EXHIBIT (9)(h)
ADMINISTRATION AGREEMENT
This Administration Agreement is made as of this 1st day of April, 1996
between EMERALD FUNDS, a Massachusetts business trust (herein called the
"Trust"), and BISYS FUND SERVICES LIMITED PARTNERSHIP d/b/a BISYS FUND SERVICES,
an Ohio limited partnership (herein called "BISYS").
WHEREAS, the Trust is an open-end, management investment company and is so
registered under the Investment Company Act of 1940;
WHEREAS, the Trust intends to offer one or more classes of shares of
beneficial interest ("Shares") in each series either now or hereafter offered
(individually, a "Fund,"collectively, the "Funds") by the Trust; and
WHEREAS, the Trust desires to retain BISYS as its administrator to provide
it with certain administrative services with respect to each of the Funds set
forth in Schedule A attached hereto, and BISYS 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:
I. DELIVERY OF DOCUMENTS
The Trust has delivered to BISYS copies of each of the following documents
and will deliver to it all future amendments and supplements thereto, if any:
(a) The Trust's Agreement and Declaration of Trust and all
amendments thereto (such Agreement and Declaration of Trust, as
presently in effect and as it shall from time to time be amended,
herein called the "Trust's Declaration");
(b) The Code of Regulations of the Trust (such Code of Regulations
as presently in effect and as it shall from time to time be amended,
herein called the "Code of Regulations");
(c) Resolutions of the Board of Trustees of the Trust authorizing
the execution and delivery of this Agreement;
(d) The Trust's Registration Statement under the Securities Act of
1933, as amended (the "1933 Act"), and the Investment Company Act of
1940, as amended (the "1940 Act"), on Form N-1A as filed with the
Securities and Exchange Commission (the "Commission") on March 21,
1988 relating to the Shares and any amendments thereto;
(e) Notification of registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission;
(f) Prospectuses and statements of additional information of the
Trust with respect to the Funds (such prospectuses and statements of
additional information, as presently in effect and as they shall
from time to time be amended and supplemented, herein called
individually the "Prospectus" and collectively the "Prospectuses");
and
(g) Copies of the Trust's Distribution, Service and Shareholder
Processing Plans (the "Plans") with respect to certain classes of
shares of the Funds.
II. ADMINISTRATION
1. APPOINTMENT OF ADMINISTRATOR. The Trust hereby appoints BISYS as
its Administrator for each of the Funds on the terms and for the period
set forth in this Agreement and BISYS hereby accepts such appointment and
agrees to perform the services and duties set forth in this Section II for
the compensation provided in this Section. The Trust understands that
BISYS now acts and will continue to act as administrator of various
investment companies and fiduciary of other managed accounts, and the
Trust has no objection to BISYS's so acting. In addition, it is
understood that the persons employed by BISYS to assist in the performance
of its duties hereunder will not devote their full time to such services
and nothing herein contained shall be deemed to limit or restrict the
right of BISYS or any affiliate of BISYS to engage in and devote time and
attention to other businesses or to render services of whatever kind or
nature.
2. SERVICES AND DUTIES.
(a) BISYS agrees to perform the services enumerated below in
accordance with the service standards set forth in Schedule B
attached hereto and made a part hereof. As Administrator, and
subject to the supervision and control of the Trust's Board of
Trustees, BISYS will provide facilities, equipment, statistical and
research data, clerical, accounting and bookkeeping services,
internal compliance services relating to accounting and legal
matters, and personnel to carry out all administrative services
required for operation of the business and affairs of the Funds,
other than those investment advisory functions which are to be
performed by the Trust's investment adviser (the "Adviser") pursuant
to the Advisory Agreement, the services of Emerald Asset Management,
Inc. ("EAM") as Distributor pursuant to the Distribution Agreement,
those services to be performed by the Trust's custodian and transfer
agent, those services to be provided by BISYS, EAM or others under
the Plans, and those services normally performed by the Trust's
counsel and auditors. BISYS's responsibilities include without
limitation the following services (except to the extent the same are
provided by BISYS, EAM or others under the Plans):
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(1) Providing a facility to receive purchase and redemption
orders via toll-free IN-XXXXX telephone lines;
(2) Providing for the preparing, supervising and mailing of
confirmations for all purchase and redemption orders;
(3) Providing and supervising the operation of order-taking
facilities, including an automated data processing system to
process purchase and redemption orders received by EAM (BISYS
assumes responsibility for the accuracy of the data
transmitted for processing or storage);
(4) Overseeing the performance of The Bank of New York under
the Custody Agreement and the performance of BISYS Fund
Services, Inc. under the Transfer Agency Agreement with
respect to shareholder accounts;
(5) Except to the extent the same is performed by a Service
Organization under a Plan, making available information
concerning each Fund to its shareholder accounts; distributing
written communications to each Fund's shareholders of record
such as periodic listings of each Fund's securities, annual
and semi-annual reports, and Prospectuses and supplements
thereto; and handling problems relating to shareholders and
calls relating to administrative matters; and
(6) Providing and supervising the services of employees
("relationship coordinators") whose principal responsibility
and function shall be to preserve and strengthen each Fund's
relationships with its shareholders.
(b) BISYS shall assure that persons are available to transmit
redemption requests to the Trust's transfer agent as promptly as
practicable.
(c) BISYS shall assure that persons are available to transmit
orders accepted for the purchase of Shares to the transfer agent of
the Trust as promptly as practicable.
(d) BISYS shall participate in the periodic updating of the
Prospectuses and shall accumulate information for and, subject to
approval by the Trust's Treasurer and legal counsel, coordinate the
preparation, filing, printing and dissemination of reports to the
Funds' shareholders and 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.
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(e) BISYS shall compute, or provide for the computation of, the
per share net asset value and public offering price for each class
of each Fund on each business day.
(f) BISYS shall calculate, or provide for the calculation of,
dividends and capital gain distributions to be paid to the
shareholders of each Fund in conformity with Subchapter M of the
Internal Revenue Code.
(g) BISYS shall pay all costs and expenses of maintaining the
offices of the Trust, wherever located, and shall arrange for
payment by the Funds of all expenses payable by the Funds.
(h) BISYS, after consultation with legal counsel for the Trust,
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 Funds shall be
made by the Funds.
(i) BISYS shall provide the services of certain persons who may be
appointed as officers of the Trust by the Trust's Board of Trustees.
(j) BISYS shall oversee the maintenance by The Bank of New York
and BISYS Fund Services, Inc. of the books and records required
under the 1940 Act in connection with the performance of the Custody
Agreement and Transfer Agency Agreement, and shall maintain, or
provide for the maintenance of, such other books and records (other
than those required to be maintained by the Adviser) as may be
required by law or may be required for the proper operation of the
business and affairs of the Funds. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, BISYS agrees that all
such books and records which it maintains, or is responsible for
maintaining, for the Funds are the property of the Trust and further
agrees to surrender promptly to the Trust any of such books and
records upon the Trust's request. BISYS further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act said
books and records required to be maintained by Rule 31a-1 under said
Act.
(k) BISYS shall coordinate the preparation of the Funds' federal,
state and local income tax returns.
(l) BISYS shall prepare and, subject to approval of the Trust's
Treasurer, disseminate to the Trust's Trustees the Trust's and each
Fund's quarterly financial statements and schedules of investments,
and shall prepare such other reports relating to the business and
affairs of the Trust and each Fund (not otherwise appropriately
prepared by the Adviser, EAM, the Trust's counsel or auditors, or
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by BISYS, EAM or others pursuant to a Plan) as the officers and
Trustees of the Trust may from time to time reasonably request in
connection with the performance of their duties.
(m) In performing its duties as Administrator of the Trust, BISYS
will act in conformity with the Trust's Declaration, Code of
Regulations and Prospectuses and with the instructions and
directions of the Board of Trustees of the Trust and will conform to
and comply with the requirements of the 1940 Act and all other
applicable federal or state laws and regulations.
3. SUBCONTRACTORS. It is understood that BISYS may from time to time
employ or associate with itself such person or persons as BISYS 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 BISYS and that BISYS shall be as fully
responsible to the Trust 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 BISYS intends to enter into an
agreement ( the "Fund Accounting Agreement") with BISYS Fund Services,
Inc. (the "Fund Accountant") under which said company will provide certain
accounting, bookkeeping, pricing and dividend and distribution calculation
services with respect to the Funds. It is further understood that each
Fund shall reimburse the Fund Accountant for its reasonable out-of-pocket
expenses in providing services under the Fund Accounting Agreement,
including without limitation the following:
(a) All freight and other delivery and bonding charges incurred by
the Fund Accountant in delivering materials to and from the Trust;
(b) All direct telephone transmission and telecopy or other
electronic transmission expenses incurred by the Fund Accountant in
communication with the Trust, the Trust's investment adviser or
custodian, dealers or others as required for the Fund Accountant to
perform the services to be provided under the Fund Accounting
Agreement;
(c) The cost of obtaining security market quotes from independent
pricing services;
(d) The cost of microfilm or microfiche of records or other
materials;
(e) Any expenses the Fund Accountant shall incur at the written
direction of an officer of the Trust thereunto duly authorized; and
(f) Any additional expenses reasonably incurred by the Fund
Accountant in the performance of its duties and obligations under
the Fund Accounting Agreement.
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4. EXPENSES ASSUMED AS ADMINISTRATOR. Except as otherwise stated in
Section II, subsection 3 and in this subsection 4, BISYS shall pay all
expenses incurred by it in performing its services and duties as
Administrator. Other expenses to be incurred in the operation of the
Funds (other than those borne by the Adviser) including taxes, interest,
brokerage fees and commissions, if any, fees of Trustees who are not
officers, directors, partners, employees or holders of five percent or
more of the outstanding voting securities of the Adviser or BISYS or any
of their affiliates, Securities and Exchange Commission fees and state
blue sky registration or qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees, payments under
the Plans, certain insurance premiums, outside auditing and legal
expenses, costs of maintaining corporate existence, costs attributable to
shareholder services, including without limitation telephone and personnel
expenses, costs of preparing and printing Prospectuses for regulatory
purposes, costs of shareholders' reports and Trust meetings and any
extraordinary expenses will be borne by the Trust.
5. COMPENSATION. For the services provided and the expenses assumed
as Administrator pursuant to Section II of this Agreement (including the
services provided by subcontractors pursuant to Section II, subsection 3
of this Agreement), the Trust will pay BISYS a fee, computed daily and
payable monthly, in accordance with Schedule C attached hereto and made a
part hereof. Such fee as is attributable to each Fund shall be a separate
(and not joint or joint and several) obligation of each such Fund.
Notwithstanding anything to the contrary herein, if in any fiscal year the
aggregate expenses of any Fund (as defined under the securities
regulations of any state having jurisdiction over such Fund) exceed the
expense limitations of any such state, the Trust may deduct from the fees
to be paid hereunder, or BISYS will bear, to the extent required by state
law, that portion of such excess which bears the same relation to the
total of such excess as BISYS' fee hereunder bears to the total fee
otherwise payable for the fiscal year by the Trust pursuant to this
Agreement and the Advisory Agreement between the Trust and the Adviser
with respect to such Fund. BISYS' obligation is not limited to the amount
of its fees hereunder. Such deduction or payment, if any, will be
estimated and accrued daily and paid on a monthly basis.
III. CONFIDENTIALITY
BISYS will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and the Funds and
their prior or present shareholders or those persons or entities who respond to
EAM's inquiries concerning investment in the Trust, and except as provided
below, will not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder. Any other use by
BISYS of the information and records referred to above may be made only after
prior notification to and approval in writing by the Trust. Such approval shall
not be unreasonably withheld and may not be withheld where (i) BISYS may be
exposed to civil or criminal contempt proceedings for failure to divulge such
information; (ii) BISYS is requested to divulge such information by duly
constituted authorities; or (iii) BISYS is so requested by the Trust.
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IV. LIMITATION OF LIABILITY
BISYS shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Trust in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or negligence on its part in the performance of its duties or from its reckless
disregard of its obligations and duties under this Agreement. Any person, even
though also an officer, director, partner, employee or agent of BISYS, who may
be or become an officer, Trustee, employee or agent of the Trust, shall be
deemed, when rendering services to the Trust or to any Fund, or acting on any
business of the Trust or of any Fund (other than services or business in
connection with BISYS's duties hereunder) to be rendering such services to or
acting solely for the Trust or Fund and not as an officer, director, partner,
employee or agent or one under the control or direction of BISYS even though
paid by BISYS.
V. DURATION AND TERMINATION
This Agreement shall continue in effect with respect to each Fund, unless
earlier terminated by either party hereto as provided hereunder, until
, 1999, and thereafter shall continue for successive one-year terms; provided,
however, that either party hereto may terminate this Agreement at any time
during any such renewal term for any or no reason by the provision of 90 days'
written notice to the other party, and provided further that such continuance is
specifically reviewed and approved at least annually (a) by the vote of a
majority of the Trust's Board of Trustees or by the vote of a majority of the
outstanding voting securities of such Fund and (b) by the majority of the
Trust's Trustees who are not parties to the Agreement or interested persons (as
defined in the 0000 Xxx) of any party to this Agreement. This Agreement is also
terminable at any time during the initial or any renewal term upon mutual
agreement of the parties hereto or for "cause" (as defined below) by the party
alleging "cause," in either case on not less than 30 days notice by the Trust's
Board of Trustees or by BISYS; provided that no notice shall be required with
respect to clauses (b), (c) or (e) of the definition of "cause" below.
If after such termination for so long as BISYS, with the written 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
BISYS and unpaid by the Trust upon such termination shall be immediately due and
payable upon and notwithstanding such termination. BISYS shall be entitled to
collect from the Trust, in addition to the compensation described under Section
II, subsection 5 hereof, the amount of all of BISYS' reasonable cash
disbursements for services in connection with BISYS' 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, BISYS
will provide the Trust with reasonable access to all Trust documents or records,
if any, remaining in its possession.
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For purposes of this Agreement, "cause" shall mean (a) willful
misfeasance, bad faith, negligence or reckless disregard on the part of the
party to be terminated with respect to its obligations and duties set forth
herein; (b) a 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; (c) financial difficulties on the part
of the party to be terminated which is 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; (d) any circumstance which substantially impairs the performance of
the obligations and duties of the party to be terminated, or the ability to
perform those obligations and duties, as contemplated herein; or (e) the
existence of a performance standard deficiency, as such term is defined in
Schedule B hereto.
If, for any reason other than mutual agreement or "cause" as defined
above, during the initial term of this Agreement, BISYS is replaced as fund
administrator, or if a third party is added to perform all or a part of the
services provided by BISYS under this Agreement (excluding any subcontractor
appointed by BISYS as provided in Section II, subsection 3 hereof), then the
Trust shall make a one-time cash payment, as liquidated damages, to BISYS equal
to the balance due BISYS for the remainder of the initial term of this
Agreement, assuming for purposes of calculation of the payment that the asset
level of the Trust on the date BISYS is replaced, or a third party is added,
will remain constant for the balance of the initial term.
VI. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the party against whom
an enforcement of the change, waiver, discharge or termination is sought.
VII. NOTICES
Notices of any kind to be given to the Trust hereunder by BISYS shall be
in writing and shall be duly given if mailed or delivered to the Trust at 00
Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxx X.
Xxxxxxxx, Esq., President, with a copy to Drinker Xxxxxx & Xxxxx, Philadelphia
Xxxxxxxx Xxxx Xxxxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxx, or at such other address or to such individual as shall be so
specified by the Trust to BISYS. Notices of any kind to be given to BISYS
hereunder by the Trust shall be in writing and shall be duly given if mailed or
delivered to BISYS at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention:
Xxxxxxx X. Xxxxxx, or at such other address or to such individual as BISYS shall
specify to the Trust.
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VIII. MISCELLANEOUS
1. CONSTRUCTION. 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 VIII, subsection 2
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 Ohio
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.
2. ASSIGNMENT. This Agreement and the rights and duties hereunder
shall not be assignable by either of the parties hereto except by the specific
written consent of the other party. This subsection 3 shall not limit or in any
way affect BISYS' right to appoint sub-contractors pursuant to Section II,
subsection 3 hereof.
3. NAMES. The names "Emerald Funds" and "Trustees of Emerald Funds"
refer respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under an Agreement and
Declaration of Trust dated March 15, 1988 which is hereby referred to and a copy
of which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and the principal office of the Trust. The obligations of
"Emerald Funds" entered into in the name or on behalf thereof by any of its
Trustees, representative or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust property belonging to such class for the enforcement of any claims
against the Trust.
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.
EMERALD FUNDS
By: _______________________________________
President
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: BISYS FUND SERVICES, INC.,
GENERAL PARTNER
By: ________________________________________
Executive Vice President
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
BETWEEN EMERALD FUNDS
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
FUNDS
This Agreement shall apply to all share classes of all Funds of Emerald Funds,
either now or hereafter created. The current share classes and Funds are set
forth below.
Emerald Equity Fund - Retail Shares and Institutional Shares
Emerald Small Capitalization Fund - Retail Shares and Institutional Shares
Emerald Balanced Fund - Retail Shares and Institutional Shares
Emerald Short-Term Fixed Income
Fund - Retail Shares and Institutional Shares
Emerald U.S. Government Securities
Fund - Retail Shares and Institutional Shares
Emerald Managed Bond Fund - Retail Shares and Institutional Shares
Emerald Florida Tax-Exempt Fund - Retail Shares and Institutional Shares
Emerald Prime Fund - Retail Shares, Emerald Shares and Emerald Service Shares
Emerald Treasury Fund - Retail Shares, Emerald Shares and Emerald Service Shares
Emerald Tax-Exempt Fund - Retail Shares, Emerald Shares and Emerald Service
Shares
Emerald Treasury Trust Fund - Emerald Shares
Emerald Prime Trust Fund - Emerald Shares
Emerald International Equity Fund - Retail Shares and Institutional Shares
Emerald Equity Value Fund - Retail Shares and Institutional Shares
SCHEDULE B
TO THE ADMINISTRATION AGREEMENT
BETWEEN EMERALD FUNDS
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
ADMINISTRATION
AND
COMPLIANCE SERVICE STANDARDS
Pursuant to Section II, subsection 2(a) of this Agreement, BISYS has agreed to
perform the services described in this Agreement in accordance with the service
standards set forth in this Schedule B. Such standards are contained on the
pages attached hereto. The parties agree that such performance standards may be
revised, from time to time, by mutual agreement. The parties further agree that
BISYS shall provide a report (the "Report") to the Trust's Board of Trustees at
each Regular Meeting of such Board and, if requested, at any Special Meeting of
such Board, which shall describe BISYS' performance and shall indicate whether
the standards attached hereto have been met for the relevant reporting period.
It is further agreed that any failure to meet a performance standard shall
require BISYS to (1) take appropriate corrective action or (2) provide an
explanation satisfactory to the Board which states why such standard cannot be
met. In the former case, except for those instances in which BISYS' failure to
meet a performance standard was due to circumstances beyond its control, BISYS
agrees that (1) any material failure to meet the standards, or provide a
complete remedy for such failure satisfactory to the Board, with respect to the
Compliance and Blue Sky Services listed under Sections B and C attached hereto
or (2) with respect to the Client Services listed under Section A attached
hereto, any failure to raise for a period of at least __ consecutive days within
90 days following the last day of the period covered by the relevant Report, its
performance to the standards levels set forth therein or such lower level that
is deemed satisfactory by the Board shall constitute a performance standard
deficiency for purposes of the "cause" definition contained in Section V of the
Agreement.
Dated: ___________________
SCHEDULE C
TO THE ADMINISTRATION AGREEMENT
BETWEEN EMERALD FUNDS
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
FEES
BISYS shall be entitled to receive a fee from the Trust in accordance with the
following schedule:
Average Daily Net Assets of All Funds Fee Amount
------------------------------------- ----------
First $5 billion* .0775%
Next $2.5 billion .07%
Next $2.5 billion .065%
All assets exceeding $10 billion .05%
* In the event average daily net assets for all Funds within the Trust fall
below $3 billion, the fee payable to BISYS will be increased to eight
one-hundredths of one percent (.08%) of such average daily net assets.
EMERALD FUNDS
By: _______________________________________
BISYS FUND SERVICES LIMITED
PARTNERSHIP
By: BISYS FUND SERVICES, INC.,
GENERAL PARTNER
By: ________________________________________
