FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 13th day of
November, 2000, by and between Chaconia Income & Growth Fund, Inc., a
corporation organized under the laws of the State of Maryland (hereinafter
referred to as "Company") and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as "FMFS").
WHEREAS, the Company is an open end investment management company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create separate series, each with
its own separate investment portfolio;
WHEREAS, FMFS is in the business of providing, among other things,
mutual fund administration services to investment companies; and
WHEREAS, the Company desires to retain FMFS to provide mutual fund
administration services to each of the portfolios of the Company, (each a
"Fund") and each additional series of the Company listed on Exhibit A attached
hereto, and as may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and FMFS agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Company hereby appoints FMFS as Administrator of the Company on the
terms and conditions set forth in this Agreement, and FMFS hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement in consideration of the compensation
provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Supply:
a. Corporate secretarial services
b. Office facilities (which may be in FMFS's or its
affiliate's own offices)
c. Non-investment-related statistical and research data
as needed
3. Coordinate board communication by:
a. Establish meeting agendas
b. Preparing board reports based on financial and
administrative data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director
and officer liability coverage, and
making the necessary SEC filings relating thereto
e. Preparing minutes of meetings of the board and
shareholders
f. Recommend dividend declarations to the Board, prepare
and distribute to appropriate parties' notices
announcing declaration of dividends and other
distributions to shareholders
g. Provide personnel to serve as officers of the Company
if so elected by the Board and attend Board meetings
to present materials for Board review
4. Audits
a. Prepare appropriate schedules and assist independent
auditors
b. Provide information to SEC and facilitate audit
process
c. Provide office facilities
5. Assist in overall operations of the Fund
6. Pay Fund expenses upon written authorization from the
Company
7. Monitor arrangements under shareholder services or similar
plan
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements,
including: 1) Asset diversification tests 2) Total
return and SEC yield calculations 3) Maintenance of
books and records under Rule 31a-3 4) Code of Ethics
for the disinterested Directors of the Fund
b. Monitor Fund's compliance with the policies and
investment limitations of the Company as set forth in
its Prospectus and Statement of Additional Information
c. Maintain awareness of applicable regulatory and
operational service issues and recommend dispositions
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings
relating to the registration of the securities of the
Company so as to enable the Company to make a
continuous offering of its shares in all states
b. Monitor status and maintain registrations in each
state
c. Provide information regarding material developments in
state securities regulation
3. SEC Registration and Reporting
a. Assist Company counsel in updating Prospectus and
Statement of Additional Information and in preparing
proxy statements and Rule 24f-2 notices
b. Prepare annual and semiannual reports, Form N-SAR
filings and Rule 24f-2 notices
c. Coordinate the printing, filing and mailing of
publicly disseminated Prospectuses and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
f. Monitor sales of each Fund's shares and ensure that
such shares are
properly registered with the SEC and the appropriate
state authorities
g. File Rule 24f-2 notices
4. IRS Compliance
a. Monitor Company's status as a regulated investment
company under Subchapter M, including without
limitation, review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by Fund's Prospectus and
Statement of Additional Information;
2. Prepare financial reports for officers, shareholders, tax
authorities, performance reporting companies, the board,
the SEC, and independent auditors;
3. Supervise the Company's Custodian and Accountants in the
maintenance of the Company's general ledger and in the
preparation of the Fund's financial statements, including
oversight of expense accruals and payments, of the
determination of net asset value of the Company's net assets
and of the Company's shares, and of the declaration and
payment of dividends and other distributions to
shareholders;
4. Compute the yield, total return and expense ratio of each
class of each Portfolio, and each Portfolio's portfolio
turnover rate; and
5. Monitor the expense accruals and notify Company management
of any proposed adjustments.
6. Prepare monthly financial statements, which will include
without limitation the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses
7. Prepare quarterly broker security transaction summaries.
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and
state tax returns including, without limitation, Forms
1120/8610 with any necessary schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to Directors and
other service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate
shareholders
3. COMPENSATION
FMFS shall be compensated for providing the services set forth in this
Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and as mutually agreed upon and amended from time to time.
The Company agrees to pay all fees and reimbursable expenses within 10
business days following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Company in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FMFS's control, except a loss
arising out of or relating to FMFS's refusal or failure to comply with
the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its duties
under this Agreement, the Company shall indemnify and hold harmless
FMFS from and against any and all claims, demands, losses, expenses,
and liabilities (whether with or without basis in fact or law) of any
and every nature (including reasonable attorneys' fees) which FMFS may
sustain or incur or which may be asserted against FMFS by any person
arising out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims,
demands, losses, expenses, and liabilities arising out of or relating
to FMFS's refusal or failure to comply with the terms of this Agreement
or from bad faith, negligence or from willful misconduct on its part in
performance of its duties under this Agreement, (i) in accordance with
the foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to FMFS by any duly authorized officer of the
Company, such duly authorized officer to be included in a list of
authorized officers furnished to FMFS and as amended from time to time
in writing by resolution of the Board of Directors of the Company.
FMFS shall indemnify and hold the Company harmless from and
against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Company may sustain or
incur or which may be asserted against the Company by any person
arising out of any action taken or omitted to be taken by FMFS as a
result of FMFS's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FMFS's control. FMFS 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 FMFS. FMFS
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 Company shall be
entitled to inspect FMFS's premises and operating capabilities at any
time during regular business hours of FMFS, upon reasonable notice to
FMFS.
Regardless of the above, FMFS 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 which 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, which 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.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Company all records and other information relative to the Company and
prior, present, or potential shareholders of the Company (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 after prior notification to and approval in
writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where FMFS may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so
requested by the Company.
6. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue subject to Board
approval in effect for successive annual periods. The 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. However, this Agreement may be amended by mutual written
consent of the parties.
7. RECORDS
FMFS 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 Funds but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. FMFS
agrees that all such records prepared or maintained by FMFS relating to
the services to be performed by FMFS hereunder are the property of the
Company and will be preserved, maintained, and made available in
accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Company on and in accordance with its
request.
8. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation promulgated by
the Securities and Exchange Commission thereunder.
9. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the
Company by written notice to FMFS, FMFS will promptly, upon such
termination and at the expense of the Company, transfer to such
successor all relevant books, records, correspondence, and other data
established or maintained by FMFS under this Agreement in a form
reasonably acceptable to the Company (if such form differs from the
form in which FMFS has maintained, the Company 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 FMFS's personnel in the establishment of
books, records, and other data by such successor.
10. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS
to act as agent for the other party to this Agreement, or to conduct
business in the name of, or for the account of the other party to this
Agreement.
11. DATA NECESSARY TO PERFORM SERVICES
The Company or its agent, which may be FMFS, shall furnish to FMFS the
data necessary to perform the services described herein at times and in
such form as mutually agreed upon if FMFS is also acting in another
capacity for the Company, nothing herein shall be deemed to relieve
FMFS of any of its obligations in such capacity.
12. ADDITIONAL SERIES
In the event that the Company establishes one or more additional series
of shares with respect to which it desires to have FMFS render services
under the terms of this Agreement, it shall so notify FMFS in writing,
and if FMFS agrees in writing to provide such services, such series
will be subject to the terms and conditions of this Agreement, and
shall be maintained and accounted for by FMFS on a discrete basis.
13. NOTICES
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as
follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
Xxxxx Xxxxx, Xx., Secretary
The Chaconia Income & Growth Fund, Inc.
c/o Foley & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
THE CHACONIA INCOME & GROWTH FUND, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
By:_______________________________ By: ________________________________
Print:_____________________________ Print:______________________________
Date:_____________________________ Date:_______________________________
Attest:____________________________ Attest:_____________________________
