Exhibit (h)(5)
CO-ADMINISTRATION AND ACCOUNTING
SERVICES AGREEMENT
THIS AGREEMENT is made as of January 1, 2009 by and among PNC Global
Investment Servicing (U.S.) Inc., a Massachusetts corporation ("PNC"), Allegiant
Asset Management Company ("Advisor"), a Michigan corporation, Allegiant Funds
and Allegiant Advantage Fund (each a "Fund," and collectively referred to herein
as the "Funds"), each a Massachusetts business trust.
WITNESSETH:
WHEREAS, each of the Funds is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, each of PNC and Advisor are wholly owned, indirect subsidiaries of
PNC Financial Services Group, Inc.; and
WHEREAS, the Funds wish to retain PNC and Advisor to provide
co-administration and accounting services to its investment portfolios listed on
Exhibit A attached hereto and made a part hereof, as such Exhibit A may be
amended from time to time (each a "Portfolio"), and each of PNC and Advisor
wishes to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound hereby the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Funds and any other
person duly authorized by the Funds's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Funds. An
Authorized Person's scope of authority may be limited by setting forth
such limitation in a written document signed by both parties hereto.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Co-Administrators" means PNC and Advisor, collectively, and
"Co-Administrator" means PNC or Advisor, individually.
(f) "Oral Instructions" mean oral instructions received by a
Co-Administrator from an Authorized Person or from a person reasonably
believed by the Co-Administrator to be an Authorized Person. A
Co-Administrator may, in its sole discretion in each separate
instance, consider and rely upon instructions it
1
receives from an Authorized Person via electronic mail as Oral
Instructions.
(g) "SEC" means the Securities and Exchange Commission.
(h) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(i) "Shares" means the shares of beneficial interest of any series or
class of the Funds.
(j) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by a Co-Administrator or (ii) trade
instructions transmitted (and received by a Co-Administrator) by means
of an electronic transaction reporting system access to which requires
use of a password or other authorized identifier. The instructions may
be delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.
2. APPOINTMENT. Each Fund hereby appoints PNC and Advisor to provide such
co-administration and accounting services to each of its Portfolios as are
customarily provided to investment companies in the industry, in accordance
with the terms set forth in Sections 15, 16, 17, 18 and 19 of this
Agreement. Each of PNC and Advisor accepts such appointment by each Fund
and agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. Each Fund has provided or, where applicable, will
provide the Co-Administrators with the following:
(a) at a Co-Administrator's request, certified or authenticated copies of
the resolutions of the Fund's Board of Trustees, approving the
appointment of a Co-Administrator or its affiliates to provide
services to each Portfolio and approving this Agreement;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreement or agreements; and
(d) copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS.
Each Co-Administrator undertakes to comply with all applicable requirements
of the Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to it and the duties to be
performed by it hereunder. Except as specifically set forth herein, a
Co-Administrator assumes no responsibility for such compliance by the Funds
or other entity. In addition, neither Co-Administrator assumes any
responsibility for such compliance by the other Co-Administrator.
2
5. INSTRUCTIONS.
a. Unless otherwise provided in this Agreement, a Co-Administrator shall
act only upon Oral Instructions or Written Instructions.
b. A Co-Administrator shall be entitled to rely upon any Oral Instruction
or Written Instruction it receives from an Authorized Person (or from
a person reasonably believed by a Co-Administrator to be an Authorized
Person) pursuant to this Agreement. A Co-Administrator may assume that
any Oral Instruction or Written Instruction received hereunder is not
in any way inconsistent with the provisions of organizational
documents or this Agreement or of any vote, resolution or proceeding
of the Fund's Board of Trustees or of the Fund's shareholders, unless
and until a Co-Administrator receives Written Instructions to the
contrary.
c. Each Fund agrees to forward to a Co-Administrator Written Instructions
confirming Oral Instructions (except where such Oral Instructions are
given by a Co-Administrator or its affiliates) so that the
Co-Administrator receives the Written Instructions by the close of
business on the same day that such Oral Instructions are received. The
fact that such confirming Written Instructions are not received by the
Co-Administrator or differ from the Oral Instructions shall in no way
invalidate the transactions or enforceability of the transactions
authorized by the Oral Instructions or such Co-Administrator's ability
to rely upon such Oral Instructions.
6. RIGHT TO RECEIVE ADVICE.
a. ADVICE OF THE FUND. If a Co-Administrator is in doubt as to any action
it should or should not take, it may request directions or advice,
including Oral Instructions or Written Instructions, from a Fund.
b. ADVICE OF COUNSEL. If a Co-Administrator shall be in doubt as to any
question of law pertaining to any action it should or should not take,
it may request advice at its own cost (unless, given the matter in
question, the parties agree that such cost should properly be borne by
a Fund) from counsel of its own choosing (who may be counsel for a
Fund, a Fund's investment adviser or either Co-Administrator, at the
option of the Co-Administrator).
c. CONFLICTING ADVICE. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions a Co-Administrator
receives from a Fund and the advice it receives from counsel, a
Co-Administrator may rely upon and follow the advice of counsel. In
the event a Co-Administrator so relies on the advice of counsel, it
shall be responsible for any action or omission on its part in
carrying out such advice which constitutes willful misfeasance, bad
faith, negligence or reckless disregard by such Co-Administrator of
any duties, obligations or responsibilities set forth in this
Agreement.
3
(b) PROTECTION OF THE CO-ADMINISTRATORS. A Co-Administrator shall be
indemnified by each Fund and without liability for any action it takes
or does not take in reliance upon directions or advice or Oral
Instructions or Written Instructions a Co-Administrator receives from
or on behalf of the Fund or from counsel and which a Co-Administrator
believes, in good faith, to be consistent with those directions or
advice and Oral Instructions or Written Instructions. Nothing in this
section shall be construed so as to impose an obligation upon a
Co-Administrator (i) to seek such directions or advice or Oral
Instructions or Written Instructions, or (ii) to act in accordance
with such directions or advice or Oral Instructions or Written
Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of such Co-Administrator's properly
taking or not taking such action. Nothing in this subsection shall
excuse a Co-Administrator when an action or omission on its part in
carrying out such directions, advice, Oral Instructions or Written
Instructions constitutes willful misfeasance, bad faith, negligence or
reckless disregard by such Co-Administrator of any duties, obligations
or responsibilities set forth in this Agreement.
7. RECORDS; VISITS.
(a) The books and records pertaining to the Funds and the Portfolios which
are in the possession or under the control of a Co-Administrator shall
be the property of the Funds. Such books and records shall be prepared
and maintained as required by the 1940 Act and other applicable laws,
rules and regulations. The Funds and Authorized Persons shall have
access to such books and records at all times during the relevant
Co-Administrator's normal business hours. Upon the reasonable request
of a Fund, copies of any such books and records shall be provided by
the relevant Co-Administrator to the Fund or to an Authorized Person,
at the Fund's expense.
(b) The Co-Administrators shall maintain and preserve the following
records:
(i) all books and records with respect to each Portfolio's books of
account;
(ii) records of each Portfolio's securities transactions; and
(iii) all other books and records as are required to be maintained and
preserved pursuant to Rules 31a-1, 31a-2 and 31a-3 under the
1940 Act in connection with the services provided hereunder.
8. CONFIDENTIALITY.
(a) "Confidential Information" means all information provided by
either party (the "Originating Party") and any of its affiliates
to the other party (the "Receiving Party") in connection with
this Agreement. Confidential Information shall include, without
limitation: (i) list(s) of customer names and addresses and other
customer-related information, regardless of whether the
Originating Party's
4
relationship with the customer ceases, including any nonpublic
personal information as defined by federal law, including, but
not limited to, the Xxxxx-Xxxxx-Xxxxxx Act, as it may be amended,
any regulations promulgated thereunder and any other customer
information protected by applicable state law; (ii) any data or
information that is competitively sensitive material, and not
generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finances,
operations, customer relationships, customer profiles, customer
lists, sales estimates, business plans, and internal performance
results relating to the past, present or future business
activities of the Funds, PNC or Advisor, their respective
subsidiaries and affiliated companies and the customers, clients
and suppliers of any of them; (iii) any scientific or technical
information, design, process, procedure, formula, or improvement
that is commercially valuable and secret in the sense that its
confidentiality affords the Funds, PNC or Advisor a competitive
advantage over its competitors; (iv) all confidential or
proprietary concepts, documentation, reports, data,
specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, and trade secrets,
whether or not patentable or copyrightable; and (v) anything
designated as confidential. Notwithstanding the foregoing,
information shall not be subject to such confidentiality
obligations if it: (i) is already known to the receiving party at
the time it is obtained; (ii) is or becomes publicly known or
available through no wrongful act of the receiving party; (iii)
is rightfully received from a third party who, to the best of the
receiving party's knowledge, is not under a duty of
confidentiality; (iv) is released by the protected party to a
third party without restriction; (v) is required to be disclosed
by the receiving party pursuant to a requirement of a court
order, subpoena, governmental or regulatory agency or law
(provided the receiving party will provide the other party
written notice of such requirement, to the extent such notice is
permitted); (vi) is relevant to the defense of any claim or cause
of action asserted against the receiving party; (vii) has been or
is independently developed or obtained by the receiving party; or
(viii) is Fund information provided by PNC in connection with an
independent third party compliance or other review.
(b) All Confidential Information shall be held in the strictest
confidence and will not be disclosed by either party or its
representatives, except as specifically permitted by the terms
hereof. Each party and its respective representatives will use
the Confidential Information solely for the purposes of
performing under and in compliance with the terms of this
Agreement, will not use the Confidential Information for any
other purpose, and will not disclose or communicate the
Confidential Information, directly or indirectly, to any third
party except as necessary to carry out the purpose of this
Agreement. Each party further agrees that the Confidential
Information will be disclosed only to such of its representatives
who need to examine the Confidential Information for the purposes
described above. Before being provided with any Confidential
Information, each such representative shall be informed of the
confidential nature of the Confidential Information and shall be
directed to treat the Confidential Information confidentially.
Each party shall in any event be responsible for any
5
breach of this Agreement by any representative.
(c) Each party shall take all steps reasonably necessary to keep
confidential the Confidential Information and shall take all
steps reasonably necessary to assure observation of this
Agreement by its representatives. All Confidential Information
shall remain the exclusive property of the Originating Party or
its affiliates, as applicable. Upon request by the Originating
Party, the Receiving Party shall promptly surrender to the
Originating Party any of the Confidential Information in the
Receiving Party's possession, and shall surrender all
Confidential Information to the Originating Party promptly and
without request upon the termination of this Agreement. The
Receiving Party will not retain any copies of the Confidential
Information.
(d) In the event that a Receiving Party or any of its representatives
is requested or required (by oral question, interrogatories,
requests for information or documents, subpoenas, civil
investigation or similar process) to disclose any of the
Confidential Information, such Receiving Party will provide the
Originating Party and its affiliates with prompt notice of such
requests so that the Originating Party or its affiliates, as
applicable, may seek an appropriate protective order, or if
appropriate, waive compliance with the provisions of this
Agreement. The Receiving Party will use its best efforts to
obtain or assist the Originating Party and its affiliates in
obtaining such a protective order.
(e) Each of the parties agree that any breach or threatened breach of
the provisions of this Section 8 shall cause immediate and
irreparable injury to the other party for which there exists no
adequate remedy at law. Accordingly, the parties hereby grant
each other the right to appear at any time in any court of law
and to obtain an order enjoining and/or restraining the Receiving
Party from using and/or disclosing such Confidential Information
except as such disclosure is permitted in this Agreement. The
parties shall be bound by all provisions of such protective order
and/or any determination of a court of competent jurisdiction.
(f) The provisions of this Section 8 shall survive termination of
this Agreement.
9. LIAISON WITH ACCOUNTANTS. A Co-Administrator shall act as liaison with each
Fund's independent public accountants and shall provide account analyses,
fiscal year summaries, and other audit-related schedules with respect to
each Portfolio. A Co-Administrator shall take all reasonable action in the
performance of its duties under this Agreement to assure that the necessary
information is made available to such accountants for the expression of
their opinion, as required by the relevant Fund.
10. CO-ADMINISTRATORS' SYSTEMS. PNC shall retain title to and ownership of any
and all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions, discoveries,
patentable or copyrightable matters, concepts, expertise, patents,
copyrights, trade secrets, and other related legal rights utilized by PNC
in connection with the services provided by PNC to the Funds.
6
Advisor shall retain title to and ownership of those data bases, computer
programs, screen formats, report formats, interactive design techniques,
derivative works, inventions, discoveries, patentable or copyrightable
matters, concepts, expertise, patents, copyrights, trade secrets, and other
related legal rights provided by Advisor in connection with the services
provided by Advisor to the Funds.
11. DISASTER RECOVERY. A Co-Administrator shall enter into and shall maintain
in effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment
failures, such Co-Administrator shall, at no additional expense to the
Funds, take reasonable steps to minimize service interruptions. A
Co-Administrator shall have no liability with respect to the loss of data
or service interruptions caused by equipment failure, provided such loss or
interruption is not caused by such Co-Administrator's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations under this Agreement.
12. COMPENSATION. As compensation for services rendered by the
Co-Administrators during the term of this Agreement, each Fund, on behalf
of its respective Portfolio, will pay to the Co-Administrators a fee or
fees, and reimburse the Co-Administrators for out-of-pocket expenses, as
may be agreed to in writing by the Fund and the respective
Co-Administrators.
13. INDEMNIFICATION. Each Fund, on behalf of its Portfolios, agrees to
indemnify, defend and hold harmless each Co-Administrator and its
affiliates, including their respective officers, directors, agents and
employees from all taxes, charges, expenses, assessments, claims and
liabilities (including, reasonable attorneys' fees and disbursements and
liabilities arising under the Securities Laws and any state and foreign
securities and blue sky laws) arising directly or indirectly from any
action or omission to act which a Co-Administrator takes in connection with
the provision of services to the relevant Fund, provided that the Fund
shall not be obligated to indemnify any such person against any liability
(or any expenses incident to such liability) caused by a Co-Administrator's
or its affiliates' own willful misfeasance, bad faith, negligence or
reckless disregard in the performance of its activities under this
Agreement. Any amounts payable by a Fund hereunder shall be satisfied only
against the relevant Portfolio's assets and not against the assets of any
other investment portfolio of the Fund. The provisions of this Section 13
shall survive termination of this Agreement.
14. RESPONSIBILITY OF THE CO-ADMINISTRATORS.
(a) A Co-Administrator shall be under no duty to take any action hereunder
on behalf of a Fund or any Portfolio except as specifically set forth
herein or as may be specifically agreed to by the relevant
Co-Administrator and the relevant Fund in a written amendment hereto.
A Co-Administrator shall be obligated to exercise care and diligence
in the performance of its duties hereunder and to act in good faith in
performing services provided for under this Agreement and the service
level standards set forth in Exhibit C attached hereto. A
Co-Administrator shall
7
be liable only for any damages arising out of its own failure to
perform its duties under this Agreement to the extent such damages
arise out of its own willful misfeasance, bad faith, negligence or
reckless disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary, (i) a
Co-Administrator shall not be liable for losses, delays, failure,
errors, interruption or loss of data occurring directly or indirectly
by reason of circumstances beyond its reasonable control (provided
such Co-Administrator has acted in accordance with the standard of
care set forth above), including without limitation acts of God;
action or inaction of civil or military authority; public enemy; war;
terrorism; riot; fire; flood; sabotage; epidemics; labor disputes;
civil commotion; interruption, loss or malfunction of utilities,
transportation, computer or communications capabilities; insurrection;
elements of nature; or non-performance by a third party; and (ii) a
Co-Administrator shall not be under any duty or obligation to inquire
into and shall not be liable for the validity or invalidity, authority
or lack thereof, or truthfulness or accuracy or lack thereof, of any
instruction, direction, notice, instrument or other information which
a Co-Administrator reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, neither
Co-Administrator nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether or not
the likelihood of such losses or damages was known by such
Co-Administrator or its affiliates.
(d) Any claims (including the filing of a suit or, if applicable,
commencement of arbitration proceedings) must be asserted by a Fund
against a Co-Administrator or any of its affiliates within 24 months
after the Fund became aware of the claim or the Board of Trustees of
the Fund is informed of specific facts that should have alerted it
that a basis for such a claim might exist.
(e) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(f) The provisions of this Section 14 shall survive termination of this
Agreement.
(g) Notwithstanding anything in this Agreement to the contrary, a
Co-Administrator shall have no liability either for any error or
omission of the other Co-Administrator or any of their predecessors as
servicer on behalf of the Fund or for any failure to discover any such
error or omission.
15. ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
The Co-Administrators will perform the following accounting services with
respect to each Portfolio:
(i) Journalize investment, capital share and income and expense
activities;
8
(ii) Verify investment buy/sell trade tickets when received from the
investment adviser for a Portfolio (the "Adviser");
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Funds with the
relevant Fund's custodian, and provide the Adviser with the
beginning cash balance available for investment purposes;
(vi) Update the cash availability throughout the day as required by the
Adviser;
(vii) Post to and prepare the Statement of Assets and Liabilities and the
Statement of Operations;
(viii) Calculate various contractual expenses (E.G., advisory and custody
fees);
(ix) Monitor the expense accruals and notify Fund management of any
proposed adjustments;
(x) Control all disbursements, authorize such disbursements and act as
paying agent for such disbursements upon Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes from independent pricing services
approved by the Adviser, or if such quotes are unavailable, then
obtain such prices from the Adviser, and in either case calculate
the market value of each Portfolio's investments;
(xiv) Transmit to or make available a copy of the daily portfolio
valuation to the Adviser;
(xv) Compute net asset value;
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity; and
(xvii) Convert and maintain historical components of equity required to
complete future net asset reports.
9
16. FINANCIAL ADMINISTRATION SERVICES ON A CONTINUOUS BASIS.
The Co-Administrators will perform the following financial administration
services with respect to each Portfolio:
(i) Supply various normal and customary Portfolio statistical data as
requested on an ongoing basis;
(ii) Monitor, to the extent information is available to such
Co-Administrator, the accuracy of statistical information delivered
to third-party statistical agencies by the Co-Administrator;
(iii) Prepare for execution and file each Fund's Federal and state tax
returns;
(iv) Prepare each Fund's annual and semi-annual shareholder reports;
draft and coordinate the filing of Forms N-CSR, N-Q and N-PX (with
voting records provided to PNC in the format requested by PNC);
(v) Prepare and file (or coordinate the filing of) Forms 24f-2 and N-SAR
for each Fund;
(vi) Monitor each Portfolio's status as a regulated investment company
under Sub-chapter M of the Internal Revenue Code of 1986, as
amended;
(vii) Monitor each Portfolio's compliance with the 1940 Act and with
disclosure included in its prospectuses and statements of additional
information;
(viii) Assist in the selection of and coordinate contractual relationships
and communications between each Fund and its contractual service
providers;
(ix) Monitor each Fund's compliance with the amounts and conditions of
each state qualification;
(x) Perform accounting services required for the Trustees Deferred
Compensation Plan;
(xi) With respect to PNC only, provide employees or officers to serve as
Treasurer of each Fund and to serve as such other officers as a Fund
may request, subject to the agreement of PNC;
(xii) Prepare monthly expense budgets in accordance with each Fund's
management specifications; and
(xiii) Monitor indices and halted securities and communicate those issues
that trigger the potential for security fair valuation in accordance
with fair value pricing procedures established by each Fund's Board
of Trustees.
10
17. FAIR VALUATION SERVICES ON A CONTINUOUS BASIS.
Each Fund desires that, in accordance with the Fair Value Pricing Procedures
adopted by the Board of Trustees of the Fund ("Fair Value Pricing of Foreign
Securities"), PNC use the fair value prices that are provided by a third-party
pricing vendor, currently FT Interactive Data, selected by the Fund ("Pricing
Vendor") in connection with certain foreign equity securities, and PNC is
willing to receive and use such fair value prices from the Pricing Vendor as
follows:
(i) PNC has entered into an agreement with the Pricing Vendor for the
Pricing Vendor to provide fair value prices for the relevant foreign
equity securities ("Fair Value Prices") in accordance with Section
II D of the Valuation Procedures for the Fund. Notwithstanding
anything to the contrary herein, PNC shall not be obligated to
perform the services set forth in this Section 17 unless an
agreement, including all relevant schedules and appendices thereto,
between PNC and the Pricing Vendor for the provision of Fair Value
Prices is then-currently in effect.
(ii) Unless a Fund directs PNC otherwise by Written Instructions, each
Fund hereby authorizes and instructs PNC to: (a) under the
circumstances set forth in Fair Value Pricing of Foreign Securities,
receive from the Pricing Vendor, Fair Value Prices (in a format
reasonably required by PNC) for those portfolios identified on
Exhibit A hereto as international funds (the "International Funds")
as each Fund may revise it from time to time; and (b) under the
circumstances set forth in Fair Value Pricing of Foreign Securities,
use such Fair Value Prices that it timely receives in all relevant
calculations (e.g., NAV, total returns, yields, etc.) for the
International Funds only; provided further that PNC agrees to
perform only the services detailed in Exhibit D hereto. Each Fund
shall provide PNC with at least ten (10) business day's written
notice of any change to Exhibit A. For clarification, a Portfolio
shall not be considered an International Fund, and PNC shall have no
responsibility under this Section 17 with respect to any such
Portfolio that is not enumerated on the then-current Exhibit A.
(iii) Each Fund understands and agrees that PNC will not be able to employ
its standard review process to the Fair Value Prices and that,
absent PNC's receipt of a Fair Value Price with a manifest error,
PNC shall have no obligation to inquire into, verify, or otherwise
analyze the accuracy or reasonableness of any of the Fair Value
Prices it receives. Each Fund hereby assumes all responsibility for
the appropriateness of the International Funds' use of Fair Value
Prices. Each Fund hereby represents and warrants that the Valuation
Committee of the relevant International Funds has evaluated and
approved the use of the Vendor's Fair Value Prices for each of the
International Funds and believes such use to be consistent with (a)
the Fair Value Pricing Procedures and (b) the registration
statement(s) of the International Funds.
11
(iv) Each Fund and the Advisor agrees not to use or permit the use of
Fair Value Prices for the benefit of any Portfolio or investment
vehicle not identified by this Agreement.
18. REGULATORY ADMINISTRATION SERVICES ON A CONTINUOUS BASIS.
The Co-Administrators will perform the following regulatory administration
services with respect to each Portfolio:
(i) Prepare an annual Post-Effective Amendment to each Fund's
Registration Statement, subject to review by and approval of the
Fund's counsel, and coordinate with the Fund's financial printer to
make such filings with the SEC;
(ii) Assist administratively in obtaining the fidelity bond and
directors' and officers'/errors and omissions insurance policies for
each Fund in accordance with the requirements of Rules 17g-1 and
17d-1 (d) (7) under the 1940 Act as such bond and policies are
approved by the Fund's Board of Trustees;
(iii) Coordinate the filing of each Fund's fidelity bond with the SEC and
monitor the Fund's assets to assure adequate fidelity bond coverage
is maintained;
(iv) Draft notices, agendas and resolutions for quarterly Board meetings
and up to two special Board meetings subject to review and approval
by each Fund's counsel;
(v) Coordinate the preparation, assembly and mailing of Board materials
for quarterly Board meetings and up to two special Board meetings
(other than organizational meetings for new investment portfolios);
(vi) Attend quarterly and up to two special Board meetings (and make
presentations at such meetings as appropriate) and draft minutes of
such meetings (but only if requested by Advisor to do so and subject
to review and approval by each Fund's counsel);
(vii) Maintain each Fund's corporate calendar to assure compliance with
various SEC filing and Board approval deadlines;
(viii) Maintain each Fund's files; and
(ix) Assist in monitoring regulatory developments which may affect the
Funds and assist the Funds in the handling of SEC examinations.
All regulatory services are subject to the review and approval of each Fund's
counsel.
19. ADMINISTRATIVE SUPPORT SERVICES.
12
PNC GIS will perform the following administrative support services as
requested by each Fund:
(a) Assist in the development of shareholder communications including
mergers and acquisitions communications (new funds, name changes,
change notifications, stickers, prospectus updates), tax guides,
(service level agreement standards overview), and as reasonably
requested by the Fund;
(b) Provide performance reporting materials such as monthly and
quarterly Fund fact sheets, highlights and third-party rating
sheets and product guides; and
(c) Review Allegiant Fund websites for current and compliant
information.
20. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first above written and
shall continue until August 31, 2009 (the "Initial Term"). Thereafter,
this Agreement shall continue automatically for successive terms of
one (1) year (each, a "Renewal Term"); provided however, that this
Agreement may be terminated at the end of the Initial Term or any
subsequent date by a Fund or by a Co-Administrator on ninety (90)
days' prior written notice to the other parties. In the event a Fund
gives notice of termination, all reasonable expenses associated with
movement (or duplication) of records and materials and conversion
thereof to a successor accounting and administration services agent(s)
(and any other service provider(s)), and all reasonable and directly
related trailing expenses incurred by the Co-Administrators, will be
borne by the relevant Fund.
(b) If a party hereto fails in any material respect to perform its duties
and obligations hereunder (a "Defaulting Party"), the other party (the
"Non-Defaulting Party") may give written notice thereof to the
Defaulting Party, and if such material breach shall not have been
remedied within thirty (30) days after such written notice is given,
then the Non-Defaulting Party may terminate this Agreement by giving
thirty (30) days written notice of such termination to the Defaulting
Party. Termination of this Agreement by the Non-Defaulting Party shall
not constitute a waiver of any other rights or remedies with respect
to obligations of the parties prior to such termination or rights of
PNC to be reimbursed for out-of-pocket expenses. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver
by the Non-Defaulting Party of any other rights it might have under
this Agreement or otherwise against the Defaulting Party.
(c) Each Fund may terminate this Agreement prior to the end of the Initial
Term or any Renewal Term if PNC fails to meet the service standards in
any one category as set forth in Exhibit C to this Agreement for (i) a
period of four (4) consecutive
13
months or (ii) any six (6) months in a twelve (12) month period.
(d) In addition, a party may terminate the Fair Value Services described
in Section 17 of this Agreement on sixty (60) days' written notice to
the other party. Termination of the Fair Value Services shall not
terminate the Agreement which shall otherwise remain in full force and
effect.
(e) Notwithstanding anything contained in this Agreement to the contrary,
if a Fund is liquidated (a "LIQUIDATION") or the assets of a Fund or
one or more of a Fund's Portfolio(s) are merged or purchased or the
like with or by another entity that does not use the services of PNC
(a "REORGANIZATION") after the first year of this Agreement, the Fund
may terminate this Agreement with respect to the Fund or such
Portfolio(s), as applicable, at any time after the occurrence of such
Liquidation or Reorganization event by the Board of the Fund on 90
days' written notice to PNC. In such case, if the Fund elects to
terminate this Agreement as a result of a Liquidation or with respect
to such Portfolio(s) involved in a Reorganization, the Fund shall pay
PNC an amount equal to a "multiplier" times the greater of (x) the
monthly average fees due to PNC under this Agreement during the last
three whole months prior to the Liquidation or Reorganization, as
applicable, for providing services to the terminating Portfolio(s) or
(y) the monthly average fees paid to PNC for providing services to the
terminating Portfolio(s) during the last three whole months prior to
delivery of the notice of termination. The "Multiplier" will equal the
number of months remaining in the Agreement at the time that PNC is no
longer providing services to the terminating Portfolio(s) under this
Agreement divided by three.
For clarification, if this Agreement is terminated with respect to
less than all of the Portfolios, this Agreement will remain in full
force and effect with respect to all of the remaining Portfolios.
21. NOTICES. Notices shall be addressed (a) if to PNC, at 000 Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President; (b) if to the Funds or
Advisor, at 000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxx 00000, Attention:
Xxxxxxxx X. Xxxx,, with a copy to Xxxxxx Xxxxxx, Esquire, Drinker Xxxxxx &
Xxxxx, LLP, One Xxxxx Square, 18th & Cherry Streets, Philadelphia,
Pennsylvania 19103 or (c) if to neither of the foregoing, at such other
address as shall have been given by like notice to the sender of any such
notice or other communication by the other party. If notice is sent by
confirming telegram, cable, telex or facsimile sending device, it shall be
deemed to have been given immediately. If notice is sent by first-class
mail, it shall be deemed to have been given three days after it has been
mailed. If notice is sent by messenger, it shall be deemed to have been
given on the day it is delivered.
22. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by written amendment, signed by the party against whom enforcement of
such change or waiver is sought.
14
23. ASSIGNMENT. PNC may assign its rights hereunder to any majority-owned
direct or indirect subsidiary of PNC or of The PNC Financial Services
Group, Inc., provided that (i) PNC gives Advisor and each Fund 30 days'
prior written notice of such assignment, (ii) the assignee or delegate
agrees to comply with the relevant provisions of the 1940 Act, and (iii)
PNC and such assignee or delegate promptly provides such information as
each Fund may reasonably request and respond to such questions as each Fund
may reasonably ask, relative to the assignment or delegation (including,
without limitation, the capabilities of the assignee or delegate).
24. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
25. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
26. MISCELLANEOUS.
(a) Notwithstanding anything in this Agreement to the contrary, each Fund
agrees not to make any modifications to its registration statement or
adopt any policies which would affect materially the obligations or
responsibilities of a Co-Administrator hereunder without the prior
written approval of a Co-Administrator, which approval shall not be
unreasonably withheld or delayed.
(b) Except as expressly provided in this Agreement, a Co-Administrator
hereby disclaims all representations and warranties, express or
implied, made to each Fund or any other person, including, without
limitation, any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of trade), of
any services or any goods provided incidental to services provided
under this Agreement. A Co-Administrator disclaims any warranty of
title or non-infringement except as otherwise set forth in this
Agreement.
(c) This Agreement embodies the entire agreement and understanding between
the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof, provided that the parties may
embody in one or more separate documents their agreement, if any, with
respect to delegated duties. 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. Notwithstanding any provision hereof, the
services of PNC are not, nor shall they be construed as constituting,
legal advice or the provision of legal services for or on behalf of a
Fund or any other person. Neither this Agreement nor the provision of
services under this Agreement establishes or is intended to establish
an attorney-client relationship between a Fund and PNC.
(d) This Agreement shall be deemed to be a contract made in Delaware and
governed
15
by Delaware law, without regard to principles of conflicts of law.
(e) 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. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(f) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such party.
(g) To help the U.S. government fight the funding of terrorism and money
laundering activities, U.S. Federal law requires each financial
institution to obtain, verify, and record certain information that
identifies each person who initially opens an account with that
financial institution on or after October 1, 2003. Certain of PNC's
affiliates are financial institutions, and PNC may, as a matter of
policy, request (or may have already requested) each Fund's name,
address and taxpayer identification number or other government-issued
identification number, and, if such party is a natural person, that
party's date of birth. PNC may also ask (and may have already asked)
for additional identifying information, and PNC may take steps (and
may have already taken steps) to verify the authenticity and accuracy
of these data elements.
27. XXXXXXXX-XXXXX CERTIFICATIONS. PNC acknowledges that it may from time to
time provide certain information that is necessary to complete a report or
other filing that is required to be certified by certain of each Fund's
officers pursuant to Section 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002
(the "Act") and rules and regulations promulgated from time to time
thereunder (each such report or other filing, a "Certified Report"). PNC
agrees that any information PNC provides that is necessary to complete a
Certified Report, to its best knowledge, will be true and complete when
given. PNC further agrees that any written representation or certification
it provides to each Fund and/or the officers of each Fund in support of a
certification by them to the SEC pursuant to the Act and/or any rules and
regulations issued from time to time thereunder, to its best knowledge,
will be true and correct and complete when given. This covenant shall
survive termination of this Agreement.
28. BUSINESS TRUST. The names "Allegiant Funds" and "Allegiant Advantage Fund"
and of any investment portfolio thereof, and any reference to the
"Trustees" of Allegiant Funds and Allegiant Advantage Fund, refer
respectively to the Trusts created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Declarations
of Trust which are hereby referred to and copies of which is on file at the
office of the State Secretary of the Commonwealth of Massachusetts and at
the principal offices of the Trusts. The obligations of Allegiant Funds and
Allegiant Advantage Fund entered into in its name, or on behalf of any of
its investment portfolios, or on behalf thereof by any of its Trustees,
representatives or agents, are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders or
representatives of the respective Trust personally, but bind only the
relevant Trust's
16
property, and all persons dealing with any class of shares of a Trust must
look solely to that Trust property belonging to such class for the
enforcement of any claims against that Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed effective as of the day and year first above written.
PNC GLOBAL INVESTMENT SERVICING ALLEGIANT ASSET MANAGEMENT COMPANY
(U.S.) INC.
By: /s/ Xxx X. Xxxxxxxx By: /s/ Xxxxxxxx X. Xxxx
---------------------------------- -------------------------------------
Name: Xxx X. Xxxxxxxx Name: Xxxxxxxx X. Xxxx
-------------------------------- -----------------------------------
Title: Senior Vice President Title: Chief Administrative Officer
------------------------------- ----------------------------------
ALLEGIANT FUNDS ALLEGIANT ADVANTAGE FUND
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
---------------------------------- -------------------------------------
Name: Xxxx Xxxxxx Name: Xxxx Xxxxxx
-------------------------------- -----------------------------------
Title: Treasurer Title: Treasurer
------------------------------- ----------------------------------
17
EXHIBIT A
THIS EXHIBIT A, dated as of January 1, 2009 is Exhibit A to that certain
Co-Administration and Accounting Services Agreement dated as of January 1, 2009
among PNC Global Investment Servicing (U.S.) Inc., Allegiant Asset Management
Company, Allegiant Funds and Allegiant Advantage Fund.
ALLEGIANT FUNDS
PORTFOLIOS
ALLEGIANT INTERMEDIATE TAX EXEMPT BOND FUND
ALLEGIANT INTERMEDIATE BOND FUND
ALLEGIANT OHIO INTERMEDIATE TAX EXEMPT BOND FUND
ALLEGIANT LIMITED MATURITY BOND FUND
ALLEGIANT TOTAL RETURN ADVANTAGE FUND
ALLEGIANT PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
ALLEGIANT BOND FUND
ALLEGIANT GOVERNMENT MORTGAGE FUND
ALLEGIANT MICHIGAN INTERMEDIATE MUNICIPAL BOND FUND
ALLEGIANT ULTRA SHORT BOND FUND
ALLEGIANT S&P 500 INDEX FUND
ALLEGIANT BALANCED ALLOCATION FUND*
ALLEGIANT LARGE CAP GROWTH FUND
ALLEGIANT LARGE CAP VALUE FUND
ALLEGIANT MULTI-FACTOR SMALL CAP VALUE FUND
ALLEGIANT INTERNATIONAL EQUITY FUND*
ALLEGIANT SMALL CAP GROWTH FUND
ALLEGIANT LARGE CAP CORE EQUITY FUND
ALLEGIANT MID CAP GROWTH FUND
ALLEGIANT AGGRESSIVE ALLOCATION FUND
ALLEGIANT CONSERVATIVE ALLOCATION FUND
ALLEGIANT MID CAP VALUE FUND
ALLEGIANT SMALL CAP CORE FUND
ALLEGIANT MULTI-FACTOR SMALL CAP CORE FUND
ALLEGIANT MULTI-FACTOR SMALL CAP GROWTH FUND
ALLEGIANT MULTI-FACTOR SMALL CAP FOCUSED VALUE FUND
ALLEGIANT OHIO MUNICIPAL MONEY MARKET FUND
ALLEGIANT TREASURY MONEY MARKET FUND
ALLEGIANT MONEY MARKET FUND
ALLEGIANT GOVERNMENT MONEY MARKET FUND
ALLEGIANT TAX EXEMPT MONEY MARKET FUND
ALLEGIANT PENNSYLVANIA TAX EXEMPT MONEY MARKET FUND
18
ALLEGIANT ADVANTAGE FUND
INSTITUTIONAL MONEY MARKET FUND
* An "International Funds" for purposes of Section 17 of this Agreement.
19
EXHIBIT B
PNC DATAPATH ACCESS SERVICES
1. PNC SERVICES
PNC shall:
(a) Provide internet access to PNC's DataPath ("DataPath") at
xxx.xxxxxxxxxxxxxx.xxx or other site operated by PNC (the "Site") for
Funds portfolio data otherwise supplied by PNC to Funds service
providers via other electronic and manual methods. Types of
information to be provided on the Site include: (i) data relating to
portfolio securities, (ii) general ledger balances and (iii) net asset
value-related data, including NAV and net asset, distribution and
yield detail (collectively, the "Accounting Services");
(b) Supply each of the Authorized Persons ("Users") with a logon ID and
Password;
(c) Provide to Users access to the information listed in subsection (a)
above using standard inquiry tools and reports. With respect to the
Accounting Services, Authorized Users will be able to modify standard
inquiries to develop user-defined inquiry tools; however, PNC will
review computer costs for running user-defined inquiries and may
assess surcharges for those requiring excessive hardware resources. In
addition, costs for developing significant custom reports or
enhancements are not included in the fees set forth in Section 12 of
the Agreement and will be billed separately;
(d) Utilize a form of encryption that is generally available to the public
in the U.S. for standard internet browsers and establish, monitor and
verify firewalls and other security features (commercially reasonable
for this type of information and these types of users) and exercise
commercially reasonable efforts to attempt to maintain the security
and integrity of the Site; and
(e) Monitor the telephone lines involved in providing the Accounting
Services and inform the Fundss promptly of any malfunctions or service
interruptions.
1. DUTIES OF THE FUNDS, ADVISOR AND THE USERS
The Funds, Advisor and/or the Users, as appropriate, shall:
(a) Provide and maintain a web browser supporting Secure Sockets Layer
128-bit encryption; and
20
(b) Keep logon IDs and passwords confidential and notify PNC immediately
in the event that a logon ID or password is lost, stolen or if you
have reason to believe that the logon ID and password are being used
by an unauthorized person.
3. STANDARD OF CARE; LIMITATIONS OF LIABILITY
(a) The Funds and Advisor acknowledges that the Internet is an "open,"
publicly accessible network and not under the control of any party.
PNC's provision of Accounting Services is dependent upon the proper
functioning of the Internet and services provided by
telecommunications carriers, firewall providers, encryption system
developers and others. The Funds and Advisor agrees that PNC shall not
be liable in any respect for the actions or omissions of any third
party wrongdoers (i.e., hackers not employed by such party or its
affiliates) or of any third parties involved in the Accounting
Services and shall not be liable in any respect for the selection of
any such third party, unless that selection constitutes a breach of
PNC's standard of care set forth in Section 14 of the Agreement.
(b) Without limiting the generality of the foregoing or limiting the
applicability of any other provision of this Exhibit B or the
Agreement, including Sections 11, 14(a) and 14(b), PNC shall not be
liable for delays or failures to perform any of the Accounting
Services or errors or loss of data occurring by reason of
circumstances beyond such party's control, which may include:
functions or malfunctions of the internet or telecommunications
services, firewalls, encryption systems or security devices.
21
EXHIBIT C
ALLEGIANT FUNDS AND ALLEGIANT ADVANTAGE FUND
SERVICE STANDARDS
(Standards shall be measured on a monthly basis)
FUND ACCOUNTING AND ADMINISTRATION SERVICES
CATEGORY - FUND ACCOUNTING
1. Number of Accurate NAV's Reported to each Fund's transfer agent (the
"Transfer Agent") divided by the Total Number of NAV's Required to Report
to the Transfer Agent (excluding Money Market Funds): 98%
- "NAV" for this purpose is class net assets divided by total class
shares outstanding. An NAV is not accurate if, upon
recalculation, the change in the reported extended class NAV is
greater than a full xxxxx.
- Each NAV error for a given day is treated as a single NAV error.
2. Number of accurate NAV's Reported to NASDAQ divided by Number of Total
NAV's Required to be Reported to NASDAQ (excluding Money Market
Funds): 98%
- NAV for this purpose is class net assets divided by total class
shares outstanding. An NAV is not accurate if, upon
recalculation, the NAV difference is greater than a full xxxxx.
- Each NAV error for a given day is treated as a single NAV error.
3. Accurate and Timely Cash Availability Reports ("CAR") to the Adviser
Divided by Number of Portfolios Requiring Cash Availability
Reporting: 99%
- Timely CAR means, notwithstanding any other clause to the
contrary, delivery by 10:45 a.m. (Eastern Time) for all
Portfolios with the except of the following Portfolios, which
require delivery by 10:15 a.m. (Eastern Time):
S&P 500 Index Fund
International Equity Fund
Ohio Tax Exempt Bond Fund
Pennsylvania Municipal Bond Fund
Michigan Intermediate Municipal Bond Fund
Intermediate Tax Exempt Bond Fund
22
- Accurate CAR means errors controllable by a Co-Administrator that
resulted in an overdraft to the Portfolios.
4. Number of accurate data elements (NAVs, yields and performance) delivered
to the website divided by the total number of individual data elements
delivered: 98%
- Since these extracts are system generated, a properly approved
NAV would be deemed to be accurately delivered if it were
subsequently realized to be calculated in error. This error would
effect the calculation in #1 above.
5. Notify the Adviser of compliance violations identified through the normal
quantitative secondary compliance tests performed for each Portfolio no
later than the second business day following the receipt of accurate and
complete trade information by PNC: 100%
6. Final annual and semiannual shareholder reports shall contain no material
errors: 100%
- For purposes of this performance standard, a "material error"
shall be one that requires a reprint of the report.
Note: For purposes of the foregoing calculations, the Portfolios of each Fund
will be aggregated.
23
EXHIBIT D
Services to be performed by PNC in accordance with the procedures outlined in
each Fund's valuation procedures entitled "Fair Value Pricing of Foreign
Securities" (the "Valuation Procedures") shall be limited to the following:
- Daily calculation and monitoring of the "trigger"
- Use the appropriate futures contract for "trigger" calculations based
on the timeline in Exhibit A to the Valuation Procedures
- Communicate to the relevant Fund whenever the "trigger" is met, and
calculate and release a "Fair Value NAV"
- If the trigger has been met and Fair Value Prices timely received, PNC
will also calculate whether the percentage change from that day's
price for such security versus the Fair Valued Price exceeds the
established threshold (currently, ten percent or one xxxxx per share).
If percentage change exceeds the threshold, PNC will promptly inform
the relevant Fund.
- Store and maintain records as detailed under the section entitled
"Storage and Maintenance of records" of the Valuation Procedures.
24
