EXHIBIT 23(d)(5)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 29th day of October, 1998, by and
between THE INFINITY MUTUAL FUNDS, INC. (the "Company"), a Maryland corporation,
and BISYS FUND SERVICES OHIO, INC. (the "Administrator"), an Ohio corporation.
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares of common stock ("Shares"); and
WHEREAS, the Company desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
each currently existing series of the Company advised by First American National
Bank (the "Bank"), and such additional series advised by the Bank as the Company
and the Administrator may agree on ("Portfolios") and as listed on Schedule A
attached hereto and made a part of this Agreement, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and the Administrator hereby agree as
follows:
ARTICLE 1. RETENTION OF THE ADMINISTRATOR. The Company hereby retains
the Administrator to act as the administrator of the Portfolios and to furnish
the Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment 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 Company in any way and shall
not be deemed an agent of the Company.
ARTICLE 2. ADMINISTRATIVE SERVICES. The Administrator shall perform or
supervise the performance by others of administrative services in connection
with the operations of the Portfolios, and, on behalf of the Company, 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 Portfolios' operations. The Administrator
shall provide the Directors of the Company 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 agrees to perform the
services described herein in accordance with all applicable laws, rules and
regulations and in accordance with the service standards set forth in Schedule B
attached hereto.
The Administrator shall provide the Company with regulatory reporting,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Directors' meetings) for handling
the affairs of the Portfolios 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 Directors, the
Administrator shall make reports to the Company's Directors concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Company expenses and control
all disbursements for the Company, and as appropriate
compute the Company's yields, total return, expense ratios,
portfolio, turnover rate and, if required, portfolio average
dollar-weighted maturity;
(b) assist Company counsel with the preparation of
prospectuses, statements of additional information,
registration statements and proxy materials;
(c) prepare such reports, applications and documents
(including reports regarding the sale and redemption of
Shares as may be required in order to comply with Federal
and state securities law) as may be necessary or desirable
to register the Company's Shares with state securities
authorities, monitor the sale of Company Shares for
compliance with state securities laws, and file with the
appropriate state securities authorities the registration
statements and reports for the Company and the Company's
Shares and all amendments thereto, as may be necessary or
convenient to register and keep effective the Company and
the Company's Shares with state securities authorities to
enable the Company to make a continuous offering of its
Shares;
(d) develop and prepare, with the assistance of the
Company's investment adviser, communications to
Shareholders, including the annual report to Shareholders,
coordinate the mailing of prospectuses, notices, proxy
statements, proxies and other reports to Company
Shareholders, and supervise and facilitate the proxy
solicitation process for all shareholder meetings, including
the tabulation of shareholder votes;
(e) administer contracts on behalf of the Company with,
among others, the Company's investment adviser, distributor,
custodian, transfer agent and fund accountant;
(f) supervise the Company's transfer agent with respect
to the payment of dividends and other distributions to
Shareholders;
(g) calculate performance data of the Portfolios for
dissemination to information services covering the
investment company industry;
(h) coordinate and supervise the preparation and filing
of the Company's tax returns;
(i) examine and review the operations and performance
of the various organizations providing services to the
Company or any Portfolio of the Company, including, without
limitation, the Company's investment adviser, distributor,
custodian, fund accountant, transfer agent, outside legal
counsel and independent public accountants, and at the
request of the Board of Directors, report to the Board on
the performance of organizations;
(j) assist with the layout and printing of publicly
disseminated prospectuses and assist with and coordinate
layout and printing of the Company's semi-annual and annual
reports to Shareholders;
(k) assist with the design, development, and operation
of the Portfolios, including new classes, investment
objectives, policies and structure;
(l) provide individuals reasonably acceptable to the
Company's Board of Directors to serve as officers of the
Company, who will be responsible for the management of
certain of the Company's affairs as determined by the
Company's Board of Directors;
(m) advise the Company and its Board of Directors on
matters concerning the Company and its affairs;
(n) obtain and keep in effect fidelity bonds and
directors and officers/errors and omissions insurance
policies for the Company in accordance with the requirements
of Rules 17g-1 and 17d-1(7) under the 1940 Act, as amended
from time to time, as such bonds and policies are approved
by the Company's Board of Directors;
(o) monitor and advise the Company and its Portfolios
on their registered investment company status under the
Internal Revenue Code of 1986, as amended;
(p) perform all administrative services and functions
of the Company and each Portfolio to the extent
administrative services and functions are not provided to
the Company or such Portfolio pursuant to the Company's or
such Portfolio's investment advisory agreement, distribution
agreement, custodian agreement, transfer agent agreement and
fund accounting agreement;
(q) furnish advice and recommendations with respect to
other aspects of the business and affairs of the Portfolios
as the Company and the Administrator shall determine
desirable; and
(r) prepare and file with the SEC the semi-annual
report for the Company on Form N-SAR and all required
notices pursuant to Rule 24f-2, as amended from time to
time.
The Administrator shall consult with officers of the Company and the
Company's investment adviser and, in connection therewith, shall perform the
above-referenced services and such other services for the Company 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
Portfolios; preparing an annual list of Shareholders; and mailing notices of
Shareholders' meetings, proxies and proxy statements, for all of which the
Company will pay 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 Company as well as all Directors of the
Company who are 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 Company retained by the Directors of the
Company to perform services on behalf of the Company.
(B) THE COMPANY. The Company assumes and shall pay or cause to be paid
all other expenses of the Company 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 and state securities laws, fees and out-of-pocket expenses of Directors
who are not affiliated persons of the Administrator or the Investment Adviser to
the Company 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 to the Company.
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 Company shall pay to the Administrator compensation at an
annual rate specified in Schedule A attached hereto. Such compensation shall
also be in consideration for the fund accounting services provided by the
Administrator pursuant to the Fund Accounting Agreement, dated October 29, 1998,
between the Administrator and the Company. Such compensation shall be calculated
and accrued daily, and paid to the Administrator monthly. The Company shall also
reimburse the Administrator for its reasonable itemized 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, except to the extent that such right to
compensation is in contravention of applicable law.
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 malfeasance or
misfeasance, bad faith or negligence in the 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, without limitation, 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 Company assumes 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. Notwithstanding the foregoing, the Administrator agrees to
indemnify and hold harmless the Company, its employees, agents, directors,
officers and nominees from and against any and all actions, suits and claims,
whether groundless or otherwise, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and other
expenses of every nature and character arising out of or in any way relating to
the Administrator's bad faith, willful malfeasance or misfeasance, negligence,
or reckless disregard by it of its obligations and duties, with respect to the
performance of services under this Agreement. 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 provisions contained herein shall apply, however, it is
understood that if in any case the indemnifying party may be asked to indemnify
or hold the indemnified party harmless, the indemnifying party shall be fully
and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the indemnified party will use all
reasonable care to identify and notify the indemnifying party promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the indemnifying party,
but failure to do so in good faith shall not affect the rights hereunder.
The indemnifying party 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 indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the indemnifying party and satisfactory to the
indemnified party, whose approval shall not be unreasonably withheld. In the
event that the indemnifying party elects to assume the defense of any suit and
retain counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by it. If the indemnifying party does not elect to
assume the defense of a suit, it will reimburse the indemnified party for the
reasonable fees and expenses of any counsel retained by the indemnified party.
The Administrator may apply to the Company at any time for
instructions and may consult counsel for the Company and with accountants and
other experts retained by the Company 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 Administrator will not be held to have
notice of any change of authority of any officers, employees or agents of the
Company until receipt of written notice thereof from the Company.
ARTICLE 6. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator rendered to the Company 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.
ARTICLE 7. DURATION OF THIS AGREEMENT. The Term of this Agreement
shall be as specified in Schedule A hereto.
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, with the prior written consent of
the Company, which consent shall not be unreasonably withheld, 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 the Administrator shall be responsible, to the extent
provided in Article 5 hereof, for all acts of such 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.
ARTICLE 9. AMENDMENTS. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Directors of the Company, and (ii) by the vote of a majority of
the Directors of the Company who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Directors meeting called
for the purpose of voting on such approval.
With the mutual consent of duly authorized officers of the parties,
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 approved by the
Company 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
as required by applicable law. Any records required to be maintained and
preserved pursuant to Rules 31a-1 and 31a-2 under the 1940 Act, as amended from
time to time, which are prepared or maintained by the Administrator on behalf of
the Company shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Company and will be made
available to or surrendered promptly to the Company on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Company and follow the
Company's instructions as to permitting or refusing such inspection; provided
that, with reasonable prior notice to the Company, 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 Company 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 Securities and
Exchange Commission.
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 following address: 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000,
or at such other address as such party may from time to time specify in writing
to the other party pursuant to this Section. Copies of notices that are given to
the Company shall also be sent to First American National Bank, 000 Xxxxx
Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000-0000, Attn: General
Counsel.
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, as amended from time to time. 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.
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. YEAR 2000. The Administrator agrees to perform
comprehensive tests on the systems it utilizes to provide the services hereunder
to simulate the actual turning of the century. These tests shall be intended to
identify any operational issues caused by the century change at midnight
December 31, 1999. The Administrator agrees to use all commercially reasonable
efforts to implement by June 30, 1999, all necessary updates and changes for
such systems, if any, to accommodate the turn of the century. The Administrator
agrees to provide to the Company quarterly updates on the status of its Year
2000 readiness project and to make its personnel reasonably available to address
any questions or concerns.
In the event that, at any time prior to November 1, 1999, the Company
reasonably determines, as a result of the periodic updates provided by the
Administrator, that any of the systems the Administrator utilizes to perform the
services hereunder will not be Year 2000 ready by December 31, 1999, and that
such lack of readiness will have a materially adverse effect on the Company, the
Company shall have the right to terminate this Agreement upon providing written
notice to the Administrator describing, in reasonable detail, the basis for its
termination; provided, however, that the Administrator shall have sixty (60)
days following receipt of any such notice to cure any deficiencies to the
Company's reasonable satisfaction. Promptly upon becoming aware of such, the
Administrator agrees to use all commercially reasonable efforts to cure any
defect or deficiency that relates to the turn of the century in any system the
Administrator utilizes to provide the services hereunder.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE INFINITY MUTUAL FUNDS, INC.
By:____________________________
Title:_________________________
BISYS FUND SERVICES OHIO, INC.
By:____________________________
Title:_________________________
AGREED TO AND ACCEPTED:
FIRST AMERICAN NATIONAL BANK
By: ________________________________
Title: ______________________________
SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF OCTOBER 29, 1998
BETWEEN
THE INFINITY MUTUAL FUNDS, INC.
AND
BISYS FUND SERVICES OHIO, INC.
Portfolios: This Agreement shall apply to all Portfolios of The Infinity
Mutual Funds, Inc. advised by the Bank, either now or
hereafter created (collectively, the "Portfolios"). The
current Portfolios of the Company advised by the Bank are
set forth below:
MONEY MARKET PORTFOLIOS:
ISG Prime Money Market Fund
ISG Treasury Money Market Fund
ISG Government Money Market Fund
ISG Tax-Exempt Money Market Fund
NON-MONEY MARKET PORTFOLIOS:
ISG Limited Term U.S. Government Fund
ISG Government Income Fund
ISG Limited Term Income Fund
ISG Income Fund
ISG Limited Term Tennessee Tax-Exempt Fund
ISG Tennessee Tax-Exempt Fund
ISG Municipal Income Fund
ISG Capital Growth Fund
ISG Equity Income Fund
ISG Mid-Cap Fund
ISG Large-Cap Equity Fund
ISG Small-Cap Opportunity Fund
ISG International Equity Fund
ISG Equity Value Fund
ISG Aggressive Growth Portfolio
ISG Growth Portfolio
ISG Growth & Income Portfolio
ISG Moderate Growth & Income Portfolio
ISG Current Income Portfolio
Stewardship Large-Cap Equity Fund
Stewardship Small-Cap Equity Fund
Stewardship Mid-Cap Equity Fund
Fees: Pursuant to Article 4, in consideration of the services
rendered and expenses assumed pursuant to this Agreement and
the Fund Accounting Agreement, dated October 29, 1998,
between the Administrator and the Company, the Company 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 of:
MONEY MARKET PORTFOLIOS:
Ten one-hundredths of one percent (.10%) of the Portfolio's
average daily net assets.
NON-MONEY MARKET PORTFOLIOS:
Fifteen one-hundredths of one percent (.15%) of the
Portfolio's average daily net assets.
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 purposes of determining the fees payable to the
Administrator, the value of the net assets of a particular
Portfolio shall be computed in the manner described in the
Company's Articles of Incorporation or in the Prospectus or
Statement of Additional Information respecting that
Portfolio 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 Portfolio.
The parties hereby confirm that the fees payable hereunder
shall be applied to each Portfolio as a whole, and not to
separate classes of shares within the Portfolios.
The fee payable by the Company hereunder shall be allocated
to each Portfolio based upon its pro rata share of the total
fee payable hereunder. Such fee as is attributable to each
Portfolio shall be a separate (and not joint or joint and
several) obligation of each such Portfolio. 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.
Term: Pursuant to Article 7, the term of this Agreement shall
commence on January 1, 1999, and shall remain in effect
until December 31, 2003 (the "Initial Term"). Thereafter,
unless otherwise terminated as provided herein, this
Agreement may be renewed for successive one-year periods
("Rollover Periods") by the execution of a letter of renewal
on behalf of each of the parties hereto at least 60 days
prior to the end of the Initial Term or any Rollover Period,
as the case may be. This Agreement may be terminated without
penalty (i) by failure to renew in the manner set forth
above, (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.
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, 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 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; (d) a service
standard deficiency, as defined in Schedule B attached
hereto; or (e) a failure to cure any Year 2000 deficiencies
pursuant to ARTICLE 15 of this Agreement.
Notwithstanding the foregoing, after such termination for so
long as the Administrator, with the written consent of the
Company, 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 Company
upon such termination shall be immediately due and payable
upon and notwithstanding such termination. The Administrator
shall be entitled to collect from the Company, in addition
to the compensation described in this Schedule A, the 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 Company and/or its designees of the
Company's property, records, instruments and documents, or
any copies thereof. The Administrator shall use its best
efforts to promptly effectuate the transition of services to
any successor administrator in the event this Agreement is
terminated. Subsequent to such termination, for a reasonable
fee, the Administrator will provide the Company with
reasonable access to any Company documents or records
remaining in its possession.
If, during the Initial Term, for any reason other than
nonrenewal, mutual agreement of the parties or "cause," as
defined above, the Administrator (i) is replaced as fund
manager and administrator, 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), (ii) is replaced as fund accountant,
or if a third party is added to perform all or a part of the
fund accounting services provided under the Fund Accounting
Agreement, dated as of October 29, 1998, between the
Administrator and the Company (excluding any sub-accountant
appointed by the Administrator pursuant to such Fund
Accounting Agreement), and/or (iii) is replaced as transfer
agent, or if a third party is added to perform all or a part
of the transfer agency services provided under the Transfer
Agency Agreement, dated as of October 29, 1998, between the
Administrator and the Company (excluding any sub-transfer
agent appointed by the Administrator pursuant to such
Transfer Agency Agreement), then the Company shall make a
one-time cash payment, as liquidated damages, to the
Administrator that shall be computed as set forth below. In
the event the Company is 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 or
the other service agreements referenced above, 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 services.
The one-time cash payment of liquidated damages shall be due
and payable immediately following the replacement of the
Administrator as fund administrator, fund accountant and/or
transfer agent. In the case of a merger or liquidation of
the Company, that shall be immediately following the day
during which assets are transferred pursuant to the plan of
reorganization or liquidation. Such payment amount shall be
computed as follows: (i) in the event the Company is merged
into another entity and the Administrator is not retained to
provide administration services, in the event the
Administrator ceases to provide services following (A) the
merger of the Company into another entity or (B) a
Performance Evaluation, as defined below, such payment shall
be equal to the sum of the following: (A) all monies
advanced by the Administrator or any of its affiliates in
connection with the transition of service providers from
Federated Investors to BISYS Fund Services, (B) with respect
to monies set aside by the Administrator for Company
initiatives, those amounts that were utilized by the Company
that were over and above the monthly accrual amount, (C) all
out-of-pocket expenses incurred by the Administrator or any
of its affiliates in connection with Company marketing
initiatives and (D) $500,000; or (ii) in the event the
Administrator is replaced as a service provider for any
other reason or, if a third party is added to perform all or
a part of the services provided herein or in the other
service agreements referenced above, such payment shall be
equal to the balance due the Administrator under this
Agreement for the lesser of (A) the next 12 months of the
Initial Term or (B) the remainder of such Initial Term,
assuming for purposes of calculation of the payment that (i)
such balance shall be based upon the average amount of the
Company's assets for the twelve months prior to the date the
Administrator is replaced or a third party is added and (ii)
such payment shall be based upon the actual fee being
charged, which may or may not be lower than the contractual
fee amount.
*******
The remainder of the term of this Agreement, assuming for
purposes of calculation of the payment that the asset level
of the Company on the date the Administrator is replaced, or
a third party is added, will remain constant for the balance
of the contract term. In the event the Company 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 for purposes of calculating the payment
amount representing liquidated damages, the appropriate
asset level of the Company shall be the greater of: (i) the
asset level calculated for the Company at the time the
Company's Board of Directors receives notification of an
intention on the part of Fund management to effect such a
liquidation; (ii) the asset level calculated for the Company
at the time the Company's Board of Directors formally
approves such a liquidation; or (iii) the asset level
calculated for the Company on the day prior to the first day
during which assets are transferred by the Company to the
surviving entity pursuant to the liquidation.
The parties acknowledge and agree that, in the event of a
change of control (as defined in the 0000 Xxx) of the
Administrator (a "Change of Control"), the Company shall
have an option to replace the Administrator as administrator
for the Portfolios, subject to the liquidated damages
provisions set forth above, upon the provision of 60 days
written notice to the Administrator prior to the expiration
of the Initial Term or any subsequent Rollover Period. Such
option shall expire on the 60th day following the effective
date of the Change of Control.
The parties further acknowledge and agree that, in the event
the Administrator ceases to be retained, 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.
Following October 28, 2002, the Company may conduct an
interim evaluation of the market conditions for the services
provided under this Agreement ("Market Evaluation").
Following any such Market Evaluation, at the Company's
request, the parties shall negotiate in good faith an
amendment to this Schedule A pertaining to fees. In the
event the parties agree to an amendment that reflects fees
that are lower than those set forth in this Schedule A, such
amendment shall also extend the Initial Term of this
Agreement. In that regard, the newly created Initial Term
shall expire four years following the date of such
amendment. In the event the parties (i) agree that no such
amendment is necessary or (ii) agree to an amendment that
reflects fees that are equal to or higher than those set
forth in this Schedule A, this Agreement shall continue in
full force and effect without an extension of the Initial
Term.
In the event of a change of control (as such term is defined
in the 1940 Act) of the Administrator (a "Change of
Control"), the Company may conduct an interim evaluation of
the Administrator's performance under this Agreement (the
"Performance Evaluation"). Such Performance Evaluation shall
be conducted within 30 days following the Change of Control.
If the Company's Performance Evaluation indicates that the
quality level of services being provided by the
Administrator has materially diminished in the reasonable
judgment of the Company's Directors (but does not constitute
a material breach), the Company shall, within 30 days
following the Performance Evaluation, provide written notice
to the Administrator specifying the areas in which the
quality of service has diminished. The Administrator shall
have a period of 180 days in which to restore, to the
reasonable satisfaction of the Company, the quality level of
services. If, at the end of such 180-day period, the
Administrator has not restored the quality level of
services, the Company may by written notice to the
Administrator terminate this Agreement, subject to the
liquidated damages provisions contained herein, effective on
the 90th day after such termination notice is provided to
the Administrator.
SCHEDULE B
TO THE ADMINISTRATION AGREEMENT
DATED AS OF OCTOBER 29, 1998
BETWEEN
THE INFINITY MUTUAL FUNDS, INC.
AND
BISYS FUND SERVICES OHIO, INC.
SERVICE STANDARDS
Pursuant to Article 2 of this Agreement, the Administrator 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 page
attached hereto. The parties agree that such service standards may be revised,
from time to time, by mutual agreement.
Each of the service standards will be monitored by a Quality Assurance team,
which shall be identified in a separate writing that is executed by the parties.
In the event the Administrator fails to meet a service standard in any
particular month, the Administrator agrees to take appropriate corrective
measures within the following thirty-day period in order to be in compliance
with the appropriate standard at the end of such thirty-day period; provided,
however, that the foregoing requirement shall not apply in those instances in
which the Administrator's failure to meet a service standard was due to
circumstances beyond its control.
In the event the Administrator fails to meet a particular service standard
(except for any failure due to circumstances beyond its reasonable control) in
two consecutive months, the fee payable to the Administrator hereunder shall be
reduced by ten percent (10%) or such lower amount as the parties shall agree
upon for the second of those two months. If such failure occurs in three
consecutive months, the fee payable to the Administrator hereunder shall be
reduced by fifteen percent (15%) or such lower amount as the parties shall agree
upon for the third of those three months.
In the event the Administrator fails to meet a particular service standard
(except for any failure due to circumstances beyond its reasonable control) for
any three months within a six-month period, such failure shall be deemed to be a
service standard deficiency for purposes of the "cause" definition contained in
the Term provisions set forth in Schedule A.
FUND ADMINISTRATION SERVICE STANDARDS
FOR
THE ISG/STEWARDSHIP PORTFOLIOS
OF THE INFINITY MUTUAL FUNDS, INC.
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ITEM STANDARD
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Portfolio Compliance Reviews Monthly
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Financial Reports Printed and mailed sixty days
from Company's fiscal year end
& semi-annual period end
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Prospectus Updates Prepared and printed within five
days of the effective date of
the registration statement
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Accrual Reviews Monthly
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