TRANSFER AGENT
AND
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement made this 1st day of July, 1999 by and between STRATUS
FUND, INC., a Minnesota corporation (the "Fund"), and LANCASTER ADMINISTRATIVE
SERVICES, INC., a Nebraska corporation (the "Administrator").
WHEREAS, the Fund and the Administrator entered into that certain
Amended Transfer Agent and Administrative Services Agreement dated July 1, 1995;
WHEREAS, effective July 1, 1999, Consolidated Investments Corporation
transferred to Farmers & Merchant Investments, Inc. all of the issued and
outstanding stock of the Administrator;
WHEREAS, the change in control of the Administrator effected a
termination of the Amended Transfer Agent and Administrative Services Agreement
dated July 1, 1995;
WHEREAS, the Fund and the Administrator now desire to renew their
business relationship;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR.
Subject to the conditions set forth in this Agreement, the Fund hereby
appoints the Administrator, and the Administrator accepts such appointment, to
act as the Fund's Transfer Agent and Dividend Disbursing Agent and to administer
the general affairs of the Fund and provide services to the shareholders of the
Fund subject to the supervision of the Board of Directors of the Fund for the
period and on the terms set forth herein. The Administrator agrees during such
period, at its own expense, to render the services and to assume the obligations
herein set forth, for the compensation herein provided.
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2. DESCRIPTION OF ACCOUNTING SERVICES.
The Administrator will perform the following accounting services:
(a) Journalize the Fund's investment, capital share and income and
expense activities;
(b) Verify investment buy/sell trade tickets when received from the
Fund's investment adviser and transmit trades to the Fund's
custodian for proper settlement;
(c) Maintain individual ledgers for investment securities;
(d) Maintain historical tax lots for each security;
(e) Reconcile cash and investment balances of the Fund with the
custodian, and provide the Fund's investment adviser with the
beginning cash balance available for investment purposes;
(f) Update the cash availability throughout the day as required by
the Fund's adviser;
(g) Calculate various contractual expenses (e.g., advisory and
custody fees);
(h) Monitor the expense accruals and notify Fund management of any
proposed adjustments;
(i) Control all disbursements from the Fund and authorize such
disbursements upon Written Instructions;
(j) Calculate capital gains and losses;
(k) Determine the Fund's net income;
(l) Obtain security market quotes from independent pricing services
approved by the Fund's adviser, or if such quotes are
unavailable, then obtain such prices from the Fund's adviser, and
in either case calculate the market value of the Fund's
investments;
(m) Transmit or mail copy of the daily portfolio valuation to the
Fund's adviser;
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(n) Compute the net asset value of the Fund; and
(o) Compute the Fund's yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity.
3. DESCRIPTION OF ADMINISTRATIVE SERVICES.
The Administrator will perform the following administrative
services:
(a) Furnish the Fund with office facilities at Administrator's
offices, including such space, furniture, equipment and supplies
as well as personnel sufficient to carry out the necessary
administrative, clerical and bookkeeping functions for the Fund;
(b) Prepare quarterly broker security transaction summaries;
(c) Prepare monthly security transaction listings and financial
statements which will include the following items: Schedule of
Investments, Statement of Assets and Liabilities, Statement of
Operations, Statement of Changes in Net Assets, Cash Statement
and Schedule of Capital Gains and Losses;
(d) Prepare for the execution and filing of the Fund's federal and
state income tax returns and Federal excise tax return;
(e) Supply various Fund statistical data as requested on an ongoing
basis;
(f) Assist in the preparation of the Fund's semi-annual reports with
the SEC on Form N- SAR;
(g) Assist in the preparation of the Fund's annual and semi-annual
shareholder reports;
(h) Assist in the preparation of registration statements and other
filings related to the registration of Shares; and
(i) Monitor the Fund's status as a regulated investment company
under Sub-Chapter M of the Internal Revenue Code of 1986, as
amended.
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4. DESCRIPTION OF TRANSFER AGENT SERVICES.
The Administrator will perform the following Transfer Agent services:
(a) Issue, transfer and cancel stock certificates;
(b) Maintain all shareholder accounts;
(c) Prepare annual shareholder meeting lists;
(d) Mail, receive and tabulate proxies;
(e) Mail shareholder reports and prospectuses;
(f) Withhold taxes on non-resident alien accounts;
(g) Disburse income dividends and capital gains distributions;
(h) Prepare and file U.S. Treasury Department Form 1099 for all
shareholders;
(i) Prepare and mail confirmation forms to shareholders for all
purchases and redemptions of Fund shares and other confirmable
transactions in shareholders' accounts;
(j) Record reinvestment of dividends and distributions in Fund
shares; and
(k) Cause redemptions of shares and disbursements to be made to
redeeming shareholders.
5. COMPLIANCE WITH GOVERNMENT RULES AND REGULATIONS.
The Administrator undertakes to comply with all applicable requirements
of the 1933 Act, the 1934 Act, the 1940 Act, and any laws, rules and regulations
of governmental authority having jurisdiction with respect to all duties to be
performed by the Administrator hereunder. Except as specifically set forth
herein, the Administrator assumes no responsibility for such compliance by the
Fund.
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6. EQUIPMENT FAILURE.
The Administrator shall enter into with appropriate parties an agreement
making reasonable provisions for the emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the event of
equipment failures, the Administrator shall, at no additional expense to the
Fund, take reasonable steps to minimize service interruptions but shall have no
liability with respect thereto.
7. FEES OF THE ADMINISTRATOR.
For the services and facilities to be furnished by the Administrator
hereunder, the Fund shall pay an annual fee of: 0.25% of the weekly average net
asset value of each Portfolio of the Fund as ascertained each business day and
paid monthly. Upon any termination of this Agreement before the end of any
month, compensation for the period from the end of the last month ending prior
to such termination to the date of termination shall be prorated according to
the proportion which such period bears to a full month and shall be payable upon
the date of termination. For the purpose of the Administrator's compensation,
the net asset value of the Fund's Portfolios shall be computed in the manner
specified in its Bylaws in connection with the determination of the net asset
value of its shares.
8. INDEPENDENT CONTRACTOR.
The Administrator shall, for all purposes herein, be an independent
contractor and shall have no authority to act for or represent the Fund in any
way unless otherwise provided. No agreement, bid, offer, commitment, contract or
other engagement entered into by the Administrator whether on behalf of the
Administrator or whether purported to have been entered into on behalf of the
Fund shall be binding upon the Fund without its approval, and all acts
authorized to be done by the
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Administrator under this Agreement shall be done by it as an independent
contractor and not as an agent.
9. NON-EXCLUSIVE SERVICES OF THE ADMINISTRATOR.
Except to the extent necessary for performance of the Administrator's
obligations hereunder, nothing shall restrict the right of the Administrator or
any of its directors, officers or employees who may be directors, officers or
employees of the Fund to engage in any other business or to devote time and
attention to the management or other aspects of any other business whether of a
similar or dissimilar nature or to render services of any kind to any other
corporation, firm, individual or association. The services of the Administrator
to the Fund hereunder are not to be deemed exclusive, and the Administrator
shall be free to render similar services to others so long as its services
hereunder be not impaired thereby.
10. DURATION AND TERMINATION.
This Agreement shall continue until terminated by the Fund or by the
Administrator on sixty (60) days prior written notice to the other party.
11. INDEMNIFICATION.
Administrator shall not be responsible and the Fund shall indemnify and
hold Administrator harmless from and against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability which may be asserted
against Administrator or for which it may be held to be liable, arising out of
or in any way attributable to:
(a) All actions of Administrator required to be taken by
Administrator pursuant to this Agreement provided that
Administrator has acted in good faith and with due diligence.
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(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's negligence or willful
misconduct or which arise out of the breach of any representation
or warranty of the Fund hereunder.
(c) The reliance on, or the carrying out of, any instructions or
requests of the Fund.
(d) Defaults by dealers with respect to payment for share orders
previously entered.
(e) The offer or sale of the Fund's shares in violation of any
requirement under federal securities laws or regulations or the
securities laws or regulations of any state or in violation of
any stop order or other determination or ruling by any federal
agency or state, with respect to the offer or sale of such
shares, in such state (unless such violation results from
Administrator's failure to comply with written instructions of
the Fund or of any officer of the Fund that no offers or sales
be made in or to residents of such state).
Administrator shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of Administrator's willful failure to comply
with the terms of this Agreement or which arise out of Administrator's gross
negligence or willful misconduct.
At any time Administrator may apply to any officer of the Fund for
instructions, and may consult with legal counsel for the Fund or its own legal
counsel, at the expense of the Fund, with respect to any matter arising in
connection with the services to be performed by Administrator under this
Agreement and Administrator shall not be liable and shall be indemnified by the
Fund for any action taken or omitted by it in good faith in reliance upon such
instructions or upon the opinion of such counsel. Administrator shall be
protected and indemnified in acting upon any paper or document believed by it to
be genuine and to have been signed by the proper person or persons and
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shall not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Fund. Administrator shall also be
protected and indemnified in recognizing stock certificates which Administrator
reasonably believes to bear the proper manual or facsimile signatures of the
officers of the Fund, and the proper counter-signature of any former transfer
agent or registrar, or of a co-transfer agent or co-registrar.
In no event and under no circumstances shall either party to this
Agreement be liable to the other party for consequential damages under any
provision of this Agreement or for any act or failure to act hereunder.
12. SAFEKEEPING OF BOOKS AND RECORDS.
Administrator hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms, and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of such certificates,
uncertificated shares, forms and devices. To the extent required by Section 31
of the Investment Company Act of 1940 and Rules thereunder, Administrator agrees
that all records maintained by Administrator under this Agreement are the
property of the Fund and will be preserved and will be surrendered promptly to
the Fund on request. Administrator and the Fund agree that all books, records,
information and the date pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation of and the carrying out of
this Agreement shall remain confidential, and shall not be voluntarily disclosed
to any other person.
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13. AMENDMENT OF THE AGREEMENT.
This Agreement or any part hereof may be changed or waived only by
written amendment, signed by the party against whom enforcement of such change
or waiver is sought.
14. MISCELLANEOUS.
This Agreement embodies the entire agreement and understanding between
the parties and supersedes all prior agreements and understandings relating to
the subject matter hereof.
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.
Without prior written consent of the parties hereto, this Agreement may
not be assigned by any of the parties hereto.
This Agreement shall be deemed to be a contract made in Nebraska and
governed by Nebraska law. 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
and shall inure to the benefit of the parties hereto and their respective
successors.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers all as of the day and year first above
written.
STRATUS FUND, INC.
By /s/ Xxxxxxx X. Xxxxxx
-----------------------
LANCASTER ADMINISTRATIVE
SERVICES, INC.
By /s/ Xxxx Xxxxxxx
--------------------------
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