Filed with the Securities and Exchange Commission on May 23, 2000
1933 Act Registration File No. 333-33302
1940 Act File No. 811-9871
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. 1 |X|
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Post-Effective Amendment No. |_|
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 1 |X|
_______
CULLEN FUNDS TRUST
(Exact Name of Registrant as Specified in Charter)
645 Fifth Avenue
New York, NY 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 843-0506
Brooks Cullen
645 Fifth Avenue
New York, NY 10022
(Name and Address of Agent for Service)
Copies of all communications to:
Suzanne E. Riley, Esq.
Firstar Mutual Fund Services, LLC
615 East Michigan Street, 2nd Floor
Milwaukee, WI 53202
Approximate Date of Proposed Public Offering: As soon as practical after the
effective date of this Registration Statement.
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
______
on pursuant to paragraph (b)
______ ____________
60 days after filing pursuant to paragraph (a)(1)
______
on ____________ pursuant to paragraph (a)(1)
______
75 days after filing pursuant to paragraph (a)(2)
______
on pursuant to paragraph (a)(2) of Rule 485.
______ ____________
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
Title of securities being registered: Cullen Value Fund
CULLEN VALUE FUND
A series of Cullen Funds Trust
_______, 2000
The Securities and Exchange Commission ("SEC") has not approved or disapproved
of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
TABLE OF CONTENTS
YOUR INVESTMENT................................................................1
WHAT ARE THE FUND'S GOALS?..................................................1
WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?........................1
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?...........................1
WHO SHOULD INVEST IN THE FUND?..............................................2
PERFORMANCE INFORMATION.....................................................2
WHAT ARE THE FUND'S FEES AND EXPENSES?......................................3
WHO MANAGES THE FUND?.......................................................4
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW....................................6
FINANCIAL HIGHLIGHTS........................................................6
ADDITIONAL INFORMATION ON INVESTMENT POLICIES AND RISKS.....................6
YOUR ACCOUNT...................................................................8
SHARE PRICE.................................................................8
BUYING SHARES...............................................................9
SELLING SHARES.............................................................11
ADDITIONAL POLICIES........................................................12
DISTRIBUTIONS AND TAXES....................................................13
SHAREHOLDER REPORTS AND CONFIRMATIONS......................................14
RESERVED RIGHTS............................................................14
FOR MORE INFORMATION.......................................................16
In this prospectus, the "Adviser" refers to Cullen Capital Management LLC, the
investment adviser for the Cullen Value Fund (the "Fund"), a series of the
Cullen Funds Trust (the "Trust").
YOUR INVESTMENT
WHAT ARE THE FUND'S GOALS?
The Fund seeks long-term capital appreciation. Current income is a secondary
objective.
WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?
The Fund invests primarily in common stocks of medium- and large-capitalization
companies (companies with a market capitalization of $1.5 billion or more at the
time of purchase by the Fund). The Adviser generally selects stocks of companies
that have:
o a below average price/earnings ratio as compared to that of the Standard &
Poor's 500 Stock Index; and
o above average projected earnings growth as compared to that of the Standard &
Poor's 500 Stock Index.
The Fund generally invests substantially all of its assets in common stocks. The
Fund invests roughly similar amounts of its assets in each stock in the
portfolio. This approach avoids the overweighting of any individual security
being purchased. The Adviser may sell portfolio stocks when they are no longer
attractive based on their growth potential or price.
AMERICAN DEPOSITORY RECEIPTS are negotiable certificates that represent a given
number of shares of stock in a foreign corporation. However, they are bought and
sold in the American securities market, just as stock is traded.
Although the Fund has the ability to invest up to 30% of its assets in foreign
securities, it expects to normally invest up to only 20% of its assets in these
securities. These investments are generally made in American Depository Receipts
which trade on U.S. exchanges.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
GENERAL STOCK RISKS
The Fund's major risks are those of investing in the stock market. This means
the Fund may experience sudden, unpredictable declines in value, as well as
periods of poor performance. Because stock values go up and down, the value of
the Fund's shares may go up and down. You could lose money investing in the
Fund.
MEDIUM-CAPITALIZATION COMPANIES
The Fund may invest in the stocks of medium-capitalization companies.
Medium-capitalization companies often have narrower markets and more limited
managerial and financial resources than larger, more established companies. As a
result, their performance can be more volatile and they face greater risk of
business reversals which could increase the volatility of the Fund's portfolio.
VALUE STYLE INVESTING
Different types of equity investment strategies tend to shift in and out of
favor depending on market and economic conditions, and the performance resulting
from the Fund's "value" investment style may sometimes be lower than that of
other types of equity funds.
FOREIGN SECURITIES
Foreign investments involve additional risks, which include currency
exchange-rate fluctuations, political and economic instability, differences in
financial reporting standards, and less-strict regulation of securities markets.
WHO SHOULD INVEST IN THE FUND?
The Fund is appropriate for investors who are comfortable with the risks
described in this prospectus and who have long-term investment goals. The Fund
is not appropriate for investors concerned primarily with principal stability.
PERFORMANCE INFORMATION
Because the Fund is new, no performance information for the Fund is included in
this prospectus.
WHAT ARE THE FUND'S FEES AND EXPENSES?
The tables below describe the fees and expenses that you may pay if you buy and
hold shares of the Fund.
SHAREHOLDER FEES
(fees paid directly from your investment)
None(a)
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
Management Fee 1.00%
Distribution (12b-1) Fees (b) 0.25%
Other Expenses (c) 1.19%
Total Annual Fund Operating Expenses(d) 2.44%
Less Expense Reimbursement -0.44%
Net Annual Fund Operating Expenses 2.00%
a The Fund's transfer agent charges a $12 wire redemption fee.
b The Fund has adopted a Rule 12b-1 plan, which allows the Fund to pay
distribution fees for the sale and distribution of its shares. The maximum
level of distribution expenses is 0.25% per year of the Fund's average
daily net asset value. As these fees are paid out of the Fund's assets on
an on-going basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
c These expenses, which include custodian, transfer agency and other
customary Fund expenses, are based on estimated amounts for the Fund's
current fiscal year.
d The Adviser has contractually agreed to limit the Total Annual Fund
Operating Expenses to no more than 2.00% at least through [one year],
2001. The Adviser can recapture any expenses or fees it has waived or
reimbursed within a three-year period. However, the Fund is not obligated
to pay any such waived fees more than three years after the end of the
fiscal year in which the fee was waived.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The example assumes that you
invest $10,000 in the Fund and reinvest all dividends and distributions for the
time periods indicated, and then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return each year
and that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would be:
1 Year* 3 Years**
$203 $719
* The Expense Example shown for 1 Year includes the effects of the Adviser's
reimbursement of Fund operating expenses to no more than 2.00% on an annualized
basis.
** The 3 Years Expense Example does not show the effects of the waiver or
reimbursement because the Adviser is obligated to waive and/or reimburse
expenses only through the period ended ______, 2001.
WHO MANAGES THE FUND?
INVESTMENT ADVISER
The Fund's investment adviser is Cullen Capital Management LLC, located at 645
Fifth Avenue, New York, NY 10022. Subject to the general supervision of the
Trust's Board of Trustees, the Adviser is responsible for the day to day
investment decisions of the Fund in accordance with the Fund's investment
objective and policies. In exchange for these services, the Adviser receives an
annual management fee, which is calculated daily and paid monthly, according to
the average daily net assets of the Fund. Because the Adviser is newly
organized, it has no track record as an investment adviser. However, the
portfolio manager of the Fund has extensive investment management experience.
For more information on the portfolio manager, please see below.
The Advisory Agreement between the Fund and the Adviser provides that the annual
management fee for the Adviser will be 1.00% of the Fund's average daily net
assets. However, the Adviser has contractually agreed with the Fund to waive its
fees and absorb expenses to the extent that the Fund's total annual operating
expenses exceed 2.00% of the Fund's net assets. This contractual agreement for
expense waivers expires on ________, 2001.
PORTFOLIO MANAGER
James P. Cullen is the portfolio manager of the Fund. Mr. Cullen has been in
the investment management business for more than 30 years, is a founder of
Schafer Cullen Capital Management, Inc., a registered investment adviser, and
has been its President since December 1982. Prior to forming Schafer Cullen
Capital Management, Inc., Mr. Cullen was a Vice President of Donaldson, Lufkin
& Jenrette.
CUSTODIAN, TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND FUND ACCOUNTANT
Firstar Bank, N.A. serves as custodian for the Fund's cash and securities.
Firstar Mutual Fund Services, LLC provides administrative, transfer agent,
dividend disbursing and fund accounting services to the Fund.
DISTRIBUTOR
Quasar Distributors, LLC serves as principal underwriter for the Fund and, as
such, is the agent for the distribution of shares of the Fund.
OTHER IMPORTANT INFORMATION YOU SHOULD KNOW
FINANCIAL HIGHLIGHTS
Because the Fund is new, no financial highlights are available for the Fund.
ADDITIONAL INFORMATION ON INVESTMENT POLICIES AND RISKS
The Fund invests in securities which the Adviser believes offer the possibility
of increase in value. For the most part, this means that the Fund will invest in
common stocks of medium- and large-capitalization companies having a low stock
market valuation at the time of purchase (as measured by price/earnings ratios
as compared with the average price/earnings ratio of the S&P 500 Stock Index) in
relation to investment value (as measured by prospective earnings and dividend
growth rates as compared with market averages of such rates). The Adviser then
monitors investments for price movement and earnings developments. Once a
security is purchased, the Adviser will generally hold it in the Fund's
portfolio until it no longer meets the Fund's financial or valuation criteria.
Although there may be some short-term portfolio turnover, the Adviser generally
purchases securities which it believes will appreciate in value over the long
term. However, securities may be sold without regard to the time they have been
held when, in the Adviser's opinion, investment considerations warrant such
action.
The Fund does not concentrate its investments in any particular industry or
group of industries, but diversifies its holdings among as many different
companies and industries as seems appropriate in light of conditions prevailing
at any given time.
Other than as considered appropriate for cash reserves, the Fund will generally
maintain a fully invested position in common stocks of publicly-held companies,
primarily in stocks of companies listed on a national securities exchange and
other publicly traded equity securities (common stocks or securities convertible
into common stocks). This generally means that the Fund will be at least 95%
invested in stocks (or securities convertible into stocks) at all times except
to the extent that:
o unusually large share purchases necessitate the holding of cash equivalents
while additional equities are identified and purchased; or
o anticipated share redemptions indicate that the Fund should hold larger
cash reserves to better manage such redemptions.
Investments may also be made in debt securities which are convertible into
equity securities and preferred stocks which are convertible into common stocks
and in warrants or other rights to purchase common stock, which in each case are
considered by the Adviser to be equity securities. The Adviser generally does
not engage in market timing by shifting the portfolio or a significant portion
thereof in or out of the market in anticipation of market fluctuations. Although
the Fund's portfolio will normally be fully invested in equity securities as
described above, a portion of its assets may be held from time to time in cash
or cash equivalents when the Adviser is unable to identify attractive equity
investments. Cash equivalents are instruments or investments of such high
liquidity and safety that they are virtually as good as cash. Examples of cash
equivalents include money market funds and Treasury bills.
The Fund invests primarily in the securities of U.S. issuers, although it has
the ability to invest up to 30% of its assets in securities of foreign issuers,
or depository receipts for such securities, which are traded in a U.S. market or
are available through a U.S. broker or dealer (regardless of whether traded in
U.S. dollars) and which meet the criteria for investment selection set forth
above. As a result, the Fund may be subject to additional investment risks that
are different in some respects from those experienced by a fund that invests
only in securities of U.S. domestic issuers.
Such risks include:
|X| future political and economic developments, the imposition of foreign
withholding taxes on dividend and interest income payable on the securities,
|X| the possible establishment of exchange controls,
|X| the possible seizure or nationalization of foreign investments, or
|X| the adoption of other foreign governmental restrictions which might
adversely affect the payment of amounts due with respect to such securities.
With respect to the securities of foreign issuers which are denominated in
foreign currencies, such risks also include currency exchange-rate risk.
Generally, the Fund will not purchase securities which it believes, at the time
of purchase, will be subject to exchange controls; however, there can be no
assurance that exchange control laws may not become applicable to certain of the
Fund's investments. In addition, there may be less publicly available
information about a foreign issuer than about a domestic issuer, and foreign
issuers may not be subject to the same accounting, auditing, financial record
keeping and shareholder reporting standards and requirements as domestic
issuers.
There are market risks inherent in any investment, and there is no assurance
that the primary investment objective of the Fund will be realized or that any
income will be earned. Moreover, the application of the Fund's investment
policies is basically dependent upon the Adviser's judgment. You should realize
that there are risks in any policy dependent upon judgment and that the Adviser
does not make any representation that the objectives of the Fund will be
achieved or that there may not be substantial losses in any particular
investment.
At any time the value of the Fund's shares may be more or less than your cost of
shares.
The Fund's secondary objective of current income is not a fundamental policy of
the Fund and may be changed by a vote of a majority of the Board of Trustees
without a vote of the shareholders.
YOUR ACCOUNT
SHARE PRICE
The price of a share of the Fund is called the Fund's net asset value ("NAV").
The NAV is determined as of the close of regular trading on the New York Stock
Exchange ("NYSE") (usually 4:00 p.m. Eastern time) everyday the NYSE is open for
trading. The NAV is calculated by taking the total value of the Fund's assets,
subtracting its liabilities, and then dividing by the number of shares that have
already been issued. This is a standard calculation, and forms the basis for all
transactions involving buying, selling, or reinvesting shares.
The Fund's investments are valued according to market value. When a market quote
is not readily available, the security's value is based on fair value as
determined by the Adviser under supervision of the Trust's Board of Trustees.
Your order will be priced at the next NAV calculated after your order is
receivedby the Fund's transfer agent in good order.
FOREIGN SECURITIES
Some of the Fund's portfolio securities may be listed on foreign exchanges that
trade on days when the Fund does not calculate NAV. As a result, the Fund's NAV
may change on days when you will not be able to purchase or redeem shares. In
addition, a foreign exchange may not value its listed securities at the same
time that the Fund calculates NAV. Events affecting the values of portfolio
securities that occur between the time a foreign exchange assigns a price to the
portfolio securities and the time when the Fund calculates NAV generally will
not be reflected in the Fund's NAV. However, these events will be reflected in
the Fund's NAV when the Adviser, under the supervision of the Board of Trustees
of the Trust, determine that they would have a material effect on the Fund's
NAV.
BUYING SHARES
MINIMUM INVESTMENTS
When buying shares, you must meet the following minimum investment requirements:
INITIAL ADDITIONAL
Regular Accounts $1,000 $100
IRAs and UGMA/UTMA accounts, Simple
IRA, SEP-IRA, 403(b)(7), Keogh, The lesser of $250 or $50
Pension Plan and Profit Sharing $25 per month
Plan Accounts
Please note...
o If you use an Automatic Investment Plan ("AIP"), the initial
investment minimum to open an account is $50 and the additional
investment minimum is $50.
o You will be charged a $12.50 annual account maintenance fee for
each IRA (or other retirement) account of up to a maximum of $25
and a $15 fee for transferring assets to another custodian or for
closing an account.
TIMING OF REQUESTS
When making a purchase request, make sure your request is in good order. "Good
order" means your purchase request includes:
|X| The name of the Fund
|X| The dollar amount of shares to be purchased
|X| Purchase application or investment stub
|X| Check payable to Cullen Value Fund
The price per share will be the NAV next computed after the time your request is
received in good order by the Fund's transfer agent. All requests received in
good order before 4:00 p.m. (Eastern time) will be executed on that same day.
Requests received after 4:00 p.m. will be processed on the next business day.
RECEIPT OF ORDERS
Shares may only be purchased on days the NYSE is open for trading. Your order
will be considered received after your check is converted into federal funds and
received by the transfer agent (usually the next business day). If you are
paying with federal funds (wire), your order will be considered received when
the Fund's transfer agent receives the federal funds.
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METHODS OF BUYING
<S> <C>
THROUGH A You can purchase shares of the Fund through any broker/dealer organization that has a sales
BROKER/DEALER agreement with the Fund's distributor. The broker-dealer organization is responsible for
ORGANIZATION sending your purchase order to the Fund. Please keep in mind that your broker/dealer may charge
additional fees for its services.
BY MAIL To open an account, complete an account application form and send it together with your
check to the address below. To make additional investments once you have opened your
account, send your check together with the detachable form that is included with your Fund
account statement or confirmation. You may also send a letter stating the amount of your
investment with your name, the name of the Fund and your account number together with a
check to the address below. Checks should be made payable to "Cullen Value Fund." No
third party checks will be accepted. If your check is returned for any reason, a $25 fee
will be assessed against your account.
REGULAR MAIL OVERNIGHT DELIVERY
Cullen Value Fund Cullen Value Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
NOTE: The Fund does not consider the U.S. Postal Service or other independent delivery
services to be its agents. Therefore, when you deposit your account application
form, additional purchase request, or redemption request in the mail or use other
delivery services, or if your documents are simply in the transfer agent's
post office box, that does not mean that the Fund's transfer agent actually RECEIVED
those documents.
BY TELEPHONE To make additional investments by telephone, you must check the appropriate box on your account
application form authorizing telephone purchases. If you have given authorization for telephone
transactions and your account has been open for at least 15 days, you may call the Fund toll free at
1-877-485-8586 to move money from your bank account to your Fund account upon request. Only
bank accounts held at U.S. institutions that are Automated Clearing House ("ACH") members
may be used for telephone transactions. For security reasons, requests by telephone
will be recorded.
BY WIRE To open an account or to make additional investments by wire, call 1-877-485-8586 to notify the
Fund of the incoming wire using the wiring instructions below:
Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 075000022
Credit: Firstar Mutual Fund Services, LLC
Account #: __________
Further Credit: Cullen Value Fund
(your name or the title on the account)
(your account #)
THROUGH AN Once your account has been opened, you may purchase shares of the Fund through an AIP. You
AUTOMATIC can have money automatically transferred from your checking or savings account on a weekly,
INVESTMENT bi-weekly, monthly, bi-monthly or quarterly basis. To be eligible for this plan, your bank
PLAN must be a U.S. institution that is an ACH member. The Fund may modify or terminate the AIP
at any time. The first AIP purchase will take place no earlier than 15 days after the
Fund's transfer agent has received your request.
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SELLING SHARES
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METHODS OF SELLING
<S> <C>
THROUGH A If you purchased your shares through a broker/dealer or other financial organization, your
BROKER/DEALER redemption order may be placed through the same organization. The organization is responsible
ORGANIZATION for sending your redemption order to the Fund on a timely basis. Please keep in mind that your
broker/dealer may charge additional fees for its services.
BY MAIL Send your written redemption request to the address below. Your request should contain the
Fund's name, your account number and the dollar amount or the number of shares to be redeemed.
Be sure to have all shareholders sign the letter as their names appear on the account.
Additional documents are required for certain types of shareholders, such as corporations,
partnerships, executors, trustees, administrators, or guardians (i.e., corporate resolutions or
trust documents indicating proper authorization).
REGULAR MAIL OVERNIGHT DELIVERY
Cullen Value Fund Cullen Value Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
The Fund's transfer agent may require a SIGNATURE GUARANTEE for certain redemption requests, such
as redemption requests from IRA accounts, or redemption requests made payable to a person or an address
not on record with the Fund.
BY TELEPHONE If you are authorized to perform telephone transactions (either through your account application form
or by subsequent arrangement in writing with the Fund) you may redeem as little as $500 and as
much as $50,000 by calling 1-877-485-8586. A signature guarantee is required of all shareholders
to change or add telephone redemption privileges. For security reasons, requests by telephone will
be recorded. No telephone redemptions may be made within 15 days of any address change.
BY WIRE To redeem shares by wire, call the Fund at 1-877-485-8586 and specify the amount of money you wish to
be wired. Your bank may charge a fee to receive wired funds. The transfer agent charges a $12
outgoing wire fee.
THROUGH A If you own shares with a value of $10,000 or more, you may participate in the systematic
SYSTEMATIC withdrawal plan. The systematic withdrawal plan allows you to make automatic withdrawals from
WITHDRAWAL PLAN your Fund account at regular intervals. Money will be transferred from your Fund account to the
checking or savings account you choose on your account application form. If you expect to
purchase additional shares of the Fund, it may not be to your advantage to participate in the
systematic withdrawal plan because of the possible adverse tax consequences of making contemporaneous
purchases and redemptions.
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SIGNATURE GUARANTEES
Signature guarantees are designed to prevent unauthorized transactions. The
guarantor pledges that the signature presented is genuine and, unlike a notary
public, is financially responsible if it is not.
You can obtain signature guarantees from banks, broker/dealers, credit unions,
securities exchanges and some other institutions. A notary public is not
acceptable. The Fund requires a signature guarantee for redemption requests from
IRA accounts, redemption requests made payable to a person or an address not on
record with the Fund, or to change or add telephone redemption privileges.
The Fund's transfer agent reserves the right to reject any signature guarantee.
WHEN REDEMPTION PROCEEDS ARE SENT TO YOU
Your shares will be redeemed at the NAV next determined after the Fund's
transfer agent receives your redemption request in good order. Your redemption
request cannot be processed on days the NYSE is closed.
When making a redemption request, make sure your request is in good order. "Good
order" means your redemption request includes:
|X| the name of the Fund
|X| the dollar amount or the number of shares to be redeemed
|X| signatures of all registered shareholders exactly as the shares are
registered
|X| the account number
All requests received in good order by the Fund's transfer agent before the
close of the regular trading session of the NYSE (usually 4:00 p.m. Eastern
time) will normally be wired to the bank you indicate or mailed on the following
day to the address of record. Except in extreme circumstances, proceeds will be
wired or a check mailed within 7 calendar days after the Fund receives your
redemption request.
If you purchase shares using a check and soon after request a redemption, the
Fund will honor the redemption request, but will not mail or wire the proceeds
until your purchase check has cleared (usually within 12 days, but in no event
more than 15 days).
The Fund may make a redemption in-kind (a payment in portfolio securities rather
than cash) if the amount you are redeeming is in excess of the lesser of (i)
$250,000 or (ii) 1% of the Fund's assets. Generally, a redemption in-kind is
used when large redemption requests may cause harm to the Fund and its
shareholders.
ADDITIONAL POLICIES
TELEPHONE TRANSACTIONS
Once you place a telephone transaction request, it cannot be canceled or
modified. The Fund uses reasonable procedures to confirm that telephone requests
are genuine. The Fund may be responsible if it does not follow these procedures.
You are responsible for losses resulting from fraudulent or unauthorized
instructions received over the telephone, provided the Fund reasonably believes
the instructions were genuine. Contact the Fund immediately if you believe there
is a discrepancy between a transaction you performed and the confirmation
statement you received, or if you believe someone has obtained unauthorized
access to your account.
During times of unusual market activity, the Fund's phones may be busy and you
may experience a delay in placing a telephone request. If you are unable to
contact the Fund's transfer agent by phone, shares may also be purchased or
redeemed by delivering the redemption request to the Fund's transfer agent.
INVESTING THROUGH A THIRD PARTY
If you invest through a third party (rather than with the Fund), the policies
and fees may be different than described in this prospectus. Banks, brokers,
401(k) plans, financial advisers, and financial supermarkets may charge
transaction fees and may set different minimum investments or limitations on
buying or selling shares. Consult a representative of your plan or financial
institution if you are not sure.
DISTRIBUTIONS AND TAXES
In general, the Fund will distribute substantially all of its net investment
income and any net capital gains that it has realized in the sale of securities.
These income and gains distributions will generally be paid once each year, on
or before December 31. Distributions will automatically be reinvested in
additional shares of the Fund, unless you elect to have the distributions paid
to you in cash. If you choose to have distribution checks mailed to you and
either the U.S. Postal Service is unable to deliver the check to you or the
check remains outstanding for at least 6 months, the Fund reserves the right to
reinvest the check at the then current NAV until you notify the Fund with
different instructions.
In general, Fund distributions are taxable to you as either ordinary income or
capital gains. Any distributions you receive from the Fund's net income and
gains (other than the Fund's net capital gains), will be taxable to you as
ordinary dividend income at your marginal income tax rate, and to certain
corporate investors, who may be eligible for the dividends received deduction.
Any distributions you receive from the Fund's net capital gains generally will
be taxable to you at your long-term capital gains rate. This is generally true
no matter how long you have owned your shares and whether you reinvest your
distributions or take them in cash. If the Fund distributes realized gains soon
after you purchase shares, a portion of your investment may be treated as a
taxable distribution.
You may also have to pay taxes when you sell or redeem your shares if the value
of your shares has increased above their cost basis since you bought them. Any
loss recognized on the sale of a share held for less than six months is treated
as long-term capital loss to the extent of any net capital gain distributions
made with respect to such share.
Fund distributions and gains from the sale of your shares may be subject to
state and local income tax. Non-U.S. investors may be subject to U.S.
withholding and estate tax. You should consult your tax adviser about the
federal, state, local or foreign tax consequences of your investment in the
Fund.
SHAREHOLDER REPORTS AND CONFIRMATIONS
As a shareholder, you will be provided annual and semi-annual reports showing
the Fund's portfolio investments and financial information. You will also
receive confirmations of your purchases into, and redemptions out of, the Fund.
Account statements will be mailed to you on an annual basis.
RESERVED RIGHTS
The Fund reserves the right to:
o Refuse, change, discontinue, or temporarily suspend account
services, including purchase or telephone redemption privileges,
for any reason.
o Reject any purchase request for any reason. Generally, the Fund does this if
the purchase is disruptive to the efficient management of the Fund (e.g., due
to the timing of the investment).
o Change the minimum or maximum investment amounts.
o Delay sending out redemption proceeds for up to seven days (this
generally only applies to very large redemptions without notice or
during unusual market conditions).
o Suspend redemptions or postpone payments when the NYSE is closed
for any reason other than its usual weekend or holiday closings,
when trading is restricted by the SEC, or under emergency
circumstances as determined by the SEC in accordance with the
provisions of the Investment Company Act of 1940.
o Close any account that does not meet minimum investment
requirements. The Fund will give you notice and 60 days to begin
an automatic investment program or to increase your balance to the
required minimum. The initial minimum investment may be waived at
the Fund's discretion. An account will not be closed when it falls
below the minimum investment requirement as a result of market
fluctuations.
o Reject any purchase or redemption request that does not contain all required
documentation.
INVESTMENT ADVISER
Cullen Capital Management LLC
NEW YORK, NEW YORK
DISTRIBUTOR
Quasar Distributors, LLC
MILWAUKEE, WISCONSIN
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
MILWAUKEE, WISCONSIN
LEGAL COUNSEL
Sidley & Austin
CHICAGO, ILLINOIS
ADMINISTRATOR, TRANSFER AGENT,
AND FUND ACCOUNTANT
Firstar Mutual Fund Services, LLC
MILWAUKEE, WISCONSIN
CUSTODIAN
Firstar Bank, N.A.
CINCINNATI, OHIO
FOR MORE INFORMATION
You can find more information about the Fund in the following documents:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains details about investments and techniques of the Fund and
certain other additional information. A current SAI is on file with the SEC and
is incorporated into this prospectus by reference. This means that the SAI is
legally considered a part of this prospectus even though it is not physically
contained within this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
After the Fund has been operating for the appropriate time, annual and
semi-annual reports will be made available. The Fund's annual and semi-annual
reports provide the most recent financial reports and portfolio listings. The
annual report contains a discussion of the market conditions and investment
climate that affected the Fund's performance during the Fund's last fiscal year.
You can obtain a free copy of these documents, request other information or make
shareholder inquiries about the Fund by calling the Fund at 1-877-485-8586 or by
writing to:
CULLEN VALUE FUND
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WI 53201-0701
You may write to the SEC Public Reference Room at the regular mailing address or
the e-mail address below and ask them to mail you information about the Fund,
including the SAI. They will charge you a fee for this duplicating service. You
can also visit the SEC Public Reference Room and copy documents while you are
there. For more information about the operation of the Public Reference Room,
call the SEC at the telephone number below.
PUBLIC REFERENCE SECTION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0102
[email protected]
1-202-942-8090
Reports and other information about the Fund are also available on the EDGAR
Database on the SEC's Internet site at HTTP://WWW.SEC.GOV.
1940 Act File No. 811-9871
CULLEN VALUE FUND
A series of Cullen Funds Trust
STATEMENT OF ADDITIONAL INFORMATION
______, 2000
This Statement of Additional Information (the "SAI") is not a prospectus. You
may obtain a copy of the prospectus dated ______, 2000 (the "Prospectus") of
Cullen Value Fund (the "Fund"), a series of the Cullen Funds Trust (the
"Trust"), without charge by calling the Fund at 1-877-485-8586 or by writing the
Fund at the address set forth below. This SAI contains information in addition
to and more detailed than that set forth in the Prospectus. You should read this
SAI together with the Prospectus and retain it for future reference.
REGULAR MAIL OVERNIGHT OR EXPRESS MAIL
Cullen Value Fund Cullen Value Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 East Michigan Street, 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
TABLE OF CONTENTS
Page
The Trust.....................................................................3
Description of the Fund and its Investment Objective, Policies and Risks......3
Investment Restrictions.......................................................7
Management of the Fund........................................................8
Control Persons and Principal Holders of Shares...............................10
Investment Advisory and Other Services........................................10
Distributor...................................................................12
Distribution Plan.............................................................13
Brokerage.....................................................................13
Capital Structure.............................................................14
Determination of Net Asset Value..............................................14
Purchase and Redemption of Shares.............................................15
Additional Information on Distributions and Taxes.............................16
Calculation of Performance Data...............................................19
Shareholder Reports...........................................................21
Service Providers.............................................................21
Financial Statements..........................................................22
Additional Information........................................................22
THE TRUST
- --------------------------------------------------------------------------------
The Trust is an open-end management investment company created as a Delaware
business trust on March 25, 2000 and registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The Trust currently offers
one diversified portfolio to investors, the Cullen Value Fund. An investor, by
investing in the Fund, becomes entitled to a pro rata share of all dividends and
distributions arising from the net income and capital gains on the investments
of the Fund. Likewise, an investor shares pro rata in any losses of the Fund.
DESCRIPTION OF THE FUND AND ITS INVESTMENT OBJECTIVE, POLICIES AND RISKS
- --------------------------------------------------------------------------------
For additional information on the Fund, its investment objective, policies and
risks, see also "What Are The Fund's Goals?", "What Are The Fund's Principal
Investment Strategies?" and "Additional Information On Investment Policies And
Risks" in the Fund's Prospectus and "Investment Restrictions" below.
INVESTMENT OBJECTIVE
The primary investment objective of the Fund is long-term capital appreciation,
and portfolio securities are selected primarily with a view to achieve this
objective. The Fund's primary objective is a fundamental policy of the Fund and
may not be changed without shareholder approval as described below in
"Investment Restrictions." Current income is a secondary objective in the
selection of investments. This secondary objective is not a fundamental policy
of the Fund and may be changed by a vote of a majority of the Board of Trustees
without a vote of the shareholders.
DIVERSIFICATION
It is anticipated that the Fund will diversify its investments among various
issuers in different industries. The Fund may, however, from time to time,
invest up to 25% of the value of its total assets in securities of issuers all
of which conduct their principal business activities in the same industry.
PORTFOLIO TURNOVER
The Fund expects to purchase and sell securities at such times as it deems to be
in the best interest of its shareholders. The Fund anticipates that its annual
portfolio turnover rate should not significantly exceed 50%. The Fund, however,
has not placed any limit on its rate of portfolio turnover, and securities may
be sold without regard to the time they have been held when, in the opinion of
the Fund's investment adviser, investment considerations warrant such action.
CONVERTIBLE SECURITIES
Convertible securities are bonds, debentures, notes, preferred stocks, or other
securities that may be converted into or exchanged for a specified amount of
common stock of the same or a different issuer within a particular period of
time at a specified price or formula. A convertible security entitles the holder
to receive interest normally paid or accrued on debt or the dividend paid on
preferred stock until the convertible security matures or is redeemed, converted
or exchanged. Convertible securities have unique investment characteristics in
that they generally (1) have higher yields than common stocks, but lower yields
than comparable non-convertible securities, (2) are less subject to fluctuation
in value than the underlying stock since they have fixed income characteristics,
and (3) provide the potential for capital appreciation if the market price of
the underlying common stock increases.
The value of a convertible security is a function of its "investment value"
(determined by its yield in comparison with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege) and its
"conversion value" (the security's worth, at market value, if converted into the
underlying common stock). The investment value of a convertible security is
influenced by changes in interest rates, with investment value declining as
interest rates increase and increasing as interest rates decline. The credit
standing of the issuer and other factors also may have an effect on the
convertible security's investment value. The conversion value of a convertible
security is determined by the market price of the underlying common stock. If
the conversion value is low relative to the investment value, the price of the
convertible security is governed principally by its investment value. Generally,
the conversion value decreases as the convertible security approaches maturity.
To the extent the market price of the underlying common stock approaches or
exceeds the conversion price, the price of the convertible security will be
increasingly influenced by its conversion value.
FOREIGN SECURITIES AND CURRENCIES
Foreign investments involve special risks, including:
- - - expropriation, confiscatory taxation, and withholding taxes on dividends and
interest;
- - - less extensive regulation of foreign brokers, securities markets, and
issuers;
- - - less publicly available information and different accounting standards;
- - - costs incurred in conversions between currencies, possible delays in
settlement in foreign securities markets, limitations on the use or transfer of
assets (including suspension of the ability to transfer currency from a given
country), and difficulty of enforcing obligations in other countries; and
- - - diplomatic developments and political or social instability. Foreign
economies may differ favorably or unfavorably from the U.S. economy in
various respects, including growth of gross domestic product, rates of
inflation, currency depreciation, capital reinvestment, resource
self-sufficiency and balance-of-payments positions. Many foreign securities may
be less liquid and their prices more volatile than comparable U.S. securities.
From time to time foreign securities may be difficult to liquidate rapidly
without adverse price efforts. Certain costs attributable to foreign investing
such as custody charges and brokerage costs, may be higher than those
attributable to domestic investing.
The risks of foreign investments are generally intensified for investments in
developing countries. Risks of investing in such markets include:
- - - less social, political and economic stability;
- - - small securities markets and lower trading volume, which may result in a
lack of liquidity and greater price volatility;
- - - certain national policies that may restrict the Fund's investment
opportunities, including restrictions on investments in issuers or industries
deemed sensitive to national interests, or expropriation or confiscation of
assets or property, which could result in the Fund's loss of its entire
investment in that market; and
- - - less developed legal structures governing private or foreign investment or
allowing for judicial redress for injury to private property.
In addition, brokerage commissions, custodial services, withholding taxes, and
other costs relating to investments in emerging markets generally are more
expensive than in the U.S. and certain more established foreign markets.
Economics in emerging markets generally are heavily dependent upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values, and other protectionist measures negotiated or imposed by the countries
with which they trade.
Because most foreign securities are denominated in non-U.S. currencies, the
investment performance of the Fund could be affected by changes in foreign
currency exchange rates to some extent. The value of the Fund's assets
denominated in foreign currencies will increase or decrease in response to
fluctuations in the value of those foreign currencies relative to the U.S.
dollar. Currency exchange rates can be volatile at times in response to supply
and demand in the currency exchange markets, international balances of payments,
governmental intervention, speculation, and other political and economic
conditions.
MEDIUM-CAPITALIZATION COMPANIES
The Fund may invest in medium-capitalization companies. While
medium-capitalization companies often have the potential for growth, investments
in medium-capitalization companies often involve greater risks than investments
in large, more established companies. Medium-capitalization companies may lack
the management experience, financial resources, product diversification, and
competitive strengths of large companies. In addition, in certain instances the
securities of medium-capitalization companies are traded only over-the-counter
("OTC") or on a regional securities exchange, and the frequency and volume of
their trading may be substantially less than is typical of larger companies.
(The OTC market is the security exchange system in which broker/dealers
negotiate directly with one another rather than through the facilities of a
securities exchange). Therefore, the securities of medium-capitalization
companies may be subject to greater and more abrupt price fluctuations. When
making large sales, the Fund may have to sell portfolio holdings at discounts
from quoted prices or may have to make a series of small sales over an extended
period of time due to the trading volume of medium-capitalization company
securities. Investors should be aware that, based on the foregoing factors, an
investment in the Fund may be subject to greater price fluctuations than an
investment in a mutual fund that invests primarily in the largest, most
established companies. The investment adviser's research efforts may also play a
greater role in selecting securities for the Fund than in a mutual fund that
invests exclusively in larger, more established companies.
WARRANTS
The Fund may acquire warrants. Warrants are securities giving the holder the
right, but not the obligation, to buy the stock of an issuer at a given price
(generally higher than the value of the stock at the time of issuance) during a
specified period or perpetually. Warrants may be acquired separately or in
connection with the acquisition of securities. Warrants do not carry with them
the right to dividends or voting rights with respect to the securities that they
entitle their holder to purchase, and they do not represent any rights in the
assets of the issuer. As a result, warrants may be considered to have more
speculative characteristics than certain other types of investments. In
addition, the value of a warrant does not necessarily change with the value of
the underlying securities, and a warrant ceases to have value if it is not
exercised prior to its expiration date.
CASH INVESTMENTS
Cash or cash equivalents in which the Fund may invest when its investment
adviser is unable to identify attractive equity investments include short-term
money market securities such as U.S. Treasury bills, prime-rated commercial
paper, certificates of deposit, variable rate demand notes, or repurchase
agreements. Variable rate demand notes are non-negotiable instruments. The
instruments the Fund invests in are generally rated at least Al by Standard &
Poor's Corporation. However, the Fund may be susceptible to credit risk with
respect to these notes to the extent the issuer defaults on its payment
obligation.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with banks or non-bank dealers. In
a repurchase agreement, the Fund buys a security at one price, and at the time
of sale, the seller agrees to repurchase the obligation at a mutually agreed
upon time and price (within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the seller's
obligation to repurchase is secured by the value of the underlying security. In
the event of a bankruptcy or other default of the seller, the Fund could
experience both delays in liquidating the underlying securities and losses,
including: (a) possible decline in the value of the underlying security during
the period while the Fund seeks to enforce its rights; (b) possible subnormal
levels of income or proceeds and lack of access to income and proceeds during
this period; and (c) expenses of enforcing its rights.
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
FUNDAMENTAL RESTRICTIONS
The policies set forth below are fundamental policies of the Fund and may not be
changed without approval of the holders of the lesser of: (i) 67% of the Fund's
shares present or represented at a shareholders meeting at which the holders of
more than 50% of such shares are present or represented, or (ii) more than 50%
of outstanding shares of the Fund. The Fund may not:
1. Purchase securities on margin, participate in a joint-trading
account (the bunching of securities transaction orders with orders of other
accounts managed by the adviser not being considered participation in a
joint-trading account for this purpose), sell securities short, act as an
underwriter or distributor of securities other than shares of the Fund, lend
money (except by purchasing publicly distributed debt securities or entering
into repurchase agreements) or purchase or sell commodities, commodities futures
or real estate (marketable securities of companies whose business involves the
purchase or sale of real estate not being considered real estate for this
purpose).
2. Borrow money or issue senior securities except for temporary bank
borrowings (not in excess of 5% of the value of its total assets) for emergency
or extraordinary purposes, or pledge, mortgage or hypothecate any of its assets
to secure such borrowings to an extent greater than 10% of the value of the
Fund's net assets.
3. Make investments for the purpose of exercising control or management
of any company.
4. Purchase securities of any issuer (other than the United States or
an instrumentality of the United States) if, as a result of such purchase, the
Fund would hold more than 10% of the voting securities of any class of such
issuer or more than 5% of the Fund's total assets would be invested in
securities of such issuer.
5. Concentrate 25% or more of the value of its total assets,
exclusive of U.S. government securities, in securities issued by companies
primarily engaged in the same industry.
6. Enter into repurchase agreements with maturities of more than seven
days.
7. Invest in put or call options.
NON-FUNDAMENTAL RESTRICTIONS
Additional investment restrictions adopted by the Fund, which may be changed by
the Board of Trustees without a vote of the shareholders, provide that the Fund
may not:
1. Invest in the securities of a foreign issuer or depository receipts
for such securities, if at the time of acquisition more than 30% of the value of
the Fund's assets would be invested in such securities. (The Fund is permitted
to invest up to 30% of its assets in securities of foreign issuers or depository
receipts therefor which are traded in a U.S. market or available through a U.S.
broker or dealer, regardless of whether such securities or depository receipts
are traded in U.S. dollars).
2. Purchase securities of other investment companies, except on the
open market where no commission or profit results other than the broker's
commission, or as part of a plan of merger, consolidation or reorganization
approved by the shareholders of the Fund.
3. Acquire or retain any security issued by a company, an officer or
director of which is an officer or trustee of the Trust or an officer, director,
member or other affiliated person of its investment adviser.
4. Purchase any securities which are restricted from sale to the public
without registration under the Securities Act of 1933.
5. Loan portfolio securities except where collateral values are
continuously maintained at no less than 100% by "marking to market" daily and
the practice is fair, just and equitable.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
The Board of Trustees of the Trust consists of ___ individuals, ___ of whom are
not "interested persons" of the Trust as defined in the Investment Company Act
("Non-Interested Trustees"). The Board of Trustees is responsible for managing
the Trust's business and affairs. The Board of Trustees has appointed the
Trust's officers, who conduct the daily business of the Trust.
Set forth below is information about the trustees and officers of the Trust.
Trustees deemed to be "interested persons" of the Trust for purposes of the
Investment Company Act are indicated by an asterisk (*).
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION(S) HELD WITH FUND PRINCIPAL OCCUPATION(S) DURING
PAST 5 YEARS
- ------------------------------------------ ---------------------------- -----------------------------------
<S> <C> <C>
James P. Cullen* Trustee and President President, controlling Member and
Cullen Capital Management LLC Portfolio Manager, Cullen Capital
645 Fifth Avenue Management LLC, since _________
New York, NY 10022 2000; President, Schafer Cullen
DOB: 1938 Capital Management, Inc., a
registered investment adviser,
from December 1982 to present.
John C. Gould Vice President Vice President and Assistant
Cullen Capital Management LLC Portfolio Manager, Cullen Capital
645 Fifth Avenue Management LLC, since _____ 2000;
New York, NY 10022 Assistant Portfolio Manager,
DOB: 1960 Schafer Cullen Capital
Management, Inc., from 1989 to
present.
Brooks H. Cullen Vice President Vice President and Analyst,
Cullen Capital Management LLC Cullen Capital Management LLC,
645 Fifth Avenue since _____ 2000; Analyst,
New York, NY 10022 Schafer Cullen Capital
DOB: 1967 Management, Inc., from 1996 to
present.
Andrew Kaneb Vice President Vice President, Research Director
Cullen Capital Management LLC and Analyst, Cullen Capital
645 Fifth Avenue Management LLC, since _____ 2000;
New York, NY 10022 Analyst, Schafer Cullen Capital
DOB: 1968 Management, Inc., from 1999 to
present; Director of Strategic
Planning, Sega Gaming Technology,
from 1997 to 1999; Analyst,
Deutsche Morgan Grenfell (investment
bank), from 1995 to 1997.
Richard H. Stahmer Secretary and Treasurer Secretary and Treasurer, Cullen
Cullen Capital Management LLC Capital Management LLC, since
645 Fifth Avenue _____ 2000; Trader, Schafer
New York, NY 10022 Cullen Capital Management, Inc.,
DOB: 1973 1998 to present; Trader, Gabelli
Asset Management, from 1995 to
1998.
</TABLE>
James P. Cullen and Brooks H. Cullen are father and son.
The following compensation table provides certain information about the trustee
fees for the Fund's current fiscal year, ending June 30, 2001.
<TABLE>
<CAPTION>
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
NAME AND POSITION AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION BENEFITS ACCRUED AS BENEFITS UPON FROM COMPANY AND FUND
FROM COMPANY PART OF COMPANY RETIREMENT COMPLEX PAID TO
EXPENSES DIRECTORS
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
James P. Cullen, Trustee $ _____ $0 $0 $0
- ---------------------------- ----------------- ----------------------- ---------------------- ------------------------
</TABLE>
Each Non-Interested Trustee of the Trust is paid a trustee's fee of $_____ per
year plus $_____ for each meeting attended and is reimbursed for the expenses of
attendance at such meetings. Neither the Trust nor the Fund pays any fees to the
trustees who are considered "interested persons" of the Trust or the Fund or the
Fund's investment adviser, as defined in the Investment Company Act. Neither the
Trust nor the Fund maintains any deferred compensation, pension or retirement
plans, and no pension or retirement benefits are accrued as part of Trust or
Fund expenses.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
- --------------------------------------------------------------------------------
As of ___, 2000, which was prior to the public offering of the Fund's shares,
James P. Cullen was the holder of 100% of the Fund's shares, and there were
otherwise no control persons or principal holders of securities of the Fund.
Control persons are persons deemed to control the Fund because they own
beneficially over 25% of the outstanding equity securities. Principal holders
are persons that own beneficially 5% or more of the Fund's outstanding equity
securities.
INVESTMENT ADVISORY AND OTHER SERVICES
- --------------------------------------------------------------------------------
ADVISORY AGREEMENT
On ______, the Board of Trustees (including at least a majority of the
Non-Interested Trustees) and the shareholders of the Fund approved an investment
advisory agreement (the "Advisory Agreement") pursuant to which Cullen Capital
Management LLC, 645 Fifth Avenue, New York, NY 10022 (the "Adviser"), furnishes
continuous investment advisory services and management to the Fund. The Adviser
is an investment advisory firm formed in Delaware. For more information about
the Adviser, see "Who Are the Fund's Investment Adviser and Portfolio Manager?"
in the Prospectus.
Mr. Cullen, President of the Trust, is also the controlling member of the
Adviser. John C. Gould, Brooks H. Cullen and Andrew Kaneb, Vice Presidents of
the Trust, are also Vice Presidents of the Adviser, respectively. Richard H.
Stahmer, Secretary and Treasurer of the Trust, is also Secretary and Treasurer
of the Adviser.
Under the Advisory Agreement and subject to the general supervision of the
Trust's Board of Trustees, the Adviser is responsible for making and
implementing investment decisions for the Fund. In addition, the Adviser
furnishes office space, office facilities, equipment, personnel (other than the
services of trustees of the Trust who are not interested persons of the
Adviser), and clerical and bookkeeping services for the Fund to the extent not
provided by the Fund's custodian, transfer agent and dividend paying agent, and
accounting services agent. The Trust or the Fund pays all other expenses of the
Fund's operation, including, without limitation, interest, taxes and any
governmental filing fees; brokerage commissions and other costs incurred in
connection with the purchase or sale of securities; compensation and expenses of
its Non-Interested Trustees; legal and audit expenses; the fees and expenses of
the Fund's custodian, transfer agent and dividend paying agent, and accounting
services agent; expenses relating to the redemption of shares; expenses of
servicing shareholder accounts; fees and expenses related to the registration
and qualification of the Fund and its shares under federal and state securities
laws; expenses of printing and mailing reports, notices and proxy material to
shareholders; insurance premiums for fidelity and other insurance coverage;
expenses of preparing prospectuses and statements of additional information and
of printing and distributing them to existing shareholders; and any nonrecurring
expenses, including actions, suits or proceedings to which the Trust or the Fund
is a party and any obligation which the Trust or the Fund may incur to indemnify
others.
The Advisory Agreement provides that the Adviser shall have no liability to the
Trust, the Fund or the Trust's shareholders in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of its
obligations under the Agreement.
The Advisory Agreement is not assignable and may be terminated by either party,
without penalty, on 60 days' notice. The Advisory Agreement will continue in
effect until ________, 2002 (unless sooner terminated) and thereafter for
successive one-year periods so long as it is approved annually (a) by the vote
of a majority of the Non-Interested Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (b) either by the Board of
Trustees of the Trust or by the vote of the shareholders as described under
"Investment Restrictions."
As described in the Prospectus, the Adviser has contractually agreed to limit
the total expenses of the Fund (excluding interest, taxes, brokerage and
extraordinary expenses) to an annual rate of 2.00% through ______, 2001.
Pursuant to this agreement, the Fund will reimburse the Adviser for any fee
waivers or expense reimbursements made pursuant to the agreement within a
three-year period, provided that any such waivers or reimbursements made by the
Fund will not cause the Fund's expense limitation to exceed the amount set forth
above. However, the Fund is not obligated to pay any such waived fees for more
than three years after the end of the fiscal year in which the fee was waived.
CODE OF ETHICS
The Trust and the Adviser have adopted the same written Code of Ethics. This
Code of Ethics governs the personal securities transactions of trustees,
managers, members, officers and employees who may have access to current trading
information of the Fund. The Code permits such persons to invest in securities
for their personal accounts, including securities that may be purchased or held
by the Fund. The Code includes reporting and other obligations to monitor
personal transactions and ensure that such transactions are consistent with the
best interests of the Fund.
FUND ADMINISTRATION
Firstar Mutual Fund Services, LLC, a subsidiary of Firstar Bank, N.A., provides
administrative personnel and services (including blue-sky services) to the Trust
and the Fund. Administrative services include, but are not limited to, providing
equipment, telephone facilities, various personnel, including clerical and
supervisory, and computers as is necessary or beneficial to provide compliance
services to the Fund and the Trust. Firstar Mutual Fund Services, LLC also
serves as fund accountant and transfer agent under separate agreements.
FINANCIAL INTERMEDIARIES
From time to time, the Fund may pay, directly or indirectly, amounts to
financial intermediaries that provide transfer-agent type and/or other
administrative services relating to the Fund to their customers or other persons
who beneficially own interests in the Fund, such as participants in 401(k)
plans. These services may include, among other things, sub-accounting services,
transfer agent-type services, answering inquiries relating to the Fund,
transmitting, on behalf of the Fund, proxy statements, annual reports, updated
prospectuses, other communications regarding the Fund, and related services as
the Fund or the intermediaries' customers or such other persons may reasonably
request. In such cases, to the extent paid by the Fund, the Fund will not pay
more for these services through intermediary relationships than it would if the
intermediaries' customers were direct shareholders in the Fund.
DISTRIBUTOR
- --------------------------------------------------------------------------------
Quasar Distributors, LLC serves as the principal underwriter and national
distributor for the shares of the Fund pursuant to a Distribution Agreement with
the Trust dated as of _________, 2000 (the "Distribution Agreement"). Quasar
Distributors, LLC is registered as a broker-dealer under the Securities Exchange
Act of 1934 and each state's securities laws and is a member of the NASD. The
offering of the Fund's shares is continuous. The Distribution Agreement provides
that the Distributor, as agent in connection with the distribution of Fund
shares, will use its best efforts to distribute the Fund's shares.
DISTRIBUTION PLAN
- --------------------------------------------------------------------------------
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act. The Plan authorizes payments by the Fund in
connection with the distribution of shares at an annual rate of 0.25% of the
Fund's average daily net asset value. Payments may be made by the Fund under the
Plan for the purpose of financing any activity primarily intended to result in
the sale of shares of the Fund, as determined by the Board of Trustees. Such
activities typically include advertising; compensation for sales and sales
marketing activities of financial service agents and others, such as dealers or
distributors; shareholder account servicing; production and dissemination of
prospectuses and sales and marketing materials; and capital or other expenses of
associated equipment, rent, salaries, bonuses, interest and other overhead. To
the extent any activity is one which the Fund may finance without the Plan, the
Fund may also make payments to finance such activity outside of the Plan and not
subject to its limitations. Payments under the Plan are not tied exclusively to
actual distribution expenses, and the payments may exceed distribution expenses
actually incurred.
Administration of the Plan is regulated by Rule 12b-1 under the Investment
Company Act, which includes requirements that the Board of Trustees receive and
review at least quarterly reports concerning the nature and qualification of
expenses which are made, that the Board of Trustees, including a majority of the
Non-Interested Trustees, approve all agreements implementing the Plan and that
the Plan may be continued from year-to-year only if the Board of Trustees,
including a majority of the Non-Interested Trustees, concludes at least annually
that continuation of the Plan is likely to benefit shareholders.
BROKERAGE
- --------------------------------------------------------------------------------
The Adviser is responsible for selecting brokers and dealers to effect purchases
or sales of securities for the account of the Fund. In selecting such brokers,
it is the policy of the Adviser to seek the best execution of orders at the most
favorable price in light of the overall quality of brokerage and research
services provided, as described in this and the following paragraph. In
selecting brokers to effect portfolio transactions, the determination of what is
expected to result in best execution at the most favorable price involves a
number of largely judgmental considerations. Among these are the Adviser's
evaluation of the broker's efficiency in executing and clearing transactions,
block trading capability (including the broker's willingness to position
securities), the broker's familiarity with the security and the broker's
financial strength and stability. The most favorable price to the Fund means the
best net price without regard to the mix between purchase or sale price and
commission, if any.
In allocating the Fund's brokerage, the Adviser will also take into
consideration the research, analytical, statistical and other information and
services provided by the broker, such as general economic reports and
information, reports or analyses of particular companies or industry groups and
technical information and the availability of the brokerage firm's analysts for
consultation. While the Adviser believes these services have substantial value,
they are considered supplemental to the Adviser's own efforts in the performance
of its duties under the Advisory Agreement. As permitted by the Advisory
Agreement and in accordance with Section 28(e) of the Securities Exchange Act of
1934, as amended, the Adviser may pay brokers higher brokerage commissions than
might be available from other brokers if the Adviser determines in good faith
that such amount paid is reasonable in relation to the value of the overall
quality of the brokerage, research and other services provided. Other clients of
the Adviser may indirectly benefit from the availability of these services to
the Adviser, and the Fund may indirectly benefit from services available to the
Adviser as a result of transactions for the other clients.
The Adviser expects to enter into arrangements with broker-dealers whereby the
Adviser obtains computerized stock quotation and news services, performance and
ranking services, portfolio analysis services and other research services in
exchange for the direction of portfolio transactions which generate dealer
concessions or brokerage (agency) commissions for such broker-dealers. From time
to time, the Adviser may make other similar arrangements with brokers or dealers
which agree to provide research services in consideration of dealer concessions
or brokerage commissions. Consistent with the Adviser's fiduciary duties to the
Fund, brokerage will be directed to such brokers or dealers pursuant to any such
arrangement only when the Adviser believes that the commissions charged are
reasonable in relation to the value and overall quality of the brokerage and
research services provided.
CAPITAL STRUCTURE
- --------------------------------------------------------------------------------
The Trust is a Delaware business trust, formed on March 25, 2000. It is
authorized to issue an unlimited number of shares of beneficial interest. The
trustees of the Trust may, at any time and from time to time, by resolution,
authorize the division of shares into an unlimited number of series and the
division of any series into two or more classes. By this offering, one class of
shares of the Fund are being offered. Shares of the Fund are offered subject to
a charge imposed pursuant to Rule 12b-1 under the Investment Company Act.
Shareholders of the Trust are entitled to one vote for each full share and to a
proportionate fractional vote for each fractional share standing in the
shareholder's name on the books of the Trust. Each share has equal dividend,
distribution and liquidation rights. Shares do not have preemptive or
subscription rights. All shares are fully paid and non-assessable.
DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
Shares of the Fund are sold on a continual basis at the net asset value ("NAV")
per share next computed following receipt of an order by the Fund's transfer
agent in good order. The Fund's NAV per share for the purpose of pricing
purchase and redemption orders is determined at the close of normal trading
(usually 4:00 p.m. Eastern time) on each day the New York Stock Exchange
("NYSE") is open for trading. The NYSE is closed on the following holidays: New
Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Securities listed on a U.S. securities exchange or Nasdaq for which market
quotations are readily available are valued at the last quoted sale price on the
day the valuation is made. Price information on listed securities is taken from
the exchange where the security is primarily traded. Any securities or other
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by the Adviser under supervision of the Fund's
Board of Trustees.
Debt securities are valued by a pricing service that utilizes electronic date
processing techniques to determine values for normal institutional-sized trading
units of debt securities without regard to sale or bid prices when such
techniques are believed to more accurately reflect the fair market value for
such securities. Otherwise, sale or bid prices are used. Debt securities having
remaining maturities of 60 days or less when purchased are valued by the
amortized cost method. Under this method of valuation, a security is initially
valued at its acquisition cost, and thereafter, amortization of any discount or
premium is assumed each day, regardless of the impact of the fluctuating rates
on the market value of the instrument.
Securities quoted in foreign currency, if any, are valued daily in U.S. dollars
at the foreign currency exchange rates that are prevailing at the time the daily
NAV per share is determined. Although the Fund values its foreign assets in U.S.
dollars on a daily basis, it does not intend to convert its holdings of foreign
currencies into U.S. dollars on a daily basis. Foreign currency exchange rates
are generally determined prior to the close of trading on the NYSE.
Occasionally, events affecting the value of foreign investments and such
exchange rates occur between the time at which they are determined and the close
of trading on the NYSE. Such events would not normally be reflected in a
calculation of the Fund's NAV on that day. If events that materially affect the
sale of the Fund's foreign investments or the foreign currency exchange rates
occur during such period, the investments may be valued at their fair value as
determined in good faith by the Adviser under the supervision of the Board of
Trustees of the Fund.
PURCHASE AND REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
PURCHASING SHARES
Shares of the Fund are sold in a continuous offering and may be purchased on any
business day through authorized investment dealers or directly from the Fund.
STOCK CERTIFICATES AND CONFIRMATIONS. The Fund does not generally issue stock
certificates representing shares purchased. Confirmations of the opening of an
account and of all subsequent transactions in the account are forwarded by the
Fund to the shareholder's address of record.
REDEEMING SHARES
SIGNATURE GUARANTEES. A signature guarantee of each shareholder on an account is
required to redeem shares if a shareholder requests (i) a redemption from an IRA
account; (ii) redemption proceeds be sent to an address other than that on
record with the Fund; or (iii) proceeds be made payable to someone other than
the shareholder(s) of record.
Signature guarantees are designed to protect both the shareholder and the Fund
from fraud. Signature guarantees can be obtained from most banks, credit unions
or savings associations, or from broker/dealers, municipal securities
broker/dealers, government securities broker/dealers, national securities
exchanges, registered securities exchanges, or clearing agencies deemed eligible
by the SEC. The Fund does NOT accept signatures guaranteed by a notary public.
ADDITIONAL DOCUMENTATION. Additional documents are required for certain types of
shareholders, such as corporations, partnerships, executors, trustees,
administrators, or guardians. The Fund's transfer agent requires documents from
entities to identify individuals possessing authority to redeem shares from the
Fund. The documentation may include corporate resolutions, partnership
agreements, trust instruments or plans that give such authority to the
individual.
REDEMPTION IN-KIND. The Fund has elected to be governed by Rule l8f-1 under the
Investment Company Act, which obligates the Fund to redeem shares in cash, with
respect to any one shareholder during any 90-day period, up to the lesser of
$250,000 or 1% of the assets of the Fund. If the Adviser determines that
existing conditions make cash payments undesirable, redemption payments may be
made in whole or in part in securities or other financial assets, valued for
this purpose as they are valued in computing the NAV for the Fund's shares (a
"redemption in-kind"). Shareholders receiving securities or other financial
assets in a redemption in-kind may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences. If you
expect to make a redemption in excess of the lesser of $250,000 or 1% of the
Fund's assets during any 90-day period and would like to avoid any possibility
of being paid with securities in-kind, you may do so by providing the Fund with
an unconditional instruction to redeem at least 15 calendar days prior to the
date on which the redemption transaction is to occur, specifying the dollar
amount or number of shares to be redeemed and the date of the transaction
(please call 1-877-485-8586). This will provide the Fund with sufficient time to
raise the cash in an orderly manner to pay the redemption and thereby minimize
the effect of the redemption on the interests of the Fund's remaining
shareholders.
ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS
A shareholder will automatically receive all income dividends and capital gain
distributions in additional full and fractional shares of the Fund at their net
asset value as of the date of payment unless the shareholder elects to receive
such dividends or distributions in cash. Shareholders will receive a
confirmation of each new transaction in their account. The Fund will confirm all
account activity, including the payment of dividend and capital gain
distributions and transactions made as a result of a Systematic Withdrawal Plan
or an Automatic Investment Plan. Shareholders may rely on these statements in
lieu of stock certificates.
TAXES
DISTRIBUTIONS OF NET INVESTMENT INCOME. The Fund receives income generally in
the form of dividends on its investments. This income, less expenses incurred in
the operation of the Fund, constitutes the Fund's net investment income from
which dividends may be paid to you. Any distributions by the Fund from such
income will be taxable to you as ordinary income, whether you take them in cash
or in additional shares.
DISTRIBUTIONS OF CAPITAL GAINS. The Fund may derive capital gains and losses in
connection with sales or other dispositions of its portfolio securities.
Distributions from net short-term capital gains will be taxable to you as
ordinary income. Distributions from net long-term capital gains will be taxable
to you as long-term capital gain, regardless of how long you have held your
shares in the Fund. Any net capital gains realized by the Fund generally will be
distributed once each year, and may be distributed more frequently, if
necessary, in order to reduce or eliminate excise or income taxes on the Fund.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTIONS. The Fund will inform you of
the amount of your ordinary income dividends and capital gains distributions at
the time they are paid, and will advise you of their tax status for federal
income tax purposes shortly after the close of each calendar year. If you have
not held Fund shares for a full year, the Fund may designate and distribute to
you, as ordinary income or capital gain, a percentage of income that is not
equal to the actual amount of such income earned during the period of your
investment in the Fund.
ELECTION TO BE TAXED AS A REGULATED INVESTMENT COMPANY. The Fund intends to
elect to be treated as a regulated investment company under Subchapter M of the
Internal Revenue Code and intends to so qualify during the current fiscal year.
As a regulated investment company, the Fund generally pays no federal income tax
on the income and gains it distributes to you. The Board reserves the right not
to maintain the qualification of the Fund as a regulated investment company if
it determines such course of action to be beneficial to shareholders. In such
case, the Fund will be subject to federal, and possibly state corporate taxes on
its taxable income and gains, and distributions to you will be taxed as ordinary
dividend income to the extent of the Fund's earnings and profits.
EXCISE TAX DISTRIBUTION REQUIREMENTS. To avoid federal excise taxes, the
Internal Revenue Code requires the Fund to distribute to you by December 31 of
each year, at a minimum, the following amounts: 98% of its taxable ordinary
income earned during the calendar year; 98% of its capital gain net income
earned during the twelve month period ending October 31; and 100% of any
undistributed amounts from the prior year. The Fund intends to declare and pay
these amounts in December (or in January that are treated by you as received in
December) to avoid these excise taxes, but can give no assurances that its
distributions will be sufficient to eliminate all taxes.
REDEMPTION OF FUND SHARES. Redemptions and exchanges of Fund shares are taxable
transactions for federal and state income tax purposes. If you redeem your Fund
shares, the IRS will require that you report a gain or loss on your redemption
or exchange. If you hold your shares as a capital asset, the gain or loss that
you realize will be capital gain or loss and will be long-term or short-term,
generally depending on how long you hold your shares. Any loss incurred on the
redemption or exchange of shares held for six months or less will be treated as
a long-term capital loss to the extent of any long-term capital gains
distributed to you by the Fund on those shares.
All or a portion of any loss that you realize upon the redemption of your Fund
shares will be disallowed to the extent that you buy other shares in the Fund
(through reinvestment of dividends or otherwise) within 30 days before or after
your share redemption. Any loss disallowed under these rules will be added to
your tax basis in the new shares you buy.
DIVIDENDS-RECEIVED DEDUCTION FOR CORPORATIONS. If you are a corporate
shareholder, you should note that it is expected that a portion of the dividends
paid by the Fund will qualify for the dividends-received deduction. In some
circumstances, you will be allowed to deduct these qualified dividends, thereby
reducing the tax that you would otherwise be required to pay on these dividends.
The dividends-received deduction will be available only with respect to
dividends designated by the Fund as eligible for such treatment. All dividends
(including the deducted portion) must be included in your alternative minimum
taxable income calculation.
INVESTMENT IN COMPLEX SECURITIES. The Fund may invest in complex securities.
These investments may be subject to numerous special and complex tax rules.
These rules could affect whether gains and losses recognized by the Fund are
treated as ordinary income or capital gain, accelerate the recognition of income
to the Fund and/or defer the Fund's ability to recognize losses. In turn, these
rules may affect the amount, timing or character of the income distributed to
you by the Fund.
The tax consequences to a foreign shareholder of investing in the Fund may be
different from those described herein. Foreign shareholders are advised to
consult their own tax advisers with respect to the particular tax consequences
to them of an investment in the Fund.
The foregoing is only a general summary of certain provisions of the Internal
Revenue Code and current Treasury regulations applicable to the Fund and its
shareholders. The Internal Revenue Code and such regulations are subject to
change by legislative or administrative action. Investors are urged to consult
their own tax advisers regarding the application of federal, state and local tax
laws.
CALCULATION OF PERFORMANCE DATA
- --------------------------------------------------------------------------------
Average annual total return is the average annual compounded rate of return for
periods of one year, five years and ten years, all ended on the last day of a
recent calendar quarter. Average annual total return quotations reflect changes
in the price of a Fund's shares and assume that all dividends and capital gains
distributions during the respective periods were reinvested in Fund shares.
Average annual total return is calculated by computing the average annual
compounded rates of return of a hypothetical investment over such periods,
according to the following formula (average annual total return is then
expressed as a percentage):
P(1 + T)n = ERV
Where:
T = average annual total return
P = a hypothetical initial investment of $1,000
n = number of years
ERV = ending redeemable value; ERV is the value, at the end of the
applicable period, of a hypothetical $1,000 investment made at
the beginning of the applicable period.
The Fund's performance will vary from time to time and your shares, when
redeemed, may be worth more or less than their original cost. You should not
consider past results as representative of future performance. Factors affecting
the Fund's performance include, among other things, general market conditions,
the composition of the Fund's portfolio, and operating expenses. In reporting
performance, the Fund makes no adjustment for taxes payable by shareholders on
reinvested income dividends and capital gains distributions.
The Fund may also advertise comparative performance information obtained from
industry or financial publications. The Fund may compare its performance to that
of other mutual funds with similar investment objectives and to stock or other
relevant indices. From time to time, articles about the Fund regarding its
performance or ranking may appear in national publications. Some of these
publications may publish their own rankings or performance reviews of mutual
funds, including the Fund. Reference to or reprints of such articles may be used
in the Fund's promotional literature.
COMPARISONS
LIPPER ANALYTICAL SERVICES, INC. ("LIPPER") AND OTHER INDEPENDENT RANKING
ORGANIZATIONS. From time to time, in marketing and other fund literature, the
Fund's performance may be compared to the performance of other mutual funds in
general or to the performance of particular types of mutual funds with similar
investment goals, as tracked by independent organizations. Among these
organizations, Lipper, a widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets, may be
cited. Lipper performance figures are based on changes in net asset value, with
all income and capital gains dividends reinvested. Such calculations do not
include the effect of any sales charges imposed by other funds. The Fund will be
compared to Lipper's appropriate fund category, that is, by fund objective and
portfolio holdings. The Fund's performance may also be compared to the average
performance of its Lipper category.
MORNINGSTAR, INC. The Fund's performance may also be compared to the performance
of other mutual funds by Morningstar, Inc., which rates funds on the basis of
historical risk and total return. Morningstar's ratings range from five stars
(highest) to one star (lowest) and represent Morningstar's assessment of the
historical risk level and total return of a fund as a weighted average for 3, 5,
and 10 year periods. Ratings are not absolute and do not represent future
results.
INDEPENDENT SOURCES. Evaluations of fund performance made by independent sources
may also be used in advertisements concerning the Fund, including reprints of,
or selections from, editorials or articles about the Fund, especially those with
similar objectives. Sources for fund performance and articles about the Fund may
include publications such as Money, Forbes, Kiplinger's, Smart Money, Financial
World, Business Week, U.S. News and World Report, The Wall Street Journal,
Barron's and a variety of investment newsletters.
INDICES. The Fund may compare its performance to a wide variety of indices.
There are differences and similarities between the investments that a Fund may
purchase and the investments measured by the indices.
HISTORICAL ASSET CLASS RETURNS. From time to time, marketing materials may
portray the historical returns of various asset classes. Such presentations will
typically compare the average annual rates of return of inflation, U.S. Treasury
bills, bonds, common stocks, and small stocks. There are important differences
between each of these investments that should be considered in viewing any such
comparison. The market value of stocks will fluctuate with market conditions,
and small-stock prices generally will fluctuate more than large-stock prices.
Stocks are generally more volatile than bonds. In return for this volatility,
stocks have generally performed better than bonds or cash over time. Bond prices
generally will fluctuate inversely with interest rates and other market
conditions, and the prices of bonds with longer maturities generally will
fluctuate more than those of shorter-maturity bonds. Interest rates for bonds
may be fixed at the time of issuance, and payment of principal and interest may
be guaranteed by the issuer and, in the case of U.S. Treasury obligations,
backed by the full faith and credit of the U.S. Treasury.
SHAREHOLDER REPORTS
- --------------------------------------------------------------------------------
An annual report will be issued to shareholders after the close of each fiscal
year, which ends June 30. This report will include financial statements for the
Fund audited by the Fund's independent accountants, PricewaterhouseCoopers LLP.
A semi-annual report will also be issued to the Fund's shareholders.
SERVICE PROVIDERS
- --------------------------------------------------------------------------------
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, acts as custodian
of the cash and securities of the Fund. The custodian holds all cash and,
directly or through a book entry system or an agent, securities of the Fund,
delivers and receives payment for securities sold by the Fund, collects income
from investments of the Fund and performs other duties, all as directed by
officers of the Fund. The custodian does not exercise any supervisory function
over the management of, or the purchase and sale of securities by, the Fund.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND FUND ACCOUNTANT
Firstar Mutual Fund Services, LLC acts as the Fund's transfer agent,
dividend-paying agent, fund accountant and shareholder servicing agent. Firstar
Mutual Fund Services, LLC's address is 615 East Michigan Street, Milwaukee,
Wisconsin 53202.
DISTRIBUTOR
Quasar Distributors, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202,
serves as principal underwriter for the Fund and as such, is the agent for the
distribution of shares of the Fund.
COUNSEL
Sidley & Austin, Bank One Plaza, 10 South Dearborn Street, Chicago, Illinois
60603, is counsel for the Fund.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP has been selected as the independent accountants of
the Fund. As such, they are responsible for auditing the financial statements of
the Fund.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Financial statements are not available for the Fund because the Fund commenced
operations on _________, 2000.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
The Fund's Prospectus and this Statement of Additional Information omit certain
information contained in the Registration Statement which the Fund has filed
electronically with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, and reference is hereby made to the
Registration Statement for further information with respect to the Fund and the
securities offered hereby. This Registration Statement is available for
inspection by the public at the public reference facilities maintained by the
Commission in Washington, D.C.
CULLEN FUNDS TRUST
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) DECLARATION OF TRUST
(i) Certificate of Trust1
(ii) Agreement and Declaration of Trust1
(b) BYLAWS1
(c) INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS-- Incorporated by reference
to the Agreement and Declaration of Trust and Bylaws.
(d) FORM OF ADVISORY AGREEMENT1
(e) UNDERWRITING AGREEMENT-- Form of Underwriting Agreement filed herewith.
(f) BONUS OR PROFIT SHARING CONTRACTS - Not applicable.
(g) CUSTODY AGREEMENT-- Form of Custody Agreement filed herewith.
(h) OTHER MATERIAL CONTRACTS
(i) Administration Agreement-- Form of Administration Agreement filed
herewith.
(ii) Transfer Agent Servicing Agreement-- Form of Transfer Agent Servicing
Agreement filed herewith.
(iii) Fund Accounting Servicing Agreement-- Form of Fund Accounting
Servicing Agreement filed herewith.
(i) OPINION AND CONSENT OF COUNSEL-- To be filed by amendment.
(j) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS-- To be filed by amendment.
(k) OMITTED FINANCIAL STATEMENTS - Not applicable.
(l) AGREEMENT RELATING TO INITIAL CAPITAL-- To be filed by amendment.
(m) RULE 12B-1 PLAN - Form of Rule 12b-1 Plan filed herewith.
(n) RULE 18F-3 PLAN - Not applicable.
(o) RESERVED.
(p) FORM OF CODE OF ETHICS1
1 Incorporated by reference to Registrant's Initial Filing of the Registration
Statement filed March 27, 2000.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
No person is directly or indirectly controlled by or under common
control with the Registrant.
ITEM 25. INDEMNIFICATION.
Reference is made to Article VII of the Registrant's Agreement and
Declaration of Trust.
Pursuant to Rule 484 under the Securities Act of 1933, as amended, the
Registrant furnishes the following undertaking: "Insofar as indemnification for
liability arising under the Securities Act of 1933 (the "Act") may be permitted
to trustees, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that, in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a trustee,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue."
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
Cullen Capital Management LLC will serve as the investment adviser for
the Registrant. The business and other connections of Cullen Capital Management
LLC will be set forth in the Uniform Application for Investment Adviser
Registration ("Form ADV") of Cullen Capital Management LLC as will shortly be
filed with the SEC and which will be incorporated by reference herein.
ITEM 27. PRINCIPAL UNDERWRITER.
(a) Quasar Distributors, LLC, 615 East Michigan Street, Milwaukee,
Wisconsin, 53202, the Distributor for shares of the Registrant,
will also act as principal underwriter for other open-end
investment companies not yet under registration as of the date of
filing.
(b) To the best of Registrant's knowledge, the directors and executive officers
of Quasar Distributors, LLC are as follows:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES WITH QUASAR POSITIONS AND OFFICES WITH
BUSINESS ADDRESS DISTRIBUTORS, LLC REGISTRANT
- --------------------------------------------- ---------------------------------------- ------------------------------
<S> <C> <C>
James R. Schoenike President, Board Member None
- --------------------------------------------- ---------------------------------------- ------------------------------
Donna J. Berth Treasurer None
- --------------------------------------------- ---------------------------------------- ------------------------------
James J. Barresi Secretary None
- --------------------------------------------- ---------------------------------------- ------------------------------
Joe Redwine Board Member None
- --------------------------------------------- ---------------------------------------- ------------------------------
Bob Kern Board Member None
- --------------------------------------------- ---------------------------------------- ------------------------------
Paul Rock Board Member None
- --------------------------------------------- ---------------------------------------- ------------------------------
Jennie Carlson Board Member None
- --------------------------------------------- ---------------------------------------- ------------------------------
</TABLE>
The address of each of the foregoing is 615 East Michigan Street, Milwaukee,
Wisconsin, 53202.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The books and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 are maintained in the following locations:
RECORDS RELATING TO: ARE LOCATED AT:
- ------------------- ---------------
Registrant's Fund Accounting, Administrator Firstar Mutual Fund Services, LLC
and Transfer Agent 615 East Michigan Street
Milwaukee, WI 53202
Registrant's Investment Adviser Cullen Capital Management LLC
645 Fifth Avenue
New York, NY 10022
Registrant's Custodian Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 54202
ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A AND B.
Not applicable.
ITEM 30. UNDERTAKINGS.
The Registrant hereby undertakes to furnish each person to whom a
Prospectus for one or more of the series of the Registrant is delivered with a
copy of the relevant latest annual report to shareholders, upon request and
without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Pre-Effective Amendment No. 1 to be signed below on its behalf by the
undersigned, duly authorized, in the City of New York and the State of New York
on the 23rd day of May, 2000.
CULLEN FUNDS TRUST
BY: /S/ JAMES P. CULLEN
James P. Cullen
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on May 23, 2000 by the following
persons in the capacities indicated.
SIGNATURE TITLE
/S/ JAMES P. CULLEN Trustee
- ---------------------------
James P. Cullen
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of _____,
2000, by and among Cullen Funds Trust, a Delaware business trust ("Trust"),
Cullen Capital Management LLC, a Delaware limited liability company (the
"Adviser") and Quasar Distributors, LLC, a Delaware limited liability company
("Distributor").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
is authorized to issue shares of beneficial interests ("Shares") in separate
series with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Adviser is duly registered under the Investment Advisers
Act of 1940, as amended, and any applicable state securities laws, as an
investment adviser;
WHEREAS, the Trust desires to retain the Distributor as principal
underwriter in connection with the offering and sale of the Shares of each
series listed on Schedule A (as amended from time to time) (the "Funds") to this
Agreement;
WHEREAS, the Distributor is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member of
the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, this Agreement has been approved by a vote of the Trust's
board of trustees ("Board") and its disinterested trustees in conformity with
Section 15(c) of the 1940 Act; and
WHEREAS, the Distributor is willing to act as principal underwriter for
the Trust on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR.
The Trust hereby appoints the Distributor as its agent for the sale and
distribution of Shares of the Funds, subject to the terms and for the period set
forth in this Agreement. The Distributor hereby accepts such appointment and
agrees to act hereunder.
2. SERVICES AND DUTIES OF THE DISTRIBUTOR.
(a) The Distributor agrees to sell Shares of the Funds as agent for the
Trust during the term of this Agreement, upon the terms and at the current
offering price (plus sales charge, if any) described in the Prospectus. As used
in this Agreement, the term "Prospectus" shall mean the current prospectus,
including the statement of additional information, as amended or supplemented,
relating to the Funds and included in the currently effective registration
statement or post-effective amendment thereto (the "Registration Statement") of
the Trust under the Securities Act of 1933 (the "1933 Act") and the 1940 Act.
(b) During the continuous public offering of Shares of the Funds, the
Distributor will hold itself available to receive orders, satisfactory to the
Distributor, for the purchase of Shares of the Funds and will accept such orders
on behalf of the Trust. Such purchase orders shall be deemed effective at the
time and in the manner set forth in the Prospectus.
(c) The Distributor, with the operational assistance of the Trust's
transfer agent, shall make Shares available through the National Securities
Clearing Corporation's Fund/SERV System.
(d) In connection with all matters relating to this Agreement, the
Distributor agrees to act in conformity with the Trust's Declaration of Trust
and By-Laws and with the instructions of the Board and to comply with the
requirements of the 1933 Act, the 1934 Act, the 1940 Act, the regulations of the
NASD and all other applicable federal or state laws and regulations. The
Distributor acknowledges and agrees that it is not authorized to provide any
information or make any representations other than as contained in the
Prospectus and any sales literature specifically approved by the Trust and the
Distributor.
(e) The Distributor agrees to cooperate with the Trust in the
development of all proposed advertisements and sales literature relating to the
Funds. The Distributor agrees to review all proposed advertisements and sales
literature for compliance with applicable laws and regulations, and shall file
with appropriate regulators those advertisements and sales literature it
believes are in compliance with such laws and regulations. The Distributor
agrees to furnish to the Trust any comments provided by regulators with respect
to such materials and to use its best efforts to obtain the approval of the
regulators to such materials.
(f) The Distributor at its sole discretion may repurchase Shares
offered for sale by shareholders of the Funds. Repurchase of Shares by the
Distributor shall be at the price determined in accordance with, and in the
manner set forth in, the current Prospectus. At the end of each business day,
the Distributor shall notify, by any appropriate means, the Trust and its
transfer agent of the orders for repurchase of Shares received by the
Distributor since the last report, the amount to be paid for such Shares, and
the identity of the shareholders offering Shares for repurchase. The Trust
reserves the right to suspend such repurchase right upon written notice to the
Distributor. The Distributor further agrees to act as agent for the Trust to
receive and transmit promptly to the Trust's transfer agent shareholder requests
for redemption of Shares.
(g) The Distributor may, in its discretion, acting only as principal on
its own behalf, enter into agreements with such qualified broker-dealers as it
may select, in order that such broker-dealers also may sell Shares of the Funds.
The Distributor may pay a portion of any applicable sales charge, or allow a
discount, to a selling broker-dealer, as described in the Prospectus or, if not
described, as agreed upon with the broker-dealer. The Distributor shall include
in the forms of agreement with selling broker-dealers a provision for the
forfeiture by them of their sales charge or discount with respect to Shares sold
by them and redeemed, repurchased or tendered for redemption within seven
business days after the date of confirmation of such purchases.
(h) The Distributor shall devote its best efforts to effect sales of
Shares of the Funds but shall not be obligated to sell any certain number of
Shares.
(i) The Distributor shall prepare reports for the Board regarding its
activities under this Agreement as from time to time shall be reasonably
requested by the Board.
(j) The services furnished by the Distributor hereunder are not to be
deemed exclusive and the Distributor shall be free to furnish similar services
to others so long as its services under this Agreement are not impaired thereby.
The Trust recognizes that from time to time officers and employees of the
Distributor may serve as directors, trustees, officers and employees of other
entities (including investment companies), that such other entities may include
the name of the Distributor as part of their name and that the Distributor or
its affiliates may enter into distribution, administration, fund accounting,
transfer agent or other agreements with such other entities.
3. DUTIES AND REPRESENTATIONS OF THE TRUST.
(a) The Trust represents that it is registered as an open-end
management investment company under the 1940 Act and agrees that it will act in
material conformity with its Declaration of Trust, By-Laws, its Registration
Statement as may be amended from time to time and resolutions and other
instructions of its Board. The Trust agrees to comply in all material respects
with the 1933 Act, the 1940 Act, and all other applicable federal and state laws
and regulations.
(b) The Trust shall take or cause to be taken all necessary action to
register Shares of the Funds under the 1933 Act and to maintain an effective
Registration Statement for such Shares in order to permit the sale of Shares as
herein contemplated. The Trust authorizes the Distributor to use the Prospectus,
in the form furnished to the Distributor from time to time, in connection with
the sale of Shares.
(c) The Trust shall have the right to suspend the sale of Shares of any
Fund at any time in response to conditions in the securities markets or
otherwise, and to suspend the redemption of Shares of any Fund at any time
permitted by the 1940 Act or the rules of the Securities and Exchange Commission
("SEC"). The Trust shall advise the Distributor promptly of any such
determination.
(d) The Trust agrees to advise the Distributor promptly in writing:
(i) of any correspondence or other communication by the SEC or
its staff relating to the Funds, including requests by the SEC for
amendments to the Registration Statement or Prospectus;
(ii) in the event of the issuance by the SEC of any stop-order
suspending the effectiveness of the Registration Statement then in
effect or the initiation of any proceeding for that purpose;
(iii) of the happening of any event which makes untrue any
statement of a material fact made in the Prospectus or which requires
the making of a change in such Prospectus in order to make the
statements therein not misleading; and
(iv) of all actions taken by the SEC with respect to any
amendments to any Registration Statement or Prospectus which may from
time to time be filed with the SEC.
(e) The Trust shall file such reports and other documents as may be
required under applicable federal and state laws and regulations. The Trust
shall notify the Distributor in writing of the states in which the Shares may be
sold and shall notify the Distributor in writing of any changes to such
information.
(f) The Trust agrees to file from time to time such amendments to its
Registration Statement and Prospectus as may be necessary in order that its
Registration Statement and Prospectus will not contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(g) The Trust shall fully cooperate in the efforts of the Distributor
to sell and arrange for the sale of Shares and shall make available to the
Distributor a statement of each computation of net asset value. In addition, the
Trust shall keep the Distributor fully informed of its affairs and shall provide
to the Distributor from time to time copies of all information, financial
statements, and other papers that the Distributor may reasonably request for use
in connection with the distribution of Shares, including, without limitation,
certified copies of any financial statements prepared for the Trust by its
independent public accountants and such reasonable number of copies of the most
current Prospectus, statement of additional information and annual and interim
reports to shareholders as the Distributor may request. The Trust represents
that it will not use or authorize the use of any advertising or sales material
unless and until such materials have been approved and authorized for use by the
Distributor.
4. COMPENSATION.
As compensation for the services performed and the expenses assumed by
Distributor under this Agreement including, but not limited to, any commissions
paid for sales of Shares, Distributor shall be entitled to the fees and expenses
set forth in Schedule B to this Agreement which are payable promptly after the
last day of each month. Such fees shall be paid to Distributor by the Trust
pursuant to its Rule 12b-1 plan or, if Rule 12b-1 payments are not sufficient to
pay such fees and expenses, or if the Rule 12b-1 plan is discontinued, or if the
Fund's sponsor, the Adviser, otherwise determines that Rule 12b-1 fees shall
not, in whole or in part, be used to pay Distributor, the Adviser shall be
responsible for the payment of the amount of such fees not covered by Rule 12b-1
payments.
5. EXPENSES.
(a) The Trust shall bear all costs and expenses in connection with
registration of the Shares with the SEC and related compliance with state
securities laws, as well as all costs and expenses in connection with the
offering of the Shares and communications with shareholders of its Funds,
including but not limited to (i) fees and disbursements of its counsel and
independent public accountants; (ii) costs and expenses of the preparation,
filing, printing and mailing of Registration Statements and Prospectuses and
amendments thereto, as well as related advertising and sales literature, (iii)
costs and expenses of the preparation, printing and mailing of annual and
interim reports, proxy materials and other communications to shareholders of the
Funds; and (iv) fees required in connection with the offer and sale of Shares in
such jurisdictions as shall be selected by the Trust pursuant to Section 3(e)
hereof.
(b) The Distributor shall bear the expenses of registration or
qualification of the Distributor as a dealer or broker under federal or state
laws and the expenses of continuing such registration or qualification. The
Distributor does not assume responsibility for any expenses not expressly
assumed hereunder.
6. INDEMNIFICATION.
(a) The Trust shall indemnify, defend and hold the Distributor, and
each of its present or former members, officers, employees, representatives and
any person who controls or previously controlled the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all losses, claims, demands, liabilities, damages and expenses (including
the costs of investigating or defending any alleged losses, claims, demands,
liabilities, damages or expenses and any reasonable counsel fee incurred in
connection therewith) which the Distributor, each of its present and former
members, officers, employees or representatives or any such controlling person,
may incur under the 1933 Act, the 1934 Act, any other statute (including Blue
Sky laws) or any rule or regulation thereunder, or under common law or
otherwise, arising out of or based upon any untrue statement, or alleged untrue
statement of a material fact contained in the Registration Statement or any
Prospectus, as from time to time amended or supplemented, or in any annual or
interim report to shareholders, or in any advertisement or sales literature, or
arising out of or based upon any omission, or alleged omission, to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Trust's
obligation to indemnify the Distributor and any of the foregoing indemnitees
shall not be deemed to cover any losses, claims, demands, liabilities, damages
or expenses arising out of any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, Prospectus,
annual or interim report, or any such advertisement or sales literature in
reliance upon and in conformity with information relating to the Distributor and
furnished to the Trust or its counsel by the Distributor for the purpose of, and
used in, the preparation thereof; and provided further that the Trust's
agreement to indemnify the Distributor and any of the foregoing indemnitees
shall not be deemed to cover any liability to the Trust or its shareholders to
which the Distributor would otherwise be subject by reason of its willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations and duties under this
Agreement. The Trust's agreement to indemnify the Distributor, and any of the
foregoing indemnitees, as the case may be, with respect to any action, is
expressly conditioned upon the Trust being notified of such action brought
against the Distributor, or any of the foregoing indemnitees, within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Distributor, or such person, such notification to be given by letter or by
telegram addressed to the Trust's President, but the failure so to notify the
Trust of any such action shall not relieve the Trust from any liability which
the Trust may have to the person against whom such action is brought by reason
of any such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of the Trust's indemnity agreement contained
in this Section 6(a).
(b) The Trust shall be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such loss, claim, demand, liability, damage or expense, but if the
Trust elects to assume the defense, such defense shall be conducted by counsel
chosen by the Trust and approved by the Distributor, which approval shall not be
unreasonably withheld. In the event the Trust elects to assume the defense of
any such suit and retain such counsel, the indemnified defendant or defendants
in such suit shall bear the fees and expenses of any additional counsel retained
by them. If the Trust does not elect to assume the defense of any such suit, or
in case the Distributor does not, in the exercise of reasonable judgment,
approve of counsel chosen by the Trust or, if under prevailing law or legal
codes of ethics, the same counsel cannot effectively represent the interests of
both the Trust and the Distributor, and each of its present or former members,
officers, employees, representatives or any controlling person, the Trust will
reimburse the indemnified person or persons named as defendant or defendants in
such suit, for the fees and expenses of any counsel retained by Distributor and
them. The Trust's indemnification agreement contained in Sections 6(a) and 6(b)
and the Trust's representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Distributor, and each of its present or former directors,
officers, employees, representatives or any controlling person, and shall
survive the delivery of any Shares and the termination of this Agreement. This
agreement of indemnity will inure exclusively to the Distributor's benefit, to
the benefit of each of its present or former members, officers, employees or
representatives or to the benefit of any controlling persons and their
successors. The Trust agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against the Trust or any of its
officers or directors in connection with the issue and sale of any of the
Shares.
(c) The Trust shall not indemnify any person pursuant to this Section 6
unless (i) the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such indemnified person was not
liable by reason of his willful misfeasance, bad faith or gross negligence in
the performance of his duties, or his reckless disregard of obligations and
duties, under this Agreement or, (ii) in the absence of such a decision, a
reasonable determination (based upon a review of the facts) that such
indemnified person was not liable by reason of such conduct has been made by the
vote of a majority of a quorum of trustees of the Trust who are neither
"interested persons" of the Trust nor parties to the proceedings, or by an
independent legal counsel in a written opinion.
(d) The Trust shall advance attorney's fees and other expenses incurred
by any person in defending any claim, demand, action or suit which is the
subject of a claim for indemnification pursuant to this Section 6, so long as:
(i) such person shall undertake to repay all such advances unless it is
ultimately determined that he is entitled to indemnification hereunder; and (ii)
such person shall provide security for such undertaking, or the Trust shall be
insured against losses arising by reason of any lawful advances, or a majority
of a quorum of the disinterested, non-party trustees of the Trust (or an
independent legal counsel in a written opinion) shall determine, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that such person ultimately will be found
entitled to indemnification hereunder.
(e) Distributor shall indemnify, defend and hold the Trust, and each of
its present or former trustees, officers, employees, representatives, and any
person who controls or previously controlled the Trust within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
losses, claims, demands, liabilities, damages and expenses (including the costs
of investigation or defending any alleged losses, claims, demands, liabilities,
damages or expenses, and any reasonable counsel fee incurred in connection
therewith) which the Trust, and each of its present or former trustees,
officers, employees, representatives, or any such controlling person, may incur
under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or
any rule or regulation thereunder, or under common law or otherwise, arising out
of or based upon any untrue, or alleged untrue, statement of a material fact
contained in the Trust's Registration Statement or any Prospectus, as from time
to time amended or supplemented, or in any annual or interim report to
shareholders or in any advertisement or sales literature, or arising out of or
based upon the omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statement not misleading,
but only if such statement or omission was made in reliance upon, and in
conformity with, information relating to the Distributor and furnished to the
Trust or its counsel by the Distributor for the purpose of, and used in, the
preparation thereof. The Distributor's agreement to indemnify the Trust and any
of the foregoing indemnitees shall not be deemed to cover any liability to the
Distributor to which the Trust would otherwise be subject by reason of its
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties,
under this Agreement. The Distributor's agreement to indemnify the Trust, and
any of the foregoing indemnitees, is expressly conditioned upon the
Distributor's being notified of any action brought against the Trust, and any of
the foregoing indemnitees, such notification to be given by letter or telegram
addressed to the Distributor's President, within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Trust or such person, but the failure so
to notify the Distributor of any such action shall not relieve the Distributor
from any liability which the Distributor may have to the person against whom
such action is brought by reason of any such untrue, or alleged untrue,
statement or omission, otherwise than on account of the Distributor's indemnity
agreement contained in this Section 6(e).
(f) The Distributor shall be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such loss, claim, demand, liability, damage or expense, but if the
Distributor elects to assume the defense, such defense shall be conducted by
counsel chosen by the Distributor and approved by the Trust, which approval
shall not be unreasonably withheld. In the event the Distributor elects to
assume the defense of any such suit and retain such counsel, the indemnified
defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by them. If the Distributor does not elect to assume
the defense of any such suit, or in case the Trust does not, in the exercise of
reasonable judgment, approve of counsel chosen by the Distributor or, if under
prevailing law or legal codes of ethics, the same counsel cannot effectively
represent the interests of both the Trust and the Distributor, and each of its
present or former members, officers, employees, representatives or any
controlling person, the Distributor will reimburse the indemnified person or
persons named as defendant or defendants in such suit, for the fees and expenses
of any counsel retained by the Trust and them. The Distributor's indemnification
agreement contained in Sections 6(e) and (f) and the Distributor's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Trust, and each of its present or former directors, officers, employees,
representatives or any controlling person, and shall survive the delivery of any
Shares and the termination of this Agreement. This Agreement of indemnity will
inure exclusively to the Trust's benefit, to the benefit of each of its present
or former directors, officers, employees or representative or to the benefit of
any controlling persons and their successors. The Distributor agrees promptly to
notify the Trust of the commencement of any litigation or proceedings against
the Distributor or any of its officers or directors in connection with the issue
and sale of any of the Shares.
7. OBLIGATIONS OF TRUST.
This Agreement is executed by and on behalf of the Trust and the
obligations of the Trust hereunder are not binding upon any of the trustees,
officers or shareholders of the Trust individually but are binding only upon the
Trust and with respect to the Funds to which such obligations pertain.
8. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original agreement but all of which counterparts
shall together constitute but one and the same instrument.
9. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin, without regard to conflicts of law principles. To the extent
that the applicable laws of the State of Wisconsin, or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the latter
shall control, and nothing herein shall be construed in a manner inconsistent
with the 1940 Act or any rule or order of the SEC thereunder.
10. DURATION AND TERMINATION.
(a) This Agreement shall become effective with respect to each Fund
listed on Schedule A hereof as of the date hereof and, with respect to each Fund
not in existence on that date, on the date an amendment to Schedule A to this
Agreement relating to that Fund is executed. Unless sooner terminated as
provided herein, this Agreement shall continue in effect for one year from the
date hereof. Thereafter, if not terminated, this Agreement shall continue
automatically in effect as to each Fund for successive one-year periods,
provided such continuance is specifically approved at least annually by (i) the
Trust's Board or (ii) the vote of a "majority of the outstanding voting
securities" of a Fund, and provided that in either event the continuance is also
approved by a majority of the Trust's Board who are not "interested persons" of
any party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval.
(b) Notwithstanding the foregoing, this Agreement may be terminated,
without the payment of any penalty, with respect to a particular Fund (i)
through a failure to renew this Agreement at the end of a term, (ii) upon mutual
consent of the parties, or (iii) upon no less than 60 days' written notice, by
either the Trust through a vote of a majority of the members of the Board who
are not "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of this Agreement or by vote of a "majority
of the outstanding voting securities" of a Fund, or by the Distributor. The
terms of this Agreement shall not be waived, altered, modified, amended or
supplemented in any manner whatsoever except by a written instrument signed by
the Distributor and the Trust. This Agreement will automatically terminate in
the event of its assignment.
11. CONFIDENTIALITY.
The Distributor agrees on behalf of its employees to treat all records
relative to the Trust and prior, present or potential shareholders of the Trust
as confidential, and not to use such records for any purpose other than
performance of the Distributor's responsibilities and duties under this
Agreement, except after notification and prior approval by the Trust, which
approval shall not be unreasonably withheld, and may not be withheld where the
Distributor may be exposed to civil or criminal proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, when subject to governmental or regulatory audit or investigation,
or when so requested by the Trust. Records and information which have become
known to the public through no wrongful act of the Distributor or any of its
employees, agents or representatives shall not be subject to this paragraph.
12. MISCELLANEOUS.
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. Any provision of this Agreement
which may be determined by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person," and "assignment" shall have the same meaning as such terms
have in the 1940 Act.
13. NOTICE.
Any notice required or permitted to be given by any party to the others
shall be in writing and shall be deemed to have been given when delivered
personally or sent by registered or certified mail, postage prepaid, return
receipt requested or sent by facsimile transmission to the other parties'
respective addresses set forth below:
Notice to the Distributor shall be sent to:
Quasar Distributors, LLC
Attn: Teresa Cowan
615 East Michigan Street
Milwaukee, WI 53202
notice to the Trust shall be sent to:
Cullen Funds Trust
Attn: President
645 Fifth Avenue
New York, NY 10022
notice to the Adviser shall be sent to:
Cullen Capital Management LLC
Attn: President
645 Fifth Avenue
New York, NY 10022
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first above
written.
CULLEN FUNDS TRUST QUASAR DISTRIBUTORS, LLC
By: __________________________ By: ______________________________
Title: _______________________ Title: ____________________________
CULLEN CAPITAL MANAGEMENT LLC
By: ________________________
Title: _______________________
SCHEDULE A
TO THE
DISTRIBUTION AGREEMENT
BY AND AMONG
CULLEN FUNDS TRUST
CULLEN CAPITAL MANAGEMENT LLC
AND
QUASAR DISTRIBUTORS, LLC
NAMES OF FUNDS
Cullen Value Fund
SCHEDULE B
TO THE
DISTRIBUTION AGREEMENT
BY AND AMONG
CULLEN FUNDS TRUST
CULLEN CAPITAL MANAGEMENT LLC
AND
QUASAR DISTRIBUTORS, LLC
FEES
BASIC DISTRIBUTION SERVICES
o Fee at the annual rate of .01 of 1% (one basis point) of the Fund's average
daily net assets, payable monthly in arrears
o Minimum annual fee: first portfolio -- $15,000; each additional
portfolio -- $3,000
ADVERTISING COMPLIANCE REVIEW/NASD FILINGS
o $150 for the first 10 pages/minutes; $20 per page/minute thereafter
o NASDR Expedited Service for 3 day turnaround
o $1000 for the first 10 pages/minutes; $25 per page/minute thereafter
(Comments are faxed. NASDR may not accept expedited request.)
LICENSING OF INVESTMENT ADVISOR'S STAFF (IF DESIRED)
o $900 per year per Series 7 representative
o All associated NASD and State fees for Registered Representatives, including
license and renewal fees.
OUT-OF-POCKET EXPENSES
Reasonable out-of-pocket expenses incurred by the Distributor in connection with
activities primarily intended to result in the sale of Shares, including,
without limitation:
o typesetting, printing and distribution of Prospectuses and shareholder
reports
o production, printing, distribution and placement of advertising and sales
literature and materials
o engagement of designers, free-lance writers and public relations firms
o long-distance telephone lines, services and charges
o postage
o overnight delivery charges
o regulatory filing fees
o record retention
o travel, lodging and meals
CUSTODY AGREEMENT
This AGREEMENT, dated as of _________ 2000, by and between Cullen Funds
Trust (the "Trust"), a business trust organized under the laws of Delaware,
acting with respect to Cullen Value Fund ( individually, a "Fund" and,
collectively, the "Funds"), each of them a series of the Trust and each of them
operated and administered by the Trust, and FIRSTAR BANK, N.A., a national
banking association (the "Custodian").
W I T N E S S E T H:
WHEREAS, the Trust desires that the Fund's Securities and cash be held
and administered by the Custodian pursuant to this Agreement; and
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1.1 "AUTHORIZED PERSON" means any Officer or other person duly authorized
by resolution of the Board of Trustees to give Oral Instructions and Written
Instructions on behalf of the Fund and named in Exhibit A hereto or in such
resolutions of the Board Of Trustees, certified by an Officer, as may be
received by the Custodian from time to time.
1.2 "BOARD OF TRUSTEES" shall mean the Trustees from time to time serving
under the Trust's Agreement and Declaration of Trust, as from time to time
amended.
1.3 "BOOK-ENTRY SYSTEM" shall mean a federal book-entry system as provided
in Subpart O of Treasury Circular No. 300, 31 CFR 306, in Subpart B of 31 CFR
Part 350, or in such book-entry regulations of federal agencies as are
substantially in the form of such Subpart O.
1.4 "BUSINESS DAY" shall mean any day recognized as a settlement day by The
New York Stock Exchange, Inc. and any other day for which the Trust computes the
net asset value of Shares of the Fund.
1.5 "FUND CUSTODY ACCOUNT" shall mean any of the accounts in the name of
the Trust, which is provided for in Section 3.2 below.
1.6 "NASD" shall mean The National Association of Securities Dealers, Inc.
1.7 "OFFICER" shall mean the Chairman, President, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer,
or any Assistant Treasurer of the Trust.
1.8 "ORAL INSTRUCTIONS" shall mean instructions orally transmitted to and
accepted by the Custodian because such instructions are: (i) reasonably believed
by the Custodian to have been given by an Authorized Person, (ii) recorded and
kept among the records of the Custodian made in the ordinary course of business
and (iii) orally confirmed by the Custodian. The Trust shall cause all Oral
Instructions to be confirmed by Written Instructions prior to the end of the
next Business Day. If such Written Instructions confirming Oral Instructions are
not received by the Custodian prior to a transaction, it shall in no way affect
the validity of the transaction or the authorization thereof by the trust. If
Oral Instructions vary from the Written Instructions which purport to confirm
them, the Custodian shall notify the trust of such variance but such Oral
Instructions will govern unless the Custodian has not yet acted.
1.9 "PROPER INSTRUCTIONS" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written Instructions when
deemed appropriate by both parties.
1.10 "SECURITIES DEPOSITORY" shall mean The Depository Trust Company and
(provided that Custodian shall have received a copy of a resolution of the Board
Of Trustees, certified by an Officer, specifically approving the use of such
clearing agency as a depository for the Fund) any other clearing agency
registered with the Securities and Exchange Commission under Section 17A of the
Securities and Exchange Act of 1934 as amended (the "1934 Act"), which acts as a
system for the central handling of Securities where all Securities of any
particular class or series of an issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of the Securities.
1.11 "SECURITIES" shall include, without limitation, common and preferred
stocks, bonds, call options, put options, debentures, notes, bank certificates
of deposit, bankers' acceptances, mortgage-backed securities or other
obligations, and any certificates, receipts, warrants or other instruments or
documents representing rights to receive, purchase or subscribe for the same, or
evidencing or representing any other rights or interests therein, or any similar
property or assets that the Custodian has the facilities to clear and to
service.
1.12 "SHARES" shall mean, with respect to a Fund, the units of beneficial
interest issued by the trust on account of the Fund.
1.13 "SUB-CUSTODIAN" shall mean and include (i) any branch of a "U.S.
Bank," as that term is defined in Rule 17f-5 under the 1940 Act, (ii) any
"Eligible Foreign Custodian," as that term is defined in Rule 17f-5 under the
1940 Act, having a contract with the Custodian which the Custodian has
determined will provide reasonable care of assets of the Funds based on the
standards specified in Section 3.3 below. Such contract shall include provisions
that provide: (i) for indemnification or insurance arrangements (or any
combination of the foregoing) such that the Funds will be adequately protected
against the risk of loss of assets held in accordance with such contract; (ii)
that the Funds' assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the Sub-Custodian or its
creditors except a claim of payment for their safe custody or administration, in
the case of cash deposits, liens or rights in favor of creditors of the
Sub-Custodian arising under bankruptcy, insolvency, or similar laws; (iii) that
beneficial ownership for the Funds' assets will be freely transferable without
the payment of money or value other than for safe custody or administration;
(iv) that adequate records will be maintained identifying the assets as
belonging to the funds or as being held by a third party for the benefit of the
Funds; (v) that the Funds' independent public accountants will be given access
to those records or confirmation of the contents of those records; and (vi) that
the Funds will receive periodic reports with respect to the safekeeping of the
Funds' assets, including, but not limited to, notification of any transfer to or
from a Fund's account or a third party account containing assets held for the
benefit of the Fund. Such contract may contain, in lieu of any or all of the
provisions specified above, such other provisions that the Custodian determines
will provide, in their entirety, the same or a greater level of care and
protection for Fund assets as the specified provisions, in their entirety.
1.14 "WRITTEN INSTRUCTIONS" shall mean (i) written communications actually
received by the Custodian and signed by an Authorized Person, or (ii)
communications by telex or any other such system from one or more persons
reasonably believed by the Custodian to be Authorized Persons, or (iii)
communications between electro-mechanical or electronic devices provided that
the use of such devices and the procedures for the use thereof shall have been
approved by resolutions of the Board Of Trustees, a copy of which, certified by
an Officer, shall have been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 APPOINTMENT. The Trust hereby constitutes and appoints the Custodian as
custodian of all Securities and cash owned by or in the possession of the Fund
at any time during the period of this Agreement.
2.2 ACCEPTANCE. The Custodian hereby accepts appointment as such custodian
and agrees to perform the duties thereof as hereinafter set forth.
2.3 DOCUMENTS TO BE FURNISHED. The following documents, including any
amendments thereto, will be provided contemporaneously with the execution of the
Agreement to the Custodian by the trust:
a. A copy of the Declaration of Trust certified by the Secretary;
b. A copy of the Bylaws of the Trust certified by the Secretary;
c. A copy of the resolution of the Board Of Trustees of the Trust
appointing the Custodian, certified by the Secretary;
d. A copy of the then current Prospectus of the Fund; and
e. A certification of the Chairman and Secretary of the Trust setting forth
the names and signatures of the current Officers of the Trust and other
Authorized Persons.
2.4 NOTICE OF APPOINTMENT OF DIVIDEND AND TRANSFER AGENT. The Trust agrees
to notify the Custodian in writing of the appointment, termination or change in
appointment of any Dividend and Transfer Agent of the Fund.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 SEGREGATION. All Securities and non-cash property held by the Custodian
for the account of the Fund (other than Securities maintained in a Securities
Depository or Book-Entry System) shall be physically segregated from other
Securities and non-cash property in the possession of the Custodian (including
the Securities and non-cash property of the other Funds) and shall be identified
as subject to this Agreement.
3.2 FUND CUSTODY ACCOUNTS. As to each Fund, the Custodian shall open and
maintain in its trust department a custody account in the name of the Trust
coupled with the name of the Fund, subject only to draft or order of the
Custodian, in which the Custodian shall enter and carry all Securities, cash and
other assets of such Fund which are delivered to it.
3.3 APPOINTMENT OF AGENTS. (a) In its discretion, the Custodian may appoint
one or more Sub-Custodians to act as Securities Depositories or as
sub-custodians to hold Securities and cash of the Funds and to carry out such
other provisions of this Agreement as it may determine, provided, however, that
the appointment of any such agents and maintenance of any Securities and cash of
the Fund shall be at the Custodian's expense and shall not relieve the Custodian
of any of its obligations or liabilities under this Agreement.
(b) If, after the initial approval of Sub-Custodians by the Board Of
Trustees in connection with this Agreement, the Custodian wishes to appoint
other Sub-Custodians to hold property of the Fund, it will so notify the Trust
and provide it with information reasonably necessary to determine any such new
Sub-Custodian's eligibility under Rule 17f-5 under the 1940 Act, including a
copy of the proposed agreement with such Sub-Custodian. The Trust shall at the
meeting of the Board Of Trustees next following receipt of such notice and
information give a written approval or disapproval of the proposed action.
(c) The Agreement between the Custodian and each Sub-Custodian acting
hereunder shall contain the required provisions set forth in Rule 17f-5(a)(1)
(iii).
(d) At the end of each calendar quarter, the Custodian shall provide
written reports notifying the Board of Trustees of the placement of the
Securities and cash of the Funds with a particular Sub-Custodian and of any
material changes in the Funds' arrangements. The Custodian shall promptly take
such steps as may be required to withdraw assets of the Funds from any
Sub-Custodian that has ceased to meet the requirements of Rule 17f-5 under the
1940 Act.
(e) With respect to its responsibilities under this Section 3.3, the
Custodian hereby warrants to the Trust that it agrees to exercise reasonable
care, prudence and diligence such as a person having responsibility for the
safekeeping of property of the Funds. The Custodian further warrants that a
Fund's assets will be subject to reasonable care, based on the standards
applicable to custodians in the relevant market, if maintained with each
Sub-Custodian, after considering all factors relevant to the safekeeping of such
assets, including, without limitation: (i) the Sub-Custodian's practices,
procedures, and internal controls, for certificated securities (if applicable),
the method of keeping custodial records, and the security and data protection
practices; (ii) whether the Sub-Custodian has the requisite financial strength
to provide reasonable care for Fund assets; (iii) the Sub-Custodian's general
reputation and standing and, in the case of a Securities Depository, the
Securities Depository's operating history and number of participants; and (iv)
whether the Fund will have jurisdiction over and be able to enforce judgments
against the Sub-Custodian, such as by virtue of the existence of any offices
of the Sub-Custodian in the United States or the Sub-Custodian's consent to
service of process in the United States.
(f) The Custodian shall establish a system to monitor the appropriateness
of maintaining the Fund's assets with a particular Sub-Custodian and the
contract governing the Funds' arrangements with such Sub-Custodian.
3.3 DELIVERY OF ASSETS TO CUSTODIAN. The Trust shall deliver, or cause to
be delivered, to the Custodian all of the Funds' Securities, cash and other
assets, including (a) all payments of income, payments of principal and capital
distributions received by the Fund with respect to such Securities, cash or
other assets owned by the Fund at any time during the period of this Agreement,
and (b) all cash received by the Fund for the issuance, at any time during such
period, of Shares. The Custodian shall not be responsible for such Securities,
cash or other assets until actually received by it.
3.4 SECURITIES DEPOSITORIES AND BOOK-ENTRY SYSTEMS. The Custodian may
deposit and/or maintain Securities of the Fund in a Securities Depository or in
a Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of Securities of the Funds in any Securities
Depository or Book-Entry System, the Trust shall deliver to the Custodian a
resolution of the Board Of Trustees, certified by an Officer, authorizing and
instructing the Custodian on an on-going basis to deposit in such Securities
Depository or Book-Entry System all Securities eligible for deposit therein and
to make use of such Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of collateral
consisting of Securities.
(b) Securities of the Funds kept in a Book-Entry System or Securities
Depository shall be kept in an account ("Depository Account") of the Custodian
in such Book-Entry System or Securities Depository which includes only assets
held by the Custodian as a fiduciary, custodian or otherwise for customers.
(c) The records of the Custodian with respect to Securities of the Fund
maintained in a Book-Entry System or Securities Depository shall, by book-entry,
identify such Securities as belonging to such Fund.
(d) If Securities purchased by a Fund are to be held in a Book-Entry System
or Securities Depository, the Custodian shall pay for such Securities upon (i)
receipt of advice from the Book-Entry System or Securities Depository that such
Securities have been transferred to the Depository Account, and (ii) the making
of an entry on the records of the Custodian to reflect such payment and transfer
for the account of such Fund. If Securities sold by a Fund are held in a
Book-Entry System or Securities Depository, the Custodian shall transfer such
Securities upon (i) receipt of advice from the Book-Entry System or Securities
Depository that payment for such Securities has been transferred to the
Depository Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of such Fund.
(e) The Custodian shall provide the Trust with copies of any report
(obtained by the Custodian from a Book-Entry System or Securities Depository in
which Securities of the Fund are kept) on the internal accounting controls and
procedures for safeguarding Securities deposited in such Book-Entry System or
Securities Depository.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the Fund
resulting (i) from the use of a Book-Entry System or Securities Depository by
reason of any negligence or willful misconduct on the part of Custodian or any
Sub-Custodian appointed pursuant to Section 3.3 above or any of its or their
employees, or (ii) from failure of Custodian or any such Sub-Custodian to
enforce effectively such rights as it may have against a Book-Entry System or
Securities Depository. At its election, the Trust shall be subrogated to the
rights of the Custodian with respect to any claim against a Book-Entry System or
Securities Depository or any other person from any loss or damage to the Fund
arising from the use of such Book-Entry System or Securities Depository, if and
to the extent that the Funds has not been made whole for any such loss or
damage.
3.5 DISBURSEMENT OF MONEYS FROM FUND CUSTODY ACCOUNT. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from the Fund Custody
Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only in accordance with
Section 4.1 of this Agreement and only (i) in the case of Securities (other than
options on Securities, futures contracts and options on futures contracts),
against the delivery to the Custodian (or any Sub-Custodian appointed pursuant
to Section 3.3 above) of such Securities registered as provided in Section 3.9
below or in proper form for transfer, or if the purchase of such Securities is
effected through a Book-Entry System or Securities Depository, in accordance
with the conditions set forth in Section 3.5 above; (ii) in the case of options
on Securities, against delivery to the Custodian (or such Sub-Custodian) of such
receipts as are required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options on futures
contracts, against delivery to the Custodian (or such Sub-Custodian) of evidence
of title thereto in favor of the Fund or any nominee referred to in Section 3.9
below; and (iv) in the case of repurchase or reverse repurchase agreements
entered into between the Trust and a bank which is a member of the Federal
Reserve System or between the Trust and a primary dealer in U.S. Government
securities, against delivery of the purchased Securities either in certificate
form or through an entry crediting the Custodian's account at a Book-Entry
System or Securities Depository with such Securities;
(b) In connection with the conversion, exchange or surrender, as set forth
in Section 3.7(f) below, of Securities owned by the Fund;
(c) For the payment of any dividends or capital gain distributions declared
by the Fund;
(d) In payment of the redemption price of Shares as provided in Section 5.1
below;
(e) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of the Fund:
interest; taxes; administration, investment advisory, accounting, auditing,
transfer agent, custodian, trustee and legal fees; and other operating expenses
of the Fund; in all cases, whether or not such expenses are to be in whole or in
part capitalized or treated as deferred expenses;
(f) For transfer in accordance with the provisions of any agreement among
the Trust, the Custodian and a broker-dealer registered under the 1934 Act and a
member of the NASD, relating to compliance with rules of The Options Clearing
Corporation and of any registered national securities exchange (or of any
similar organization or organizations) regarding escrow or other arrangements in
connection with transactions by the Fund;
(g) For transfer in accordance with the provision of any agreement among
the Trust, the Custodian, and a futures commission merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in connection with
transactions by the Fund;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution (including the Custodian),
which deposit or account has a term of one year or less; and
(i) For any other proper purpose, but only upon receipt, in addition to
Proper Instructions, of a copy of a resolution of the Board Of Trustees,
certified by an Officer, specifying the amount and purpose of such payment,
declaring such purpose to be a proper corporate purpose, and naming the person
or persons to whom such payment is to be made.
3.6 DELIVERY OF SECURITIES FROM FUND CUSTODY ACCOUNT. Upon receipt of
Proper Instructions, the Custodian shall release and deliver Securities from the
Fund Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of the Fund but only
against receipt of payment therefor in cash, by certified or cashiers check or
bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of Section 3.5 above;
(c) To an offeror's depository agent in connection with tender or other
similar offers for Securities of the Fund; provided that, in any such case, the
cash or other consideration is to be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the name of
the Fund, the Custodian or any Sub-Custodian appointed pursuant to Section 3.3
above, or of any nominee or nominees of any of the foregoing, or (ii) for
exchange for a different number of certificates or other evidence representing
the same aggregate face amount or number of units; provided that, in any such
case, the new Securities are to be delivered to the Custodian;
(e) To the broker selling Securities, for examination in accordance with
the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan or merger,
consolidation, recapitalization, reorganization or readjustment of the issuer
of such Securities, or pursuant to provisions for conversion contained in such
Securities, or pursuant to any deposit agreement, including surrender or receipt
of underlying Securities in connection with the issuance or cancellation of
depository receipts; provided that, in any such case, the new Securities and
cash, if any, are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or reverse
repurchase agreement entered into by the Fund;
(h) In the case of warrants, rights or similar Securities, upon the
exercise thereof, provided that, in any such case, the new Securities and cash,
if any, are to be delivered to the Custodian;
(i) For delivery in connection with any loans of Securities of the Fund,
but only against receipt of such collateral as the Trust shall have specified to
the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by the Fund
requiring a pledge of assets by the Trust, but only against receipt by the
Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Trust;
(l) For delivery in accordance with the provisions of any agreement among
the Trust, the Custodian and a broker-dealer registered under the 1934 Act and a
member of the NASD, relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities exchange (or of
any similar organization or organizations) regarding escrow or other
arrangements in connection with transactions by the Fund;
(m) For delivery in accordance with the provisions of any agreement among
the Trust, the Custodian, and a futures commission merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits in connection with
transactions by the Fund; or
(n) For any other proper corporate purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of the Board Of
Trustees, certified by an Officer, specifying the Securities to be delivered,
setting forth the purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or persons to
whom delivery of such Securities shall be made.
3.7 ACTIONS NOT REQUIRING PROPER INSTRUCTIONS. Unless otherwise instructed
by the Trust, the Custodian shall with respect to all Securities held for the
Fund:
(a) Subject to Section 7.4 below, collect on a timely basis all income and
other payments to which the Fund is entitled either by law or pursuant to
custom in the securities business;
(b) Present for payment and, subject to Section 7.4 below, collect on a
timely basis the amount payable upon all Securities which may mature or be
called, redeemed, or retired, or otherwise become payable;
(c) Endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or certificates of
ownership under the federal income tax laws or the laws or regulations of any
other taxing authority now or hereafter in effect, and prepare and submit
reports to the Internal Revenue Service ("IRS") and to the Trust at such time,
in such manner and containing such information as is prescribed by the IRS;
(f) Hold for the Fund, either directly or, with respect to Securities held
therein, through a Book-Entry System or Securities Depository, all rights and
similar securities issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper Instructions,
attend to all non-discretionary details in connection with the sale, exchange,
substitution, purchase, transfer and other dealings with Securities and assets
of the Fund.
3.8 REGISTRATION AND TRANSFER OF SECURITIES. All Securities held for a Fund
that are issued or issuable only in bearer form shall be held by the Custodian
in that form, provided that any such Securities shall be held in a Book-Entry
System if eligible therefor. All other Securities held for the Fund may be
registered in the name of such Fund, the Custodian, or any Sub-Custodian
appointed pursuant to Section 3.3 above, or in the name of any nominee of any of
them, or in the name of a Book-Entry System, Securities Depository or any
nominee of either thereof. The Trust shall furnish to the Custodian appropriate
instruments to enable the Custodian to hold or deliver in proper form for
transfer, or to register in the name of any of the nominees hereinabove referred
to or in the name of a Book-Entry System or Securities Depository, any
Securities registered in the name of a Fund.
3.9 RECORDS.
(a) The Custodian shall maintain, by Fund, complete and accurate records
with respect to Securities, cash or other property held for the Fund, including
(i) journals or other records of original entry containing an itemized daily
record in detail of all receipts and deliveries of Securities and all receipts
and disbursements of cash; (ii) ledgers (or other records) reflecting (A)
Securities in transfer, (B) Securities in physical possession, (C) monies and
Securities borrowed and monies and Securities loaned (together with a record of
the collateral therefor and substitutions of such collateral), (D) dividends
and interest received, and (E) dividends receivable and interest receivable; and
(iii) canceled checks and bank records related thereto. The Custodian shall keep
such other books and records of the Funds as the Trust shall reasonably request,
or as may be required by the 1940 Act, including, but not limited to, Section 31
of the 1940 Act and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall (i) be
maintained in a form acceptable to the Trust and in compliance with rules and
regulations of the Securities and Exchange Commission, (ii) be the property of
the Trust and at all times during the regular business hours of the Custodian be
made available upon request for inspection by duly authorized officers,
employees or agents of the Trust and employees or agents of the Securities and
Exchange Commission, and (iii) if required to be maintained by Rule 31a-1 under
the 1940 Act, be preserved for the periods prescribed in Rule 31a-2 under the
1940 Act.
3.10 FUND REPORTS BY CUSTODIAN. The Custodian shall furnish the Trust with
a daily activity statement and a summary of all transfers to or from each Fund
Custody Account on the day following such transfers. At least monthly and from
time to time, the Custodian shall furnish the Trust with a detailed statement of
the Securities and moneys held by the Custodian and the Sub-Custodians for the
Fund under this Agreement.
3.11 OTHER REPORTS BY CUSTODIAN. The Custodian shall provide the Trust with
such reports, as the Trust may reasonably request from time to time, on the
internal accounting controls and procedures for safeguarding Securities, which
are employed by the Custodian or any Sub-Custodian appointed pursuant to Section
3.3 above.
3.12 PROXIES AND OTHER MATERIALS. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the Fund, to be
promptly executed by the registered holder of such Securities, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Trust such proxies, all proxy soliciting materials and
all notices relating to such Securities.
3.13 INFORMATION ON CORPORATE ACTIONS. The Custodian shall promptly deliver
to the Trust all information received by the Custodian and pertaining to
Securities being held by the Fund with respect to optional tender or exchange
offers, calls for redemption or purchase, or expiration of rights as described
in the Standards of Service Guide attached as Exhibit B. If the Trust desires to
take action with respect to any tender offer, exchange offer or other similar
transaction, the Trust shall notify the Custodian at least five Business Days
prior to the date on which the Custodian is to take such action. The Trust will
provide or cause to be provided to the Custodian all relevant information for
any Security which has unique put/option provisions at least five Business Days
prior to the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 PURCHASE OF SECURITIES. Promptly upon each purchase of Securities for
the Fund, Written Instructions shall be delivered to the Custodian, specifying
(a) the name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and accrued
interest, if any) or other units purchased, (c) the date of purchase and
settlement, (d) the purchase price per unit, (e) the total amount payable upon
such purchase, and (f) the name of the person to whom such amount is payable.
The Custodian shall upon receipt of such Securities purchased by such Fund pay
out of the moneys held for the account of a Fund the total amount specified in
such Written Instructions to the person named therein. The Custodian shall not
be under any obligation to pay out moneys to cover the cost of a purchase of
Securities for the Fund, if in the Fund Custody Account there is insufficient
cash available to the Fund for which such purchase was made.
4.2 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED. In
any and every case where payment for the purchase of Securities for a Fund is
made by the Custodian in advance of receipt of the Securities purchased but in
the absence of specified Written Instructions to so pay in advance, the
Custodian shall be liable to the Fund for such Securities to the same extent as
if the Securities had been received by the Custodian.
4.3 SALE OF SECURITIES. Promptly upon each sale of Securities by a Fund,
Written Instructions shall be delivered to the Custodian, specifying (a) the
name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and accrued
interest, if any), or other units sold, (c) the date of sale and settlement, (d)
the sale price per unit, (e) the total amount payable upon such sale, and (f)
the person to whom such Securities are to be delivered. Upon receipt of the
total amount payable to the Fund as specified in such Written Instructions, the
Custodian shall deliver such Securities to the person specified in such Written
Instructions. Subject to the foregoing, the Custodian may accept payment in such
form as shall be satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in Securities.
4.4 DELIVERY OF SECURITIES SOLD. Notwithstanding Section 4.3 above or any
other provision of this Agreement, the Custodian, when instructed to deliver
Securities against payment, shall be entitled, if in accordance with generally
accepted market practice, to deliver such Securities prior to actual receipt of
final payment therefor. In any such case, the Fund shall bear the risk that
final payment for such Securities may not be made or that such Securities may be
returned or otherwise held or disposed of by or through the person to whom they
were delivered, and the Custodian shall have no liability for any for the
foregoing.
4.5 PAYMENT FOR SECURITIES SOLD, ETC. In its sole discretion and from time
to time, the Custodian may credit the Fund Custody Account, prior to actual
receipt of final payment thereof, with (i) proceeds from the sale of Securities
which it has been instructed to deliver against payment, (ii) proceeds from the
redemption of Securities or other assets of the Fund, and (iii) income from
cash, Securities or other assets of the Fund. Any such credit shall be
conditional upon actual receipt by Custodian of final payment and may be
reversed if final payment is not actually received in full. The Custodian may,
in its sole discretion and from time to time, permit the Fund to use funds so
credited to the Fund Custody Account in anticipation of actual receipt of final
payment. Any such funds shall be repayable immediately upon demand made by the
Custodian at any time prior to the actual receipt of all final payments in
anticipation of which funds were credited to the Fund Custody Account.
4.6 ADVANCES BY CUSTODIAN FOR SETTLEMENT. The Custodian may, in its sole
discretion and from time to time, advance funds to the Trust to facilitate the
settlement of a Fund's transactions in the Fund Custody Account. Any such
advance shall be repayable immediately upon demand made by Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 TRANSFER OF FUNDS. From such funds as may be available for the purpose
in the relevant Fund Custody Account, and upon receipt of Proper Instructions
specifying that the funds are required to redeem Shares of the Fund, the
Custodian shall wire each amount specified in such Proper Instructions to or
through such bank as the Trust may designate with respect to such amount in such
Proper Instructions.
5.2 NO DUTY REGARDING PAYING BANKS. The Custodian shall not be under any
obligation to effect payment or distribution by any bank designated in Proper
Instructions given pursuant to Section 5.1 above of any amount paid by the
Custodian to such bank in accordance with such Proper Instructions.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account, (a) in accordance with the
provisions of any agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Trust and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
the Fund,
(b) for purposes of segregating cash or Securities in connection with
securities options purchased or written by the Fund or in connection with
financial futures contracts (or options thereon) purchased or sold by the Fund,
(c) which constitute collateral for loans of Securities made by the Fund,
(d) for purposes of compliance by the Fund with requirements under the
1940 Act for the maintenance of segregated accounts by registered investment
companies in connection with reverse repurchase agreements and when-issued,
delayed delivery and firm commitment transactions, and
(e) for other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the Board
Of Trustees, certified by an Officer, setting forth the purpose or purposes of
such segregated account and declaring such purposes to be proper corporate
purposes.
Each segregated account established under this Article VI shall be
established and maintained for a single Fund only. All Proper Instructions
relating to a segregated account shall specify the Fund involved.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 STANDARD OF CARE. The Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this Agreement, and shall
be without liability to the Trust or any Fund for any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability or claim unless
such loss, damage, cost, expense, liability or claim arises from negligence, bad
faith or willful misconduct on its part or on the part of any Sub-Custodian
appointed pursuant to Section 3.3 above. The Custodian shall be entitled to rely
on and may act upon advice of counsel on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
The Custodian shall promptly notify the Trust of any action taken or omitted by
the Custodian pursuant to advice of counsel. The Custodian shall not be under
any obligation at any time to ascertain whether the Trust or the Fund is in
compliance with the 1940 Act, the regulations thereunder, the provisions of the
Trust's charter documents or by-laws, or its investment objectives and policies
as then in effect.
7.2 ACTUAL COLLECTION REQUIRED. The Custodian shall not be liable for, or
considered to be the custodian of, any cash belonging to a Fund or any money
represented by a check, draft or other instrument for the payment of money,
until the Custodian or its agents actually receive such cash or collect on such
instrument.
7.3 NO RESPONSIBILITY FOR TITLE, ETC. So long as and to the extent that it
is in the exercise of reasonable care, the Custodian shall not be responsible
for the title, validity or genuineness of any property or evidence of title
thereto received or delivered by it pursuant to this Agreement.
7.4 LIMITATION ON DUTY TO COLLECT. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or property due
and payable with respect to Securities held for the Fund if such Securities are
in default or payment is not made after due demand or presentation.
7.5 RELIANCE UPON DOCUMENTS AND INSTRUCTIONS. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in writing
received by it and reasonably believed by it to be genuine. The Custodian shall
be entitled to rely upon any Oral Instructions and any Written Instructions
actually received by it pursuant to this Agreement.
7.6 EXPRESS DUTIES ONLY. The Custodian shall have no duties or obligations
whatsoever except such duties and obligations as are specifically set forth in
this Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
7.7 CO-OPERATION. The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Trust to keep the books
of account of the Funds and/or compute the value of the assets of the Funds. The
Custodian shall take all such reasonable actions as the Trust may from time to
time request to enable the Trust to obtain, from year to year, favorable
opinions from the Trust's independent accountants with respect to the
Custodian's activities hereunder in connection with (a) the preparation of the
Trust's reports on Form N-1A and Form N-SAR and any other reports required by
the Securities and Exchange Commission, and (b) the fulfillment by the Trust of
any other requirements of the Securities and Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY TRUST. The Trust shall indemnify and hold harmless
the Custodian and any Sub-Custodian appointed pursuant to Section 3.3 above, and
any nominee of the Custodian or of such Sub-Custodian, from and against any
loss, damage, cost, expense (including attorneys' fees and disbursements),
liability (including, without limitation, liability arising under the Securities
Act of 1933, the 1934 Act, the 1940 Act, and any state or foreign securities
and/or banking laws) or claim arising directly or indirectly (a) from the fact
that Securities are registered in the name of any such nominee, or (b) from any
action or inaction by the Custodian or such Sub-Custodian (i) at the request or
direction of or in reliance on the advice of the Trust, or (ii) upon Proper
Instructions, or (c) generally, from the performance of its obligations under
this Agreement or any sub-custody agreement with a Sub-Custodian appointed
pursuant to Section 3.3 above, provided that neither the Custodian nor any such
Sub-Custodian shall be indemnified and held harmless from and against any such
loss, damage, cost, expense, liability or claim arising from the Custodian's or
such Sub-Custodian's negligence, bad faith or willful misconduct.
8.2 INDEMNIFICATION BY CUSTODIAN. The Custodian shall indemnify and hold
harmless the Trust from and against any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability (including without limitation,
liability arising under the Securities Act of 1933, the 1934 Act, the 1940 Act,
and any state or foreign securities and/or banking laws) or claim arising from
the negligence, bad faith or willful misconduct of the Custodian or any
Sub-Custodian appointed pursuant to Section 3.3 above, or any nominee of the
Custodian or of such Sub-Custodian.
8.3 INDEMNITY TO BE PROVIDED. If the Trust requests the Custodian to take
any action with respect to Securities, which may, in the opinion of the
Custodian, result in the Custodian or its nominee becoming liable for the
payment of money or incurring liability of some other form, the Custodian shall
not be required to take such action until the Trust shall have provided
indemnity therefor to the Custodian in an amount and form satisfactory to the
Custodian.
8.4 SECURITY. If the Custodian advances cash or Securities to the Fund for
any purpose, either at the Trust's request or as otherwise contemplated in this
Agreement, or in the event that the Custodian or its nominee incurs, in
connection with its performance under this Agreement, any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability or claim
(except such as may arise from its or its nominee's negligence, bad faith or
willful misconduct), then, in any such event, any property at any time held for
the account of such Fund shall be security therefor, and should the Fund fail
promptly to repay or indemnify the Custodian, the Custodian shall be entitled to
utilize available cash of such Fund and to dispose of other assets of such Fund
to the extent necessary to obtain reimbursement or indemnification.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its reasonable
control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that the Custodian in the event of a failure
or delay (i) shall not discriminate against the Funds in favor of any other
customer of the Custodian in making computer time and personnel available to
input or process the transactions contemplated by this Agreement and (ii) shall
use its best efforts to ameliorate the effects of any such failure or delay.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 EFFECTIVE PERIOD. This Agreement shall become effective as of its
execution and shall continue in full force and effect until terminated as
hereinafter provided.
10.2 TERMINATION. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than sixty (60) days after the date of the
giving of such notice. If a successor custodian shall have been appointed by the
Board Of Trustees, the Custodian shall, upon receipt of a notice of acceptance
by the successor custodian, on such specified date of termination (a) deliver
directly to the successor custodian all Securities (other than Securities held
in a Book-Entry System or Securities Depository) and cash then owned by the Fund
and held by the Custodian as custodian, and (b) transfer any Securities held in
a Book-Entry System or Securities Depository to an account of or for the benefit
of the Funds at the successor custodian, provided that the Trust shall have paid
to the Custodian all fees, expenses and other amounts to the payment or
reimbursement of which it shall then be entitled. Upon such delivery and
transfer, the Custodian shall be relieved of all obligations under this
Agreement. The Trust may at any time immediately terminate this Agreement in
the event of the appointment of a conservator or receiver for the Custodian by
regulatory authorities or upon the happening of a like event at the direction of
an appropriate regulatory agency or court of competent jurisdiction.
10.3 FAILURE TO APPOINT SUCCESSOR CUSTODIAN. If a successor custodian is
not designated by the Trust on or before the date of termination specified
pursuant to Section 10.1 above, then the Custodian shall have the right to
deliver to a bank or corporation company of its own selection, which (a) is a
"bank" as defined in the 1940 Act and (b) has aggregate capital, surplus and
undivided profits as shown on its then most recent published report of not less
than $25 million, all Securities, cash and other property held by Custodian
under this Agreement and to transfer to an account of or for the Funds at such
bank or trust company all Securities of the Funds held in a Book-Entry System or
Securities Depository. Upon such delivery and transfer, such bank or trust
company shall be the successor custodian under this Agreement and the Custodian
shall be relieved of all obligations under this Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from
time to time by the Trust and the Custodian. The fees and other charges in
effect on the date hereof and applicable to the Fund are set forth in Exhibit C
attached hereto.
ARTICLE XII
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the property of
the Trust as provided in the Trust's Agreement and Articles of Incorporation, as
from time to time amended. 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 Trust, 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, but shall bind only the
corporation property of the Trust as provided in the above-mentioned Agreement
and Articles of Incorporation.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices, instructions,
and other communications to be given hereunder shall be in writing and shall be
sent or delivered to the recipient at the address set forth after its name
hereinbelow:
TO THE TRUST:
Cullen Funds Trust
Attn: President
645 Fifth Avenue
New York, NY 10022
TO CUSTODIAN:
Firstar Bank, N.A.
425 Walnut Street, M.L. CN-WN-06TC
Cincinnati, Ohio 45202
Attention: Mutual Fund Custody Services
Facsimile: (513) 632-3299
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
14.2 REFERENCES TO CUSTODIAN. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior written
approval of Custodian, excepting printed matter contained in the prospectus or
statement of additional information for the Fund and such other printed matter
as merely identifies Custodian as custodian for the Fund. The Trust shall submit
printed matter requiring approval to Custodian in draft form, allowing
sufficient time for review by Custodian and its counsel prior to any deadline
for printing.
14.3 NO WAIVER. No failure by either party hereto to exercise, and no delay
by such party in exercising, any right hereunder shall operate as a waiver
thereof. The exercise by either party hereto of any right hereunder shall not
preclude the exercise of any other right, and the remedies provided herein are
cumulative and not exclusive of any remedies provided at law or in equity.
14.4 AMENDMENTS. This Agreement cannot be changed orally and no amendment
to this Agreement shall be effective unless evidenced by an instrument in
writing executed by the parties hereto.
14.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of which
shall be deemed an original but all of which together shall constitute but one
and the same instrument.
14.6 SEVERABILITY. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions shall not be affected or
impaired thereby.
14.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable by
either party hereto without the written consent of the other party hereto.
14.8 HEADINGS. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered in its name and on its behalf by its representatives
thereunto duly authorized, all as of the day and year first above written.
ATTEST: CULLEN FUNDS TRUST
______________________________ By:_____________________________
ATTEST: FIRSTAR BANK, N.A.
______________________________ By:____________________________
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of ______,
2000, by and between Cullen Funds Trust, a Delaware business trust (hereinafter
referred to as the "Trust") and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as "FMFS").
WHEREAS, the Trust is an open-end management investment company which
is registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of providing fund administration services for the
benefit of its customers; and
WHEREAS, the Trust desires to retain FMFS to act as Administrator for
each series of the Trust listed on Exhibit A attached hereto, (each hereinafter
referred to as a "Fund"), as may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Trust hereby appoints FMFS as Administrator of the Trust on the terms and
conditions set forth in this Agreement, and FMFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Supply:
a. Corporate secretarial services
b. Office facilities (which may be in FMFS's or its affiliate's
own offices)
c. Non-investment-related statistical and research data as needed
3. Coordinate board communication by:
a. Establish meeting agendas
b. Preparing board reports based on financial and administrative
data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and officer
liability coverage, and making the necessary SEC filings
relating thereto
e. Preparing minutes of meetings of the board and shareholders
f. Recommend dividend declarations to the Board, prepare and
distribute to appropriate parties notices announcing
declaration of dividends and other distributions to
shareholders
g. Provide personnel to serve as officers of the Trust if so
elected by the Board and attend Board meetings to present
materials for Board review
4. Audits
a. Prepare appropriate schedules and assist independent auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
5. Assist in overall operations of the Fund
6. Pay Fund expenses upon written authorization from the Trust
7. Monitor arrangements under shareholder services or similar plan
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements,
including: 1) Asset diversification tests 2) Total
return and SEC yield calculations 3) Maintenance of
books and records under Rule 31a-3 4) Code of Ethics
for the disinterested trustees of the Fund
b. Monitor Fund's compliance with the policies and investment
limitations of the Trust as set forth in its Prospectus and
Statement of Additional Information
c. Maintain awareness of applicable regulatory and
operational service issues and recommend dispositions
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings relating
to the registration of the securities of the Trust so as to
enable the Trust to make a continuous offering of its shares in
all states
b. Monitor status and maintain registrations in each state
c. Provide information regarding material developments in state
securities regulation
3. SEC Registration and Reporting
a. Assist Trust counsel in updating Prospectus and Statement of
Additional Information and in preparing proxy statements and
Rule 24f-2 notices
b. Prepare annual and semiannual reports, Form N-SAR filings and
Rule 24f-2 notices
c. Coordinate the printing, filing and mailing of publicly
disseminated Prospectuses and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
f. Monitor sales of each Fund's shares and ensure that such shares
are properly registered with the SEC and the appropriate state
authorities
g. File Rule 24f-2 notices
4. IRS Compliance
a. Monitor Company's status as a regulated investment
company under Subchapter M, including without limitation,
review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by Fund's Prospectus and Statement
of Additional Information;
2. Prepare financial reports for officers, shareholders, tax
authorities, performance reporting companies, the board, the SEC,
and independent auditors;
3. Supervise the Company's Custodian and Trust Accountants in the
maintenance of the Company's general ledger and in the preparation of
the Fund's financial statements, including oversight of expense
accruals and payments, of the determination of net asset value of the
Company's net assets and of the Company's shares, and of the
declaration and payment of dividends and other distributions to
shareholders;
4. Compute the yield, total return and expense ratio of each class of
each Portfolio, and each Portfolio's portfolio turnover rate; and
5. Monitor the expense accruals and notify Trust management of any
proposed adjustments.
6. Prepare monthly financial statements, which will include without
limitation the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses
7. Prepare quarterly broker security transaction summaries.
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and
state tax returns including, without limitation, Forms 1120/8610
with any necessary schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to trustees and other
service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
3. COMPENSATION
The Trust, on behalf of the Fund, agrees to pay FMFS for the performance of
the duties listed in this Agreement, the fees and out-of-pocket expenses as
set forth in the attached Exhibit A. Notwithstanding anything to the
contrary, amounts owed by the Trust to FMFS shall only be paid out of the
assets and property of the particular Fund involved.
These fees may be changed from time to time, subject to mutual written
Agreement between the Trust and FMFS.
The Trust agrees to pay all fees and reimbursable expenses within ten (10)
business days following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its duties under
this Agreement. FMFS shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with matters to
which this Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond FMFS's
control, except a loss arising out of or relating to FMFS's refusal or
failure to comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance of its
duties under this Agreement. Notwithstanding any other provision of this
Agreement, if FMFS has exercised reasonable care in the performance of its
duties under this Agreement, the Trust shall indemnify and hold harmless FMFS
from and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any and every
nature (including reasonable attorneys' fees) which FMFS may sustain or incur
or which may be asserted against FMFS by any person arising out of any action
taken or omitted to be taken by it in performing the services hereunder,
except for any and all claims, demands, losses, expenses, and liabilities
arising out of or relating to FMFS's refusal or failure to comply with the
terms of this Agreement or from bad faith, negligence or from willful
misconduct on its part in performance of its duties under this Agreement,
(i) in accordance with the foregoing standards, or (ii) in reliance upon any
written or oral instruction provided to FMFS by any duly authorized officer
of the Trust, such duly authorized officer to be included in a list of
authorized officers furnished to FMFS and as amended from time to time
in writing by resolution of the Board of Trustees of the Trust.
FMFS shall indemnify and hold the Trust harmless from and against any
and all claims, demands, losses, expenses, and liabilities whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which the Trust may sustain or incur or which may be asserted
against the Trust by any person arising out of any action taken or omitted to be
taken by FMFS as a result of FMFS's refusal or failure to comply with the terms
of this Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, FMFS shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond FMFS's control. FMFS will make every reasonable effort to restore any
lost or damaged data and correct any errors resulting from such a breakdown at
the expense of FMFS. FMFS agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled to
inspect FMFS's premises and operating capabilities at any time during regular
business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and
it is further understood that the indemnitee will use all
reasonable care to notify the indemnitor promptly concerning
any situation which presents or appears likely to present the
probability of a claim for indemnification. The indemnitor
shall have the option to defend the indemnitee against any
claim which may be the subject of this indemnification. In the
event that the indemnitor so elects, it will so notify the
indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which
it shall seek indemnification under this section. The
indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked to
indemnify the indemnitee except with the indemnitor's prior
written consent.
C.FMFS is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument of
the Trust and agrees that obligations assumed by the Trust
pursuant to this Agreement shall be limited in all cases to the
Trust and its assets, and if the liability relates to one or
more series, the obligations hereunder shall be limited to the
respective assets of such series. FMFS further agrees that it
shall not seek satisfaction of any such obligation from the
shareholder or any individual shareholder of a series of the
Trust, nor from the Trustees or any individual Trustee of the
Trust.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and employees to
treat confidentially and as proprietary information of the Trust all records
and other information relative to the Trust and prior, present, or potential
shareholders of the Trust (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of
its responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Trust, which approval shall not be
unreasonably withheld and may not be withheld where FMFS may be exposed to
civil or criminal contempt proceedings for failure to comply, when requested
to divulge such information by duly constituted authorities, or when so
requested by the Trust.
6. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will continue
in effect for a period of three years. During the initial three year term of
this Agreement, if the Trust terminates any services with FMFS, the Trust
agrees to compensate Firstar an amount equal to the fees remaining under the
initial three year Agreement. Subsequent to the initial three year term, this
Agreement may be terminated by either party upon giving ninety (90) days
prior written notice to the other party or such shorter period as is mutually
agreed upon by the parties. However, this Agreement may be amended by mutual
written consent of the parties.
7. RECORDS
FMFS shall keep records relating to the services to be performed hereunder,
in the form and manner, and for such period as it may deem advisable and is
agreeable to the Trust but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act
and the rules thereunder. FMFS agrees that all such records prepared or
maintained by FMFS relating to the services to be performed by FMFS hereunder
are the property of the Trust and will be preserved, maintained, and made
available in accordance with such section and rules of the 1940 Act and will
be promptly surrendered to the Trust on and in accordance with its request.
8. GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Wisconsin. However,
nothing herein shall be construed in a manner inconsistent with the 1940 Act
or any rule or regulation promulgated by the Securities and Exchange
Commission thereunder.
9. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the
Trust by written notice to FMFS, FMFS will promptly, upon such
termination and at the expense of the Trust, transfer to such successor
all relevant books, records, correspondence, and other data established
or maintained by FMFS under this Agreement in a form reasonably
acceptable to the Trust (if such form differs from the form in which
FMFS has maintained, the Trust shall pay any expenses associated with
transferring the data to such form), and will cooperate in the transfer
of such duties and responsibilities, including provision for assistance
from FMFS's personnel in the establishment of books, records, and other
data by such successor.
10.NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS to act
as agent for the other party to this Agreement, or to conduct business in the
name of, or for the account of the other party to this Agreement.
11.DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FMFS, shall furnish to FMFS the data
necessary to perform the services described herein at times and in such form
as mutually agreed upon if FMFS is also acting in another capacity for the
Trust, nothing herein shall be deemed to relieve FMFS of any of its
obligations in such capacity.
12.NOTICES
Notices of any kind to be given by either party to the other party shall be
in writing and shall be duly given if mailed or delivered as follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
Cullen Funds Trust
Attn: President
645 Fifth Avenue
New York, NY 10022
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
CULLEN FUNDS TRUST FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of _____,
2000, by and between Cullen Funds Trust, a Delaware business trust (hereinafter
referred to as the "Trust") and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as the "FMFS").
WHEREAS, the Trust is an open-end management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of administering transfer and dividend disbursing
agent functions for the benefit of its customers; and
WHEREAS, the Trust desires to retain FMFS to provide transfer and
dividend disbursing agent services to each series of the Trust listed on Exhibit
A attached hereto, (each hereinafter referred to as a "Fund") as may be amended
from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF TRANSFER AGENT
The Trust hereby appoints FMFS as Transfer Agent of the Trust on the
terms and conditions set forth in this Agreement, and FMFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
FMFS shall perform all of the customary services of a transfer agent and
dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of shares;
B. Process purchase orders with prompt delivery, where
appropriate, of payment and supporting documentation to the Trust's
custodian, and issue the appropriate number of uncertificated shares
with such uncertificated shares being held in the appropriate shareholder
account;
C. Arrange for issuance of shares obtained through transfers of funds from
shareholders' accounts at financial institutions and arrange for the
exchange of shares for shares of other eligible investment companies, when
permitted by Prospectus.
D. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Trust's custodian;
E. Pay monies upon receipt from the Trust's custodian, where relevant,
in accordance with the instructions of redeeming shareholders;
F. Process transfers of shares in accordance with the shareholder's
instructions;
G. Process exchanges between funds and/or classes of shares of funds both
within the same family of funds and with the Firstar Money Market Fund, if
applicable;
H. Prepare and transmit payments for dividends and distributions declared
by the Trust with respect to the Fund, after deducting any amount
required to be withheld by any applicable laws, rules and regulations
and in accordance with shareholder instructions;
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic
investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain, pursuant to
Rule 17ad-10(e) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), a record of the total number of shares
of the Fund which are authorized, issued and outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive and
tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders;
N. Provide shareholder account information upon request and prepare
and mail confirmations and statements of account to shareholders
for all purchases, redemptions and other confirmable transactions as
agreed upon with the Trust;
O. Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate Federal
authorities any taxes to be withheld on dividends and
distributions paid by the Trust, all as required by applicable Federal tax
laws and regulations;
P. Provide a Blue Sky System which will enable the Trust to monitor the total
number of shares of the Fund sold in each state. In addition, the Trust or
its agent, including FMFS, shall identify to FMFS in writing those
transactions and assets to be treated as exempt from the Blue Sky
reporting for each state. The responsibility of FMFS for the Company's
Blue Sky state registration status is solely limited to the initial
compliance by the Trust and the reporting of such transactions to the
Trust or its agent;
Q. Answer correspondence from shareholders, securities brokers and others
relating to FMFS's duties hereunder and such other correspondence as may
from time to time be mutually agreed upon between FMFS and the Trust.
Reimburse the Fund each month for all material losses resulting from "as
of" processing errors for which FMFS is responsible in accordance with the "as
of" processing guidelines set forth in the attached Exhibit B.
3. COMPENSATION
The Trust agrees to pay FMFS for the performance of the duties listed in
this Agreement as set forth on Exhibit A attached hereto; the fees and
out-of-pocket expenses include, but are not limited to the following: printing,
postage, forms, stationery, record retention (if requested by the Trust),
mailing, insertion, programming (if requested by the Trust), labels, shareholder
lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Trust and FMFS.
The Trust agrees to pay all fees and reimbursable expenses within ten (10)
business days following the receipt of the billing notice.
Notwithstanding anything to the contrary, amounts owed by the Trust to FMFS
shall only be paid out of assets and property of the particular Fund involved.
4. REPRESENTATIONS OF FMFS
FMFS represents and warrants to the Trust that:
A. It is a limited liability corporation duly organized, existing and in
good standing under the laws of Wisconsin;
B. It is a registered transfer agent under the Exchange Act.
C. It is duly qualified to carry on its business in the State of Wisconsin;
D. It is empowered under applicable laws and by its charter and bylaws to
enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to authorize it
to enter and perform this Agreement;
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement; and
G. It will comply with all applicable requirements of the Securities Act of
1933, as amended, and the Exchange Act, the 1940 Act, and any laws, rules,
and regulations of governmental authorities having jurisdiction.
5. REPRESENTATIONS OF THE TRUST
The Trust represents and warrants to FMFS that:
A. The Trust is an open-ended non diversified investment company under the
1940 Act;
B. The Trust is a business trust organized, existing, and in good standing
under the laws of Delaware;
C. The Trust is empowered under applicable laws and by its Agreement and
Declaration of Trust and Bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Agreement and Declaration
of Trust have been taken to authorize it to enter into and perform this
Agreement;
E. The Trust will comply with all applicable requirements of the
Securities Act, the Exchange Act, the 1940 Act, and any laws, rules and
regulations of governmental authorities having jurisdiction; and
F. A registration statement under the Securities Act will be made effective
and will remain effective, and appropriate state securities law filings
have been made and will continue to be made, with respect to all shares of
the Trust being offered for sale.
6. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
FMFS shall exercise reasonable care in the performance of its duties under
this Agreement. FMFS shall not be liable for any error of judgment or mista ke
of law or for any loss suffered by the Trust in connection with matters to which
this Agreement relates, including losses resulting from mechanical breakdowns or
the failure of communication or power supplies beyond FMFS's control, except a
loss arising out of or relating to the Agent's refusal or failure to comply with
the terms of this Agreement or from bad faith, negligence, or willful misconduct
on its part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, if FMFS has exercised
reasonable care in the performance of its duties under this Agreement, the Trust
shall indemnify and hold harmless FMFS from and against any and all claims,
demands, losses, expenses, and liabilities (whether with or without basis in
fact or law) of any and every nature (including reasonable attorneys' fees)
which FMFS may sustain or incur or which may be asserted against FMFS by any
person arising out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims, demands,
losses, expenses, and liabilities arising out of or relating to FMFS's refusal
or failure to comply with the terms of this Agreement or from bad faith,
negligence or from willful misconduct on its part in performance of its duties
under this Agreement, (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to FMFS by any duly
authorized officer of the Trust, such duly authorized officer to be included in
a list of authorized officers furnished to FMFS and as amended from time to time
in writing by resolution of the Board of Trustees of the Trust.
FMFS shall indemnify and hold the Trust harmless from and against any and all
claims, demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable attorneys'
fees) which the Trust may sustain or incur or which may be asserted against the
Trust by any person arising out of any action taken or omitted to be taken by
FMFS as a result of FMFS's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication or power
supplies beyond its control, FMFS shall take all reasonable steps to minimize
service interruptions for any period that such interruption continues beyond
FMFS's control. FMFS will make every reasonable effort to restore any lost or
damaged data and correct any errors resulting from such a breakdown at the
expense of FMFS. FMFS agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled to
inspect FMFS's premises and operating capabilities at any time during regular
business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and correct
administrative errors at its own expense.
In order that the indemnification provisions contained in this section shall
apply, it is understood that if in any case the indemnitor may be asked to
indemnify or hold the indemnitee harmless, the indemnitor shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the indemnitee will use all reasonable care to
notify the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for indemnification. The
indemnitor shall have the option to defend the indemnitee against any claim
which may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the indemnitee
shall in such situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall in no case
confess any claim or make any compromise in any case in which the indemnitor
will be asked to indemnify the indemnitee except with the indemnitor's prior
written consent.
FMFS is hereby expressly put on notice of the limitation of shareholder
liability as set forth in the Trust Instrument of the Trust and agrees that
obligations assumed by the Trust pursuant to this Agreement shall be limited in
all cases to the Trust and its assets, and if the liability relates to one or
more series, the obligations hereunder shall be limited to the respective assets
of such series. FMFS further agrees that it shall not seek satisfaction of any
such obligation from the shareholder or any individual shareholder of a series
of the Trust, nor from the Trustees or any individual Trustee of the Trust.
7. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and prior, present, or potential
shareholders (and clients of said shareholders) and not to use such records and
information for any purpose other than the performance of its responsibilities
and duties hereunder, except after prior notification to and approval in writing
by the Trust, which approval shall not be unreasonably withheld and may not be
withheld where FMFS may be exposed to civil or criminal contempt proceedings for
failure to comply after being requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
8. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will
continue in effect for a period of three years. During the initial three year
term of this Agreement, if the Trust terminates any services with FMFS, the
Trust agrees to compensate Firstar an amount equal to the fees remaining under
the initial three year Agreement. Subsequent to the initial three year term,
this Agreement may be terminated by either party upon giving ninety (90) days
prior written notice to the other party or such shorter period as is mutually
agreed upon by the parties. However, this Agreement may be amended by mutual
written consent of the parties.
9. RECORDS
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Trust but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
The Investment Company Act of 1940 as amended (the "Investment Company Act"),
and the rules thereunder. The Agent agrees that all such records prepared or
maintained by The Agent relating to the services to be performed by the Agent
hereunder are the property of the Trust and will be preserved, maintained, and
made available with such section and rules of the Investment Company Act and
will be promptly surrendered to the Trust on and in accordance with its request.
10.GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Wisconsin. However,
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the Securities and Exchange Commission
thereunder.
11.DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
FMFS's duties or responsibilities hereunder is designated by the Trust by
written notice to FMFS, FMFS will promptly, upon such termination and at the
expense of the Trust, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by FMFS under this
Agreement in a form reasonably acceptable to the Trust (if such form differs
from the form in which FMFS has maintained, the Trust shall pay any expenses
associated with transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from FMFS's personnel in the establishment of books, records, and other data by
such successor.
12.NOTICES
Notices of any kind to be given by either party to the other party shall be
in writing and shall be duly given if mailed or delivered as follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
Cullen Funds Trust
Attn: President
645 Fifth Avenue
New York, NY 10022
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
CULLEN FUNDS TRUST FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:_____________________________
EXHIBIT B
FIRSTAR MUTUAL FUND SERVICES, LLC AS OF PROCESSING POLICY
Firstar Mutual Fund Services, LLC (FMFS) will reimburse the Fund(s) for any
net material loss that may exist on the Fund(s) books and for which FMFS is
responsible, at the end of each calendar month. "Net Material Loss" shall be
defined as any remaining loss, after netting losses against any gains, which
impacts a Fund's net asset value per share by more than 1/2 cent. Gains and
losses will be reflected on the Fund's daily share sheet, and the Fund will be
reimbursed for any net material loss on a monthly basis. FMFS will reset the as
of ledger each calendar month so that any losses which do not exceed the
materiality threshold of 1/2 cent will not be carried forward to the next
succeeding month. FMFS will notify the advisor to the Fund(s) on the daily share
sheet of any losses for which the advisor may be held accountable.
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of _____,
2000, by and between Cullen Funds Trust, a Delaware business trust (hereinafter
referred to as the "Trust") and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as "FMFS").
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is a limited liability corporation and, among other
things, is in the business of providing mutual fund accounting services to
investment companies; and
WHEREAS, the Trust desires to retain FMFS to provide accounting services
to each series of the Trust listed on Exhibit A attached hereto, (each
hereinafter referred to as a "Fund"), as it may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and FMFS agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT
The Trust hereby appoints FMFS as Fund Accountant of the Trust on the
terms and conditions set forth in this Agreement, and FMFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis
using security trade information communicated from the investment
manager.
(2) For each valuation date, obtain prices from a pricing
source approved by the Board of Trustees of the Trust and apply
those prices to the portfolio positions. For those securities
where market quotations are not readily available, the Board of
Trustees of the Trust shall approve, in good faith, the method
for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of
each valuation date and calculate gross earnings on investments
for the accounting period.
(4) Determine gain/loss on security sales and identify
them as, short-term or long-term; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Trust as to methodology, rate or
dollar amount.
(2) Record payments for Fund expenses upon receipt of
written authorization from the Trust.
(3) Account for Fund expenditures and maintain expense
accrual balances at the level of accounting detail, as agreed
upon by FMFS and the Trust.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share activity
as reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the
Trust.
(3) Determine net investment income (earnings) for the
Fund as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each valuation
date.
(4) Maintain a general ledger and other accounts, books,
and financial records for the Fund in the form as agreed upon.
(5) Determine the net asset value of the Fund according to
the accounting policies and procedures set forth in the Fund's
Prospectus.
(6) Calculate per share net asset value, per share net
earnings, and other per share amounts reflective of Fund
operations at such time as required by the nature and
characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share
price for each valuation date to parties as agreed upon from time
to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment
portfolio of the Fund to support the tax reporting required for
IRS-defined regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales
using the tax lot relief method designated by the Trust.
(4) Provide the necessary financial information to support
the taxable components of income and capital gains distributions
to the transfer agent to support tax reporting to the
shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the Fund's accounting
records available to the Trust, the Securities and Exchange
Commission, and the outside auditors.
(2) Maintain accounting records according to the
1940 Act and regulations provided thereunder
F. FMFS will perform the following accounting functions on a
daily basis:
(1) Reconcile cash and investment balances of each
Portfolio with the Custodian, and provide the Advisor with the
beginning cash balance available for investment purposes;
(2) Transmit or mail a copy of the portfolio valuation to
the Advisor;
(3) Review the impact of current day's activity on a per
share basis, review changes in market value.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings;
(2) Supply various Trust, Portfolio and class statistical
data as requested on an ongoing basis.
3. PRICING OF SECURITIES
For each valuation date, obtain prices from a pricing source selected by FMFS
but approved by the Board of Trustees and apply those prices to the portfolio
positions of the Fund. For those securities where market quotations are not
readily available, the Company's Board of Trustees shall approve, in good faith,
the method for determining the fair value for such securities.
If the Trust desires to provide a price which varies from the pricing source,
the Trust shall promptly notify and supply FMFS with the valuation of any such
security on each valuation date. All pricing changes made by the Trust will be
in writing and must specifically identify the securities to be changed by CUSIP,
name of security, new price or rate to be applied, and, if applicable, the time
period for which the new price(s) is/are effective.
4. CHANGES IN ACCOUNTING PROCEDURES
Any resolution passed by the Board of Trustees of the Trust that affects
accounting practices and procedures under this Agreement shall be effective upon
written receipt and acceptance by the FMFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
FMFS reserves the right to make changes from time to time, as it deems
advisable, relating to its services, systems, programs, rules, operating
schedules and equipment, so long as such changes do not adversely affect the
service provided to the Trust under this Agreement.
6. COMPENSATION
FMFS shall be compensated for providing the services set forth in this Agreement
in accordance with the Fee Schedule attached hereto as Exhibit A and as mutually
agreed upon and amended from time to time. The Trust agrees to pay all fees and
reimbursable expenses within ten (10) business days following the receipt of the
billing notice. Notwithstanding anything to the contrary, amounts owed by the
Trust to FMFS shall only be paid out of the assets and property of the
particular Fund involved.
7. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FMFS's control, except a loss
arising out of or relating to FMFS's refusal or failure to comply with
the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its duties
under this Agreement, the Trust shall indemnify and hold harmless FMFS
from and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any and
every nature (including reasonable attorneys' fees) which FMFS may
sustain or incur or which may be asserted against FMFS by any person
arising out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims,
demands, losses, expenses, and liabilities arising out of or relating
to FMFS's refusal or failure to comply with the terms of this Agreement
or from bad faith, negligence or from willful misconduct on its part in
performance of its duties under this Agreement, (i) in accordance with
the foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to FMFS by any duly authorized officer of the
Trust, such duly authorized officer to be included in a list of
authorized officers furnished to FMFS and as amended from time to time
in writing by resolution of the Board of Trustees of the Trust.
FMFS shall indemnify and hold the Trust harmless from and against
any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Trust may sustain or
incur or which may be asserted against the Trust by any person arising
out of any action taken or omitted to be taken by FMFS as a result of
FMFS's refusal or failure to comply with the terms of this Agreement,
its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FMFS's control. FMFS will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FMFS. FMFS
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency use
of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Trust shall be entitled
to inspect FMFS's premises and operating capabilities at any time
during regular business hours of FMFS, upon reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee harmless,
the indemnitor shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further
understood that the indemnitee will use all reasonable care to notify
the indemnitor promptly concerning any situation which presents or
appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim which may be the subject of this
indemnification. In the event that the indemnitor so elects, it will so
notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. Indemnitee shall in no
case confess any claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee except with the
indemnitor's prior written consent.
C. FMFS is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument of the Trust
and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the Trust and its assets,
and if the liability relates to one or more series, the obligations
hereunder shall be limited to the respective assets of such series.
FMFS further agrees that it shall not seek satisfaction of any such
obligation from the shareholder or any individual shareholder of a
series of the Trust, nor from the Trustees or any individual Trustee of
the Trust.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and prior, present, or potential
shareholders of the Trust (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where FMFS may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Trust.
9. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and will continue in
effect for a period of three years. During the initial three year term of this
Agreement, if the Trust terminates any services with FMFS, the Trust agrees to
compensate Firstar an amount equal to the fees remaining under the initial three
year Agreement. Subsequent to the initial three year term, this Agreement may be
terminated by either party upon giving ninety (90) days prior written notice to
the other party or such shorter period as is mutually agreed upon by the
parties. However, this Agreement may be amended by mutual written consent of the
parties.
10. RECORDS
FMFS shall keep records relating to the services to be performed hereunder, in
the form and manner, and for such period as it may deem advisable and is
agreeable to the Trust but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act,
and the rules thereunder. FMFS agrees that all such records prepared or
maintained by FMFS relating to the services to be performed by FMFS hereunder
are the property of the Trust and will be preserved, maintained, and made
available in accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Trust on and in accordance with its request.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed in a manner inconsistent
with the 1940 Act or any rule or regulation promulgated by the SEC thereunder.
12. DUTIES IN THE EVENT OF TERMINATION
In the event that in connection with termination, a successor to any of FMFS's
duties or responsibilities hereunder is designated by the Trust by written
notice to FMFS, FMFS will promptly, upon such termination and at the expense of
the Trust transfer to such successor all relevant books, records, correspondence
and other data established or maintained by FMFS under this Agreement in a form
reasonably acceptable to the Trust (if such form differs from the form in which
FMFS has maintained the same, the Trust shall pay any expenses associated with
transferring the same to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from FMFS's
personnel in the establishment of books, records and other data by such
successor.
13. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS to act as
agent for the other party to this Agreement, or to conduct business in the name
of, or for the account of the other party to this Agreement.
14. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FMFS, shall furnish to FMFS the data
necessary to perform the services described herein at such times and in such
form as mutually agreed upon. If FMFS is also acting in another capacity for the
Trust, nothing herein shall be deemed to relieve FMFS of any of its obligations
in such capacity.
15. NOTIFICATION OF ERROR
The Trust will notify FMFS of any balancing or control error caused by FMFS the
later of: within three (3) business days after receipt of any reports rendered
by FMFS to the Trust; within three (3) business days after discovery of any
error or omission not covered in the balancing or control procedure, or within
three (3) business days of receiving notice from any shareholder.
16. NOTICES
Notices of any kind to be given by either party to the other party shall be in
writing and shall be duly given if mailed or delivered as follows: Notice to
FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
and notice to the Trust shall be sent to:
Cullen Funds Trust
Attn: President
645 Fifth Avenue
New York, NY 10022
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the day
and year first written above.
CULLEN FUNDS TRUST FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: __________________________ Attest:_____________________________
