Exhibit(h)(1)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the 1st day of July, 2002, by and between
THE COVENTRY GROUP, a Massachusetts business trust (the "Trust") having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and
BISYS FUND SERVICES LIMITED PARTNERSHIP (the "Administrator"), an Ohio limited
partnership having its principal place of business at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several investment portfolios, each of which issues shares
of beneficial interest; and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services for
each series of the Trust managed by Signal Capital Management, Inc., (a "Signal
Series") as set forth in Schedule A hereto, and each additional Signal Series
that may hereafter be created and identified in Schedule A (individually
referred to herein as a "Fund" and collectively as the "Funds").
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. RETENTION OF THE ADMINISTRATOR. The Trust hereby retains the
Administrator to act as the administrator of the Funds and to furnish the Funds
with the management and administrative services as set forth in Article 2 below.
The Administrator hereby accepts such appointment to perform the duties set
forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 2. ADMINISTRATIVE SERVICES. The Administrator shall perform or
supervise the performance by others of other administrative services in
connection with the operations of the Funds, and, on behalf of the Trust, will
investigate, assist in the selection of and conduct relations with custodians,
depositories, accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Funds' operations. The Administrator shall
provide the Trustees of the Trust with such reports regarding investment
performance as they may reasonably request but shall have no responsibility for
supervising the performance by any investment adviser or sub-adviser of its
responsibilities.
The Administrator shall provide the Trust with all necessary office
space, equipment, personnel, compensation and facilities (including facilities
for shareholders' and Trustees' meetings)
1
for handling the affairs of the Funds and such other services as the
Administrator shall, from time to time, determine to be necessary to perform its
obligations under this Agreement. In addition, at the request of the Board of
Trustees, the Administrator shall make reports to the Board concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Fund expenses and control all
disbursements for the Funds, and as appropriate, compute the
Funds' yields, total return, expense ratios, Fund turnover
rate and, if required, Fund average dollar-weighted maturity;
(b) provide information and assistance to counsel to the Trust
in preparing (i) the annual update to the Trust's registration
statement on Form N-1A, (ii) supplements to the Trust's
registration statement, and (iii) Notices of Annual or Special
Meetings of shareholders of the Trust and proxy materials
relating thereto; and file any of the foregoing with the
Securities and Exchange Commission (the "SEC") upon the
request of the Trust or counsel to the Trust;
(c) prepare such reports, applications and documents
(including reports regarding the sale and redemption of shares
of beneficial interest in the Funds as may be required in
order to comply with Federal and state securities law) as may
be necessary or desirable to register the Funds' shares of
beneficial interest ("Shares") with state securities
authorities, monitor the sale of Shares for compliance with
state securities laws, and file with the appropriate state
securities authorities the registration statements and reports
for the Funds and the Shares and all amendments thereto, as
may be necessary or convenient to register and keep effective
the Funds and the Shares with state securities authorities to
enable the Funds to make a continuous offering of its Shares;
(d) coordinate and prepare, with the assistance of the Fund's
investment adviser and officers, communications to
shareholders of record of the Funds ("Shareholders"),
including the annual report to Shareholders, prepare and file
with the SEC the semi-annual report for the Funds on Form
N-SAR and all required notices pursuant to Rule 24f-2;
coordinate the printing and distribution of prospectuses,
supplements, proxy materials and reports to Shareholders; and
coordinate the tabulation of proxies in connection with the
annual meeting of Shareholders each year, if one is held;
(e) administer contracts on behalf of the Funds with, among
others, the Funds' investment adviser, distributor, custodian,
transfer agent and fund accountant;
(f) supervise the Funds' transfer agent with respect to the
payment of dividends
2
and other distributions to Shareholders;
(g) calculate performance data of the Funds for dissemination
to information services (up to six (6) services covering the
mutual funds industry);
(h) coordinate and supervise the preparation and filing of the
Funds' and Trust's tax returns;
(i) examine and review the operations and performance of the
various organizations providing services to the Fund,
including, without limitation, the Funds' investment adviser,
distributor, custodian, fund accountant, transfer agent,
outside legal counsel and independent public accountants, and
at the request of the Board, report to the Board on the
performance of services by such organizations;
(j) assist with the layout and printing of prospectuses and
assist with and coordinate layout and printing of the Funds'
semi-annual and annual reports to Shareholders;
(k) assist with the design, development, and operation of the
Funds, including new classes, investment objectives, policies
and structure;
(l) make available appropriate individuals to serve as
officers of the Trust, upon designation as such by the Board;
(m) advise the Funds and the Board on matters concerning the
Trust, the Funds and their affairs;
(n) obtain, maintain and file fidelity bonds and directors and
officers/errors and omissions insurance policies for the Trust
and Funds at the expense of the Trust and Funds in accordance
with the requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act, to the extent such bonds and policies may be
approved by the Trust's Board;
(o) monitor and advise the Trust and Funds on their status as
a regulated investment Trust under the Internal Revenue Code
of 1986, as amended;
(p) perform certain required administrative services and
functions of the Trust and each Fund to the extent such
administrative services and functions are not provided to the
Trust or such Fund pursuant to the Trust's or such Fund's
investment advisory agreement, distribution agreement,
custodian agreement, transfer agent agreement and fund
accounting agreement;
3
(q) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Funds as the Trust
and the Administrator shall determine desirable;
(r) assist in developing compliance procedures for each Fund,
and provide compliance monitoring services incorporating
certain of those procedures, which will include, among other
matters, compliance with each Fund's investment objective,
defined investment policies, restrictions, tax
diversification, distribution and income requirements as are
determinable based upon the fund's accounting records;
(s) monitor services provided under Shareholder Service Plans
adopted by the Board, and financial institutions that serve,
or propose to serve, as shareholder services agents thereunder
("Shareholder Service Agents"); coordinate the services to be
rendered by Shareholder Service Agents pursuant to Shareholder
Service Agreements under Shareholder Service Plans, and review
the qualifications of Shareholder Service Agents to serve as
such under the relevant Shareholder Service Plan; coordinate
and assist in execution and delivery of Shareholder Service
Agreements; report to the Board regarding amounts paid under
Shareholder Service Agreements and the nature of services
provided by the Shareholder Service Agents thereunder; and
maintain appropriate records in connection with the foregoing;
(t) assist the Trust in providing documents for routine
regulatory examinations or investigations concerning the
Funds; and assist counsel to the Funds in preparing responses
to such routine or non-routine regulatory matters; and
(u) assist the Trust in preparing for Board meetings by (i)
coordinating board book production and distribution, and (ii)
preparing the relevant sections of the board materials
pertaining to the responsibilities of the Administrator and
other functions of BISYS.
The Administrator shall perform such other services for the Trust that
are mutually agreed upon by the parties from time to time. Such services may
include performing internal audit examinations; mailing the annual reports of
the Funds; preparing an annual list of Shareholders; and mailing notices of
Shareholders' meetings, proxies and proxy statements, for all of which the Trust
will pay such fees as may be agreed upon, as well as the Administrator's
out-of-pocket expenses.
ARTICLE 3. ALLOCATION OF CHARGES AND EXPENSES.
(A) THE ADMINISTRATOR. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are
4
affiliated persons of the Administrator or any affiliated corporation of the
Administrator; provided, however, that unless otherwise specifically provided,
the Administrator shall not be obligated to pay the compensation of any employee
of the Trust retained by the Trustees of the Trust to perform services on behalf
of the Trust.
(B) THE TRUST. The Trust (and the Funds, as appropriate) assumes and
shall pay or cause to be paid all other expenses of the Trust and the Funds that
are not otherwise allocated herein, including, without limitation, organization
costs, taxes, expenses for legal and auditing services, the expenses of
preparing (including typesetting), printing and mailing reports, prospectuses,
statements of additional information, proxy solicitation material and notices to
existing Shareholders, all expenses incurred in connection with issuing and
redeeming Shares, the costs of custodial services, the cost of initial and
ongoing registration of the Shares under Federal securities laws, the cost of
notice filings and any other filings that are necessary under state securities
laws, fees and out-of-pocket expenses of Trustees who are not affiliated persons
of the Administrator or the Investment Adviser to the Funds or any affiliated
corporation of the Administrator or the Investment Adviser, insurance, interest,
brokerage costs, litigation and other extraordinary or nonrecurring expenses,
and all fees and charges of investment advisers.
ARTICLE 4. COMPENSATION OF THE ADMINISTRATOR.
(A) ADMINISTRATION FEE. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Funds shall pay to the Administrator compensation at an annual
rate specified in Schedule B attached hereto. Such compensation shall be
calculated and accrued daily, and paid to the Administrator monthly. The Funds
shall also reimburse the Administrator for reasonable out-of-pocket expenses,
including the travel and lodging expenses incurred by officers and employees of
the Administrator in connection with attendance at Board meetings.
If this Agreement becomes effective subsequent to the first day of
a month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
(B) SURVIVAL OF COMPENSATION RIGHTS. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the
5
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder, except as may otherwise be provided under provisions of
applicable law which cannot be waived or modified hereby. (As used in this
Article 5, the term "Administrator" shall include directors, officers, employees
and other agents of the Administrator as well as the Administrator itself.)
So long as the Administrator acts in good faith and with due diligence
and without negligence, the Funds assume full responsibility and shall indemnify
the Administrator and hold it harmless from and against any and all actions,
suits and claims, whether groundless or otherwise, and from and against any and
all losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of the Administrator's actions taken or
nonactions with respect to the performance of services hereunder. The indemnity
and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Funds may be asked to indemnify or hold the
Administrator harmless, the Funds shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Funds, but failure to do so in good faith shall not affect the rights
hereunder.
The Trust shall be entitled to participate at its own expense or, if it
so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the Trust elects to assume the defense
of any such claim, the defense shall be conducted by counsel chosen by the Trust
and satisfactory to the Administrator, whose approval shall not be unreasonably
withheld. In the event that the Trust elects to assume the defense of any suit
and retain counsel, the Administrator shall bear the fees and expenses of any
additional counsel retained by it. If the Trust does not elect to assume the
defense of a suit, it will reimburse the Administrator for the reasonable fees
and expenses of any counsel retained by the Administrator.
The Administrator may apply to the Trust at any time for instructions
and may consult counsel for the Trust or its own counsel and with accountants
and other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. The
6
Administrator will not be held to have notice of any change of authority of any
officers, employees or agents of the Trust until receipt of written notice
thereof from the Trust.
ARTICLE 6. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that directors, officers, employees
and Shareholders of the Trust are or may be or become interested in the
Administrator, as officers, employees or otherwise and that partners, officers
and employees of the Administrator and its counsel are or may be or become
similarly interested in the Trust, and that the Administrator may be or become
interested in the Trust as a Shareholder or otherwise.
ARTICLE 7. DURATION OF THIS AGREEMENT. The term of this Agreement shall
commence on the date first indicated above in this Agreement (the "Effective
Date") and shall remain in effect for a three (3) year period following the
Effective Date (the "Initial Term"). Thereafter, unless otherwise terminated as
provided herein, this Agreement shall be renewed automatically for successive
one-year periods ("Rollover Periods"). Except as provided below as pertains to a
termination notice given following the completion of at least two (2) full years
of the Initial Term, this Agreement may be terminated only (i) by provision of a
notice of nonrenewal in the manner set forth below, (ii) by mutual agreement of
the parties, or (iii) for "cause," as defined below, upon the provision of 60
days advance written notice by the party alleging cause. Written notice of
nonrenewal must be provided within 60 days of the end of the Initial Term or any
Rollover Period, as the case may be. In addition, following the completion of
the second full year of the Initial Term, this Agreement may be terminated by
either party upon 120 days advance written notice to the other.
For purposes of this Agreement, "cause" shall mean (a) a material
breach of this Agreement that has not been cured within thirty (30) days
following written notice of such breach from the non-breaching party; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; or (c) financial difficulties on the
part of the party to be terminated which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors.
Notwithstanding the foregoing, after such termination for so long as
the Administrator, with the consent of the Trust, in fact continues to perform
any one or more of the services contemplated by this Agreement or any schedule
or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Compensation due the Administrator and unpaid by the Trust
upon such termination shall be immediately due and payable upon and
notwithstanding such termination. The Administrator shall be entitled to collect
from the Trust, in addition to the compensation described in Schedule B, the
7
amount of all of the Administrator's cash disbursements for services in
connection with the Administrator's activities in effecting such termination,
including without limitation, the delivery to the Trust and/or its designees of
the Trust's property, records, instruments and documents, or any copies thereof.
Subsequent to such termination, for a reasonable fee, the Administrator will
provide the Trust with reasonable access to any Trust documents or records
remaining in its possession.
If, for any reason other than (i) nonrenewal, (ii) mutual agreement of
the parties (iii) or "cause," as defined above, the Administrator is replaced as
administrator of the Funds, or if a third party is added to perform all or a
part of the services provided by the Administrator under this Agreement
(excluding any sub-administrator appointed by the Administrator as provided in
Article 7 hereof), then the Trust shall make a one-time cash payment, in
consideration of the fee structure and services to be provided under this
Agreement, and not as a penalty, to the Administrator equal to the balance due
the Administrator for the remainder of the then-current term of this Agreement,
assuming for purposes of calculation of the payment that such balance shall be
based upon the average amount of the Trust's assets for the twelve months prior
to the date the Administrator is replaced or a third party is added. However,
this provision shall not apply should termination occur upon 120 days advance
written notice given following the completion of the second full year of the
Initial Term.
In the event the Funds are merged into another legal entity in part or
in whole pursuant to any form of business reorganization or is liquidated in
part or in whole prior to the expiration of the then-current term of this
Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which the
Administrator is not retained to provide administration services consistent with
this Agreement. The one-time cash payment referenced above shall be due and
payable on the day prior to the first day in which the Administrator is replaced
or a third party is added.
The parties further acknowledge and agree that, in the event the
Administrator is replaced, or a third party is added, as set forth above, (i) a
determination of actual damages incurred by the Administrator would be extremely
difficult, and (ii) the liquidated damages provision contained herein is
intended to adequately compensate the Administrator for damages incurred and is
not intended to constitute any form of penalty.
ARTICLE 8. ASSIGNMENT. This Agreement shall not be assignable by either party
without the written consent of the other party; provided, however, that the
Administrator may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder. The
Administrator shall not, however, be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that, with the exception of any sub-administrator that has been approved by the
Trustees, the Administrator shall be responsible, to the extent provided in
Article 5 hereof, for all acts of any subcontractor as if such acts were its
own. This Agreement shall be binding upon, and shall inure to the benefit of,
the parties hereto and their respective successors and permitted assigns.
8
ARTICLE 9. AMENDMENTS. This Agreement may be amended by the parties
hereto only in a written documents signed by both parties, and provided that an
amendment that materially affects the rights or obligations of the Trust
hereunder shall be approved by the Board.
For special cases, the parties hereto may amend such
procedures set forth herein as may be appropriate or practical under the
circumstances, and the Administrator may conclusively assume that any special
procedure which has been agreed to by the Trust does not conflict with or
violate any requirements of its Articles of Incorporation or then current
prospectuses, or any rule, regulation or requirement of any regulatory body.
ARTICLE 10. CERTAIN RECORDS. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Funds shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Trust has
agreed to indemnify the Administrator against such liability.
ARTICLE 11. DEFINITIONS OF CERTAIN TERMS. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the SEC.
ARTICLE 12. NOTICE. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention:
President; with a copy to Xxxx Xxxxxxxx, President, Signal Capital Management,
Inc., 000 X. Xxxx Xxxxxx, #000, Xxxx Xxxxx, XX 00000-0000; and if to the
Administrator at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention: President.
ARTICLE 13. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of Ohio, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
9
ARTICLE 14. MULTIPLE ORIGINALS. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 15. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
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 trust property of the
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees, and this Agreement has been signed and delivered by an authorized
officer of the 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 trust property of the Trust as provided in
the Trust's Agreement and Declaration of Trust.
ARTICLE 16. PRIVACY. Nonpublic personal financial information relating
to consumers or customers of the Trust provided by, or at the direction of the
Trust to Administrator, or collected or retained by Administrator to perform its
duties as administrator of the Funds shall be considered confidential
information. Administrator shall not give, sell or in any way transfer such
confidential information to any person or entity, other than affiliates of
Administrator except at the direction of the Trust or as required or permitted
by law. Administrator shall have in place and maintain physical, electronic and
procedural safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent unauthorized access to or use
of records and information relating to consumers of the Trust. The Trust
represents to Administrator that it has adopted a statement of its privacy
policies and practices as required by SEC's Regulation S-P and agrees to provide
Administrator with a copy of that statement annually
* * * * *
10
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE COVENTRY GROUP
By:
-------------------------------
Title:
------------------------------
BISYS FUND SERVICES OHIO, INC.
By:
--------------------------------
Title:
-----------------------------
11
SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF JULY 1, 2002
BETWEEN THE COVENTRY GROUP
AND
BISYS FUND SERVICES OHIO, INC.
Funds: This Agreement shall apply to all Signal Series Funds of the Trust,
either currently existing or hereafter created. The current Signal
Series Funds of the Trust are set forth below:
Signal Large Cap Growth Fund
Signal Income Fund
Signal Tax-Exempt Income Fund
Signal Tax-Exempt Money Market Fund
Signal Money Market Fund
A-1
SCHEDULE B
TO THE ADMINISTRATION AGREEMENT
DATED AS OF JULY 1, 2002
BETWEEN THE COVENTRY GROUP
AND
BISYS FUND SERVICES OHIO, INC.
Fees: Pursuant to Article 4, in consideration of services rendered and
expenses assumed pursuant to this Agreement, the Trust will pay the
Administrator on the first business day of each month, or at such
time(s) as the Administrator shall request and the parties hereto shall
agree, a fee computed daily at the annual rate set forth below.
Twenty one-hundredths of one
percent (.20%) of each Fund's
average daily net assets, except
the Money Market Fund.
Twenty-five one-hundredths of one
percent (.25%) of the Money
Market Fund's average daily net
assets.
The above fees shall be subject an annual minimum of two hundred
twenty-five thousand dollars ($225,000) applicable to all of the Signal
Series Funds in the aggregate during each year or portion thereof that
this Agreement remains in effect. For these purposes, all fees paid by
the Funds for the relevant year under their Transfer Agent Agreement
and Fund Accounting Agreement with BISYS Fund Services Ohio, Inc. shall
be credited towards the minimum. The annual minimum shall be subject to
increase, following the completion of the first year of the Initial
Term, to reflect the annual percentage increase in the Consumer Price
Index published by the U.S. Department of Labor.
The fee for the period from the day of the month this Agreement is
entered into until the end of that month shall be prorated according to
the proportion which such period bears to the full monthly period. Upon
any termination of this Agreement before the end of any month, the fee
for such part of a month shall be prorated according to the proportion
which such period bears to the full monthly period and shall be payable
upon the date of termination of this Agreement.
For the purpose of determining fees payable to the Administrator, the
value of the net assets of a particular Fund shall be computed in the
manner described in the Fund's
B-1
Declaration of Trust or in the Prospectus or Statement of Additional
Information respecting that Fund as from time to time is in effect for
the computation of the value of such net assets in connection with the
determination of the liquidating value of the shares of such Fund.
The fees payable hereunder shall be applied to each Fund as a whole,
and not to separate classes of shares within the Funds. The parties
further confirm that the fee schedule set forth above is based upon the
class structure in place as of the date of commencement of this
Agreement. The fee payable by the Funds hereunder shall be allocated to
each Fund based upon its pro rata share of the total fee payable
hereunder. Such fee as is attributable to each Fund shall be a separate
(and not joint or joint and several) obligation of each such Fund. The
Administrator may agree, from time to time, to waive any fees payable
under this Agreement. Such waiver shall be at the Administrator's sole
discretion.
B-2
