ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 29th day of October, 2003, by and
between Lotsoff Capital Management Equity Trust, a Delaware statutory trust (the
"Trust"), and UMB Fund Services, Inc., a Wisconsin corporation (the
"Administrator").
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act") and is authorized to
issue shares of beneficial interests (the "Shares") in separate series with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Trust and the Administrator desire to enter into an agreement
pursuant to which the Administrator shall provide administration and fund
accounting services to such investment portfolios of the Trust as are listed on
Schedule A hereto and any additional investment portfolios the Trust and
Administrator may agree upon and include on Schedule A as such Schedule may be
amended from time to time (such investment portfolios and any additional
investment portfolios are individually referred to as a "Fund" and collectively
the "Funds").
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Appointment
The Trust hereby appoints the Administrator as administrator and fund
accountant of the Funds for the period and on the terms set forth in this
Agreement. The Administrator accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Services as Administrator
(a) Subject to the direction and control of the Trust's Board of Trustees
and utilizing information provided by the Trust and its current and prior agents
and service providers, the Administrator will provide the services listed on
Schedule B hereto. The duties of the Administrator shall be confined to those
expressly set forth therein, and no implied duties are assumed by or may be
asserted against the Administrator hereunder.
(b) The Trustees of the Trust shall cause the officers, trustees,
investment adviser(s) and sub-advisers, legal counsel, independent accountants,
transfer agent, custodian and other service providers and agents, past or
present, for the Funds to cooperate with the Administrator and to provide the
Administrator with such information, documents and advice relating to the Funds
and the Trust as necessary and/or appropriate or as requested by the
Administrator, in order to enable the Administrator
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to perform its duties hereunder. In connection with its duties hereunder, the
Administrator shall (without investigation or verification) be entitled and is
hereby instructed to, rely upon any and all instructions, advice, information or
documents provided to the Administrator by an officer or representative of the
Funds or by any of the aforementioned persons. The Administrator shall be
entitled to rely on any document that it reasonably believes to be genuine and
to have been signed or presented by the proper party. Fees charged by such
persons shall be an expense of the Trust. The Administrator shall not be held to
have notice of any change of authority of any officer, agent, representative or
employee of the Trust, investment adviser(s) or service provider until receipt
of written notice thereof from the Trust. As used in this Agreement, the term
"Investment Adviser" includes all sub-advisers or persons performing similar
services.
(c) To the extent required by Rule 31a-3 under the 1940 Act, the
Administrator hereby agrees that all records which it maintains for the Trust
pursuant to its duties hereunder are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the Trust's
request. Subject to the terms of Section 6, and where applicable, the
Administrator further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records described in Schedule B which are
maintained by the Administrator for the Trust.
(d) It is understood that in determining security valuations, the
Administrator employs one or more pricing services, as directed by the Trust, to
determine valuations of portfolio securities for purposes of calculating net
asset values of the Trust. The Trust shall identify to the Administrator the
pricing service(s) to be utilized on behalf of the Trust. The Administrator
shall price the securities and other holdings of the Trust for which market
quotations or prices are available by the use of such services. For those
securities where prices are not provided by the pricing service(s) utilized by
the Administrator, the Trust shall approve, in good faith, the method for
determining the fair value of the securities. The Trust's investment adviser
shall determine or obtain the valuation of the securities in accordance with
those procedures and shall deliver to the Administrator the resulting prices for
use in its calculation of net asset values. The Administrator is authorized to
rely on the prices provided by such service(s) or by the Trust's investment
adviser(s) or other authorized representative of the Trust without investigation
or verification.
(e) The Trust's Board of Trustees and the Funds' investment adviser(s) have
and retain primary responsibility for all compliance matters relating to the
Funds including but not limited to compliance with the 1940 Act, the Internal
Revenue Code of 1986, as amended, and the policies and limitations of each Fund
relating to the portfolio investments as set forth in the Prospectus and
Statement of Additional Information. The Administrator's monitoring and other
functions hereunder shall not relieve the Board and the investment adviser(s) of
their primary day-to-day responsibility for assuring such compliance.
(f) The Trust hereby certifies that each Fund is lawfully eligible for sale
in each jurisdiction indicated for such Fund on the list furnished to the
Administrator as of the date of this Agreement.
3. Fees; Delegation; Expenses
(a) In consideration of the services rendered pursuant to this Agreement,
the Trust will pay the Administrator a fee, computed daily and payable monthly,
plus out-of-pocket expenses, each as
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provided in Schedule C hereto. In addition, to the extent that the Administrator
corrects, verifies or addresses any prior actions or inactions by any Fund or by
any prior service provider, the Administrator shall be entitled to additional
fees as provided in Schedule C. Fees shall be paid by each Fund at a rate that
would aggregate at least the applicable minimum fee for each Fund. Basis point
fees and minimum annual fees apply separately to each Fund, and average net
assets are not aggregated in calculating the applicable basis point fee per Fund
or the applicable minimum. Fees shall be adjusted in accordance with Schedule C
or as otherwise agreed to by the parties from time to time. The parties may
amend this Agreement to include fees for any additional services requested by
the Trust, enhancements to current services, or to add Funds for which the
Administrator has been retained.
(b) For the purpose of determining fees payable to the Administrator, net
asset value shall be computed in accordance with the Trust's Prospectuses and
resolutions of the Trust's Board of Trustees. The fee for the period from the
day of the month this Agreement is entered into until the end of that month
shall be pro-rated according to the proportion that such period bears to the
full monthly period. Upon any termination of this Agreement before the end of
any month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. Should the Trust be
liquidated, merged with or acquired by another fund or investment company, any
accrued fees shall be immediately payable.
(c) The Administrator will bear all expenses incurred by it in connection
with the performance of its services under Section 2, except as otherwise
provided herein. The Administrator shall not be required to pay or finance any
costs and expenses incurred in the operation of the Funds, including, but not
limited to: taxes; interest; brokerage fees and commissions; salaries, fees and
expenses of officers and Trustees; Securities and Exchange Commission (the
"Commission") fees and state Blue Sky fees; advisory fees; charges of
custodians, transfer agents, dividend disbursing and accounting services agents
and other service providers; security pricing services; insurance premiums;
outside auditing and legal expenses; costs of organization and maintenance of
corporate existence; taxes and fees payable to federal, state and other
governmental agencies; preparation, typesetting, printing, proofing and mailing
of prospectuses, statements of additional information, supplements, notices,
forms and applications and proxy materials for regulatory purposes and for
distribution to current shareholders; preparation, typesetting, printing,
proofing and mailing and other costs of shareholder reports; expenses in
connection with the electronic transmission of documents and information
including electronic filings with the Commission and the states; research and
statistical data services; expenses incidental to holding meetings of the Fund's
shareholders and Trustees; fees and expenses associated with internet, e-mail
and other related activities; and extraordinary expenses. Expenses incurred for
distribution of shares, including the typesetting, printing, proofing and
mailing of prospectuses for persons who are not shareholders of the Trust, will
be borne by the Funds' investment adviser, except for such expenses permitted to
be paid by the Trust under a distribution plan adopted in accordance with
applicable laws. The Administrator shall not be required to pay any Blue Sky
fees or take any related Blue Sky actions unless and until it has received the
amount of such fees from the Trust.
(d) Except as otherwise specified, fees payable hereunder shall be
calculated in arrears and billed on a monthly basis. The Trust agrees to pay all
fees within thirty days of receipt of each invoice. The Administrator retains
the right to charge interest in the amount of 1-1/2 percent per month on any
amounts that remain unpaid beyond the date the past due notice was sent to the
Trust.
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4. Proprietary and Confidential Information
The Administrator agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records relative
to the Funds' shareholders, not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder, and
not to disclose such information except where the Administrator may be exposed
to civil or criminal proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities or court process, when
subject to governmental or regulatory audit or investigation, or when so
requested by the Trust. In case of any requests or demands for inspection of the
records of the Funds, the Administrator will endeavor to notify the Trust
promptly and to secure instructions from a representative of the Trust as to
such inspection. Records and information which have become known to the public
through no wrongful act of the Administrator or any of its employees, agents or
representatives, and information which was already in the possession of the
Administrator prior to receipt thereof, shall not be subject to this paragraph.
5. Limitation of Liability
(a) The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Funds in connection with the
matters to which this Agreement relates, except for a loss resulting from the
Administrator's willful misfeasance, bad faith or negligence in the performance
of its duties or from reckless disregard by it of its obligations and duties
under this Agreement. Furthermore, the Administrator shall not be liable for (i)
any action taken or omitted to be taken in accordance with or in reliance upon
written or oral instructions, advise, data, documents or information (without
investigation or verification) received by the Administrator from an officer or
representative of the Trust, or from a representative of any of the parties
referenced in Section 2 that are not affiliated with the Administrator, (ii) its
reliance on the security valuations without investigation or verification
provided by pricing service(s), the Trust's investment adviser(s) or
representatives of the Trust, or (iii) any action taken or omission by a Fund,
the Trust, investment adviser(s) or any past or current service provider that
are not affiliated with the Administrator.
(b) The Administrator assumes no responsibility hereunder, and shall not be
liable, for any default, damage, loss of data or documents, errors, delay or any
other loss whatsoever caused by events beyond its reasonable control. The
Administrator will, however, take all reasonable steps to minimize service
interruptions for any period that such interruption continues beyond its
control.
(c) The Trust agrees to indemnify and hold harmless the Administrator, its
employees, officers and directors, (collectively, the "Indemnified Parties")
from and against any and all claims, demands, actions and suits, and from and
against any and all judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character which
may be asserted against or incurred by any Indemnified Party or for which any
Indemnified Party may be held liable (a "Claim") arising out of or in any way
relating to (i) the Administrator's actions or omissions except to the extent a
Claim resulted from the Administrator's willful misfeasance, bad faith, or
negligence in the performance of its duties hereunder or from reckless disregard
by it of its obligations and duties hereunder; (ii) the
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Administrator's reliance on, implementation of or use of (without investigation
or verification) advice, instructions, requests, directions, information, data,
records and documents received by the Administrator from any party referenced in
Section 2 hereof that is not affiliated with the Administrator or other
representative of the Trust, (iii) any breach of any of the Trust's obligations,
representations or warranties hereunder, or (iv) any action taken by or omission
of the Trust, investment adviser(s) or any past or current service provider.
The Administrator agrees to indemnify and hold harmless the Trust, its
employees, officers and trustees, (collectively, the "Indemnified Parties") from
and against any and all claims, demands, actions and suits, and from and against
any and all judgments, liabilities, losses, damages, costs, charges, reasonable
counsel fees and other expenses of every nature and character which may be
asserted against or incurred by any Indemnified Party or for which any
Indemnified Party may be held liable (a "Claim") arising out of or in any way
relating to (i) the Administrator's actions or omissions except to the extent a
Claim resulted from the Administrator's willful misfeasance, bad faith, or
negligence in the performance of its duties hereunder or from reckless disregard
by it of its obligations and duties hereunder; or (ii) any breach of any of the
Administrator's obligations, representations or warranties hereunder.
(d) In no event and under no circumstances shall either party, its
affiliates or any of its or their officers, directors, trustees, members, agents
or employees be liable to anyone, including, without limitation, the other
party, under any theory of tort, contract, strict liability or other legal or
equitable theory for lost profits, exemplary, punitive, special, indirect or
consequential damages for any act or failure to act under any provision of this
Agreement regardless of whether such damages were foreseeable and even if
advised of the possibility thereof. The indemnity and defense provisions set
forth in this Section 5 shall indefinitely survive the termination and/or
assignment of this Agreement.
6. Term
(a) This Agreement shall become effective with respect to each Fund listed
on Schedule A hereof as of the date this Agreement is executed and, with respect
to each Fund not in existence on that date, on the date an amendment to Schedule
A to this Agreement relating to that Fund is executed. This Agreement shall
continue in effect with respect to each Fund until terminated as provided
herein.
(b) Either party may terminate this Agreement at any time by giving the
other party a written notice not less than sixty (60) days prior to the date the
termination is to be effective, provided, however, neither party may provide
notice of termination of this Agreement such that the effective date of the
notification occur thirty (30) days prior to the end of the Fund's fiscal year
or sixty (60) days following the Fund's fiscal year, except for cause, such as a
good faith allegation of a violation of law or a material breach of this
Agreement. The terms of this Agreement shall not be waived, altered, modified,
amended or supplemented in any manner whatsoever except by a written instrument
signed by the Administrator and the Trust.
(c) Notwithstanding anything herein to the contrary, upon the termination
of this Agreement or the liquidation of a Fund or the Trust, the Administrator
shall deliver the records of the Fund(s) and/or Trust as the case may be, in the
form maintained by the Administrator (to the extent permitted by
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applicable license agreements) to the Trust or person(s) designated by the Trust
at the Trust's cost and expense, and thereafter the Trust or its designee shall
be solely responsible for preserving the records for the periods required by all
applicable laws, rules and regulations. The Trust shall be responsible for all
expenses associated with the movement (or duplication) of records and materials
and conversion thereof to a successor fund accounting and administrative
services agent, including all reasonable trailing expenses incurred by the
Administrator. In addition, in the event of termination of this Agreement, or
the proposed liquidation or merger of the Trust or a Fund(s), and the Trust
requests the Administrator to provide additional services in connection
therewith, the Administrator shall provide such services and be entitled to such
compensation as the parties may mutually agree.
7. Non-Exclusivity
The services of the Administrator rendered to the Trust are not deemed to
be exclusive. The Administrator may render such services and any other services
to others, including other investment companies. The Trust recognizes that from
time to time directors, officers and employees of the Administrator may serve as
trustees, directors, officers and employees of other entities (including other
investment companies), and that the Administrator or its affiliates may enter
into other agreements with such other entities.
8. Governing Law; Invalidity
This Agreement shall be governed by Wisconsin law, excluding the laws on
conflicts of laws. To the extent that the applicable laws of the State of
Wisconsin, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control, and nothing herein shall
be construed in a manner inconsistent with the 1940 Act or any rule or order of
the Commission thereunder. Any provision of this Agreement which may be
determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. In such case, the parties shall in good faith modify or
substitute such provision consistent with the original intent of the parties.
9. Notices
Any notice required or permitted to be given by either party to the other
shall be in writing and shall be deemed to have been given when sent by
registered or certified mail, postage prepaid, return receipt requested, as
follows: Notice to the Administrator shall be sent to UMB Fund Services, Inc.,
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, XX, 00000, Attention: Xxxxx
Xxxxxxx, with a copy to General Counsel, and notice to the Trust shall be sent
to Lotsoff Capital Management Equity Trust, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, XX,
00000, Attention: Xxxxxxx Xxxxxxx.
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10. Entire Agreement
This Agreement, together with the Schedules attached hereto, constitutes
the entire Agreement of the parties hereto.
11. Trust Limitations
This Agreement is executed by the Trust with respect to each of the Funds
and the obligations hereunder are not binding upon any of the Trustees, officers
or shareholders of the Trust individually but are binding only upon the Fund to
which such obligations pertain and the assets and property of such Fund. All
obligations of the Trust under this Agreement shall apply only on a Fund-by-Fund
basis, and the assets of one Fund shall not be liable for the obligations of
another Fund. The Fund's Declaration of Trust is on file with the Secretary of
State of Delaware.
12. Miscellaneous
(a) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original agreement but such counterparts shall
together constitute but one and the same instrument. The facsimile signature of
any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
(b) The Trust hereby grants to the Administrator the limited power of
attorney on behalf of the Funds to sign Blue Sky forms and related documents in
connection with the performance of its obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
LOTSOFF CAPITAL MANAGEMENT EQUITY TRUST
(the "Trust")
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
President
UMB FUND SERVICES, INC.
("Administrator")
By: /s/ Xxxxxxx X. Xxxxxx Xxxxxx
-----------------------------------------
Executive Vice President
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Schedule A
to the
Administration and Fund Accounting Agreement
by and between
Lotsoff Capital Management Equity Trust
and
UMB Fund Services, Inc.
Name of Funds
Lotsoff Capital Management Micro Cap Fund
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Schedule B
to the
Administration and Fund Accounting Agreement
by and between
Lotsoff Capital Management Equity Trust
and
UMB Fund Services, Inc.
SERVICES
Subject to the direction and control of the Trust's Board of Trustees and
utilizing information provided by the Trust and its agents, the Administrator
will:
o provide office space, facilities, equipment and personnel to carry out its
services hereunder;
o compile data for and prepare with respect to the Funds timely Notices to
the Commission required pursuant to Rule 24f-2 under the 1940 Act and
Semi-Annual Reports on Form N-SAR;
o assist in the preparation for execution by the Trust and file all federal
income and excise tax returns and state income tax returns (and such other
required tax filings as may be agreed to by the parties) other than those
required to be made by the Trust's custodian or transfer agent, subject to
the review and approval of the Trust and the Trust's independent
accountants;
o prepare the financial statements for the Annual and Semi-Annual Reports
required pursuant to Section 30(d) under the 1940 Act, subject to the
review and approval of the Trust and the Trust's independent accountants;
o provide financial and Fund performance information for inclusion in the
Registration Statement for the Trust (on Form N-1A or any replacement
therefor) and any amendments thereto, subject to the review of Trust
counsel;
o determine and periodically monitor each Fund's income and expense accruals
and cause all appropriate expenses to be paid from Trust assets on proper
authorization from the Trust;
o calculate income factors and daily net asset values of each Fund (i) in
accordance with the Trust's operating documents as provided to the
Administrator, and (ii) based on security valuations provided by the Trust,
the Trust's investment adviser, and pricing service(s), as provided herein;
o maintain all general ledger accounts and related subledgers;
o assist in the acquisition of the Trust's fidelity bond required by the 1940
Act, monitor the amount of the bond and make the necessary Commission
filings related thereto;
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o from time to time as the Administrator deems appropriate, check each Fund's
compliance with the policies and limitations of each Fund relating to the
portfolio investments as set forth in the Prospectus and Statement of
Additional Information and monitor each Fund's status as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended (but these functions shall not relieve the Trust's investment
adviser and sub-advisers, if any, of their primary day-to-day
responsibility for assuring such compliance);
o maintain, and/or coordinate with the other service providers the
maintenance of, the accounts, books and other documents required pursuant
to Rule 31a-1(a) and (b) under the 1940 Act;
o prepare and/or file state securities registration compliance filings, with
the advice of the Trust's legal counsel, upon and in accordance with
instructions from the Trust, which instructions will include the states to
qualify in, the amounts of Shares to initially and subsequently qualify and
the warning threshold to be maintained;
o collect information from various service providers and compile board books
and distribute to the appropriate parties
o develop with legal counsel and the secretary of the Trust an agenda for
each board meeting and, if requested by the Trustees, attend board meetings
and prepare minutes;
o prepare Form 1099s for Trustees and other fund vendors;
o assist in compiling exhibits and disclosures for Form N-CSR and Form N-PX
as requested by the Trust
o calculate dividend and capital gains distributions subject to review and
approval by the Trust and its independent accountants; and
o generally assist in the Trust's administrative operations as mutually
agreed to by the parties.
The duties of the Administrator shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against the
Administrator hereunder. These services do not include correcting, verifying or
addressing any prior actions or inactions by any Fund or by any prior service
provider. To the extent the Administrator agrees to take such actions, those
actions taken shall be deemed part of the Schedule B.
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Schedule C
to the
Administration and Fund Accounting Agreement
by and between
Lotsoff Capital Management Equity Trust
and
UMB Fund Services, Inc.
Annual Fees per Portfolio
Asset-Based Fees*
o Up to $250 million 12.0 basis points
o $250 million - $500 million 9.5 basis points
o $500 million - $750 million 7.0 basis points
o $750 million - $1 billion 5.0 basis points
o $1 billion - $2 billion 4.75 basis points
o $2 billion - $3 billion 4.5 basis points
o Over $3 billion 4.25 basis points
Minimum Annual Fee*
Minimum annual asset-based fee per fund $90,000
* $75,000 of the annual minimum fee subject to waiver of 50% for portfolios
under $25 million and 25% for portfolios between $25 million and $50
million for the first twelve months after inception and further subject to
a waiver of 25% for portfolios under $25 million and 12.5% for portfolios
between $25 million and $50 million for the second twelve-month period
after inception.
Multi-Class
Per class, per month $1,500
Out-of-Pocket Expenses
Out-of-pocket expenses include, but are not limited to: portfolio pricing
services; XXXXX filing fees; designing, typesetting and printing
shareholder reports and prospectuses; photocopying; express delivery
charges; and travel on behalf of fund business.
Programming and Project Fees
Additional fees at $150 per hour or as quoted by project may apply for
special programming to meet your servicing requirements or to create custom
reports.
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