ADMINISTRATION ASSISTANCE SERVICES AGREEMENT
THIS AGREEMENT is made as of Dec. 16 , 2002 by and among PFPC INC., a
Massachusetts corporation ("PFPC"), MERIDIAN FUND, INC., a Maryland corporation
(the "Fund"), and ASTER INVESTMENT MANAGEMENT CO., INC., a California
corporation (the "Advisor").
WITNESSETH:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to provide administration
assistance services to the Fund's investment portfolios listed on Exhibit A
attached hereto and made a part hereof, as such Exhibit A may be amended from
time to time (each a "Portfolio"), and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and intending to be legally bound hereby the parties
hereto agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person
duly authorized by the Fund's Board of Directors to give Oral
Instructions and Written Instructions on behalf of the Fund. An
Authorized Person's scope of authority may be limited by setting forth
such limitation in a written document signed by both parties hereto.
1
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be an
Authorized Person. PFPC may, in its sole discretion in each separate
instance, consider and rely upon instructions it receives from an
Authorized Person via electronic mail as Oral Instructions.
(f) "SEC" means the Securities and Exchange Commission.
(g) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(h) "Shares" means the shares of beneficial interest of any series or class
of the Fund.
(i) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PFPC or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic
transaction reporting system access to which requires use of a password
or other authorized identifier. Written Instructions may be delivered
by hand, mail, tested telegram, cable, telex or facsimile sending
device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide administration
assistance services to each of the Portfolios, in accordance with the
terms set forth in this Agreement. PFPC accepts such appointment and
agrees to furnish such services in accordance with the terms of this
Agreement.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC with the following:
2
(a) at PFPC's request, certified or authenticated copies of the
resolutions of the Fund's Board of Directors approving the
appointment of PFPC or its affiliates to provide services to
each Portfolio and approving this Agreement;
(b) a copy of Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreement or agreements;
(d) a copy of the distribution/underwriting agreement with respect
to each class of Shares representing an interest in a
Portfolio;
(e) a copy of each additional administration agreement with
respect to a Portfolio;
(f) copies of various procedures adopted by the Board of Directors
of the Fund (Rule 17a-7, 17e-1, etc.);
(g) a copy of each distribution and/or shareholder servicing plan
and agreement made in respect of the Fund or a Portfolio; and
(h) copies (certified or authenticated, where applicable) of any
and all amendments or supplements to the foregoing.
In addition, the Fund will provide PFPC with any additional
documentation that PFPC may request that is reasonably necessary for
PFPC to perform the services described in this Agreement.
4. COMPLIANCE WITH RULES AND REGULATIONS.
PFPC undertakes to comply with all applicable requirements of the
Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be
performed by PFPC hereunder. Except as specifically set forth herein,
PFPC assumes no responsibility for such compliance by the Fund or other
entity, except for any entity to which PFPC delegates or assigns duties
to be performed under this Agreement in accordance with Section 19.
3
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act
only upon Oral Instructions or Written Instructions. PFPC
undertakes to comply with all Oral Instructions or Written
Instructions received by it and believed to be genuine, and
shall act (or refrain from acting) strictly in accordance with
the terms of such Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives from an Authorized Person (or
from a person reasonably believed by PFPC to be an Authorized
Person) pursuant to this Agreement. PFPC may assume that any
Oral Instruction or Written Instruction received hereunder is
not in any way inconsistent with the provisions of the
organizational documents or this Agreement or of any vote,
resolution or proceeding of the Fund's Board of Directors or
of the Portfolio's shareholders, unless and until PFPC
receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral Instructions (except where such Oral
Instructions are given by PFPC or its affiliates) so that PFPC
receives the Written Instructions by the close of business on
the same day that such Oral Instructions are received. The
fact that such confirming Written Instructions are not
received by PFPC or differ from the Oral Instructions shall in
no way invalidate the transactions or enforceability of the
transactions
4
authorized by the Oral Instructions or PFPC's ability to rely
upon such Oral Instructions.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC is in doubt as to any action it
should or should not take, PFPC may request directions or
advice, including Oral Instructions or Written Instructions,
from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC may request, at its own expense, advice from
counsel of its own choosing (who may be counsel for the Fund,
the Fund's investment adviser or PFPC, at the option of PFPC).
(c) Conflicting Advice. In the event of a conflict between
directions or advice or Oral Instructions or Written
Instructions PFPC receives from the Fund and the advice PFPC
receives from counsel, PFPC may rely upon and follow the
advice of counsel, unless such advice conflicts with the
advice given to it by the Fund's counsel as to a legal
requirement under the Securities Laws. If practical under the
circumstance, PFPC shall promptly inform the Fund of any such
conflict before taking the action in question.
(d) Protection of PFPC. PFPC shall be indemnified by the Fund and
without liability for any action PFPC takes or does not take
in reliance upon directions or advice or Oral Instructions or
Written Instructions PFPC receives from or on behalf of the
Fund or from counsel and which PFPC believes, in good faith,
to be consistent with those directions or
5
advice and Oral Instructions or Written Instructions provided
however, that such actions or omissions of PFPC do not
constitute willful misfeasance, bad faith, gross negligence or
reckless disregard its duties under this in this Agreement.
Nothing in this section shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions or advice or
Oral Instructions or Written Instructions, or (ii) to act in
accordance with such directions or advice or Oral Instructions
or Written Instructions unless, under the terms of other
provisions of this Agreement, the same is a condition of
PFPC's properly taking or not taking such action. Nothing in
this subsection shall excuse PFPC from liability for any
action or omission on the part of PFPC that constitutes
willful misfeasance, bad faith, gross negligence or reckless
disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.
7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund and the
Portfolios which are in the possession or under the control of
PFPC shall be the property of the Fund. Such books and records
shall be prepared and maintained as required by the 1940 Act
and other applicable securities laws, rules and regulations.
The Fund, Authorized Persons and employees and agents of the
SEC or other governmental authorities with the approval of the
Fund shall have access to such books and records at all times
during PFPC's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records
6
shall be provided by PFPC to the Fund, to an Authorized Person
or to employees and agents of the SEC or other governmental
agencies, at the Fund's expense.
(b) PFPC shall keep the following records:
(i) all books and records with respect to each
Portfolio's books of account;
(ii) records of each Portfolio's securities transactions;
and
(iii) all other books and records as PFPC is required to
maintain pursuant to Rule 31a-1 of the 1940 Act in
connection with the services provided hereunder.
(c) Upon termination of this Agreement, PFPC shall, at the Fund's
reasonable request and in accordance with Written
Instructions, deliver a copy of the books and records
pertaining to the Fund or Portfolios that are in the
possession or under control of PFPC, to the Fund or any other
person designated by the Fund.
8. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that
is competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product plans,
marketing strategies, finances, operations, customer relationships,
customer profiles, customer lists, sales estimates, business plans, and
internal performance results relating to the past, present or future
business activities of the Fund or PFPC, their respective subsidiaries
and affiliated companies and the customers, clients and suppliers of
any of them; (b) any scientific or technical information, design,
process, procedure, formula, or improvement that is
7
commercially valuable and secret in the sense that its confidentiality
affords the Fund or PFPC a competitive advantage over its competitors;
(c) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, and trade secrets, whether or
not patentable or copyrightable; and (d) anything designated as
confidential. Notwithstanding the foregoing, information shall not be
subject to such confidentiality obligations if it: (a) is already known
to the receiving party at the time it is obtained; (b) is or becomes
publicly known or available through no wrongful act of the receiving
party; (c) is rightfully received from a third party who, to the best
of the receiving party's knowledge, is not under a duty of
confidentiality; (d) is released by the protected party to a third
party without restriction; (e) is required to be disclosed by the
receiving party pursuant to a requirement of a court order, subpoena,
governmental or regulatory agency or law (provided the receiving party
will provide the other party written notice of such requirement, to the
extent such notice is permitted); (f) is relevant to the defense of any
claim or cause of action asserted against the receiving party; or (g)
has been or is independently developed or obtained by the receiving
party.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses,
fiscal year summaries, and other audit-related schedules with respect
to each Portfolio. PFPC shall take all reasonable action in the
performance of its duties under this Agreement to assure that all
necessary information is made available to such
8
accountants for the expression of their opinion, as required by the
Fund.
10. PFPC SYSTEM. PFPC shall retain title to and ownership of any and all
data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC in connection with the services provided by PFPC to
the Fund.
11. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of communication and electronic data
processing equipment to the extent appropriate equipment is available.
In the event of equipment failures or other events, PFPC shall, at no
additional expense to the Fund, take reasonable steps to minimize
service interruptions. PFPC shall have no liability with respect to the
loss of data or service interruptions caused by equipment failure,
provided such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties or obligations under this Agreement.
12. COMPENSATION. As compensation for services rendered by PFPC during the
term of this Agreement, the Advisor will pay to PFPC a fee or fees as
may be agreed to in writing by the Advisor and PFPC.
13. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to
indemnify, defend and hold harmless PFPC and its affiliates, including
their respective officers, directors, agents and employees, from all
taxes, charges, expenses, assessments,
9
claims and liabilities (including, without limitation, attorneys' fees
and disbursements and liabilities arising under the Securities Laws and
any state and foreign securities and blue sky laws) arising directly or
indirectly from any action or omission to act which PFPC takes (i) at
the request or direction of or in reliance on the advice of the Fund or
(ii) in accordance with Oral Instructions or Written Instructions,
provided that neither PFPC, nor any of its affiliates, shall be
indemnified, and PFPC shall indemnify and hold harmless the Fund, the
Portfolios and their affiliates against any liability (or any expenses
incident to such liability) caused by PFPC's or its affiliates' own
willful misfeasance, bad faith, gross negligence or reckless disregard
in the performance of PFPC's activities under this Agreement. Any
amounts payable by the Fund hereunder shall be satisfied only against
the relevant Portfolio's assets and not against the assets of any other
investment portfolio of the Fund. The provisions of this Section 13
shall survive termination of this Agreement.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action hereunder on
behalf of the Fund or any Portfolio except as specifically set
forth herein or as may be specifically agreed to by PFPC and
the Fund in a written amendment hereto. PFPC shall be
obligated to exercise care and diligence in the performance of
its duties hereunder and to act in good faith in performing
services provided for under this Agreement. PFPC shall be
liable only for any damages arising out of PFPC's failure to
perform its duties under this Agreement to the extent such
damages
10
arise out of PFPC's willful misfeasance, bad faith, gross
negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement and notwithstanding anything
in this Agreement to the contrary, and provided that PFPC is
in compliance with Section 11 hereof, (i) PFPC shall not be
liable for losses, delays, failure, errors, interruption or
loss of data occurring directly or indirectly by reason of
circumstances beyond its reasonable control, including without
limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire;
flood; sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities,
transportation, computer or communications capabilities;
insurrection; elements of nature; or non-performance by an
unaffiliated third party provided that PFPC has acted in
accordance with the standard set forth in Section 14(a) above;
and (ii) PFPC shall not be under any duty or obligation to
inquire into and shall not be liable for the validity or
invalidity, authority or lack thereof, or truthfulness or
accuracy or lack thereof, of any instruction, direction,
notice, instrument or other information which PFPC reasonably
believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether
or not the likelihood of such losses or
11
damages was known by PFPC or its affiliates.
(d) No party may assert a cause of action against PFPC or any of
its affiliates that allegedly occurred more than 12 months
immediately prior to the filing of the suit (or, if
applicable, commencement of arbitration proceedings) alleging
such cause of action.
(e) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
(f) The provisions of this Section 14 shall survive termination of
this Agreement.
15. DESCRIPTION OF ADMINISTRATION ASSISTANCE SERVICES. PFPC will provide
the services and functions specified in this Section 15.
(a) Financial Reporting Assistance
(i) assistance in determining the Fund's dividend
distribution;
(ii) assistance in preparing annual and semi-annual
shareholders reports including:
- Schedule of Investments
- Financial Statements
- Financial Highlights, including total returns and
expense ratios
- all required footnotes
(iii) calculating and disseminating Fund performance data
such as, total returns and expense ratios;
(iv) coordinating printing of shareholder reports and
their filing with the SEC; and
(v) communicating all relevant statistical information to
the applicable reporting service, including, but not
limited to, Lipper, Morningstar and Investment
Company Institute.
12
(b) Compliance Assistance
(i) monitoring compliance of the Fund with Subchapter M
of the Internal Revenue Code to determine its status
as a Regulated Investment Company.
(c) Filing Assistance
(i) prepare semi-annual reports with the SEC on Form
N-SAR;
(ii) coordinate the filing of Form N-SAR electronically
with the SEC via XXXXX System; and
(ii) coordinate the filing of Form 24F-2 with the SEC
relating to the federal registration of Fund shares
sold.
(d) Tax Assistance
(i) Work with the Fund's independent auditors in
determining and recommending required amount of
distribution from ordinary income and capital gains
to avoid Federal income tax and Federal excise tax.
(e) Support Services Assistance
(i) assisting in developing annual expense budget for the
Fund, and monitoring expense accruals throughout the
year;
(ii) acting as a liaison with the Fund's independent
public accountants and providing account analyses,
fiscal year summaries and other audit-related
schedules;
(iii) assisting the Fund in maintaining Directors &
Officers Errors and Omissions Insurance; and
(iv) providing accounting and tax support for all aspects
of a Fund's operation including the effects of any
change in the Fund's structure.
(f) Regulatory Administrative Assistance Services
SEC Filings Assistance
(i) annual registration statement on Form N-lA (including
stickers);
(ii) coordinate XXXXX filings of annual and amended
registration statements and the printing of
definitive prospectuses with the financial printer.
13
Fidelity Bond Assistance
(i) assist Fund management with application process;
(ii) obtain quotes from broker;
(iii) monitor asset levels monthly; and
(iv) file bond with the SEC pursuant to Rule 17g-1 upon
receipt of bond.
Board Administration Assistance
(i) prepare calendar to ensure all regulatory
requirements are met.
Fund Administration Assistance
(i) maintain regulatory calendar and project schedules;
(ii) conduct conference calls (as needed or requested by
Fund management);
(iii) maintain Fund files (organizational documents, signed
contracts and minutes);
(iv) provide assistance with SEC or IRS examinations
(provision of materials), and
(v) conduct ad hoc training programs at client's request.
Service Provider Coordination Assistance
(i) Investment Adviser;
(ii) Counsel;
(iii) Auditor, and
(iv) Financial Printers.
16. DURATION AND TERMINATION. The initial term of this Agreement will be
for the period of three (3) years, commencing on the date hereinabove
first written (the "Effective Date") and will continue thereafter
subject to termination by either party as set
14
forth below. Upon expiration of the Initial Term, this Agreement shall
automatically renew for a term of one (1) year ("Renewal Term") each,
unless the Fund or PFPC provides written notice to the other of its
intent not to renew. Either of the parties hereto may terminate this
Agreement by giving the other party a notice in writing specifying the
date of such termination, which shall not be less than 90 days after
the date of giving such notice. The fees agreed to between the Fund and
PFPC will be fixed for three (3) years commencing on the Effective Date
of this Agreement and will continue thereafter subject to their review
and any adjustment as may be agreed in writing by the Fund and PFPC. In
the event the Fund gives notice of termination, all expenses associated
with movement (or duplication) of records and materials and conversion
thereof to a successor accounting and administration services agent(s)
(and any other service provider(s)), and all trailing expenses incurred
by PFPC, will be borne by the Fund. - Subject to the foregoing, upon
termination of this Agreement, PFPC shall (i) at the Fund's reasonable
request and in accordance with Written Instructions, deliver a copy of
the books and records pertaining to the Fund or Portfolios that are
under the possession or control of PFPC, to the Fund or any other
person designated by the Fund; and (ii) in the event that the Fund
moves services described in this Agreement to a successor service
provider and notice of termination was timely provided, PFPC will use
commercially reasonable efforts to facilitate the conversion by the
termination date. Should the Fund terminate this Agreement because of a
material breach by PFPC, PFPC agrees that
15
all reasonable expenses or costs associated with the movement (or
duplication) of records and materials and conversion thereof to a
successor service provider, including all trailing expenses incurred by
PFPC, will be borne by PFPC.
17. NOTICES. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President; (b) if to
the Fund, at 00 Xxxx Xxx Xxxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Xx., President or (c) if
to neither of the foregoing, at such other address as shall have been
given by like notice to the sender of any such notice or other
communication by the other party. If notice is sent by hand or by
confirming electronic or facsimile sending device, it shall be deemed
to have been given immediately. If notice is sent by first-class mail,
it shall be deemed to have been given three days after it has been
mailed. If notice is sent by messenger, it shall be deemed to have been
given on the day it is delivered.
18. AMENDMENTS. This Agreement may not be altered or amended, except by an
instrument in writing, executed by both parties, and in the case of the
Fund, if appropriate, such alteration or amendment will be authorized
by its Board of Directors.
19. ASSIGNMENT. PFPC may assign its rights hereunder to any majority-owned
direct or indirect subsidiary of PFPC or of The PNC Financial Services
Group, Inc., provided that PFPC gives the Fund 30 days prior written
notice of such assignment.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute
16
one and the same instrument.
21. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
22. MISCELLANEOUS.
(a) Notwithstanding anything in this Agreement to the contrary,
the Fund agrees not to make any modifications to its
registration statement or adopt any policies which in either
case would affect materially the obligations or
responsibilities of PFPC hereunder without the prior written
approval of PFPC, which approval shall not be unreasonably
withheld or delayed.
(b) Except as expressly provided in this Agreement, PFPC hereby
disclaims all representations and warranties, express or
implied, made to the Fund or any other person, including,
without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose
or otherwise (irrespective of any course of dealing, custom or
usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(c) This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents
their agreement, if any, with respect to delegated duties. The
captions in this
17
Agreement are included for convenience of reference only and
in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. Notwithstanding
any provision hereof, the services of PFPC are not, nor shall
they be, construed as constituting legal advice or the
provision of legal services for or on behalf of the Fund or
any other person.
(d) This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(e) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors
and permitted assigns. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
(f) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such
party.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
ASTER INVESTMENT PFPC INC.
MANAGEMENT COMPANY, INC.
By: /s/ XXXXXXX X. XXXXX XX. By: /S/ Xxxx Xxxxxxx
----------------------------- ----------------------------------
Title: President Title: SVP
MERIDIAN FUND, INC.
By: /s/ XXXXXXX X. XXXXX XX.
-----------------------------
Title: President
19
EXHIBIT A
THIS EXHIBIT A, dated as of Dec. 16, 2002 is Exhibit A to that certain
Administration Assistance Services Agreement dated as of Dec. 16, 2002 among
PFPC INC., MERIDIAN FUND, INC. and ASTER INVESTMENT MANAGEMENT CO., INC.
PORTFOLIOS
Meridian Growth Fund
Meridian Value Fund
20
