Exhibit (h)(7)
PARTIAL FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into this 14th day of March, 2006, by
and between OHIO NATIONAL FUND, INC., a Maryland corporation, DOW TARGET
VARIABLE FUND, LLC, an Ohio limited liability company (collectively referred to
as the "Corporation"), OHIO NATIONAL INVESTMENTS, INC., (the "Adviser") and U.S.
BANCORP FUND SERVICES, LLC, a Wisconsin limited liability company ("USBFS").
WHEREAS, the Corporation is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and is authorized to issue shares of beneficial interest in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, USBFS is, among other things, in the business of providing fund
administration services for the benefit of its customers; and
WHEREAS, the Corporation desires to retain USBFS to provide fund
administration services to each series of the Corporation listed on Exhibit A
hereto (as amended from time to time) (each a "Fund" and collectively, the
"Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
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 OF USBFS AS ADMINISTRATOR
The Corporation hereby appoints USBFS as administrator of the Corporation
on the terms and conditions set forth in this Agreement, and USBFS hereby
accepts such appointment and agrees to perform the services and duties set
forth in this Agreement. The services and duties of USBFS shall be confined
to those matters expressly set forth herein, and no implied duties are
assumed by or may be asserted against USBFS hereunder.
2. SERVICES AND DUTIES OF USBFS
USBFS shall provide the following administration services to the Fund:
A. Financial Reporting:
(1) SEC Registration and Reporting:
a. Prepare and file Form N-Q.
b. Prepare the schedules of investments to be included in the
annual and semiannual shareholder reports.
B. IRS Compliance:
(1) Monitor the Corporation's status as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"), including without limitation, review of
the following:
a. Asset diversification
b. Qualifying income requirements
c. Distribution requirements
(2) Calculate required distributions (including excise tax
distributions)
C. Tax Reporting:
(1) Prepare and file on a timely basis appropriate federal and state
tax returns including, without limitation, Form 1120, with any
necessary schedules.
(2) Prepare state income breakdowns where relevant.
(3) Monitor wash sale losses.
(4) Calculate eligible dividend income for corporate shareholders.
3. COMPENSATION
USBFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit B hereto
(as amended from time to time). USBFS shall also be compensated for such
out-of-pocket expenses (e.g., telecommunication charges, postage and
delivery charges, and reproduction charges) as are reasonably incurred by
USBFS in performing its duties hereunder. The Corporation shall pay all
such fees and reimbursable expenses within 30 calendar days following
receipt of the billing notice, except for any fee or expense subject to a
good faith dispute. The Corporation shall notify USBFS in writing within 30
calendar days following receipt of each invoice if the Corporation is
disputing any amounts in good faith. The Corporation shall pay such
disputed amounts within 10 calendar days of the day on which the parties
agree to the amount to be paid. With the exception of any fee or expense
the Corporation is disputing in good faith as set forth above, unpaid
invoices shall accrue a finance charge of 1 1/2% per month after the due
date. Notwithstanding anything to the contrary, amounts owed by the
Corporation to USBFS shall only be paid out of the assets and property of
the particular Fund involved.
4. REPRESENTATIONS AND WARRANTIES
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A. The Corporation hereby represents and warrants to USBFS, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(2) This Agreement has been duly authorized, executed and delivered
by the Corporation in accordance with all requisite action and
constitutes a valid and legally binding obligation of the
Corporation, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the rights and remedies of
creditors and secured parties; and
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
B. USBFS hereby represents and warrants to the Corporation, which
representations and warranties shall be deemed to be continuing
throughout the term of this Agreement, that:
(1) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(2) This Agreement has been duly authorized, executed and delivered
by USBFS in accordance with all requisite action and constitutes
a valid and legally binding obligation of USBFS, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured
parties; and
(3) It is conducting its business in compliance in all material
respects with all applicable laws and regulations, both state and
federal, and has obtained all regulatory approvals necessary to
carry on its business as now conducted; there is no statute,
rule, regulation, order or judgment binding on it and no
provision of its charter, bylaws or any contract binding it or
affecting its property which would prohibit its execution or
performance of this Agreement.
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5. STANDARD OF CARE; INDEMNIFICATION; LIMITATION OF LIABILITY
A. USBFS shall exercise reasonable care in the performance of its duties
under this Agreement. USBFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Corporation
in connection with its duties under this Agreement, including losses
resulting from mechanical breakdowns or the failure of communication
or power supplies beyond USBFS's control, except a loss arising out of
or relating to USBFS's refusal or failure to comply with the terms of
this Agreement or from its bad faith, negligence, or willful
misconduct in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, if USBFS has
exercised reasonable care in the performance of its duties under this
Agreement, the Corporation shall indemnify and hold harmless USBFS
from and against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable attorneys'
fees) that USBFS may sustain or incur or that may be asserted against
USBFS by any person arising out of any action taken or omitted to be
taken by it in performing the services hereunder (i) in accordance
with the foregoing standards, or (ii) in reliance upon any written or
oral instruction provided to USBFS by any duly authorized officer of
the Corporation, as approved by the Board of Directors of the
Corporation, except for any and all claims, demands, losses, expenses,
and liabilities arising out of or relating to USBFS's refusal or
failure to comply with the terms of this Agreement or from its bad
faith, negligence or willful misconduct in the performance of its
duties under this Agreement. This indemnity shall be a continuing
obligation of the Corporation, its successors and assigns,
notwithstanding the termination of this Agreement. As used in this
paragraph, the term "USBFS" shall include USBFS's directors, officers
and employees.
USBFS shall indemnify and hold the Corporation harmless from and
against any and all claims, demands, losses, expenses, and liabilities
of any and every nature (including reasonable attorneys' fees) that
the Corporation may sustain or incur or that may be asserted against
the Corporation by any person arising out of any action taken or
omitted to be taken by USBFS as a result of USBFS's refusal or failure
to comply with the terms of this Agreement, or from its bad faith,
negligence, or willful misconduct in the performance of its duties
under this Agreement. This indemnity shall be a continuing obligation
of USBFS, its successors and assigns, notwithstanding the termination
of this Agreement. As used in this paragraph, the term "Corporation"
shall include the Corporation's directors, officers and employees.
Neither party to this Agreement shall be liable to the other party for
consequential, special or punitive damages under any provision of this
Agreement.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, USBFS shall take all reasonable
steps to minimize
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service interruptions for any period that such interruption continues.
USBFS will make every reasonable effort to restore any lost or damaged
data and correct any errors resulting from such a breakdown at the
expense of USBFS. USBFS agrees that it shall, at all times, have
reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing
equipment to the extent appropriate equipment is available.
Representatives of the Corporation shall be entitled to inspect
USBFS's premises and operating capabilities at any time during regular
business hours of USBFS, upon reasonable notice to USBFS. Moreover,
USBFS shall provide the Corporation, at such times as the Corporation
may reasonably require, copies of reports rendered by independent
accountants on the internal controls and procedures of USBFS relating
to the services provided by USBFS under this Agreement.
Notwithstanding the above, USBFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the indemnitor may
be asked to indemnify or hold the indemnitee harmless, the indemnitor
shall be fully and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood that the
indemnitee will use all reasonable care to notify the indemnitor
promptly concerning any situation that presents or appears likely to
present the probability of a claim for indemnification. The indemnitor
shall have the option to defend the indemnitee against any claim that
may be the subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and thereupon
the indemnitor shall take over complete defense of the claim, and the
indemnitee shall in such situation initiate no further legal or other
expenses for which it shall seek indemnification under this section.
The indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked to
indemnify the indemnitee except with the indemnitor's prior written
consent.
C. The indemnity and defense provisions set forth in this Section 5 shall
indefinitely survive the termination and/or assignment of this
Agreement.
D. If USBFS is acting in another capacity for the Corporation pursuant to
a separate agreement, nothing herein shall be deemed to relieve USBFS
of any of its obligations in such other capacity.
6. DATA NECESSARY TO PERFORM SERVICES
The Corporation or its agent shall furnish to USBFS the data necessary to
perform the services described herein at such times and in such form as
mutually agreed upon.
7. PROPRIETARY AND CONFIDENTIAL INFORMATION
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USBFS agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Corporation,
all records and other information relative to the Corporation and prior,
present, or potential shareholders of the Corporation (and clients of said
shareholders), and not to use such records and information for any purpose
other than the performance of its responsibilities and duties hereunder,
except (i) after prior notification to and approval in writing by the
Corporation, which approval shall not be unreasonably withheld and may not
be withheld where USBFS may be exposed to civil or criminal contempt
proceedings for failure to comply, (ii) when requested to divulge such
information by duly constituted authorities, or (iii) when so requested by
the Corporation. Records and other information which have become known to
the public through no wrongful act of USBFS or any of its employees, agents
or representatives, and information that was already in the possession of
USBFS prior to receipt thereof from the Corporation or its agent, shall not
be subject to this paragraph.
Further, USBFS will adhere to the privacy policies adopted by the
Corporation pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be
modified from time to time. In this regard, USBFS shall have in place and
maintain physical, electronic and procedural safeguards reasonably designed
to protect the security, confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information relating to the
Corporation and its shareholders.
8. RECORDS
USBFS shall keep records relating to the services to be performed hereunder
in the form and manner, and for such period, as it may deem advisable and
is agreeable to the Corporation, but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section
31 of the 1940 Act and the rules thereunder. USBFS agrees that all such
records prepared or maintained by USBFS relating to the services to be
performed by USBFS hereunder are the property of the Corporation and will
be preserved, maintained, and made available in accordance with such
applicable sections and rules of the 1940 Act and will be promptly
surrendered to the Corporation or its designee on and in accordance with
its request.
9. COMPLIANCE WITH LAWS
The Corporation has and retains primary responsibility for all compliance
matters relating to the Fund, including but not limited to compliance with
the 1940 Act, the Code, the SOX Act, the USA Patriot Act of 2002 and the
policies and limitations of the Fund relating to its portfolio investments
as set forth in its Prospectus and SAI. USBFS's services hereunder shall
not relieve the Corporation of its responsibilities for assuring such
compliance or the Board of Director's oversight responsibility with respect
thereto.
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10. TERM OF AGREEMENT; AMENDMENT
This Agreement shall become effective as of the date first written above
and will continue in effect for a period of one year. Thereafter, if not
terminated, this Agreement shall continue in effect automatically as to
each Fund for successive one-year periods. Subsequent to the initial
one-year term, this Agreement may be terminated by either party upon giving
90 days prior written notice to the other party or such shorter period as
is mutually agreed upon by the parties. Notwithstanding the foregoing, this
Agreement may be terminated by any party upon the breach of the other party
of any material term of this Agreement if such breach is not cured within
15 days of notice of such breach to the breaching party. This Agreement may
not be amended or modified in any manner except by written agreement
executed by USBFS and the Corporation, and authorized or approved by the
Board of Directors.
11. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
USBFS's duties or responsibilities hereunder is designated by the
Corporation by written notice to USBFS, USBFS will promptly, upon such
termination and at the expense of the Corporation, transfer to such
successor all relevant books, records, correspondence, and other data
established or maintained by USBFS under this Agreement in a form
reasonably acceptable to the Corporation (if such form differs from the
form in which USBFS has maintained the same, the Corporation shall pay any
expenses associated with transferring the data to such form), and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from USBFS's personnel in the establishment of
books, records, and other data by such successor. If no such successor is
designated, then such books, records and other data shall be returned to
the Corporation.
12. ASSIGNMENT
This Agreement shall extend to and be binding upon the parties hereto and
their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Corporation without the written
consent of USBFS, or by USBFS without the written consent of the
Corporation accompanied by the authorization or approval of the
Corporation's Board of Directors.
13. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin, without regard to conflicts of law principles. 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 SEC thereunder.
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14. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower either
party to act as agent for the other party to this Agreement, or to conduct
business in the name, or for the account, of the other party to this
Agreement.
15. LEGAL-RELATED SERVICES
Nothing in this Agreement shall be deemed to appoint USBFS and its
officers, directors and employees as the Corporation's attorney, form an
attorney-client relationship or require the provision of legal advice. The
Corporation acknowledges that in-house USBFS attorneys exclusively
represent USBFS and rely on outside counsel retained by the Corporation to
review all services provided by in-house USBFS attorneys and to provide
independent judgment on the Corporation's behalf. Because no
attorney-client relationship exists between in-house USBFS attorneys and
the Corporation, any information provided to USBFS attorneys may not be
privileged and may be subject to compulsory disclosure under certain
circumstances. USBFS represents that it will maintain the confidentiality
of information disclosed to its in-house attorneys on a best efforts basis.
16. SERVICES NOT EXCLUSIVE
Nothing in this Agreement shall limit or restrict USBFS from providing
services to other parties that are similar or identical to some or all of
the services provided hereunder.
17. INVALIDITY
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.
18. LEGAL-RELATED SERVICES
Nothing in this Agreement shall be deemed to appoint USBFS and its
officers, directors and employees as the Corporation's attorneys, form
attorney-client relationships or require the provision of legal advice. The
Corporation acknowledges that in-house USBFS attorneys exclusively
represent USBFS and rely on outside counsel retained by the Corporation to
review all services provided by in-house USBFS attorneys and to provide
independent judgment on the Corporation's behalf. Because no
attorney-client relationship exists between in-house USBFS attorneys and
the Corporation, any information provided to USBFS attorneys may not be
privileged and may be subject to compulsory disclosure under certain
circumstances. USBFS represents that it will
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maintain the confidentiality of information disclosed to its in-house
attorneys on a best efforts basis.
19. 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 on the date
delivered personally or by courier service, or three days after sent by
registered or certified mail, postage prepaid, return receipt requested, or
on the date sent and confirmed received by facsimile transmission to the
other party's address set forth below:
Notice to USBFS shall be sent to:
U.S. Bancorp Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Corporation shall be sent to:
Ohio National Fund, Inc. or
Dow Target Variable Fund, LLC
Xxx Xxxxxxxxx Xxx
Xxxxxxxxxx XX 00000
20. MULTIPLE ORIGINALS
This Agreement may be executed on two or more counterparts, each of which
when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
OHIO NATIONAL FUND, INC. U.S. BANCORP FUND SERVICES, LLC
By: By:
--------------------------------- ------------------------------------
Name: Name: Xxx X. Xxxxxxx
------------------------------- Title: President
Title:
------------------------------
DOW TARGET VARIABLE FUND, LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
OHIO NATIONAL INVESTMENTS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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EXHIBIT A
TO THE
PARTIAL FUND ADMINISTRATION SERVICING AGREEMENT
FUND NAMES
Separate Series of Ohio National Fund, Inc.
Name of Series
EQUITY PORTFOLIO
MONEY MARKET PORTFOLIO
BOND PORTFOLIO
OMNI PORTFOLIO
INTERNATIONAL PORTFOLIO
INTERNATIONAL SMALL COMPANY PORTFOLIO
CAPITAL APPRECIATION PORTFOLIO
DISCOVERY PORTFOLIO
AGGRESSIVE GROWTH PORTFOLIO
SMALL CAP GROWTH PORTFOLIO
MID CAP OPPORTUNITY PORTFOLIO
CAPITAL GROWTH PORTFOLIO
S&P 500 INDEX PORTFOLIO
HIGH INCOME BOND PORTFOLIO
BLUE CHIP PORTFOLIO
NASDAQ-100 INDEX PORTFOLIO
BRISTOL PORTFOLIO
BRYTON GROWTH PORTFOLIO
U.S. EQUITY PORTFOLIO
BALANCED PORTFOLIO
COVERED CALL PORTFOLIO
TARGET VIP PORTFOLIO
TARGET EQUITY/INCOME PORTFOLIO
1st Quarter Dow 5
2nd Quarter Dow 5
3rd Quarter Dow 5
4th Quarter Dow 5
1st Quarter Dow 10
2nd Quarter Dow 10
3rd Quarter Dow 10
4th Quarter Dow 10
A-1
EXHIBIT B
TO THE
PARTIAL FUND ADMINISTRATION SERVICING AGREEMENT
FEE SCHEDULE
FUND ADMINISTRATION & COMPLIANCE SERVICES
FEE SCHEDULE- FEBRUARY 2006
Conversion and extraordinary services COMPLIANCE SOI REPORTING
quoted separately.
- $31,500 Annually: ($1500/fund, 21
Plus out-of-pocket expenses, funds) entire amount is an
including but not limited to: out-of-pocket expense
- Postage, Stationery RIC TAX SERVICE
- Programming, Special Reports - $57,500 annually: ($2,500 / fund,
23 funds) Prorated monthly
- Compliance Systems Costs $4,791.67; amount to be increased
by out-of-pocket expenses of
- Proxies, Insurance Gainskeeper
- XXXXX filing EOFFICE
- Retention of records - $125 / month
- Federal and state regulatory REPORTSOURCE
filing fees
- $175 / month
- Certain insurance premiums
- Expenses from board of directors
meetings
- Auditing and legal expenses
- Blue Sky conversion expenses (if
necessary)
- All other out-of-pocket expenses
Fees are billed monthly.
* Subject to CPI increase, Milwaukee MSA.
B-1
