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EXHIBIT (h)(1)
ADMINISTRATIVE SERVICE AGREEMENT
BETWEEN
AND
AMERICAN DATA SERVICES, INC.
[LOGO]
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INDEX
1. DUTIES OF THE ADMINISTRATOR........................................ 3
ADMINISTRATION......................................................... 3
FUND ACCOUNTING........................................................ 4
2. COMPENSATION OF THE ADMINISTRATOR.................................. 4
3. RESPONSIBILITY AND INDEMNIFICATION................................. 4
4. REPORTS............................................................ 4
5. ACTIVITIES OF THE ADMINISTRATOR.................................... 4
6. RECORDS............................................................ 4
7. CONFIDENTIALITY.................................................... 4
8. DURATION AND TERMINATION OF THE AGREEMENT.......................... 4
9. ASSIGNMENT......................................................... 4
10. NEW YORK LAWS TO APPLY............................................ 4
11. AMENDMENTS TO THIS AGREEMENT....................................... 4
12. MERGER OF AGREEMENT................................................ 4
13. NOTICES............................................................ 4
SCHEDULE A............................................................. 4
(A) ADMINISTRATIVE SERVICE FEE:........................................ 4
FEE INCREASES...................................................... 4
(B) EXPENSES........................................................... 4
(C) STATE REGISTRATION (BLUE SKY):..................................... 4
(D) SPECIAL REPORTS.................................................... 4
(E) SERVICE DEPOSIT.................................................... 4
SCHEDULE B............................................................. 4
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ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the ______ day of _________ 1999, by and between XXXXXXX., a
XXXXX Corporation / Business Trust, having its principal office and place of
business XXXXXXX(the "Fund"), and American Data Services, Inc., a New York
corporation having its principal office and place of business at the Hauppauge
Corporate Center, 000 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx
00000 (the "Administrator").
BACKGROUND
WHEREAS, the Fund is a diversified open-end management investment
company registered with the United States Securities and Exchange Commission
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Administrator is a corporation experienced in
providing administrative services to mutual funds and possesses facilities
sufficient to provide such services; and
WHEREAS, the Fund desires to avail itself of the experience,
assistance and facilities of the Administrator and to have the Administrator
perform for the Fund certain services appropriate to the operations of the Fund
and the Administrator is willing to furnish such services in accordance with the
terms hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the Fund and the Administrator hereby agree to
the following:
1. DUTIES OF THE ADMINISTRATOR.
ADMINISTRATION
The Administrator will provide the Fund with the necessary office
space, communication facilities and personnel to perform the following services
for the Fund:
(a) Monitor all regulatory (1940 Act and IRS) and prospectus
restrictions for compliance;
(b) Prepare and coordinate the printing of semi-annual and annual
financial statements;
(c) Prepare selected management reports for performance and
compliance analyses as agreed upon by the Fund and
Administrator from time to time;
(d) Prepare Directors meeting agendas and selected financial data
required for directors' meetings as agreed upon by the Fund
and the Administrator from time to time, attend and conduct
all fund business at Board meetings, and prepare Board
minutes;
(e) Determine income and capital gains available for distribution
and calculate distributions required to meet regulatory,
income, and excise tax requirements, to be reviewed by the
Fund's independent public accountants;
(f) Prepare the Fund's federal, state, and local tax returns to be
reviewed by the Fund's
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independent public accountants;
(g) Prepare and maintain the Fund's operating expense budget to
determine proper expense accruals to be charged to the Fund in
order to calculate it's daily net asset value;
(h) 1940 ACT filings -
- Prepare the Fund's Form N-SAR reports and file with SEC via
XXXXX;
- Prepare all financial information required by fund counsel to
complete annual update to Form N-1a and the Fund's Statement
of Additional Information and arrange for filing with the SEC
via XXXXX;
- Prepare and file with SEC via XXXXX annual update to Fund's
24f-2 filing (if applicable);
(i) Monitor services provided by the Fund's custodian bank as well
as any other service providers to the Fund;
(j) The Administrator shall assist the Fund's independent auditors,
or, upon approval of the Fund, any regulatory body, in any
requested review of the Fund's accounts and records. Provide
appropriate financial schedules (as requested by the Fund's
independent public accountants or SEC examiners), coordinate
the Fund's annual or SEC audit, and provide office facilities
as may be required;
(k) The preparation and filing (registration and ADS filing fees to
be paid by the Fund) of applications and reports as necessary
to register or maintain the Funds registration under the
securities or "Blue Sky" laws of the various states selected
by the Fund.
FUND ACCOUNTING
(a) Timely calculate and transmit to NASDAQ the Fund's daily net
asset value and communicate such value to the Fund and its
transfer agent;
(b) Maintain and keep current all books and records of the Fund as
required by Rule 31a-1 under the 1940 Act, as such rule or any
successor rule may be amended from time to time ("Rule
31a-1"), that are applicable to the fulfillment of ADS's
duties hereunder, as well as any other documents necessary or
advisable for compliance with applicable regulations as may be
mutually agreed to between the Fund and ADS. Without limiting
the generality of the foregoing, ADS will prepare and maintain
the following records upon receipt of information in proper
form from the Fund or its authorized agents:
- Cash receipts journal
- Cash disbursements journal
- Dividend record
- Purchase and sales - portfolio securities journals
- Subscription and redemption journals
- Security ledgers
- Broker ledger
- General ledger
- Daily expense accruals
- Daily income accruals
- Securities and monies borrowed or loaned and
collateral therefore
- Foreign currency journals
- Trial balances
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(c) Provide the Fund and its investment adviser with daily
portfolio valuation, net asset value calculation and other
standard operational reports as requested from time to time.
The Administrator shall, for all purposes herein, be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR.
In consideration of the services to be performed by the Administrator as
set forth herein for each portfolio listed in Schedule B, the Administrator
shall be entitled to receive compensation and reimbursement for all reasonable
out-of-pocket expenses. The Fund agrees to pay the Administrator the fees and
reimbursement of out-of-pocket expenses as set forth in the fee schedule
attached hereto as Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
(a) The Administrator shall be held to the exercise of reasonable care in
carrying out the provisions of the Agreement, but shall be without liability to
the Fund for any action taken or omitted by it in good faith without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties
hereunder. It shall be entitled to rely upon and may act upon the accounting
records and reports generated by the Fund, advice of the Fund, or of counsel for
the Fund and upon statements of the Fund's independent accountants, and shall be
without liability for any action reasonably taken or omitted pursuant to such
records and reports or advice, provided that such action is not, to the
knowledge of the Administrator, in violation of applicable federal or state laws
or regulations, and provided further that such action is taken without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties.
(b) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder except as
hereinafter set forth. Nothing herein contained shall be construed to protect
the Administrator against any liability to the Fund or its security holders to
which the Administrator shall otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties on
behalf of the Fund, reckless disregard of the Administrator's obligations and
duties under this Agreement or the willful violation of any applicable law.
(c) Except as may otherwise be provided by applicable law, neither the
Administrator nor its stockholders, officers, directors, employees or agents
shall be subject to, and the Fund shall indemnify and hold such persons harmless
from and against, any liability for and any damages, expenses or losses incurred
by reason of the inaccuracy of information furnished to the Administrator by the
Fund or its authorized agents or in connection with any error in judgment or
mistake of law or any act or omission in the course of, connected with or
arising out of any services to be rendered hereunder, except by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, by reason of reckless disregard of the Administrator's obligations and
duties under this Agreement or the willful violation of any applicable law.
4. REPORTS.
(a) The Fund shall provide to the Administrator on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to the Administrator during the preceding quarter was
true, complete and correct to the best of its knowledge. The Administrator shall
not be responsible for the accuracy of any information furnished to it by the
Fund, and the Fund shall hold the
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Administrator harmless in regard to any liability incurred by reason of the
inaccuracy of such information.
(b) The Administrator shall provide to the Board of Directors of the Fund,
on a quarterly basis, a report, in such a form as the Administrator and the Fund
shall from time to time agree, representing that, to its knowledge, the Fund was
in compliance with all requirements of applicable federal and state law,
including without limitation, the rules and regulations of the Securities and
Exchange Commission and the Internal Revenue Service, or specifying any
instances in which the Fund was not so in compliance. Whenever, in the course of
performing its duties under this Agreement, the Administrator determines, on the
basis of information supplied to the Administrator by the Fund, that a violation
of applicable law has occurred, or that, to its knowledge, a possible violation
of applicable law may have occurred or, with the passage of time, could occur,
the Administrator shall promptly notify the Fund and its counsel of such
violation.
5. ACTIVITIES OF THE ADMINISTRATOR.
The Administrator shall be free to render similar services to others so
long as its services hereinunder are not impaired thereby.
6. RECORDS.
The records maintained by the Administrator shall be the property of the
Fund, and shall be surrendered to the Fund, upon request by the Fund in the form
in which such accounts and records have been maintained or preserved, at the
expense of the Fund, provided that all service fees and expenses charged by the
Administrator in the performance of its duties hereunder have been fully paid to
the satisfaction of the Administrator.
The Administrator shall preserve the accounts and records as they are required
to be maintained and preserved by Rule 31a-1.
7. CONFIDENTIALITY.
The Administrator agrees that it will, on behalf of itself and its
officers and employees, treat all transactions contemplated by this Agreement,
and all other information germane thereto, as confidential and such information
shall not be disclosed to any person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THE AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, upon
ninety (90) days prior written notice. At the end of the fist three years of
this agreement and each annual anniversary date thereafter, unless this
agreement is replaced by a new agreement or notice is formally given to
terminate this agreement by either party, this agreement will automatically be
renewed for an additional twelve (12) months.
Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, the Administrator reserves the right to charge for any
other reasonable costs and expenses associated with such termination.
9. ASSIGNMENT.
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This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the prior written consent
of the Administrator.
10. NEW YORK LAWS TO APPLY
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such amendment
is in writing and signed by both parties.
12. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof
whether oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing, shall
be deemed to have been given when delivered in person or by certified mail,
return receipt requested, and shall be given to the following addresses (or such
other addresses as to which notice is given):
To the Fund: To the Administrator:
Xxxxxxx Xxxxx
President
American Data Services, Inc.
000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
AMERICAN DATA SERVICES, INC.
By:____________________________ By:__________________________
Xxxxxxx Xxxxx, President
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SCHEDULE A
(a) ADMINISTRATIVE SERVICE FEE:
For the services rendered by the Administrator in its capacity as
administrator, as specified in Paragraph 1. DUTIES OF THE ADMINISTRATOR., the
Fund shall pay the Administrator within ten (10) days after receipt of an
invoice from the Administrator at the beginning of each month, a fee equal to
the greater of:
CALCULATED FEE WILL BE BASED UPON PRIOR MONTH AVERAGE NET ASSETS:
(No prorating partial months)
- NOTE: Monthly minimum services fee per portfolio, exclusive of legal
and distribution costs, are as follows (based upon Average Net Assets):
Minimum Annual Fee - $45,000.00
OR,
NET ASSET CHARGE:
- 1/12th of 0.175% (17.5 basis points) of first $20 million of average net
assets of Fund for month; plus
- 1/12th of 0.095% (9.5 basis points) of next $80 million of average net
assets of Fund for month; plus
- 1/12th of 0.045% (4.5 basis points) of next $200 million of average net
assets of Fund for month; plus
- 1/12th of 0.02% (2 basis points) of all average net assets of Fund for
month in excess of $300 million
FEE INCREASES
On each annual anniversary date of this Agreement, the fees enumerated above
will be increased by the change in the Consumer Price Index for the Northeast
region (CPI) for the twelve-month period ending with the month preceding such
annual anniversary date.
(b) EXPENSES.
The following expenses will be charged to the Fund as incurred by ADS in
connection with the performance of its duties to include
The Fund shall reimburse the Administrator for any out-of-pocket expenses ,
exclusive of salaries, advanced by the Administrator in connection with but not
limited to the printing or filing of documents for the Fund (including XXXXX
filing costs), travel, daily quotation fees (currently $0.10 for equity & $0.58
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for debt positions), capital change information, telephone toll charges,
facsimile transmissions, supplies (related to fund records), record storage,
postage and courier charges, pro-rata portion of SAS 70 review, and NASDAQ
insertion fee ($22 per month).incurred in connection with the performance of its
duties hereunder. The Administrator shall provide the Fund with a monthly
invoice of such expenses and the Fund shall reimburse the Administrator within
fifteen (15) days after receipt thereof.
(c) STATE REGISTRATION (BLUE SKY):
The fees enumerated in paragraph (a) above do not include the service fees
for the initial state registration, renewal and maintenance of registrations (as
detailed in Paragraph 1(l) DUTIES OF THE ADMINISTRATOR). Each state registration
requested will be subject to the following fees:
Initial registration ........... $295.00
Registration renewal ........... $150.00
Sales reports (if required)..... $ 25.00
(d) SPECIAL REPORTS.
All reports and /or analyses requested by the Fund, its auditors, legal
counsel, portfolio manager, or any regulatory agency having jurisdiction over
the Fund, that are not in the normal course of fund administrative activities as
specified in Section 1 of this Agreement shall be subject to an additional
charge, agreed upon in advance, based upon the following rates:
Labor:
Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $45.00/hr.
(e) SERVICE DEPOSIT.
The Fund will remit to the Administrator upon execution of this Agreement
a security deposit equal to one (1) month's minimum fee under this Agreement,
computed in accordance with the number of portfolios listed in Schedule B of
this Agreement. The Fund will have the option to have the security deposit
applied to the last month's service fee, or applied to any new contract between
the Fund and the Administrator.
However, if the Fund elects or is forced to terminate this Agreement for any
reason what-so-ever (including, but not limited to, the voluntary or involuntary
termination of the Fund, liquidation of the Fund's assets, the sale or merger of
the Fund or it's assets to any successor entity) prior to the termination date
of this Agreement as specified in Paragraph 8 of this Agreement, the Fund will
forfeit the Security Deposit paid to the Administrator upon execution of this
Agreement
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SCHEDULE B
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
The DCM Growth Fund
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