EXHIBIT 99.(H)(1)
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT, dated as of this 8th day of August, 2006,
(the "Agreement"), between THIRD AVENUE MANAGEMENT LLC, a Delaware limited
liability company ("TAM") and THIRD AVENUE VARIABLE SERIES TRUST (the "Fund"),
an open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act").
WHEREAS, the Fund desires to retain TAM to render certain administrative
services with respect to each investment portfolio listed in Schedule A hereto,
as the same may be amended from time to time by the parties hereto
(collectively, the "Portfolios"), and TAM is willing to render such services;
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
Article 1 DEFINITIONS.
1.1 Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
(a) "Articles of Incorporation" shall mean the, Declaration
of Trust, or other similar organizational document, of the Fund as the
same may be amended from time to time.
(b) "Authorized Person" shall be deemed to include (i) any
officer of the Fund; or (ii) any person, whether or not such person is
an officer or employee of the Fund, duly authorized to give Oral
Instructions or Written Instructions on behalf of the Fund as indicated
in writing to TAM from time to time.
(c) "Board Members" shall mean the Trustees of the governing
body of the Fund.
(d) "Board of Directors" shall mean the Board of Trustees of
the Fund.
(e) "Commission" shall mean the Securities and Exchange
Commission.
(f) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Fund may from time to time
deposit, or cause to be deposited or held under the name or account of
such a custodian pursuant to a Custody Agreement.
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(g) "1933 Act" shall mean the Securities Act of 1933 and the
rules and regulations promulgated thereunder, all as amended from time
to time.
(h) "1940 Act" shall mean the Investment Company Act of 1940
and the rules and regulations promulgated thereunder, all as amended
from time to time.
(i) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by TAM from a person reasonably
believed by TAM to be an Authorized Person.
(j) "Portfolio" shall mean each separate series of shares
offered by the Fund representing interests in a separate portfolio of
securities and other assets listed on Schedule A hereto.
(k) "Prospectus" shall mean the most recently dated Fund
Prospectus and Statement of Additional Information, including any
supplements thereto if any, which has become effective under the 1933
Act and the 1940 Act.
(l) "Shares" refers collectively to such shares of capital
stock or beneficial interest, as the case may be, or class thereof, of
each respective Portfolio of the Fund as may be issued from time to
time.
(m) "Shareholder" shall mean a record owner of Shares of
each respective Portfolio of the Fund.
(n) "Written Instructions" shall mean a written
communication signed by a person reasonably believed by TAM to be an
Authorized Person and actually received by TAM. Written Instructions
shall include manually executed originals and authorized electronic
transmissions, including telefacsimile of a manually executed original
or other process.
Article 2 APPOINTMENT OF TAM.
The Fund hereby appoints TAM to act as Administrator of the Fund on the
terms set forth in this Agreement. TAM accepts such appointment and agrees to
render the services herein set forth for the compensation herein provided.
Article 3 DUTIES OF TAM.
3.1 TAM shall be responsible for the following: performing the
customary services of an Administrator, as more fully described in the written
schedule of Duties of TAM annexed hereto as Schedule B and incorporated herein,
and subject to the supervision and direction of the Fund.
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3.2 In performing its duties under this Agreement, TAM: (a) will act
in accordance with the Articles of Incorporation, By-Laws, Prospectuses and with
the Oral Instructions and Written Instructions of the Fund and will conform to
and comply with the requirements of the 1940 Act and all other applicable
federal or state laws and regulations; and (b) will consult with legal counsel
to the Fund, as necessary and appropriate.
3.3 In addition to the duties set forth herein, TAM shall perform
such other duties and functions, and shall be paid such amounts therefore, as
may from time to time be agreed upon in writing between the Fund and TAM.
Article 4 RECORDKEEPING AND OTHER INFORMATION.
4.1 TAM shall create and maintain all records required of it
pursuant to its duties hereunder and as set forth in Schedule B in accordance
with all applicable laws, rules and regulations, including records required by
Section 31(a) of the 1940 Act. Where applicable, such records shall be
maintained by TAM for the periods and in the places required by Rule 31a-2 under
the 1940 Act.
4.2 To the extent required by Section 31 of the 1940 Act, TAM agrees
that all such records prepared or maintained by TAM relating to the services to
be performed by TAM hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such section, and
will be surrendered promptly to the Fund on and in accordance with the Fund's
request.
Article 5 [Reserved]
Article 6 COMPENSATION.
6.1 TAM will from time to time employ or associate with itself such
person or persons as TAM may believe to be particularly suited to assist it in
performing services under this Agreement. Such person or persons may be officers
and employees who are employed by both TAM and the Fund. The compensation of
such person or persons shall be paid by TAM and no obligation shall be incurred
on behalf of the Fund in such respect, provided however, that this section does
not apply to any individual serving as the Chief Compliance Officer of the Fund.
6.2 TAM shall not be required to pay any of the following expenses
incurred by the Fund: membership dues in the Investment Company Institute or any
similar organization; investment advisory expenses; costs of printing and
mailing prospectuses, reports and notices; interest on borrowed money; brokerage
commissions; stock exchange listing fees; taxes and fees payable to Federal,
state and other governmental agencies; fees of Board Members of the Fund who are
not affiliated with TAM; outside auditing expenses; outside legal expenses; Blue
Sky registration or filing fees; or other expenses not specified in this Section
6.2 which are properly payable by the Fund.
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6.3 The Fund will compensate TAM for the performance of its
obligations hereunder in accordance with the fees and other charges set forth in
the written Fee Schedule annexed hereto as Schedule C and incorporated herein.
6.4 In addition to those fees set forth in Section 6.3 above, the
Fund agrees to pay, and will be billed separately for, expenses actually
incurred by TAM in the performance of its duties hereunder. Expenses shall
include, but shall not be limited to, the items specified in the written
schedule annexed hereto as Schedule D and incorporated herein. Schedule D may be
modified by written agreement between the parties. Unspecified expenses shall be
limited to those expenses reasonably incurred by TAM in the performance of its
obligations hereunder.
6.5 The Fund agrees to pay all fees, charges and expenses to TAM by
Federal Funds Wire within fifteen (15) business days following the receipt of
the respective invoice.
6.6 Any compensation agreed to hereunder may be adjusted from time
to time by attaching to Schedule C a revised Fee Schedule executed and dated by
the parties hereto.
Article 7 [RESERVED]
Article 8 TAM PROPRIETY DATA AND SYSTEMS.
8.1 TAM 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 TAM in connection with the services
provided by TAM to the Fund herein (the "TAM Data and System").
8.2 TAM hereby grants to the Fund a limited license to the TAM
System for the sole and limited purpose of having TAM provide the services
contemplated hereunder and nothing contained in this Agreement shall be
construed or interpreted otherwise and such license shall immediately terminate
with the termination of this Agreement.
Article 9 REPRESENTATIONS AND WARRANTIES.
9.1 TAM represents and warrants to the Fund that:
(a) it is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware;
(b) it has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder;; and
(c) it has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
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9.2 The Fund represents and warrants to TAM that:
(a) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized;
and
(b) it has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
Article 10 INDEMNIFICATION.
10.1 The Fund shall indemnify and hold TAM harmless from and against
any and all claims, costs, expenses (including reasonable attorneys' fees),
losses, damages, charges, payments and liabilities of any sort or kind which may
be asserted against TAM or for which TAM may be held to be liable in connection
with this Agreement or TAM's performance hereunder (a "Claim"), unless such
Claim resulted from a negligent act or omission to act, bad faith, willful
misfeasance or reckless disregard by TAM in the performance of its duties
hereunder.
10.2 TAM shall indemnify and hold the Fund harmless from and against
any and all claims, costs, expenses (including reasonable attorneys' fees),
losses, damages, charges, payments and liabilities of any sort or kind which may
be asserted against the Fund or for which the Fund may be held to be liable in
connection with this Agreement (a "Claim"), provided that such Claim resulted
from a negligent act or omission to act, bad faith, willful misfeasance or
reckless disregard by TAM in the performance of its duties hereunder.
10.3 In any case in which one party (the "Indemnifying Party") may be
asked to indemnify or hold the other party (the "Indemnified Party") harmless,
the Indemnified Party will notify the Indemnifying Party promptly after
identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Indemnified Party although the
failure to do so shall not prevent recovery by the Indemnified Party and shall
keep the Indemnifying Party advised with respect to all developments concerning
such situation. The Indemnifying Party shall have the option to defend the
Indemnified Party against any Claim which may be the subject of this
indemnification, and, in the event that the Indemnifying Party so elects, such
defense shall be conducted by counsel chosen by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party, and thereupon the Indemnifying
Party shall take over complete defense of the Claim and the Indemnified Party
shall sustain no further legal or other expenses in respect of such Claim. The
Indemnified Party will not confess any Claim or make any compromise in any case
in which the Indemnifying Party will be asked to provide indemnification, except
with the Indemnifying Party's prior written consent. The obligations of the
parties hereto under this Article 10 shall survive the termination of this
Agreement.
10.4 Any claim for indemnification under this Agreement must be made
prior to the earlier of:
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(a) one year after the Indemnified Party becomes aware of
the event for which indemnification is claimed; or
(b) one year after the earlier of the termination of this
Agreement or the expiration of the term of this Agreement.
10.5 Except for remedies that cannot be waived as a matter of law
(and injunctive or provisional relief), the provisions of this Article 10 shall
be TAM's sole and exclusive remedy for claims or other actions or proceedings to
which the Fund's indemnification obligations pursuant to this Article 10 may
apply.
Article 11 STANDARD OF CARE.
11.1 TAM shall at all times act in good faith and agrees to use its
best efforts within commercially reasonable limits to ensure the accuracy of all
services performed under this Agreement, but assumes no responsibility for loss
or damage to the Fund unless said errors are caused by TAM's own negligence, bad
faith or willful misconduct or that of its employees.
11.2 Neither party may assert any cause of action against the other
party under this Agreement that accrued more than three (3) years prior to the
filing of the suit (or commencement of arbitration proceedings) alleging such
cause of action.
11.3 Each party shall have the duty to mitigate damages for which the
other party may become responsible.
11.4 TAM will not be responsible for providing Blue Sky services to
the Fund. The Fund will separately contract with a third party for Blue Sky
services.
Article 12 CONSEQUENTIAL DAMAGES.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES.
As used in the preceding paragraph "incidental, indirect or
consequential damages" means damages which do not flow directly from the act of
the party or which arise from the intervention of special circumstances not
ordinarily predictable, and does not include direct damages which arise
naturally or ordinarily from a breach of contract.
Article 13 TERM AND TERMINATION.
13.1 This Agreement may be terminated by either party on sixty (60)
days' notice to the other party and shall be effective on the date first written
above and shall continue for a period of one (1) year (the "Initial Term").
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13.2 Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal Terms") each,
unless the Fund or TAM provides written notice to the other of its intent not to
renew. Such notice must be received not less than ninety (90) days and not more
than one-hundred eighty (180) days prior to the expiration of the Initial Term
or the then current Renewal Term.
Article 14 ADDITIONAL PORTFOLIOS
14.1 In the event that the Fund establishes one or more investment
portfolios in addition to those identified in Schedule A, with respect to which
the Fund desires to have TAM render services to that portfolio under the terms
hereof, the Fund shall so notify TAM in writing, and if TAM agrees in writing to
provide such services, Schedule A shall be amended to include such additional
Portfolios.
Article 15 CONFIDENTIALITY.
15.1 The parties agree that the Proprietary Information (defined
below) and the contents of this Agreement (collectively "Confidential
Information") are confidential information of the parties and their respective
licensors. The Fund and TAM shall exercise at least the same degree of care, but
not less than reasonable care, to safeguard the confidentiality of the
Confidential Information of the other as it would exercise to protect its own
confidential information of a similar nature. The Fund and TAM shall not
duplicate, sell or disclose to others the Confidential Information of the other,
in whole or in part, without the prior written permission of the other party.
The Fund and TAM may, however, disclose Confidential Information to their
respective parent corporation, their respective affiliates, their subsidiaries
and affiliated companies and employees, provided that each shall use reasonable
efforts to ensure that the Confidential Information is not duplicated or
disclosed in breach of this Agreement. The Fund and TAM may also disclose the
Confidential Information to independent contractors, auditors, and professional
advisors, provided they first agree in writing to be bound by the
confidentiality obligations substantially similar to this Section 15.1.
Notwithstanding the previous sentence, in no event shall either the Fund or TAM
disclose the Confidential Information to any competitor of the other without
specific, prior written consent.
15.2 Proprietary Information means:
(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,
finance, operations, customer relationships, customer profiles, sales
estimates, business plans, portfolio holdings and internal performance
results relating to the past, present or future business activities of
the Fund or TAM, their respective subsidiaries and affiliated companies
and the customers, clients and suppliers of any of them;
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(b) any scientific or technical information, design,
process, procedure, formula, or improvement that is commercially
valuable and secret in the sense that its confidentiality affords the
Fund or TAM a competitive advantage over its competitors; and
(c) all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code, object
code, flow charts, databases, inventions, know-how, show-how and trade
secrets, whether or not patentable or copyrightable.
15.3 Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment, prototypes and
models, and any other tangible manifestation of the foregoing of either party
which now exist or come into the control or possession of the other.
15.4 The obligations of confidentiality and restriction on use herein
shall not apply to any Confidential Information that a party proves:
(a) Was in the public domain prior to the date of this
Agreement or subsequently came into the public domain through no fault of such
party; or
(b) Was lawfully received by the party from a third party
free of any obligation of confidence to such third party; or
(c) Was already in the possession of the party prior to
receipt thereof, directly or indirectly, from the other party; or
(d) Is required to be disclosed in a judicial or
administrative proceeding after all reasonable legal remedies for maintaining
such information in confidence have been exhausted including, but not limited
to, giving the other party as much advance notice of the possibility of such
disclosure as practical so the other party may attempt to stop such disclosure
or obtain a protective order concerning such disclosure; or
(e) Is subsequently and independently developed by
employees, consultants or agents of the party without reference to the
Confidential Information disclosed under this Agreement.
Article 16 FORCE MAJEURE; EXCUSED NON-PERFORMANCE.
No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default or delay
is caused, directly or indirectly, by (i) fire, flood, elements of nature or
other acts of God; (ii) any outbreak or escalation of hostilities, war, riots or
civil disorders in any country, (iii) any act or omission of the other party or
any governmental authority; (iv) any labor disputes (provided that the
employees' demands are not reasonable and within the party's power to satisfy);
or (v) nonperformance by a third party or
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any similar cause beyond the reasonable control of such party, including without
limitation, failures or fluctuations in telecommunications or other equipment.
In addition, no party shall be liable for any default or delay in the
performance of its obligations under this Agreement if and to the extent that
such default or delay is caused, directly or indirectly, by the actions or
inactions of the other party. In any such event, the non-performing party shall
be excused from any further performance and observance of the obligations so
affected only for as long as such circumstances prevail and such party continues
to use commercially reasonable efforts to recommence performance or observance
as soon as practicable.
Article 17 ASSIGNMENT AND SUBCONTRACTING.
This Agreement, its benefits and obligations shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned or otherwise transferred
by either party hereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that TAM
may, in its sole discretion, assign all its right, title and interest in this
Agreement to an affiliate, parent or subsidiary, or to the purchaser of
substantially all of its business. TAM may, in its sole discretion, engage
subcontractors to perform any of the obligations contained in this Agreement to
be performed by TAM but shall not be relieved of its obligations and
responsibilities hereunder by reason of such engagement.
Article 18 ARBITRATION.
18.1 Any claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in New York, New York in accordance with its
applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply.
18.2 The parties hereby agree that judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction.
18.3 The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Article 18.
Article 19 NOTICE.
Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Fund or TAM, shall be sufficiently given if
addressed to that party and received by it at its office set forth below or at
such other place as it may from time to time designate in writing.
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To the Fund:
000 Xxxxx Xxxxxx, 00xx Xx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxx Xxxx, General Counsel
To TAM:
000 Xxxxx Xxxxxx, 00xx Xx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Article 20 GOVERNING LAW/VENUE.
The laws of the State of New York, excluding the laws on conflicts of
laws, shall govern the interpretation, validity, and enforcement of this
agreement.
Article 21 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
Article 22 CAPTIONS.
The captions of this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
Article 23 PUBLICITY.
Neither TAM nor the Fund shall release or publish news releases, public
announcements, advertising or other publicity relating to this Agreement or to
the transactions contemplated by it without the prior review and written
approval of the other party; provided, however, that either party may make such
disclosures as are required by legal, accounting or regulatory requirements
after making reasonable efforts in the circumstances to consult in advance with
the other party.
Article 24 RELATIONSHIP OF PARTIES/NON-SOLICITATION.
24.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
Article 25 ENTIRE AGREEMENT; SEVERABILITY.
25.1 This Agreement, including Schedules, Addenda, and Exhibits
hereto, constitutes the entire Agreement between the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and
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understandings, whether written or oral, between the parties with respect to the
subject matter hereof. No change, termination, modification, or waiver of any
term or condition of the Agreement shall be valid unless in writing signed by
each party. No such writing shall be effective as against TAM unless said
writing is executed by an officer of TAM. A party's waiver of a breach of any
term or condition in the Agreement shall not be deemed a waiver of any
subsequent breach of the same or another term or condition.
25.2 The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
THIRD AVENUE MANAGEMENT LLC
By:
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Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
THIRD AVENUE TRUST
By:
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Name: Xxxxxxx X. Xxxxx
Title: Treasurer and Chief Financial Officer
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SCHEDULE A
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LIST OF PORTFOLIOS
Third Avenue Value Portfolio
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SCHEDULE B
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DUTIES OF TAM
SERVICES RELATED TO ADMINISTRATION
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PROCESSING AND PAYMENT OF BILLS
o Centralized contact to receive all invoices for Fund operating
expenses.
o Voucher invoices for authorization / money movement instructions
o Distribution of approved vouchers for payment / recording
o Monitoring bank statement for appropriate money movement and timing
o Ensure proper wire instructions for expenses paid by wire transfer
o Coordinate mailing of checks to various vendors
COMPLETION OF INDUSTRY QUESTIONNAIRES
o Preparation of monthly and quarterly questionnaires directly
associated with the operations of the Portfolios,
o Ensuring timely receipt by rating agencies of information for which
the Administrator is responsible.
o The Administrator will provide Prudential monthly download and file
transfer.
PREPARATION OF QUARTERLY REPORTS
o Preparation of Schedule of Investments for the Portfolios' fiscal
quarter ends.
o Coordination to receive market/Fund commentary from Funds' adviser.
o Centralized area to receive and implement comments and changes.
o Coordination and timing with printer.
o Review content of draft copies prior to printing.
PREPARATION OF SEMI-ANNUAL REPORTS AND ANNUAL REPORTS
o Preparation of Schedule of Investments, Statements of Assets and
Liabilities, Operations and Changes, Financial Highlights and
Footnotes to Financial Statements.
o Contact for auditors regarding questions / comments relating to the
Financial Statements / process.
o Timely delivery of properly formatted tape of registered shareholders
to ADP for quarterly report mailing.
o Centralized contact for receipt of president's letter, audit opinion
letter and letter of internal controls.
o Centralized area to receive and implement comments and changes.
o Coordination and timing with printer.
o Review content of draft copies prior to printing.
o Average Net Assets / Ratio Analysis.
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MANAGEMENT REPORTING
o Daily, Schedule of Investment Report delivered electronically
o Daily, Market Capitalization Report for the Small-Cap Value Fund,
delivered electronically.
COMPLETION AND FILING OF N-SARS
o Preparation of N-SARs semi-annually.
o Preparation of Financial Data Sheet to facilitate XXXXX filing.
o Filing of N-SARs.
STATE AND LOCAL TAX INFORMATION
o Distribution notice to brokers.
o Calculation of US Treasury / Agency percent of ordinary distribution.
o Holding period / realized gains where required.
o Florida intangible tax.
o Preparation of 1099-DIV insert cards.
o Coordination with printer, mailroom for 1099-DIV insert cards.
o Review of 1099-DIV insert prior to printing.
o Calculation of Corporate Dividends Received Deduction percentage to
submit to audit firm for review.
REGULATORY COMPLIANCE
Compliance - Federal Investment Company Act of 1940
1. Review, report and renew
a. investment advisory contracts
b. fidelity bond
c. underwriting contracts
d. administration contracts
e. accounting contracts
f. custody administration contracts
g. transfer agent and stockholder services
2. Filings
a. N-1A (prospectus), post-effective amendment and supplements
("stickers")
b. 24f-2 indefinite registration of shares
c. filing fidelity bond under 17g-1
d. filing stockholder reports under on Form N-CSR
e. filing form N-PX
f. filing forms N-Q
3. Annual updates of biographical information and questionnaires
for Trustees and Officers
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CORPORATE BUSINESS AND STOCKHOLDER/PUBLIC INFORMATION
A. Trustees/Management
1. Preparation of meetings (board of trustee, audit committee and any
other relevant committees)
a. agendas - all necessary items of compliance
b. compile and distribute meeting materials
c. arrange and conduct meetings
d. prepare minutes of meetings
e. keep attendance records
f. maintain corporate records/minute book
B. Coordinate Proposals
1. Printers
2. Auditors
3. Literature fulfillment
4. Insurance
C. Maintain Corporate Calendars and Files
D. Release Corporate Information
1. To stockholders
2. To financial and general press
3. To industry publications
a. distributions (dividends and capital gains)
b. tax information
c. changes to prospectus
d. letters from management
e. Portfolios' performance
E. Communications to Stockholders
1. Coordinate printing and distribution of annual, semi-annual,
quarterly reports and prospectus
FINANCIAL AND MANAGEMENT REPORTING
A. Income and Expenses
1. Monitoring of expenses and expense accruals (monthly)
2. Checking Account Reconciliation (monthly)
3. Calculation of advisory fee and reimbursements to Fund (if
applicable)
4. Calculation of average net assets.
B. Distributions to Stockholders
1. Projections of distribution amounts
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2. Calculations of dividends and capital gain distributions (in
conjunction with the Funds and their auditors)
a. compliance with income tax provisions
b. compliance with excise tax provisions
c. compliance with Investment Company Act of 1940
C. Financial Reporting
1. Liaison between fund management, independent auditors and printers
for stockholder reports
2. Preparation of financial statements for required SEC
post-effective filings (if applicable)
3. Portfolio turnover calculations
4. Calculation of performance
D. Subchapter M Compliance (monthly)
1. Asset diversification test
E. Other Financial Analyses
1. Upon request from fund management, other budgeting and analyses
can be constructed to meet specific needs (additional fees may
apply)
2. Sales information, portfolio turnover (monthly)
3. Assist independent auditors on return of capital presentation,
excise tax calculation
4. Performance (total return-after-tax) calculation (monthly)
5. IRS Form 1099 Miscellaneous preparation, mailing & IRS filing
6. Analysis of interest derived from various Government obligations
(annual) (if interest income was distributed in a calendar year)
F. Review and Monitoring Functions (monthly)
1. Review expense and reclassification entries to ensure proper
update
2. Perform various reviews to ensure accuracy of
subscription/liquidation schedules, Accounting (the monthly
expense analysis) and Custody (review of daily bank statements to
ensure accurate money movement).
3. Review accruals and expenditures where applicable
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SCHEDULE C
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FEE SCHEDULE
For the services to be rendered, the facilities to be furnished and the
payments to be made by TAM, as provided for in this Agreement, the Fund will pay
TAM on the first business day of each month a fee for the previous month at the
rates listed below.
FUND ADMINISTRATION
-------------------
$32,000, per annum
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SCHEDULE D
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OUT-OF-POCKET EXPENSES
The Fund shall reimburse TAM monthly for applicable Fund expenses paid by TAM,
including, but not limited to the following items:
o Professional fees
o Registration and other filing fees
o Chief Compliance Officer compensation
o Board of Trustee meeting expenses
In addition, the Fund will promptly reimburse TAM for any other
unscheduled expenses incurred by TAM whenever the Fund and TAM mutually agree
that such expenses are not otherwise properly borne by TAM as part of its duties
and obligations under the Agreement.
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