FUND CFO/TREASURER AGREEMENT
AGREEMENT made as of February 24, 2014 by and between Horizons ETF Trust, a Delaware statutory trust, with its principal office and place of business at 1350 Avenue of the Americas, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Fund”), and Foreside Management Services, LLC, a Delaware limited liability company with its principal office and place of business at Three Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxx 00000 (“Foreside”).
WHEREAS, the Fund is, or will be, registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company; and
WHEREAS, the Fund desires that Foreside perform certain services and Foreside is willing to provide those services on the terms and conditions set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, the Fund and Foreside hereby agree as follows:
SECTION 1. PROVISION OF CFO/TREASURER; DELIVERY OF DOCUMENTS
(a) Foreside hereby agrees to provide an employee of Foreside acceptable to the Board of Trustees of the Fund (the “Board”) to serve as the Fund’s Chief Financial Officer and Treasurer (“CFO/Treasurer”) to the Fund for the period and on the terms and conditions set forth in this Agreement.
(b) In connection therewith, the Fund has delivered to Foreside copies of, and shall promptly furnish Foreside with all amendments of or supplements to: (i) the Fund’s Declaration of Trust and Bylaws (collectively, as amended from time to time, “Organizational Documents”); (ii) the Fund’s current Registration Statement, as amended or supplemented, filed with the U.S. Securities and Exchange Commission (“SEC”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the 1940 Act (the “Registration Statement”); (iii) the Fund’s current Prospectus and Statement of Additional Information (collectively, as currently in effect and as amended or supplemented, the “Prospectus”); (iv) each plan of distribution or similar document that may be adopted by the Fund under Rule 12b-1 under the 1940 Act and each current shareholder service plan or similar document adopted by the Fund; and (v) all compliance policies, programs and procedures adopted by the Fund with respect to the Fund. The Fund shall deliver to Foreside a certified copy of the resolution of the Board appointing the CFO/Treasurer hereunder and authorizing the execution and delivery of this Agreement. In addition, the Fund shall deliver, or cause to deliver, to Foreside upon Foreside’s reasonable request any other documents that would enable Foreside to perform the services described in this Agreement.
SECTION 2. DUTIES OF FORESIDE
(a) Subject to the approval of the Board, Foreside shall make available an employee of Foreside who is competent and knowledgeable regarding the management and internal controls of the Fund to serve as the Fund’s CFO/Treasurer, who will have the authority normally incident to such office, including the authority to execute documents required to be executed by the Fund’s “Chief Financial Officer” and/or “Treasurer”.
(b) Foreside and/or the CFO/Treasurer, as an agent of Foreside, shall provide the services as set forth on Appendix A hereto (the “Services”).
(c) Foreside shall maintain records relating to the Services, such as policies and procedures, relevant Board presentations, and other records (collectively, the “Records”), as are required to be maintained under the relevant securities laws and regulations. Such reports shall be maintained in the manner and for the periods as are required under such laws and regulations. The Records shall be the property of the Fund. The Fund, or the Fund’s authorized representatives, shall have access to the Records at all times during Foreside’s normal business hours. Upon the reasonable request of the Fund, copies of any of the Records shall be provided promptly by Foreside to the Fund or the Fund’s authorized representatives at the Fund’s expense.
(d) Nothing contained herein shall be construed to require Foreside to perform any service that could cause Foreside to be deemed an investment adviser for purposes of the 1940 Act or the Investment Advisers Act of 1940, as amended, or that could cause the Fund to act in contravention of the Fund’s Prospectus or any provision of the 1940 Act. Further, while Foreside will provide services under this Agreement to assist the Fund with respect to the Fund’s obligations under and compliance with various laws and regulations, Fund understands and agrees that Foreside is not a law firm and that nothing contained herein shall be construed to create an attorney-client relationship between Foreside and Fund or to require Foreside to render legal advice or otherwise engage in the practice of law in any jurisdiction. Thus, except with respect to Foreside’s duties as set forth in this Section 2, and except as otherwise specifically provided herein, the Fund assumes all responsibility for ensuring that the Fund complies with all applicable requirements of the Securities Act, the Securities Exchange Act of 1934 (the “Exchange Act”), the 1940 Act and any laws, rules and regulations of governmental authorities with jurisdiction over the Fund. All references to any law in this Agreement shall be deemed to include reference to the applicable rules and regulations promulgated under authority of the law and all official interpretations of such law or rules or regulations.
(e) Foreside does not offer legal or accounting services and does not provide substitute services for the services provided by legal counsel or that of a certified public accountant. Foreside will make every reasonable effort to provide the services described in this Agreement; however, Foreside does not guarantee that work performed by Foreside for the Fund would be favorably received by any regulatory agency.
(f) In order for Foreside to perform the Services, the Fund shall take reasonable steps to (i) encourage all of its service providers to furnish any and all information to Foreside as reasonably requested; and (ii) ensure that Foreside has access to all relevant records and documents maintained by the Fund or any service provider to the Fund.
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(g) Foreside may provide other services and assistance relating to the affairs of the Fund as the Fund may, from time to time, request subject to mutually acceptable compensation and implementation agreements.
SECTION 3. STANDARD OF CARE; LIMITATION OF LIABILITY; INDEMNIFICATION
(a) Foreside shall be under no duty to take any action except as specifically set forth herein or as may be specifically agreed to by Foreside in writing. Foreside shall use its best judgment and efforts in rendering the Services and shall not be liable to the Fund or any of the Fund’s shareholders for any action or inaction of Foreside or the CFO/Treasurer relating to any event whatsoever in the absence of bad faith, reckless disregard, gross negligence or willful misfeasance. Further, neither Foreside nor the CFO/Treasurer shall be liable to the Fund or any of the Fund’s shareholders for any action taken, or failure to act, in good faith reliance upon: (i) the advice and opinion of Fund counsel; and/or (ii) any certified copy of any resolution of the Board. Neither Foreside nor the CFO/Treasurer shall be under any duty or obligation to inquire into the validity or invalidity or authority or lack thereof of any statement, oral or written instruction, resolution, signature, request, letter of transmittal, certificate, opinion of counsel, instrument, report, notice, consent, order, or any other document or instrument which Foreside and/or the CFO/Treasurer reasonably believe in good faith to be genuine.
(b) The Fund agrees to indemnify and hold harmless Foreside, its affiliates and each of their respective directors, officers, employees and agents and any person who controls Foreside within the meaning of Section 15 of the Securities Act (any of Foreside, its affiliates, their respective officers, employees, agents and directors or such control persons, for purposes of this paragraph, a “Foreside Indemnitee”) against any loss, liability, claim, damages or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damages or expense and reasonable counsel fees incurred in connection therewith) arising out of or based upon (i) Foreside’s performance of its duties under this Agreement, or (ii) the breach of any obligation, representation or warranty under this Agreement by the Fund.
In no case (i) is the indemnity of the Fund in favor of any Foreside Indemnitee to be deemed to protect the Foreside Indemnitee against any liability to which the Foreside Indemnitee would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement, or (ii) is the Fund to be liable with respect to any claim made against any Foreside Indemnitee unless the Foreside Indemnitee notifies the Fund in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim are served upon the Foreside Indemnitee (or after the Foreside Indemnitee receives notice of service on any designated agent).
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Failure to notify the Fund of any claim shall not relieve the Fund from any liability that it may have to any Foreside Indemnitee unless failure or delay to so notify the Fund prejudices the Fund’s ability to defend against such claim. The Fund shall be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any claims, but if the Fund elects to assume the defense, the defense shall be conducted by counsel chosen by it and satisfactory to the Foreside Indemnitee, defendant or defendants in the suit. In the event the Fund elects to assume the defense of any suit and retain counsel, the Foreside Indemnitee, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them. If the Fund does not elect to assume the defense of any suit, it will reimburse the Foreside Indemnitee, defendant or defendants in the suit, for the reasonable fees and expenses of any counsel retained by them.
(c) Foreside agrees to indemnify and hold harmless the Fund and each of its trustees and officers and any person who controls the Fund within the meaning of Section 15 of the Securities Act (for purposes of this paragraph, the Fund and each of its trustees and officers and its controlling persons are collectively referred to as the “Fund Indemnitees”) against any loss, liability, claim, damages or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damages or expense and reasonable counsel fees incurred in connection therewith) arising out of or based upon (i) the breach of any obligation, representation or warranty under this Agreement by Foreside, or (ii) Foreside’s failure to comply in any material respect with applicable securities laws.
In no case (i) is the indemnity of Foreside in favor of any Fund Indemnitee to be deemed to protect any Fund Indemnitee against any liability to which such Fund Indemnitee would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement, or (ii) is Foreside to be liable under its indemnity agreement contained in this paragraph with respect to any claim made against any Fund Indemnitee unless the Fund Indemnitee notifies Foreside in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim are served upon the Fund Indemnitee (or after the Fund Indemnitee has received notice of service on any designated agent).
Failure to notify Foreside of any claim shall not relieve Foreside from any liability that it may have to the Fund Indemnitee against whom such action is brought unless failure or delay to so notify Foreside prejudices Foreside’s ability to defend against such claim. Foreside shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce the claim, but if Foreside elects to assume the defense, the defense shall be conducted by counsel chosen by it and satisfactory to the Fund Indemnitee, defendant or defendants in the suit. In the event that Foreside elects to assume the defense of any suit and retain counsel, the Fund Indemnitee, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them. If Foreside does not elect to assume the defense of any suit, it will reimburse the Fund Indemnitee, defendant or defendants in the suit, for the reasonable fees and expenses of any counsel retained by them.
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(d) No indemnified party shall settle any claim against it for which it intends to seek indemnification from the indemnifying party, under the terms of Section 3(b) or 3(c) above, without prior written notice to and consent from the indemnifying party, which consent shall not be unreasonably withheld. No indemnified or indemnifying party shall settle any claim unless the settlement contains a full release of liability with respect to the other party in respect of such action.
(e) Foreside shall not be liable for the errors of service providers to the Fund or their systems.
(f) The Fund agrees that Foreside, its employees, officers and directors shall not be liable to the Fund for any actions, damages, claims, liabilities, costs, expenses or losses in any way arising out of or relating to the Services for an aggregate amount in excess of the fees paid to Foreside in performing services hereunder. The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense or loss, whether in contract, statute, tort (including, without limitation, negligence) or otherwise.
In no event shall either party or their respective employees, officers, directors and trustees be liable for consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses or losses (including, without limitation, lost profits and opportunity costs or fines).
The foregoing paragraphs of this Section 3(f) shall not be construed to protect the CFO/Treasurer against any liability to the Fund or to its security holders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.
SECTION 4. REPRESENTATIONS AND WARRANTIES
| (a) | Foreside covenants, represents and warrants to the Fund that: |
(i) it is a limited liability company duly organized and in good standing under the laws of the State of Delaware;
(ii) it is duly qualified to carry on its business in the State of Maine;
(iii) it is empowered under applicable laws and by its Operating Agreement to enter into this Agreement and perform its duties under this Agreement;
(iv) all requisite corporate proceedings have been taken to authorize it to enter into this Agreement and perform its duties under this Agreement;
(v) it has access to the necessary facilities, equipment, and personnel with the requisite knowledge and experience to assist the CFO/Treasurer in the performance of his or her duties and obligations under this Agreement;
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(vi) this Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of Foreside, enforceable against Foreside 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;
(vii) it shall report to the Board promptly if Foreside learns about CFO/Treasurer malfeasance or in the event the CFO/Treasurer is terminated as an officer by another fund or terminated by Foreside;
(viii) it shall comply with all applicable laws; and
(ix) it shall maintain policies of insurance reasonable and customary for its business.
| (b) | The Fund covenants, represents and warrants to Foreside that: |
(i) it is a statutory trust duly organized and in good standing under the laws of the State of Delaware;
(ii) it is empowered under applicable laws and by its Organizational Documents to enter into this Agreement and perform its duties under this Agreement;
(iii) all requisite corporate proceedings have been taken to authorize it to enter into this Agreement and perform its duties under this Agreement;
(iv) it is, or will be within a reasonable date, an open-end management investment company registered under the 1940 Act;
(v) this Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of the Fund, enforceable against the Fund 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;
(vi) a Registration Statement under the Securities Act and the 1940 Act is or will be effective and will remain effective and appropriate State securities law filings will be or have been made and will continue to be made with respect to the Fund;
(vii) the CFO/Treasurer shall be covered by the Fund’s Directors & Officers Liability Insurance Policy (the “Policy”), and the Fund shall use reasonable efforts to ensure that such coverage be (a) reinstated should the Policy be cancelled; (b) continued after the CFO/Treasurer ceases to serve as an officer of the Fund on
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substantially the same terms as such coverage is provided for all other Fund officers after such persons are no longer officers of the Fund; and (c) continued in the event the Fund merges or terminates, on substantially the same terms as such coverage is provided for all other Fund officers (and for a period no less than six years). The Fund shall provide Foreside with proof of current coverage, including a copy of the Policy, and shall notify Foreside immediately should the Policy be cancelled or terminated; and
(viii) the CFO/Treasurer is a named officer in the Fund’s corporate resolutions and subject to the provisions of the Fund’s Organizational Documents regarding indemnification of its officers.
SECTION 5. COMPENSATION AND EXPENSES
(a) In consideration of the services provided by Foreside pursuant to this Agreement, the Fund shall pay Foreside the fees and expenses set forth in Appendix B hereto.
All fees payable hereunder shall be accrued daily by the Fund and shall be payable monthly in arrears on the first business day of each calendar month for services performed during the prior calendar month. All out-of-pocket charges incurred by Foreside shall be paid as incurred. If fees begin to accrue in the middle of a month or if this Agreement terminates before the end of any month, all fees for the period from that date to the end of that month or from the beginning of that month to the date of termination, as the case may be, shall be prorated according to the proportion that the period bears to the full month in which the effectiveness or termination occurs. Upon the termination of this Agreement, the Fund shall pay to Foreside such compensation as shall be due and payable as of the effective date of termination.
(b) Foreside may, with respect to questions of law relating to its services hereunder, apply to and obtain the advice and opinion of Fund counsel. The costs of any such advice or opinion shall be borne by the Fund.
(c) The CFO/Treasurer is serving solely as an officer of the Fund and neither the CFO/Treasurer nor Foreside shall be responsible for, or have any obligation to pay, any of the expenses of the Fund. All Fund expenses shall be the sole obligation of the Fund, which shall pay or cause to be paid all Fund expenses.
SECTION 6. EFFECTIVENESS, DURATION, TERMINATION AND ASSIGNMENT
(a) This Agreement shall become effective on the date indicated above or at such time as Foreside commences providing the Services, whichever is later (the “Effective Date”). Upon the Effective Date, this Agreement shall constitute the entire agreement between the parties and shall supersede all previous agreements between the parties, whether oral or written, relating to the Fund.
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(b) This Agreement shall continue in effect until terminated in accordance with the provisions hereof.
(c) This Agreement may be terminated at any time, without the payment of any penalty (i) by the Board on thirty (30) days’ written notice to Foreside or (ii) by Foreside on thirty (30) days’ written notice to the Fund.
(d) The provisions of Sections 3, 6(d), 7, 10, 11, and 12 shall survive any termination of this Agreement.
(e) This Agreement and the rights and duties under this Agreement shall not be assignable by either Foreside or the Fund except by the specific written consent of the other party. All terms and provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto.
SECTION 7. CONFIDENTIALITY
Each party shall comply with the laws and regulations applicable to it in connection with its use of confidential information, including, without limitation, Regulation S-P (if applicable). Foreside agrees to treat all records and other information related to the Fund as proprietary information of the Fund and, on behalf of itself and its employees, to keep confidential all such information, except that Foreside may release such other information (a) as approved in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where Foreside is advised by counsel that it may be exposed to civil or criminal contempt proceedings for failure to release the information (provided, however, that Foreside shall seek the approval of the Fund as promptly as possible so as to enable the Fund to pursue such legal or other action as it may desire to prevent the release of such information) or (b) when so requested by the Fund.
SECTION 8. FORCE MAJEURE
Foreside shall not be responsible or liable for any failure or delay in performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control including, without limitation, acts of civil or military authority, national emergencies, fire, mechanical breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication system or power supply. In addition, to the extent Foreside’s obligations hereunder are to oversee or monitor the activities of third parties, Foreside shall not be liable for any failure or delay in the performance of Foreside’s duties caused, directly or indirectly, by the failure or delay of such third parties in performing their respective duties or cooperating reasonably and in a timely manner with Foreside.
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SECTION 9. ACTIVITIES OF FORESIDE
(a) Except to the extent necessary to perform Foreside’s obligations under this Agreement, nothing herein shall be deemed to limit or restrict Foreside’s right, or the right of any of Foreside’s managers, officers or employees who also may be a director, trustee, officer or employee of the Fund (including, without limitation, the CFO/Treasurer), or who are otherwise affiliated persons 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, trust, firm, individual or association.
(b) Upon prior approval by the Fund, Foreside may subcontract any or all of its functions or responsibilities pursuant to this Agreement to one or more persons, which may be affiliated persons of Foreside who agree to comply with the terms of this Agreement; provided, that any such subcontracting shall not relieve Foreside of its responsibilities hereunder. Foreside may pay those persons for their services, but no such payment will increase Foreside’s compensation or reimbursement of expenses from the Fund.
SECTION 10. COOPERATION WITH INDEPENDENT PUBLIC ACCOUNTANTS
Foreside shall cooperate with the Fund’s independent public accountants and shall take reasonable action to make all necessary information available to the accountants for the performance of such accountants’ duties.
SECTION 11. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY
The trustees of the Fund and the shareholders of the Fund shall not be liable for any obligations of the Fund under this Agreement, and Foreside agrees that, in asserting any rights or claims under this Agreement, it shall look only to the assets and property of the Fund.
SECTION 12. MISCELLANEOUS
(a) This Agreement shall be governed by, and the provisions of this Agreement shall be construed and interpreted under and in accordance with, the laws of the State of Delaware, without regard to the conflict of laws provisions thereof.
(b) This Agreement may be executed by the parties hereto in any number of counterparts, and all of the counterparts taken together shall be deemed to constitute one and the same instrument.
(c) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid. This Agreement shall be construed as if drafted jointly by both Foreside and Fund and no presumptions shall arise favoring any party by virtue of authorship of any provision of this Agreement.
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(d) Section headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement.
(e) Any notice required or permitted to be given hereunder by either party to the other shall be deemed sufficiently given if in writing and personally delivered or sent by facsimile or registered, certified or overnight mail, postage prepaid, addressed by the party giving such notice to the other party at the address furnished below unless and until changed by Foreside or Fund, as the case may be. Notice shall be given to each party at the following address:
| (i) To Foreside: |
(ii) To Fund: | |
| Foreside Management Services, LLC Three Xxxxx Xxxxx, Xxxxx 000 Xxxxxxxx, Xxxxx 00000 Attention: Legal Department
Phone: 000.000.0000 Fax: 000.000.0000 |
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Attention: Xxxxxx Xxxx
Phone: 000.000.0000 Fax: 000.000.0000 | |
(f) Invoices for fees and expenses due to Foreside hereunder and as set forth in Appendix B hereto shall be sent by Foreside to the address furnished below unless and until changed by Fund (Fund to provide reasonable advance notice of any change of billing address to Foreside):
Attn: Xxxxxx Xxxx
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000
Email: Xxxxxx.Xxxx@xxxxxxxxxx.xxx
(g) Nothing contained in this Agreement is intended to or shall require Foreside, in any capacity hereunder, to perform any functions or duties on any day other than a Fund business day. Functions or duties normally scheduled to be performed on any day which is not a Fund business day shall be performed on, and as of, the next Fund business day, unless otherwise required by law.
(h) The term “affiliate” and all forms thereof used herein shall have the meanings ascribed thereto in the 1940 Act.
(i) No amendment to this Agreement shall be valid unless made in writing and executed by all parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written.
| HORIZONS ETF TRUST | ||
| By: | /s/ Xxxxxx Xxxx | |
| Name: | Xxxxxx Xxxx | |
| Title: | President | |
| FORESIDE MANAGEMENT SERVICES, LLC | ||
| By: | /s/ Xxxxx X. Xxxxxxxx | |
| Name: | Xxxxx X. Xxxxxxxx | |
| Title: | President |
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Appendix A
Services
| • | Review and authorize Fund filings (including Forms N-Q, N-CSR, N-SAR, 24F-2 and registration statement updates) as required under Xxxxxxxx-Xxxxx (“SOX”) and other SEC governing regulations and laws; |
| • | Establish, maintain and oversee disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940); Chair and/or attend quarterly Disclosure Controls Committee meetings to support SOX certifications; request and review sub-certifications from key service providers; |
| • | Attend quarterly Board meetings and disclose relevant information to the Audit Committee; |
| • | Assist with the coordination of the annual financial statement audit, including serving as a signatory to management representation letters, representation letter requests of other service providers and trade confirmation requests; |
| • | Certify the financial statements and other relevant information contained in periodic reports filed by the Fund with the SEC; |
| • | Review and oversee daily Fund expense payment authorizations, periodic budget/accrual review and authorization; and |
| • | Conduct periodic due diligence reviews of vendors performing Fund Administration duties. |
