Exhibit H(vi)
Investment Company Administration Agreement
Commonwealth International Series Trust
THIS AGREEMENT, dated as of the 1st day of July 2005, by and between
Commonwealth International Series Trust (the "Fund" or "Funds"), a statutory
business trust operating as an open-end, investment management company
registered under the Investment Company Act of 1940, as amended (the "Act"),
duly organized and existing under the laws of the Commonwealth of Massachusetts
and InCap Fund Administration, Inc. ("InCap"), a corporation duly organized
under the laws of the State of Maryland (collectively, the "Parties").
Witnesseth That:
Whereas, the Fund is authorized by its Agreement and Declaration of
Trust and By-Laws to issue separate series of shares representing interests in
separate investment portfolios which are identified on Schedule "C" attached
hereto and which Schedule "C" may be amended from time to time by mutual
agreement of the Fund and InCap; and
Whereas, the Parties desire to enter into an agreement whereby InCap
will provide the services to the Fund as specified herein and set forth in
particular in Schedule "A" which is attached hereto and made a part hereof.
Now Therefore, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
General Provisions
Section 1. Appointment.
The Fund hereby appoints InCap as Fund Administrator and InCap hereby
accepts such appointment. In order that InCap may perform its duties under the
terms of this Agreement, the Board of Trustees of the Fund shall direct the
officers, investment adviser, legal counsel, independent accountants and
custodian of the Fund to cooperate fully with InCap and, upon request of InCap,
to provide such information, documents and advice relating to the Fund which
InCap requires to execute its responsibilities hereunder. In connection with its
duties, InCap shall be entitled to rely, and will be held harmless by the Fund
when acting in reasonable reliance, upon any instruction, advice or document
relating to the Fund as provided to InCap by any of the aforementioned persons
on behalf of the Fund. All fees charged by any such persons acting on behalf of
the Fund would be deemed an expense of the Fund.
Any services performed by InCap under this Agreement will conform to the
requirements of:
(a) the provisions of the Act and the Securities Act of 1933, as
amended, and any rules or regulations in force thereunder;
(b) any other applicable provision of state and federal law;
(c) the provisions of the Declaration of Trust and the By-Laws of
the Fund as amended from time to time and delivered to InCap;
(d) any policies and determinations of the Board of Trustees of the
Fund which are communicated to InCap; and
(e) the policies of the Fund as reflected in the Fund's registration
statement as filed with the U.S. Securities and Exchange Commission.
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Nothing in this Agreement will prevent InCap or any officer thereof from
providing the same or comparable services for or with any other person, trust,
firm or corporation. While the services supplied to the Fund may be different
than those supplied to other persons, trusts, firms or corporations, InCap will
provide the Fund equitable treatment in supplying services. The Fund recognizes
that it will not receive preferential treatment from InCap as compared with the
treatment provided to other InCap clients.
Section 2. Duties and Obligations of InCap.
Subject to the provisions of this Agreement, InCap will provide to the
Fund the specific services as set forth in Schedule "A" attached hereto.
Section 3. Definitions. For purposes of this Agreement:
"Notice" will mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement. To be effective, such Note
shall be given to and received by the custodian and shall be signed on behalf of
the Fund by any two of its designated officers, and the term Note shall also
include instructions communicated to the custodian by InCap.
"Custodian" will refer to that agent which provides safekeeping of the
assets of the Fund.
"Instructions" will mean communications containing instructions
transmitted by electronic or telecommunications media including, but not limited
to, Industry Standardization for Institutional Trade Communications,
computer-to-computer interface, dedicated transmission line, facsimile
transmission (which may be signed by an officer or unsigned) and tested telex.
"Oral Instruction" will mean an authorization, instruction, approval, item
or set of data, or information of any kind transmitted to InCap in person or by
telephone, telegram, telecopy or other mechanical or documentary means lacking
original signature, by a person or persons reasonably identified to InCap to be
a person or persons so authorized by a resolution of the Board of Trustees of
the Fund to give Oral Instructions to InCap on behalf of the Fund.
"Shareholders" will mean the registered owners of the shares of the Fund
in accordance with the share registry records maintained by the Funds' Transfer
Agent.
"Shares" will mean the issued and outstanding shares of the Fund.
"Signature Guarantee" will mean the guarantee of signatures by an
"eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Eligible guarantor
institutions include banks, brokers, dealers, credit unions, and national
securities exchanges, registered securities associations, clearing agencies and
savings associations. Broker-dealers guaranteeing signatures must be members of
a clearing corporation or maintain net capital of at least $100,000. Signature
guarantees will be accepted from any eligible guarantor institution, which
participates in a signature guarantee program.
"Written Instruction" will mean an authorization, instruction, approval,
item or set of data or information of any kind transmitted to InCap in an
original writing containing an original signature or a copy of such document
transmitted by telecopy including transmission of such signature reasonably
identified to InCap to be the signature of a person or persons so authorized by
a resolution of the Board of Trustees of the Fund, or so identified by the Fund
to give Written Instructions to InCap on behalf of the Fund.
"Concerning Oral and Written Instructions" For all purposes under this
Agreement, InCap is authorized to act upon receipt of the first of any Written
or Oral Instruction it receives from the Fund or its agents. In cases where the
first instruction is an Oral Instruction that is not in the form of a document
or written record, a confirmatory Written Instruction or Oral Instruction in the
form of a document or written record shall be delivered promptly. In cases where
InCap receives an Instruction, whether Written or Oral, to enter a portfolio
transaction onto the Fund's records, the Fund shall cause the broker/dealer
executing such transaction to send a written confirmation to the Custodian.
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InCap shall be entitled to rely on the first Instruction received
from the Fund or its authorized agents, whether Oral or otherwise. For any act
or omission undertaken by InCap in compliance therewith, it shall be free of
liability and fully indemnified and held harmless by the Fund, provided however,
that in the event any Instruction received by InCap is countermanded by a
subsequent Written or Oral Instruction received prior to acting upon such
countermanded Instruction, InCap shall act upon such subsequent Written or Oral
Instruction. The sole obligation of InCap with respect to any follow-up or
confirmatory Written Instruction or Oral Instruction in documentary or written
form shall be to make reasonable efforts to detect any discrepancy between the
original Instruction and such follow-up or confirmatory Written or Oral
Instruction, and to report such discrepancy to the Fund. The Fund shall be
responsible and bear the expense of its taking any action, including any
reprocessing, necessary to correct any discrepancy or error. To the extent such
action requires InCap to act; the Fund shall give InCap specific Written
Instruction as to the action required.
The Fund will file with InCap a certified copy of each resolution of the
Fund's Board of Trustees authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided above.
Section 4. Indemnification.
(a) InCap shall indemnify and hold the Funds harmless from and against
each and all of the following:
(i) any and all damages or deficiencies resulting from any
misrepresentation, breach or non-fulfillment of any obligation or duty on the
part of the InCap contained in this Agreement or in connection with the
transactions contemplated hereby;
(ii) any and all expenses and liabilities of the Funds of any nature
(including penalty payments) arising from or relating to the failure of InCap to
perform its obligations under this Agreement; and
(iii) any and all accounts, suits, proceedings, demands,
assessments, judgments, costs and expenses, including attorney's fees incident
to the foregoing.
If a claim is made against the Fund as to which the Fund may seek
indemnity under this Section, the Fund will notify InCap promptly after receipt
of any written assertion of such claim threatening to institute an action or
proceeding with respect thereto and will notify InCap promptly of any action
commenced against the Funds within ten (10) days after the Fund has been served
with a summons or other legal process. Failure to notify InCap will not,
however, relieve InCap from any liability, which it may have on account of the
indemnity under this Section, so long as InCap has not been prejudiced in any
material respect by such failure.
InCap and the Fund will cooperate in the control of the defense of
any action, suit or proceeding in which the Fund is involved and for which
indemnity being provided by InCap to the Fund. InCap may negotiate the
settlement of any action, suit or proceeding subject to the Fund's approval,
which will not be unreasonably withheld. The Fund reserves the right, but not
the obligation, to participate in the defense or settlement of a claim, action
or proceeding with its own counsel. Reasonable costs or expenses incurred by the
Fund in connection with, or as a result of such participation, will be borne
solely by InCap if:
(1) the Fund has received an opinion of counsel from counsel to
InCap stating that the use of counsel to InCap by the Fund would present an
impermissible conflict of interest;
(2) the defendants in, or targets of, any such action or proceeding
include both the Fund and InCap and legal counsel to the Fund has reasonably
concluded that there are legal defenses available to it which are different from
or additional to those available to InCap or which may be adverse to or
inconsistent with defenses available to InCap (in which case InCap will not have
the right to direct the defense of such action on behalf of the Fund); or
(3) InCap authorizes the Fund to employ separate counsel at the
expense of InCap.
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(b) Any director, officer, employee, shareholder or agent of InCap, who
may be or become an officer, director, employee or agent of the Fund, will be
deemed, when rendering services to the Fund, or acting on any business of the
Fund (other than services or business in connection with InCap's duties
hereunder), to be rendering such services to or acting solely for the Fund and
not as a director, officer, employee, shareholder or agent of, or under the
control or direction of InCap even though such person may be receiving
compensation from InCap.
(c) The Fund agrees to indemnify and hold InCap harmless, together with
its officers, employees, shareholders and agents from and against any and all
claims, demands, expenses and liabilities (whether with or without basis in fact
or law) of any and every nature which InCap may sustain or incur or which may be
asserted against InCap by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by InCap in reliance
upon any Certificate, instrument, order or stock certificate or other document
reasonably believed by InCap to be genuine and signed, countersigned or executed
by any duly authorized person, upon the Oral Instructions or Written
Instructions of an authorized person of the Fund, or upon the written opinion of
legal counsel for the Fund or InCap; or
(ii) the offer or sale of shares of the Fund to any person, natural
or otherwise, which is in violation of any state or federal law.
If a claim is made against InCap as to which InCap may seek indemnity
under this Section, InCap will notify the Fund promptly after receipt of any
written assertion of such claim threatening to institute an action or proceeding
with respect thereto and will notify the Fund promptly of any action commenced
against InCap within ten (10) days after InCap has been served with a summons or
other legal process. Failure to notify the Fund will not, however, relieve the
Fund from any liability, which it may have on account of the indemnity under
this Section so long as the Fund has not been prejudiced in any material respect
by such failure.
The Fund and InCap will cooperate in the control of the defense of any
action, suit or proceeding in which InCap is involved and for which indemnity is
being provided by the Fund to InCap. The Fund may negotiate the settlement of
any action, suit or proceeding subject to InCap's approval, which will not be
unreasonably withheld. InCap reserves the right, but not the obligation, to
participate in the defense or settlement of a claim, action or proceeding with
its own counsel. Reasonable costs or expenses incurred by InCap in connection
with, or as a result of such participation, will be borne solely by the Fund if:
(i) InCap has received an opinion of counsel from counsel to the
Fund stating that the use of counsel to the Fund by InCap would present an
impermissible conflict of interest;
(ii) the defendants in, or targets of, any such action or proceeding
include both InCap and the Fund, and legal counsel to InCap has reasonably
concluded that there are legal defenses available to it which are different from
or additional to those available to the Fund or which may be adverse to or
inconsistent with defenses available to the Fund (in which case the Fund will
not have the right to direct the defense of such action on behalf of InCap); or
(iii) the Fund authorizes InCap to employ separate counsel at the
expense of the Fund.
(d) The terms of this Section will survive the termination of this
Agreement.
Section 5. Representations and Warranties.
(a) InCap represents and warrants that:
(i) it is a corporation duly organized and existing and in good
standing under the laws of the State of Maryland and is duly authorized to do
business in all jurisdictions in which it is doing business;
(ii) it is empowered under applicable laws and by its Certificate of
Incorporation and By-Laws to enter into and perform this Agreement;
(iii) all requisite corporate proceedings have been taken to
authorize InCap to enter into and perform this Agreement;
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(iv) it has and will continue to have access to the capital,
facilities, personnel and equipment required to fully perform its duties and
obligations hereunder and will furnish to the Fund such reports as may be
reasonably requested to determine its continuing compliance with this
representation;
(v) no legal or administrative proceedings have been instituted or
threatened which would impair InCap's ability to perform its duties and
obligations under this Agreement;
(vi) its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or obligation of
InCap or any law or regulation applicable to it;
(vii) it is registered as a transfer agent under Section 17A(c) (2)
of the Exchange Act;
(viii) this Agreement has been duly authorized by InCap and, when
executed and delivered, will constitute a valid, legal and binding obligation of
InCap, enforceable in accordance with its terms.
(ix) there are no violations of any kind, pending or threatened,
against InCap, and InCap has complied and will continue to comply with all laws,
rules and regulations relating to its operations and the performance of its
obligations under this Agreement. InCap will provide to the Fund such
information as may be reasonably requested from time to time to determine its
compliance with this representation.
(b) The Fund represents and warrants that:
(i) it is a statutory trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts;
(ii) it is empowered under applicable laws and by its Agreement and
Declaration of Trust and By-Laws to enter into and perform this Agreement;
(iii) all requisite proceedings have been taken to authorize the
Fund to enter into and perform this Agreement;
(iv) no legal or administrative proceedings have been instituted or
threatened which would impair the Fund's ability to perform its duties and
obligations under this Agreement;
(v) the Fund's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligations of the Fund, or any law or regulation applicable to either;
(vi) the Shares are properly registered or otherwise authorized for
issuance and sale;
(vii) this Agreement has been duly authorized by the Fund and, when
executed and delivered, will constitute a valid, legal and binding obligation of
the Fund, enforceable in accordance with its terms.
(c) Delivery of Documents
The Fund will furnish or cause to be furnished to InCap the following
documents;
(i) current Prospectus and Statement of Additional Information for
each portfolio attached hereto as may be amended from time to time;
(ii) most recent Annual Report;
(iii) most recent Semi-Annual Report for registered investment
companies on Form N-CSR;
(iv) certified copies of resolutions of the Fund's Board of Trustees
authorizing the execution of Written Instructions or the transmittal of Oral
Instructions and those persons authorized to give those Instructions.
(d) Record Keeping and Other Information
InCap will create and maintain all records required of it pursuant to its
duties hereunder and as set forth in Schedule "A" in accordance with all
applicable laws, rules and regulations, including records required by Section
31(a) of the Act. All such records will be the property of the Fund and will be
available during regular business hours for inspection, copying and use by the
Fund. Where applicable, such records will be maintained by InCap for the periods
and in the places required by Rule 31a-2 under the Act. Upon termination of this
Agreement, InCap will deliver all such records to the Fund or such person as the
Fund may designate.
In case of any request or demand for the inspection of the Share records
of the Fund, InCap shall notify the Fund and secure instructions as to
permitting or refusing such inspection. InCap may, however, exhibit such records
to any person in any case where it is advised by its counsel that it may be held
liable for failure to do so.
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Section 6. Compensation.
The Fund agrees to pay InCap compensation for its services, and to
reimburse it for expenses at the rates, times, manner and amounts as set forth
in Schedule "B" attached hereto and incorporated herein by reference and as will
be set forth in any amendments to such Schedule "B" agreed upon in writing by
the Parties. Upon receipt and approval of an invoice therefor, InCap is
authorized to collect such fees by debiting the Fund's custody account. The Fund
will approve or contest any invoice sent by InCap within five (5) days of
receipt. Disputed amounts shall not be deducted from the Fund's custody account
until the dispute is resolved. In addition, the Fund agrees to reimburse InCap
for any reasonable and ordinary out-of-pocket expenses paid by InCap on behalf
of the Fund within five (5) calendar days of the Fund's receipt of an invoice
therefor.
For the purpose of determining fees payable to InCap, the value of the
Fund's net assets will be computed at the times and in the manner specified in
the Fund's Prospectus and Statement of Additional Information then in effect.
During the term of this Agreement, should the Fund seek services or
functions in addition to those outlined below or in Schedule "A" attached
hereto, a written amendment to this Agreement specifying the additional services
and corresponding compensation may be executed by the Parties.
In the event that the Fund is more than thirty (30) days delinquent in its
payments of monthly ▇▇▇▇▇▇▇▇ in connection with this Agreement (with the
exception of specific amounts, which may be contested in good faith by the
Fund), this Agreement may be terminated upon thirty (30) days' written notice to
the Fund by InCap. In the event of a dispute over a billing amount, the Fund
must notify InCap in writing of the contested amounts within a reasonable time
of receipt of a billing for such amounts. Disputed amounts are not due and
payable while they are being disputed.
Section 7. Acts of God, etc.
InCap will not be liable or responsible for delays or errors caused by
acts of God or by reason of circumstances beyond its control including, acts of
civil or military authority, national emergencies, labor difficulties,
mechanical breakdown, insurrection, war, riots, or failure or unavailability of
transportation, communication or power supply, fire, flood or other catastrophe.
In the event of equipment failures beyond InCap's control, InCap will, at
no additional expense to the Fund, take reasonable steps to minimize service
interruptions but will have no liability with respect thereto. The foregoing
obligation will not extend to computer terminals located outside of premises
maintained by InCap.
Section 8. Inspection and Ownership of Records.
In the event of a request or demand for the inspection of the records of
the Fund, InCap will use its best efforts to notify the Fund and to secure
instructions as to permitting or refusing such inspection. InCap may, however,
make such records available for inspection to any person in any case where it is
advised in writing by its counsel that it may be held liable for failure to do
so after notice to the Fund.
InCap recognizes that the records it maintains for the Fund are the
property of the Fund and will be surrendered to the Fund upon written notice to
InCap as outlined under Section 9(c) below. InCap agrees to maintain the records
and all other information of the Fund in a confidential manner and will not use
such information for any purpose other than the performance of InCap's duties
under this Agreement. InCap shall backup any and all electronic files it
maintains on behalf of the Funds on a daily basis and store such backup files at
an off-site location. InCap shall provide the Funds with a list of all software
programs and pricing services and the like used in the daily operations of its
business as outline in the company's procedures manual.
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Section 9. Duration and Termination.
(a) The initial term of this Agreement will be for a period of thirty (30)
months, commencing on the date hereinabove first written (the "Effective Date")
and will continue thereafter subject to termination by either Party as set forth
in subsection (c) below; provided, however, that after November 1, 2005 either
party may terminate this Agreement if that party gives one hundred twenty (120)
days advance notice of the termination.
(b) The fee schedules set forth in Schedule "B" attached hereto will be
fixed for the initial term commencing on the Effective Date of this Agreement
and will continue thereafter subject to their review and any adjustment.
(c) After the initial term of this Agreement, a Party may give written
notice to the other (the day on which the notice is received by the Party
against which the notice is made shall be the "Notice Date") of a date on which
this Agreement shall be terminated ("Termination Date"). The Termination Date
shall be set on a day not less than ninety (90) days after the Notice Date. The
period of time between the Notice Date and the Termination Date is hereby
identified as the "Notice Period". Any time up to, but not later than fifteen
(15) days prior to the Termination Date, the Fund will pay to InCap such
compensation as may be due as of the Termination Date and will likewise
reimburse InCap for any out-of-pocket expenses and disbursements reasonably
incurred or expected to by incurred by InCap up to and including the Termination
Date.
(d) In connection with the termination of this Agreement, if a successor
to any of InCap's duties or responsibilities under this Agreement is designated
by the Fund by written notice to InCap, InCap will promptly on the Termination
Date, transfer to the successor all records which belong to the Fund and will
provide appropriate, reasonable and professional cooperation in transferring
such records and its functions to the named successor. The Fund shall reimburse
InCap for its reasonable out-of-pocket expenses incurred in connection with such
transfer of such records in accordance with section 10(c) above.
(e) Should the Fund desire to move any of the services outlined in this
Agreement to a successor service provider prior to the Termination Date, InCap
shall make a good faith effort to facilitate the conversion on such prior date,
however, there can be no guarantee that InCap will be able to facilitate a
conversion of services prior to the end of the Notice Period. Should services be
converted to a successor service provider prior to the end of the Notice Period,
or if the Fund is liquidated or its assets merged or purchased or the like with
another entity, payment of fees to InCap shall be accelerated to a date prior to
the conversion or termination of services and calculated as if the services had
remained at InCap until the expiration of the Notice Period and shall be
calculated at the asset levels on the Notice Date.
(f) Notwithstanding any other provisions of Paragraph 9, in the event the
Fund deregisters as an Investment Company with the United States Securities and
Exchange Commission ("SEC"), this Agreement may be terminated by the Fund upon
ninety (90) days written notice to InCap. The Termination Date shall be ninety
(90) days after the receipt of such notice by InCap. Any time up to, but not
later than fifteen (15) days prior to the Termination Date, the Fund will pay to
InCap such compensation as may be due as of the Termination Date and will
likewise reimburse InCap for any out- of- pocket expenses and disbursements
reasonably incurred or expected to be incurred by InCap up to and including the
Termination Date.
(g) Notwithstanding the foregoing, this Agreement may be terminated at any
time by either Party in the event of a material breach or threatened material
breach by the other Party in the performance of its obligations and duties under
this Agreement provided that such breach shall have remained unremedied for the
lesser of sixty (60) days or the permitted regulatory extension after receipt of
written specification thereof.
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Section 10. Rights of Ownership.
All computer programs and procedures developed to perform services
required to be provided by InCap under this Agreement are the property of InCap.
All records and other data except such computer programs and procedures are the
exclusive property of the Fund and all such other records and data will be
furnished to the Fund in appropriate form as soon as practicable after
termination of this Agreement for any reason.
Section 11. Amendments to Documents.
The Fund will furnish InCap written copies of any amendments to, or
changes in, the Articles of Incorporation, By-Laws, Prospectus or Statement of
Additional Information in a reasonable time prior to such amendments or changes
becoming effective. In addition, the Fund agrees that no amendments will be made
to the Prospectus or Statement of Additional Information of the Fund which might
have the effect of changing the procedures employed by InCap in providing the
services agreed to hereunder or which amendment might affect the duties of InCap
hereunder unless the Fund first obtains InCap's approval of such amendments or
changes.
Section 12. Confidentiality.
Both Parties hereto agree that any non-public information obtained
hereunder concerning the other Party is confidential and may not be disclosed to
any other person without the consent of the other Party, except as may be
required by applicable law or at the request of the U.S. Securities and Exchange
Commission or other governmental agency. InCap agrees that it will not use any
non-public information for any purpose other than performance of its duties or
obligations hereunder. The obligations of the Parties under this Section will
survive the termination of this Agreement. The Parties further agree that a
breach of this Section would irreparably damage the other Party and accordingly
agree that each of them is entitled, without bond or other security, to an
injunction or injunctions to prevent breaches of this provision.
Section 13. Notices.
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Fund: If to InCap:
Commonwealth International Series Trust InCap Fund Administration, Inc..
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
President President
With a copy to:
Rabil, Ropka, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Section 14. Amendment.
No provision of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by the Parties.
This Agreement may be amended from time to time by supplemental agreement
executed by the Parties and the compensation stated in Schedule "B" attached
hereto may be adjusted accordingly as mutually agreed upon.
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Section 15. Authorization.
The Parties represent and warrant to each other that the execution and
delivery of this Agreement by the undersigned officer of each Party has been
duly and validly authorized; and when duly executed, this Agreement will
constitute a valid and legally binding enforceable obligation of each Party.
Section 16. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
when so executed will be deemed to be an original, but such counterparts will
together constitute but one and the same instrument.
Section 17. Assignment.
This Agreement will extend to and be binding upon the Parties hereto and
their respective successors and assigns; provided, however, that this Agreement
will not be assignable by the Fund without the prior written consent of InCap or
by InCap without the prior written consent of the Fund which consent must be
authorized or approved by a resolution by its respective governing Boards of
Trustees prior to such assignment.
Section 18. Governing Law.
The laws of the Commonwealth of Massachusetts will govern this Agreement.
Section 19. Severability.
If any part, term or provision of this Agreement is held by any court to
be illegal, in conflict with any law or otherwise invalid, the remaining portion
or portions will be considered severable and not be affected and the rights and
obligations of the parties will be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid, provided that the basic agreement is not thereby materially impaired.
Section 20. Limitation of Liability of the Trustees and Shareholders
It is expressly agreed that the obligations of the Fund hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the fund personally, but shall bind only the trust
property of the Fund as provided in the Fund's Agreement and Declaration of
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees and this Agreement has been signed and delivered by an authorized
officer of the Fund, acting as such, and neither such authorization by the
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, bust shall bind only the trust property of the Fund as provided in
the Fund's Agreement and Declaration of Trust.
Section 21. Anti-Money Laundering
Each of InCap and the Fund acknowledge that it is a financial institution
subject to the USA Patriot Act of 2001 (the "AML Act"), which requires among
other things, that financial institutions adopt compliance programs to guard
against money laundering. Each represents and warrants to the other that it is
in compliance with and will continue to comply with the AML Act and applicable
regulations in all relevant respects. In that connection, the parties further
agree as follows:
(a) InCap shall include specific contractual provisions regarding anti-money
laundering compliance obligations in all future agreements entered into by
InCap with any financial intermediary that would be authorized to effect
transactions in shares of the Fund.
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(b) Each of InCap and the Fund agrees that it will take such further steps,
and cooperate with the others as may be reasonably necessary, to
facilitate compliance with the AML Act, including but not limited to the
provision of copies of its written procedures, policies and controls
related thereto ("AML Operations"). InCap undertakes that it will grant to
the Fund, the Fund's anti-money laundering compliance officer and
regulatory agencies, reasonable access to copies of InCap's AML
Operations, books and records pertaining to the Fund only.
Section 22. Chief Compliance Officer
InCap will assist the Fund's Chief Compliance Officer ("CCO") in his
duties of ensuring that the fund is in compliance with various federal and state
rule and regulations. InCap will respond promptly to the CCO's request for
information and will alert him to any material compliance matter pertaining to
their organization.
Section 23. Entire Agreement
This Agreement (including the Exhibits attached hereto) contains the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes all prior written or oral agreements and
understandings with respect thereto.
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In Witness Whereof, the Parties hereto have caused this Agreement
consisting of nineteen (19) typewritten pages, together with Schedules "▇," "▇"
and "C" (Pages 20-28, attached), to be signed by their duly authorized officers
as of the day and year first above written.
Commonwealth International Series Trust InCap Fund Administration, Inc.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------- ------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
President President
100
SCHEDULE A
Accounting Services Provided by InCap Fund Administration, Inc.
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o Review each Portfolio's Statement of Assets and Liabilities and Statement
of Operations.
o Assist in calculating expenses payable pursuant to the Fund's various
contractual obligations.
o Control all disbursements from the Fund on behalf of each Portfolio and
authorize such disbursements upon instructions of the Fund.
o Review calculations of capital gains and losses.
o Review calculation of each Portfolio's net income.
o Review computations of the net asset value of each Portfolio.
o Report applicable net asset value and performance data to performance
tracking organizations.
o Review the computation of each Portfolio's yields, total returns, expense
ratios and portfolio turnover rate.
o Review monthly security transactions listings.
o Review monthly broker security transactions summaries.
o Assist in the preparation and filing of the Fund's annual and semiannual
reports to shareholders and proxy statements.
o Assist with the preparation of amendments to the Fund's Registration
Statements on From N-1A and other filings relating to the registration of
shares.
o Review the analysis of each Portfolio's status as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended from time to time ("Code").
o Review the determination of the amount of dividends and other
distributions payable to shareholders as necessary to, among other things,
maintain the qualification as a regulated investment company of each
Portfolio of the Fund under the Code.
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Administrative Services Provided by InCap Fund Administration, Inc.
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o Provide overall day-to-day Fund administrative management, including
coordination of investment advisor, custodian, transfer agency,
distribution and pricing and accounting services.
o Prepare the following Federal and State filings and reports:
o Fund's post-effective amendments under the Securities Act of 1933
and the Investment Company Act of 1940.
o Rule 17g-1 filing with the SEC regarding Fidelity Bond coverage.
o Form 24F-2 - Annual notice of securities sold pursuant to Rule
24f-2.
o Form N-PX - Proxy Voting Report.
o Ongoing monitoring of State Blue Sky registrations and filings with
applicable states.
o Review, from the Fund's Fund Accounting agent, the following Federal
reports:
o Form N-SAR - Semi-Annual Report for Registered Investment Companies.
o Form N-CSR - Certified Shareholder Report.
o Form N-Q - Quarterly Schedule of Portfolio Holdings
o Prepare and file such reports, applications and documents as may be
necessary or desirable to register the Fund's shares with the Federal and
state securities authorities, and monitor the sale of Fund shares for
compliance with Federal and state securities laws.
o Review reports to shareholders, including the annual and semi-annual
report to shareholders; and coordinate mailing Prospectuses, notices,
proxy statements, proxies and other reports to shareholders.
o Assist with layout and printing of shareholder communications, including
Prospectuses and reports to shareholders.
o Administer contracts on behalf of the Fund with, among others, the Fund's
investment advisor, custodian, transfer agent/shareholder servicing agent,
distributor, and accounting services agent.
o Assist fund's legal counsel in the preparation for trustees/management
meetings including, coordinating the agenda, distribution of minutes,
attendance records and minute books.
Coordinate shareholder meetings, including assisting Fund counsel in preparation
of proxy materials, preparation of minutes and tabulation of results. Monitor
and pay Fund bills, maintain Fund budget and report budget expenses and
variances to Fund management.
o Monitor the Fund's compliance with the investment restrictions and
limitations imposed by the 1940 Act and state Blue Sky laws and applicable
regulations thereunder, the fundamental and non-fundamental investment
policies and limitations set forth in the Fund's Prospectuses and
Statement of Additional Information, and the investment restrictions and
limitations necessary for each Portfolio of the Fund to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended, or any successor statute.
102
o Prepare and distribute to appropriate parties notices announcing dividends
and other distributions to shareholders.
o Provide other administrative services as may be agreed from time to time
in writing by the Fund or Administrator.
103
SCHEDULE B
COMPENSTION
Compensation Schedule for fund accounting and fund administration services
provided by InCap Fund Administration, Inc. for the Commonwealth International
Series Trust:
$16,000/month for July 2005
$18,000/month for August - December 2005
$16,000/month thereafter
At such time as the total net assets of the Funds reach $110 million,
InCap Fund Administration will receive an additional fee of 7.5 bps on assets
between $110 million and $210 million and 5.0 bps on assets above $210 million.
In the event that total net assets of the Funds do not reach $110 million by
November 1, 2006, the fee paid to InCap Fund Administration will be increased to
$18,000/month for that month and for the balance of the contract period.
Plus out-of-pocket expenses to include, but not limited to: Wire fees, bank
service charges, printing, copying, postage, courier, account
statement/confirmations (including programming costs for specialized statements
and/or confirmation) Fund/SERV fee, price quotation service, record retention
fees, blue sky registration filing fees, shareholder web access fees,
registration fees, travel and other standard miscellaneous items, subject to a
schedule of such charges agreed to by the parties; provided, however, that some
or all of the foregoing out-of-pocket charges may be waived from July 1, 2005
through December 31, 2005 at the sole discretion of the Adviser to the Funds
Out-of pocket expenses are set by the schedule of expenses attached hereto. It
may not be changed without the mutual agreement of the parties.
104
InCap Fund Administration, Inc.
Expense Reimbursement Schedule
Commonwealth International Series Trust
In additional to contractual fees paid under agreements with InCap Fund
Administration, Inc., mutual fund clients are responsible for certain
out-of-pocket expenses. While charges may vary and some customized services are
not reflected on the following schedule, charges for the most commonly used
services are set forth below.
Postage, Printing and Copying Blue Sky Filing
Postage Actual Usage $25/regulatory filing
Copy and Printing $0.08/page
Courier Services Board Books
All cases: Actual Usage $50.00/book
Mailing Labels
Labels $.25/label
Minimum Charge $100.00
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SCHEDULE C
Commonwealth International Series Trust
Portfolios covered by this Agreement:
Commonwealth Japan Fund
Commonwealth Australia/New Zealand Fund
Commonwealth Global Fund
Commonwealth Real Estate Securities Fund
106