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EXHIBIT H.1
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is made as of this
July 1, 1998 between TIME HORIZON FUNDS, a Delaware business trust
(herein called the "Company"), and Bank of America National Trust and Savings
Association (herein called the "Administrator").
WHEREAS, the Company is registered as an open-end management
investment company under the Investment Company Act of 1940 (the "1940 Act");
and
WHEREAS, the Company wishes to retain the Administrator under this
Agreement to render investment advisory and management services to the
portfolios of the Company known as Time Horizon 1, Time Horizon 2, Time Horizon
3 and Time Horizon 4 (the "Initial Fund(s)", together with any other Company
portfolios which may be established later and served by the Administrator
hereunder, being herein referred to collectively as the "Funds" and individually
as a "Fund"); and
WHEREAS, pursuant to an Investment Advisory Agreement of even date
herewith (the "Investment Advisory Agreement") between the Company and Bank of
America National Trust and Savings Association (the "Adviser"), the Company has
retained the Adviser to provide investment advisory services to each Fund; and
WHEREAS, pursuant to a Distribution Agreement dated September 15,
1997 (the "Distribution Agreement") between the Company and Provident
Distributors, Inc. (the "Distributor"), the Company has retained the Distributor
to provide for the sale and distribution of shares of beneficial interest of
each Fund (herein collectively called "Shares"); and
WHEREAS, the Company desires to retain the Administrator to provide
management and administrative services for the Funds, and the Administrator is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
1. Appointment of Administrator.
(A) The Company hereby appoints the Administrator as
manager of each Fund on the terms and for the period set forth in this Agreement
and the Administrator hereby accepts such appointment and agrees to perform the
services and duties set forth herein on the terms herein provided. The
Administrator may, in its discretion, provide such services through its own
employees or the employees of one or more affiliated companies that are
qualified to provide such services to the Trust under applicable law and are
under the common control of BankAmerica Corporation, provided (i) that all
persons, when providing services hereunder, are functioning as part of an
organized group of persons, and (ii) that such organized group of persons is
managed at all times by authorized officers of the Administrator.
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(B) In the event that the Company establishes one or more
portfolios other than the Initial Fund(s) with respect to which it desires to
retain the Administrator to render investment advisory and management services
hereunder, it shall notify the Administrator in writing. If the Administrator is
willing to render such services, it shall notify the Company in writing
whereupon such portfolio or portfolios shall become a Fund or Funds hereunder.
2. Administrative Services and Duties. Subject to the supervision
and control of the Company's Board of Trustees, the Administrator shall provide
to the Company facilities, equipment, statistical and research data, clerical,
accounting and bookkeeping services, internal auditing and legal services, and
personnel to carry out all management services required for operation of the
business and affairs of the Funds other than those services to be performed by
the Adviser pursuant to the Investment Advisory Agreement, those services to be
performed by the Distributor pursuant to the Distribution Agreement, those
services to be performed by PNC Bank, N.A., pursuant to the Company's Custody
Agreement, those services to be performed by PFPC, Inc. pursuant to the
Company's Transfer Agency Agreement, those services to be provided by PFPC, Inc.
pursuant to the Company's Fund Accounting Agreement and those services normally
performed by the Company's counsel and auditors.
(A) The Administrator's oversight responsibilities shall include:
(1) Overseeing the performance of PNC Bank, N.A. (the
"Custodian") under the Custody Agreement with respect to the Funds; and
(2) Overseeing the performance of PFPC, Inc. (the "Transfer
Agent") under the Transfer Agency Agreement with respect to the Funds.
(B) The Administrator's other responsibilities shall include
without limitation the following services:
(1) Providing a facility to receive purchase and redemption
orders for Shares via toll-free telephone lines;
(2) Making available information concerning each Fund to its
shareholders; distributing written communications to each Fund's shareholders
such as periodic listings of each Fund's securities, annual and semi-annual
reports, and prospectuses and supplements thereto; and handling shareholder
problems and calls relating to administrative matters; and
(3) Providing and supervising the services of employees
whose principal responsibility and function shall be to preserve and
strengthen each Fund's relationships with its shareholders.
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(C) The Administrator shall assure that persons are available to
transmit redemption requests for Shares to the Company's Transfer Agent as
promptly as practicable.
(D) The Administrator shall assure that persons are available to
transmit orders accepted for the purchase of Shares to the Transfer Agent of the
Company as promptly as practicable.
(E) The Administrator shall participate in the periodic updating of
the Funds' prospectuses and statements of additional information and shall
accumulate information for and, subject to approval by the Company's Treasurer
and legal counsel, coordinate the preparation, filing, printing and
dissemination of reports to the Funds' shareholders and the Securities and
Exchange Commission (the "Commission"), including but not limited to annual
reports and semi-annual reports on Form N-SAR, notices pursuant to Rule 24f-2
and proxy materials pertaining to the Funds.
(F) The Administrator shall calculate dividends and capital gain
distributions to be paid by each Fund in conformity with subchapter M of the
Internal Revenue Code of 1986, as amended.
(G) The Administrator shall pay all costs and expenses of maintaining
the offices of the Company, wherever located, and shall arrange for payment by
the Company of all expenses payable by the Company.
(H) The Administrator, after consultation with legal counsel for the
Company, shall determine the jurisdictions in which the Shares shall be
registered or qualified for sale and, in connection therewith, shall be
responsible for the maintenance of the registration or qualification of the
Shares for sale under the securities laws of any state. Payment of Share
registration fees and any fees for qualifying or continuing the qualification of
the Company shall be made by the Company.
(I) The Administrator shall maintain such other books and records
with respect to the Funds as may be required by law or may be required for the
proper operation of the business and affairs of the Funds, other than those
required to be maintained under the Fund Accounting Agreement and by the Adviser
under the Investment Advisory Agreement. Without limiting the foregoing, the
Administrator shall be responsible for the proper maintenance of the records to
be maintained by it, throughout the term of this Agreement.
(J) The Administrator shall prepare the Funds' federal, state and
local income tax returns.
(K) The Administrator shall prepare and, subject to approval of the
Company's Treasurer, disseminate to the Company's trustees each Fund's quarterly
financial statements and schedules of investments, and shall prepare such other
reports relating to the business and affairs of the Funds (not otherwise
appropriately prepared by the Company's counsel, auditors or other Company
service providers) as the officers and trustees of the Company may from time to
time reasonably request in connection with performance of their duties.
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(L) The Administrator shall assist the Custodian, Transfer Agent,
counsel and auditors as required to carry out the business and operations of the
Funds.
3. Compliance with Governing Instruments and Laws. In performing its
duties as Administrator for the Funds, the Administrator shall act in conformity
with the Company's Declaration of Trust, Bylaws, prospectuses and statements of
additional information, and the instructions and directions of the Board of
Trustees of the Company. In addition, the Administrator shall conform to and
comply with the requirements of the 1940 Act, the Rules and Regulations of the
Commission, and all other applicable federal or state laws and regulations.
4. Services Not Exclusive. The Administrator shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Trustees from time to
time, have no authority to act for or represent the Company in any way or
otherwise be deemed its agent. The services furnished by the Administrator
hereunder are not deemed exclusive, and the Administrator shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Administrator hereby agrees that all records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any such records upon the Company's request.
The Administrator further agrees to preserve for the periods prescribed by Rule
3la-2 under the 1940 Act the records required to be maintained by Rule 3la-1
under the 1940 Act.
6. Subcontractors. It is understood that the Administrator may from time
to time employ or associate with itself such person or persons as the
Administrator may believe to be particularly fitted to assist in the performance
of this Agreement; provided, however, that the compensation of such person or
persons shall be paid by the Administrator and that the Administrator shall be
as fully responsible to the Company for the acts and omissions of any
subcontractor as it is for its own acts and omissions. Without limiting the
generality of the foregoing, it is understood that the Administrator and the
Company have entered into an agreement with the Fund Accountant under which said
institution will provide certain accounting, bookkeeping, pricing and dividend
and distribution calculation services with respect to the Funds at the expense
of the Funds.
7. Expenses Assumed as Administrator. Except as otherwise stated in this
Agreement, the Administrator shall pay all expenses incurred by it in performing
its services and duties hereunder as Administrator including the cost of any
independent pricing service used in connection with the Funds. The Company shall
bear other expenses incurred in the operation of the Funds, including without
limitation taxes, interest, brokerage fees and commissions, if any, fees of
trustees who are not officers, directors, partners, employees or holders of 5
percent or more of the outstanding voting securities of the Administrator or any
of its affiliates, Commission fees and state blue sky registration and
qualification fees, charges of custodians, transfer and dividend disbursing
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agents' fees, certain insurance premiums, outside auditing and legal expenses,
costs of maintaining trust existence, costs of preparing and printing
prospectuses or any supplements or amendments thereto necessary for the
continued effective registration of the Shares under federal or state securities
laws, costs of printing and distributing any prospectus, supplement or amendment
thereto for existing shareholders of the Funds described therein, costs of
shareholders' reports and meetings, and any extraordinary expenses. It is
understood that certain advertising, marketing, shareholder servicing,
administration and/or distribution expenses to be incurred in connection with
the Shares may be paid by the Company as provided in any plan which may in the
sole discretion of the Company be adopted in accordance with Rule 12b-1 under
the 1940 Act, and that such expenses shall be paid apart from any fees paid
under this Agreement.
8. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Company shall pay the Administrator a fee,
computed daily and payable monthly, at the annual rate of .20% of the average
net assets of each Fund. Such fee as is attributable to each Fund shall be a
separate (and not joint or joint and several) obligation of each such Fund.
9. Confidentiality. The Administrator shall treat confidentially and as
proprietary information of the Company all records and other information
relative to the Company and prior or present shareholders or those persons or
entities who respond to the Distributor's inquiries concerning investment in the
Company, and shall not use such records and information for any purpose other
than performance of its responsibilities and duties hereunder or under any other
agreement with the Company except after prior notification to and approval in
writing by the Company, which approval shall not be unreasonably withheld and
may not be withheld where the Administrator 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
Company. Nothing contained herein, however, shall prohibit the Administrator
from advertising to or soliciting the public generally with respect to other
products or services, including, but not limited to, any advertising or
marketing via radio, television, newspapers, magazines or direct mail
solicitation, regardless of whether such advertisement or solicitation may
coincidentally include prior or present Company shareholders or those persons or
entities who have responded to inquiries with respect to the Funds.
10. Limitations of Liability. Subject to the provisions of Section 6
hereof concerning the Administrator's responsibility for the acts and omissions
of persons employed or associated with the Administrator, the Administrator
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Company or by any Fund in connection with the matters to which
this Agreement relates, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or negligence on its part in the performance
of its duties or from reckless disregard by it of its obligations and duties
under this Agreement. Any person, even though also an officer, director,
employee or agent of the Administrator, who may be or become an officer,
director, employee or agent of the Company, shall be deemed, when rendering
services to the Company or to any Fund, or acting on any business of the Company
or of any Fund (other than services or business in connection with the
Administrator's
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duties as Administrator hereunder or under any other agreement with the Company)
to be rendering such services to or acting solely for the Company or Fund and
not as an officer, director, employee or agent or one under the control or
direction of the Administrator even though paid by the Administrator.
The Administrator acknowledges and agrees that the Declaration of Trust
of the Company provides that the Trustees of the Company and the officers of the
Company executing this Agreement on behalf of the Company shall not be
personally bound hereby or liable hereunder, nor shall resort be had to their
private property or the private property of the shareholders of the Company for
the satisfaction of any claim or obligation under this Agreement.
11. Duration or Termination. This Agreement shall become effective as of
the date first written above. This Agreement may be terminated by the Company at
any time with respect to any Fund, without the payment of any penalty, on 60
days' written notice to the Administrator, or by the Administrator at any time,
without the payment of penalty, on 60 days' written notice to the Company.
12. Names. The name "Time Horizon Funds" refers to the trust created and
the trustees, as trustees but not individually or personally, acting from time
to time under a Declaration of Trust dated April 12, 1995, as amended, which is
hereby referred to and a copy of which is on file at the principal office of the
Company. The trustees, officers, employees and agents of the Company shall not
personally be bound by or liable under any written obligation, contract,
instrument, certificate or other interest or undertaking of the Company made by
the trustees or by an officer, employee or agent of the Company, in his or her
capacity as such, nor shall resort be had to their private property for the
satisfaction of any obligation or claim thereunder. All persons dealing with any
series or class of shares of the Company may enforce claims against the Company
only against the assets belonging to such series or class.
13. Notices. Notices of any kind to be given to the Company hereunder by
the Administrator shall be in writing and shall be duly given if mailed or
delivered to the Company at the following:
Time Horizon Funds
c/o PFPC Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxxxxx
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With a copy to:
Xxxxx X. X'Xxxxx, Esq.
Vedder, Price, Xxxxxxx & Kammholz
000 X. XxXxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
or at such other address or to such individual as shall be so specified by the
Company to the Administrator. Notices of any kind to be given to the
Administrator hereunder by the Company shall be in writing and shall be duly
given if mailed or delivered to the Administrator at:
Bank of America National Trust
and Savings Association
Harbor Bldg., 25th Floor
333 So. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
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With a copy to:
Bank of America National Trust
and Savings Association
000 Xxxxxxxxxx Xx., 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxx, Esq.
or at such other address or to such individual as shall be so specified by the
Administrator to the Company.
14. 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. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. Subject to the provisions of Section 12 hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by Delaware law (without
regard to principles of conflicts of law); provided, however, that nothing
herein shall be construed in a manner inconsistent with the 1940 Act or any rule
or regulation of the Commission thereunder.
(Signature Page follows)
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year first
above written.
TIME HORIZON FUNDS
By: /s/ Xxx Xxxxxxxx
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Xxx Xxxxxxxx
Treasurer
Attest:
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(name) Xxxxx X. X'Xxxxx
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Secretary
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ XXXXX X. XXXX
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(name) Xxxxx X. Xxxx
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(title) Executive Vice President
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Attest:
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(name)
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(title)
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