fund Marketplace(R) ("MFMP");
WHEREAS, Schwab has designated CSTC as its agent to perform certain functions
under the Operating Agreement, including communication of aggregate purchase
and redemption orders for Fund shares to each Fund, for which Schwab remains
fully responsible to Fund Company and the Funds;
WHEREAS, Schwab and Fund Company desire to amend the Operating Agreement to
facilitate the purchase and redemption of Fund shares on behalf of certain
retirement plans ("Plans") for which CSTC acts as trustee of the trust funds
under the Plans and for which an entity identified on Schedule II, as amended
by Schwab from time to time, acts as recordkeeper ("Recordkeeper"), subject to
the terms and conditions of this Amendment; and
WHEREAS, Fund Company wishes to appoint CSTC as a limited purpose co-transfer
agent to each Fund's named transfer agent to facilitate such purchases and
redemptions on behalf of the Plans, and CSTC wishes to accept this appointment.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the parties hereto agree as follows:
1. Agency Appointment and Acceptance. Fund Company hereby appoints CSTC
to be a limited purpose co-transfer agent to each Fund's named transfer agent
for the purpose of receiving instructions in proper form from the persons
designated to direct investment of the Plan assets ("Instructions") from which
are derived orders for purchases and redemptions of Fund shares ("Orders").
CSTC hereby accepts the appointment as limited purpose co-transfer agent to
each Fund's named transfer agent.
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2. Agents of CSTC. CSTC, as a co-transfer agent, may engage such
sub-agents as it deems necessary, appropriate or desirable to carry out its
obligation as a limited purpose co-transfer agent to each Fund's named transfer
agent under Section 1 of this Amendment, pursuant to such terms as are
consistent with the agreements set forth in this Amendment and as CSTC deems
necessary, appropriate or desirable. CSTC shall, however, remain fully
responsible to Fund Company and the Funds for any obligations performed by
CSTC's agents under this Section 2. These agents of CSTC shall be the
Recordkeepers and shall each be a service company and a limited purpose
sub-transfer agent to CSTC as co-transfer agent to each Fund's named transfer
agent.
3. CSTC's Receipt and Transmission of Orders. CSTC agrees that (a) Orders
derived from Instructions received by Recordkeepers prior to the close of New
York Stock Exchange (generally, 4:00 p.m. Eastern Time) ("Market Close") on any
Business Day ("Day 1") will be transmitted by CSTC to the Fund by 10:00 a.m.
Eastern Time on the next Business Day ("Day 2") (such Orders are referred to
herein as "Day 1 Trades"); and (b) Orders derived from Instructions received by
Recordkeepers after Market Close on any Business Day ("Day 1") will be
transmitted by CSTC to the Fund by 10:00 a.m. Eastern Time on the second
Business Day following Day 1 ("Day 3") (such Orders are referred to herein as
"Day 2 Trades").
4. Fund's Pricing of Orders. Fund Company agrees that Day 1 Trades will
be effected at the net asset value of each Fund's shares ("Net Asset Value")
calculated as of Market Close on Day 1, provided such trades are received by
the Fund by 10:00 a.m. Eastern Time on Day 2; and Day 2 Trades will be effected
at the Net Asset Value calculated as of Market Close on Day 2, provided such
trades are received by the Fund by 10:00 a.m. Eastern Time on Day 3. Fund
Company agrees that, consistent with the foregoing, Day 1 Trades will have been
received by the Fund prior to Market Close on Day 1, and Day 2 Trades will have
been received by the Fund prior to Market Close on Day 2 for all purposes,
including, without limitation, effecting distributions.
5. Settlement. In accordance with the Operating Agreement, Schwab and
Fund Company will settle Day 1 Trades on Day 2 and will settle Day 2 Trades on
Day 3.
6. Provision of Net Asset Value. In accordance with the Operating
Agreement, Fund Company will provide Schwab the Net Asset Value calculated as
of Market Close on each Business Day by 7:00 p.m. Eastern Time on such Business
Day.
7. Representations and Warranties as to Transfer Agency. CSTC represents
and warrants that it is registered as a transfer agent under Section 17A of the
Securities Exchange Act of 1934, as amended ("1934 Act"), and CSTC will amend
its TA-1 filing to disclose its appointment pursuant to this Amendment as a
limited purpose co-transfer agent to each Fund's named transfer agent. CSTC
further represents and warrants that each Recordkeeper appointed by CSTC
pursuant to Section 2 of this Amendment shall be registered as a transfer agent
under Section 17A of the 1934 Act, and that it shall cause each Recordkeeper to
amend its TA-1 to disclose its appointment as a service company and a limited
purpose sub-transfer agent to CSTC as co-transfer agent to each Fund's named
transfer agent.
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Fund Company represents and warrants that the Funds' named transfer
agent is set forth on Schedule IV hereto, as amended by Fund Company
from time to time.
8. Books and Records. To the extent required under the Investment Company
Act of 1940, as amended ("1940 Act"), and the rules thereunder, CSTC agrees
that such records maintained by it or each Recordkeeper hereunder are the
property of the Funds and will be preserved, maintained, and made available in
accordance with the 1940 Act and the rules thereunder. Copies, or if required
originals, of such records shall be surrendered promptly to a Fund and its
agents (or independent accountants) upon request. This Section 8 shall survive
termination of this Amendment.
9. Role and Relationship of CSTC. The parties acknowledge and agree that,
except as specifically provided in this Amendment, and for the sole and limited
purpose set forth herein, CSTC acts as an agent for Schwab under the Operating
Agreement in connection with the effectuation of Orders subject to this
Amendment. CSTC shall not be nor hold itself out as an agent of any Fund other
than as provided herein.
10. Role and Relationship of Recordkeepers. The parties acknowledge and
agree that, except as specifically provided in this Amendment and for the sole
and limited purpose set forth herein, the Recordkeepers act as agents of the
Plans in connection with the effectuation of Orders subject to this Amendment.
The parties agree that the Recordkeepers are not agents of the Funds other than
as provided herein, and CSTC shall ensure that the Recordkeepers do not hold
themselves out as an agent of any Fund other than as provided herein.
11. Insurance Coverage. CSTC shall maintain, and shall cause each
Recordkeeper to maintain, general liability insurance, at all times that this
Amendment is in effect, that is reasonable and customary in light of its duties
hereunder. Such general liability insurance coverage shall be issued by a
qualified insurance carrier, with limits of not less than $5 million.
12. Termination. Fund Company will provide Schwab and CSTC 90 days' prior
written notice if purchase orders for a Fund's shares may no longer be effected
in accordance with this Amendment. Such termination shall not affect the
remaining provisions of this Amendment as to such Fund, and redemption orders
shall continue to be effected pursuant to this Amendment. Schwab and CSTC may
terminate this Amendment as to a Fund upon 90 days' prior written notice to
Fund Company.
Any termination of the Operating Agreement by Fund Company shall not
apply to transactions effected pursuant to this Amendment prior to 90
days after the date the Fund Company provides written notice of such
termination to Schwab and CSTC.
13. Indemnification. Schwab and CSTC, on the one hand, and Fund Company,
on the other, agree to indemnify and hold harmless Fund Company, on the one
hand, and Schwab and CSTC, on the other, together with each of its directors,
officers, employees and agents, from and against any and all losses,
liabilities, demands, claims, actions and expenses (including, without
limitation, reasonable attorney's fees) ("Losses") arising out of or in
connection with any breach by Schwab or CSTC, on the one hand, and Fund
Company, on the other, of its obligations under
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this Amendment, except to the extent such breach was a direct consequence of
an act or omission of an indemnified party constituting negligence or willful
misconduct. In no event will any party be liable for consequential,
incidental, special or indirect damages resulting to an indemnified party
subject to this Amendment. This Section 13 shall survive termination of this
Amendment.
14. Proprietary Information. The parties agree that all books, records,
information, and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or carrying out of this
Amendment, including but not limited to the information on Schedule III, as
amended by Schwab from time to time, and any reports regarding Fund
shareholdings of the Plans or the Recordkeepers that CSTC may provide to Fund
Company from time to time as part of its obligations as a limited purpose
co-transfer agent to each Fund's named transfer agent, shall be kept
confidential and shall not be otherwise used or voluntarily disclosed to any
other person, except as may be required by law or judicial process. Fund
Company expressly agrees not to use nor permit others to use any such books,
records, information, or data to solicit Plans, sponsors of Plans, or
Recordkeepers. This Section 14 shall survive termination of this Amendment.
15. Effect of Amendment. This Amendment is intended to amend and
supplement the provisions of the Operating Agreement. In the event of a
conflict between the provisions of this Amendment and the provisions of the
Operating Agreement, the provisions of this Amendment shall control. All other
provisions of the Operating Agreement shall remain in full force and effect.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC. THE HAVEN CAPITAL MANAGEMENT
TRUST, on its own behalf and on
behalf of each Fund
By:/s/ ▇▇▇▇ ▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- ---------------------------
▇▇▇▇ ▇▇▇▇▇
Vice President/Mutual Funds
Operations Administration Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------
Date: 7/29/97 Title: President
------------------------- -----------------------
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ TRUST Date: 7/11/97
COMPANY ------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Date: 8/1/97
------------------------
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SCHEDULE I
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT, MADE AS OF JUNE 20, 1997
FUND COMPANY
The Haven Capital Management Trust
Date: June 20, 1997
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SCHEDULE II
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT, MADE AS OF JUNE 20, 1997
EXCLUDED FUNDS
Dated: June 20, 1997
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SCHEDULE III
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT, MADE AS OF JUNE 20, 1997
RECORDKEEPERS
Schwab Retirement Plan Services, Inc.
Date: June 20, 1997
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SCHEDULE IV
TO THE RETIREMENT PLAN ORDER PROCESSING AMENDMENT
TO THE OPERATING AGREEMENT, MADE AS OF JUNE 20, 1997
NAMED TRANSFER AGENT
PFPC, Inc.
Date: June 20, 1997
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LIMITED POWER OF ATTORNEY
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc. ("Schwab") does hereby make, constitute, and appoint
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company ("CSTC"), as its trustee and lawful attorney or
agent ("Agent"), to transmit to each account for Schwab for the reinvestment of
capital gains and the reinvestment of dividends ("Account") with each of the
Haven mutual funds ("Funds"), which are parties to the Retirement Plan Order
Processing Amendment to the Operating Agreement ("Amendment"), dated June 20,
1997, by and among Schwab, CSTC, and the Funds or their transfer agent, orders
for the purchase or redemption of Fund shares for the Account, as set forth in
the Amendment.
Schwab agrees to indemnify and hold harmless the Funds and their transfer agent
from acting upon orders for purchase or redemption of Fund shares received from
Agent to the same extent as if the orders were received from Schwab under the
Agreement.
This authorization and indemnity is a continuing one and shall remain in full
force and effect and shall be binding upon Schwab until revoked by Schwab in
writing.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President - Mutual Funds
Date: 6/18/97
----------------------------
37
CONFIDENTIALITY AGREEMENT
This Agreement is made as of the 20th day of June, 1997, between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
& Co., Inc. ("Schwab"), a California corporation, and Haven Capital Management,
Inc. ("Fund Affiliate"), an affiliate of the registered investment company(ies),
listed on Schedule I of the Operating Agreement between Schwab and The Haven
Capital Management Trust, made as of June 20, 1997.
RECITALS
A. Fund Affiliate wishes Schwab to provide it with the names and addresses of
investment managers and retirement plan administrators, whose clients hold
positions in any of the funds (as defined in the Operating Agreement), for
purposes of Fund Affiliate's direct marketing and communication with these
investment managers and retirement plan administrators and for purposes of
tracking the demographics of sale of the Fund shares. Fund Affiliate mailings
using this confidential, proprietary information may occur through a mailing
agent for the Fund Affiliate.
B. Subject to the terms and conditions herein or as may be mutually agreed upon
in writing from time to time, Schwab is willing to provide to Fund Affiliate
such confidential, proprietary information.
AGREEMENT
THEREFORE, in consideration of the foregoing and the mutual promises set forth
below, the parties agree as follows:
1. Definitions. As used in this Agreement, each of the following terms will have
the meaning ascribed thereto:
a. "Schwab Institutional Customer" means a Schwab customer who is an
investment manager or retirement plan administrator whose client(s) hold
position(s) in any of the Funds.
b. "Mailing Agent" means the person or entity with whom Fund Affiliate
contracts to act as its agent in performing mailings to Schwab Institutional
Customers and to whom Fund Affiliate provides names and addresses of Schwab
Institutional Customers received from Schwab under this Agreement;
c. "Objecting Customer" means any Schwab Institutional Customer who has
made objection to the release of his or her name or address.
d. "Proprietary Information" means the lists of names and addresses of
Schwab Institutional Customers, other than Objecting Customers, together with
the opening and closing position in the Fund(s) by each master account and any
activity which has occurred in the master account subsequent to any previous
reporting, which will be provided to Fund Affiliate under this Agreement.
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2. Access to Proprietary Information.
a. During the term of this Agreement, Schwab will provide to Fund
Affiliate on a monthly basis, the Proprietary Information for that month. The
Proprietary Information shall be provided together with the master accounts of
Objecting Customers - which shall be identified only by coded account number.
b. Fund Affiliate will hold the Proprietary Information in strictest
confidence and will use the Proprietary Information solely for the business
purposes set forth in Recital A above. Fund Affiliate will have in effect, and
enforce, rules and policies designed to protect against unauthorized access to
or use of the Proprietary Information, including instruction of and written
agreements with their employees and Mailing Agent to insure that they protect
the confidentiality of the Proprietary Information. Fund Affiliate may disclose
Proprietary Information to its responsible employees and Mailing Agent only to
the extent necessary to carry out the purpose for which Proprietary Information
is disclosed. Fund Affiliate shall instruct its employees not to disclose
Proprietary Information to third parties, except to Mailing Agent.
c. Fund Affiliate shall not be prevented from using or disclosing any
information or material, or any element thereof, whether or not such information
or material is Proprietary Information for the purposes of this Agreement, to
the extent any such information or material, or any element thereof:
i. has been previously published or is published hereafter, unless
such publication is itself a breach of this Agreement or a similar confidential
disclosure agreement with Schwab;
ii. was already known to Fund Affiliate prior to being disclosed by
Schwab as evidenced by written records kept in the ordinary course of business
of Fund Affiliate or by proof of actual use by Fund Affiliate;
iii. has been or is hereafter rightfully received by Fund Affiliate
from a third person without restriction on disclosure and without breach of this
Agreement; or
iv. has been independently developed by Fund Affiliate.
It shall be presumed that any Proprietary Information in Fund Affiliate's
possession is not within exceptions (iii) or (iv) above, and the burden is on
Fund Affiliate to prove otherwise by records and documentation.
d. Fund Affiliate may release Proprietary Information if required by law
or by order or requirement of any court or governmental authority; provided that
prior to releasing Proprietary Information pursuant to any such requirement or
order, Fund Affiliate shall so notify Schwab. If feasible, such notice shall be
provided not less than five (5) business days prior to the required disclosure.
Fund Affiliate will use reasonable efforts not to release the Proprietary
Information pending the outcome of any measures taken by Schwab to contest the
requirement or order.
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39
e. Fund Affiliate acknowledges and agrees that it or its agent's breach
of any part of this Agreement will result in irreparable harm to Schwab for
which an adequate remedy is not available at law. Accordingly, in such event,
Schwab shall be entitled, in addition to any other remedies available, to
equitable relief, including preliminary injunction and restraining order.
f. Fund Affiliate shall receive Proprietary Information back from any
Mailing Agent, and destroy all tangible and non-tangible representations of
Proprietary Information, within thirty (30) days of its receipt, upon receipt of
Proprietary Information for a more recent month, or at termination of this
Agreement, whichever is sooner. Fund Affiliate shall, if so requested by Schwab,
deliver a letter to Schwab confirming the return and the destruction of the
Proprietary Information.
▇. ▇▇▇▇▇▇ reserves all rights in the Proprietary Information pursuant to
any patents and copyrights contained therein. Fund Affiliate recognizes and
agrees that nothing contained in this Agreement shall be construed as granting
any rights, license or otherwise, to any Proprietary Information disclosed
pursuant to this Agreement.
h. Fund Affiliate shall, at its own expense, take all reasonable steps,
including the initiation and prosecution of actions at law or in equity,
necessary to prevent disclosure of any Proprietary Information by any
representative or employee of Fund Affiliate or Mailing Agent and to prevent the
unauthorized use or disclosure of any Proprietary Information by any other
person who gained such Proprietary Information from Fund Affiliate or its agent,
representatives, or employee in violation of the terms of this Agreement.
3. Responsibility for Communications. Fund Affiliate acknowledges its sole
responsibility for any communication made with or mailings sent to Schwab
Institutional Customers hereunder, and the compliance of such communications and
mailings with all applicable laws and regulations.
4. Indemnification. Fund Affiliate shall indemnify and hold harmless Schwab and
each director, officer, employee and agent of Schwab from and against any and
all claims, liabilities, losses, damages, and expenses of any nature, including
counsel fees ("Losses") arising out of (i) any use made by Fund Affiliate or
Mailing Agent of the Proprietary Information, (ii) any failure by Fund Affiliate
or Mailing Agent to comply with any applicable laws and regulations, and (iii)
any action taken or omitted to be taken by Schwab in observance of the terms of
this Agreement.
5. Liability. Fund Affiliate shall cause Mailing Agent to enter into a contract
with Fund Affiliate, in which Schwab shall be named as an express third party
beneficiary, requiring that the Proprietary Information be kept confidential as
provided in this Agreement and not used for any other purpose than envisioned
under this Agreement. Fund Affiliate understands and agrees that it shall be
liable for any failure of the Mailing Agent to keep the Proprietary Information
confidential to the extent provided in this Agreement.
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40
6. Assignability. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties and their respective successors and assigns. Any
assignment (within the meaning of Section 2(a)(4) of the Investment Company Act
of 1940, as amended) of this Agreement by Fund Affiliate is prohibited without
▇▇▇▇▇▇'▇ prior written consent.
7. Termination. Schwab may terminate this Agreement by giving Fund Affiliate ten
(10) days prior written notice. The termination of this Agreement shall not
affect Fund Affiliate's obligations or rights with respect to Proprietary
Information disclosed prior to the effective date of termination.
8. Choice of Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California applicable to agreements
made and performed in California by California residents. If any provision of
this Agreement is determined to be illegal or unenforceable by competent
judicial authority, all other terms and provisions shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by law.
9. Single Agreement. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
10. Waiver. No delay or omission by a party in exercising any rights under this
Agreement will operate as a waiver of that or any other right. A waiver or
consent given by a party on one occasion is effective only in that instance and
will not be construed as bar to or waiver of any right on any other occasion.
11. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof. Any modification of this
Agreement must be in writing and signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Haven Capital Management, Inc. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC.
Name of Fund Affiliate
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Vice President
-------------------------- Mutual Funds
Title: President
-------------------------
Date: 7/11/97 Date: 7/28/97
-------------------------- ---------------------------
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