Exhibit 13(iii)
SUB-ADMINISTRATION AGREEMENT
AGREEMENT, made as of this 12th day of January, 1998, between The
Huntington National Bank, a national banking association, ("Huntington") and SEI
Fund Resources, a Delaware corporation, (the "Sub-Administrator").
WHEREAS, Huntington has entered into an Administration Agreement, dated as
of January 12, 1998 (the "Administration Agreement") with The Monitor Funds (the
"Trust"), a Massachusetts business trust, concerning the provision of management
and administrative services for the investment portfolios of the Trust
identified on Schedule A hereto, as such Schedule shall be amended from time to
time (individually referred to herein as the "Fund" and collectively as the
"Funds"); and
WHEREAS, Huntington desires to retain the Sub-Administrator to assist it in
performing administrative services with respect to each Fund and the Sub-
Administrator is willing to perform such services on the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Sub-Administrator:
a. review, and where necessary, file with the National Association of
Securities Dealers marketing materials relating to the Trust;
b. register the Trust with each state pursuant to Blue Sky regulations;
monitor shareholders' transactions by state to maintain current
registration limits;
c. provide consultation services with respect to the Trust's fund
accounting issues;
d. assist Huntington in the preparation of the Trust's budget and
accruals, analysis and payment of the expenses and accruals;
e. maintain feeds to third party reporting agencies;
f. prepare and file the Trust's tax returns;
g. provide consultation services with respect to dividend calculation
process, including amount paid by Fund and tax ramifications;
h. perform internal audit examinations not less frequently that once
annually at the request of the Trustees;
i. provide consultation services and review with respect to the Trust's
financial statement process, including reporting requirements and
procedures;
j. complete monthly and quarterly total return performance reporting;
k. prepare and file with the SEC all required notices pursuant to Rule
24f-2; Edgarize and file with SEC the semi-annual report for the
Trust on Form N-SAR;
l. perform secondary compliance functions with guidelines set forth for
the Trust pursuant to the Trust's prospectus, the Investment Company
Act of 1940, as amended (the "1940 Act") and the registered investment
company status under the Internal Revenue Code of 1986, as amended;
m. provide individuals acceptable to the Trustees for nomination,
appointment, or election as officers of the Trust, who will be
responsible for the management of certain of the Trust's affairs as
determined by the Trustees; and
n. obtain and keep in effect fidelity bond and directors and officers/
errors and omissions insurance policies for the Trust in accordance
with the requirements of Rules 17g-1 and 17d-1(7) under the 1940 Act
as such bonds and policies are approved by the Trust's Board of
Trustees.
Huntington will keep and maintain all books and records relating to its
services in accordance with Rule 31a-1 under the 1940 Act.
In the performance of its duties hereunder, the Sub-Administrator will
comply with the provisions of the Declaration of Trust and Bylaws of the Trust,
will safeguard and promote the welfare of the Trust and will comply with the
policies that the Trustees may from time to time reasonably determine; provided
that such policies are not in conflict with this Agreement, the Trust's
governing documents, or any applicable statutes or regulations.
2. Compensation; Reimbursement of Expenses. Huntington shall pay the
Sub-Administrator for the services to be provided by the Sub-Administrator under
this Agreement in accordance with, and in the manner set forth in, Schedule B
hereto. In addition, Huntington agrees to reimburse the Sub-Administrator for
the Sub-Administrator's reasonable out-of-pocket expenses in providing services
hereunder.
3. Effective Date. This Agreement shall become effective with respect to
a Fund as of the date first written above (or, if a particular Fund is not in
existence on that date, on the date specified in the amendment to Schedule A to
this Agreement relating to such Fund or, if no date is specified, the date on
which such amendment is executed)(the "Effective Date").
4. Term. This Agreement shall continue in effect with respect to a Fund,
unless earlier terminated by either party hereto as provided hereunder, until
January 12, 2000; and thereafter shall
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be renewed automatically for successive one-year terms unless written notice not
to renew is given by the non-renewing party to the other party at least 60 days
prior to the expiration of the then-current term; provided, however, that after
such termination for so long as the Sub-Administrator in fact continues to
perform any one or more of the services contemplated by this Agreement or any
schedule or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Notwithstanding anything to the contrary herein, this
Agreement shall terminate automatically upon termination of the Administration
Agreement. Either party to this Agreement may terminate such Agreement prior to
the expiration of the initial term set forth above by providing the other party
with written notice of such termination at least 60 days prior the date upon
which such termination shall become effective. Compensation due the Sub-
Administrator and unpaid by Huntington upon such termination shall be
immediately due and payable upon and notwithstanding such termination. The Sub-
Administrator shall be entitled to collect from Huntington, in addition to the
compensation described under paragraph 2 hereof, the amount of all the Sub-
Administrator's cash disbursements for services in connection with the Sub-
Administrator's activities in effecting such termination, including without
limitation, the delivery to Huntington, the Trust, and/or their respective
designees of the Trust's property, records, instruments and documents, or any
copies thereof. Subsequent to such termination, the Sub-Administrator will
provide Huntington and/or the Trust with reasonable access to any Trust
documents or records remaining in its possession, and Huntington shall pay the
Sub-Administrator the actual cost incurred in providing such information.
5. Standard of Care of the Sub-Administrator; Indemnification. The
duties of the Sub-Administrator shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against the Sub-
Administrator hereunder. The Sub-Administrator shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties hereunder,
except a loss resulting from willful misfeasance, bad faith or negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder, except as may otherwise be provided under provisions of
applicable law which cannot be waived or modified hereby. (As used in this
Article 5, the term "Sub-Administrator" shall include directors, officers,
employees and other agents of the Sub-Administrator as well as that corporation
itself.)
So long as the Sub-Administrator or its agents act in good faith and with
due diligence and without negligence, the Trust assumes full responsibility and
shall indemnify the Sub-Administrator and hold it harmless from and against any
and all actions, suits and claims, whether groundless or otherwise, and from and
against any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of said sub-
administration relationship to the Trust or any other service rendered to the
Trust hereunder. The indemnify and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder
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may ultimately be merited. In order that the indemnification provision
contained herein shall apply, however, it is understood that if in any case the
Trust may be asked to indemnify or hold the Sub-Administrator harmless, the
Trust shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Sub-Administrator
will use all reasonable care to identify and notify the Trust promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Trust, but good
faith failure to do shall not affect the rights hereunder.
The Trust shall be entitled to participate at its own expense or, if it so
elects, to assume the defense of any suit brought to enforce any claims subject
to this indemnity provision. If the Trust elects to assume the defense of any
such claim, the defense shall be conducted by counsel chosen by the Trust and
satisfactory to the Sub-Administrator, whose approval shall not be unreasonably
withheld. In the event that the Trust elects to assume the defense of any suit
and retain counsel, the Sub-Administrator shall bear the fees and expenses of
any additional counsel retained by it. If the Trust does not elect to assume
the defense of a suit, it will reimburse the Sub-Administrator for the
reasonable fees and expenses of any counsel retained by the Sub-Administrator.
The Sub-Administrator may apply to the Trust at any time for instructions
or may consult counsel or independent accountants with respect to any matter
arising in connection with the Sub-Administrator's duties, and the Sub-
Administrator shall not be liable or accountable for any action taken or omitted
by it in good faith in accordance with such instruction or with the opinion of
such counsel or accountants.
Also, the Sub-Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Sub-Administrator be held to
have notice of any change of authority of any officers, employee or agent of the
Trust until receipt of written notice thereof from the Trust.
6. Record Retention and Confidentiality. Huntington shall keep and
maintain on behalf of the Trust all books and records which the Trust and
Huntington are, or may be, required to keep and maintain in connection with the
services to be provided hereunder pursuant to any applicable statutes, rules and
regulations, including without limitation Rules 31a-1 and 31a-2 under the 1940
Act. Huntington further agrees that all such books and records shall be the
property of the Trust and to make such books and records available for
inspection by the Trust, the Sub-Administrator or by the Securities and Exchange
Commission at reasonable times and otherwise to keep confidential all books and
records and other information relative to the Trust and its shareholders; except
when requested to divulge such information by duly-constituted authorities or
court process.
7. Uncontrollable Events. The Sub-Administrator assumes no
responsibility hereunder, and shall not be liable, for any damage, loss of data,
delay or any other loss whatsoever caused by events beyond its reasonable
control.
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8. Rights of Ownership. All computer programs and procedures developed
to perform the services to be provided by the Sub-Administrator under this
Agreement are the property of the Sub-Administrator. All records and other data
except such computer programs and procedures are the exclusive property of the
Trust and all such other records and data will be furnished to Huntington and/or
the Trust in appropriate form as soon as practicable after termination of this
Agreement for any reason.
9. Return of Records. The Sub-Administrator at its option at any time,
and shall promptly upon the demand of Huntington and/or the Trust, turn over to
Huntington and/or the Trust and cease to retain the Sub-Administrator's files,
records and documents created and maintained by the Sub-Administrator pursuant
to this Agreement which are no longer needed by the Sub-Administrator in the
performance of its services or for its legal protection. If no so turned over
to Huntington and/or the Trust, such documents and records will be retained by
the Sub-Administrator for six years from the year of creation. At the end of
such six-year period, such records and documents will be turned over to
Huntington and/or the Trust unless the Trust authorizes in writing the
destruction of such records and documents.
10. Representations of Huntington. Huntington certifies to the Sub-
Administrator that this Agreement has been duly authorized by Huntington and,
when executed and delivered by Huntington, will constitute a legal, valid and
binding obligation of Huntington, enforceable against Huntington 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.
11. Representations of the Sub-Administrator. The Sub-Administrator
represents and warrants that: (1) the various procedures and systems which the
Sub-Administrator has implemented with regard to safeguarding from loss or
damage attributable to fire, theft, or any other cause of the records and other
data of the Trust and the Sub-Administrator's records, data, equipment
facilities and other property used in the performance of its obligations
hereunder are adequate and that it will make such changes therein from time to
time as are required for the secure performance of its obligations hereunder,
and (2) this Agreement has been duly authorized by the Sub-Administrator and,
when executed and delivered by the Sub-Administrator, will constitute a legal,
valid and binding obligation of the Sub-Administrator, enforceable against the
Sub-Administrator 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.
The Sub-Administrator warrants that all software code owned by or under the
Sub-Administrator's control, used in the performance of the Sub-Administrator's
obligations under this contract, will be Year 2000 compliant. For purposes of
this paragraph, "Year 2000 Compliant" means that the software will continue to
operate beyond December 31, 1999 without creating any logical or mathematical
inconsistencies concerning any date after December 31, 1999 and without
decreasing the functionality of the system applicable to dates prior to January
1, 2000 including, but not limited to, making changes to [a] date and data
century recognition; [b] calculations which
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accommodate same- and multi- century formulas and date values; and [c] input/
output of date values which reflect century dates. All changes described in
this paragraph will be made at no additional cost to the Trust.
12. Insurance. The Sub-Administrator shall notify Huntington should any
of its insurance coverage be canceled or reduced. Such notification shall
include the date of change and the reasons therefor. The Sub-Administrator
shall notify Huntington of any material claims against it with respect to
services performed under this Agreement, whether or not they may be covered by
insurance, and shall notify Huntington from time to time as may be appropriate
of the total outstanding claims made by the Sub-Administrator under its
insurance coverage.
13. Notices. Any notice provided hereunder shall be sufficiently given
when sent by registered or certified mail to Huntington at the following
address: 00 X. Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxx 00000, and to the Sub-
Administrator at the following address: Xxx Xxxxxxx Xxxxxx Xxxx, Xxxx, XX
00000, Attn: Legal Department or at such other address as either party may from
time to time specify in writing to the other party pursuant to this Section.
14. Headings. Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
15. Assignment. This Agreement and the rights and duties hereunder shall
not be assignable with respect to a Fund by either of the parties hereto except
by the specific written consent of the other party and with the specific written
consent of the Trust.
16. Governing Law. This Agreement shall be governed by and provisions
shall be construed in accordance with the laws of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE HUNTINGTON NATIONAL BANK
By: _____________________________
Title: ___________________________
Date: ___________________________
SEI FUND RESOURCES
By: ____________________________
Title: ___________________________
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Date: ___________________________
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SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
DATED AS OF JANUARY 12, 1998 BETWEEN
SEI FUND RESOURCES
AND
THE HUNTINGTON NATIONAL BANK
NAME OF FUND
------------
The Monitor Money Market Fund
The Monitor U.S. Treasury Money Market Fund
The Monitor Ohio Municipal Money Market Fund
The Monitor Growth Fund
The Monitor Income Fund
The Monitor Mortgage Securities Fund
The Monitor Ohio Tax-Free Fund
The Monitor Fixed Income Securities Fund
The Monitor Short/Intermediate Fixed Income Securities Fund
The Monitor Michigan Tax-Free Fund
The Monitor Intermediate Government Income Fund
THE HUNTINGTON NATIONAL BANK
By: ______________________________
Title: ____________________________
SEI FUND RESOURCES
By: ______________________________
Title: ____________________________
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SCHEDULE B
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
SEI FUND RESOURCES
AND
THE HUNTINGTON NATIONAL BANK
NAME OF FUND
------------
The Monitor Money Market Fund
The Monitor U.S. Treasury Money Market Fund
The Monitor Ohio Municipal Money Market Fund
The Monitor Growth Fund
The Monitor Income Fund
The Monitor Mortgage Securities Fund
The Monitor Ohio Tax-Free Fund
The Monitor Fixed Income Securities Fund
The Monitor Short/Intermediate Fixed Income Securities Fund
The Monitor Michigan Tax-Free Fund
The Monitor Intermediate Government Income Fund
COMPENSATION*
-------------
Annual Rate of five one-hundredths of one percent (.05%) of each such Fund's
average daily net assets for the period January 12, 1998 through January 11,
1999 and the annual rate of four and a half one-hundredths of one percent
(.0450%) of each such Fund's average daily net assets for the period January 12,
1999 through January 11, 2000.
THE HUNTINGTON NATIONAL BANK
By: ______________________________
Title: ____________________________
SEI FUND RESOURCES
By: ______________________________
Title: ____________________________
* All fees are computed daily and paid periodically.
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