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EXHIBIT (h)(1)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of August, 1999, by and
between M.S.B. FUND, INC., (the "Company"), a New York corporation having its
principal place of business at 000 Xxxx Xxxxxx Xxxxxx Xxxxxxx, Xxxxxxxx 00000,
and BISYS FUND SERVICES OHIO, INC. ("BISYS"), an Ohio corporation having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Company desires BISYS to perform certain services, and
BISYS is willing to provide such services, for the current investment portfolio
of the Company and any additional investment portfolios that may hereafter be
created (individually, the "Portfolio," and collectively, the "Portfolios"), on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and BISYS hereby agree as follows:
ARTICLE 1. Retention of BISYS. The Company hereby retains BISYS to act
as Administrator of the Portfolios and to furnish the Portfolios with the
management and administrative services as set forth in Article 2 below. BISYS
hereby accepts such employment to perform the duties set forth below.
BISYS shall, for all purposes herein, be deemed to be an independent
contractor and, unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Company in any way and shall not be deemed
an agent of the Company.
ARTICLE 2. Administrative Services. BISYS shall perform or supervise
the performance by others of other administrative services in connection with
the operations of the Portfolios, and, on behalf of the Company, will
investigate, assist in the selection of and conduct relations with custodians,
depositories, accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Portfolios' operations. BISYS shall provide
the Board of Directors of the Company (hereafter referred to as the "Directors")
with such reports regarding investment performance as they may reasonably
request but shall have no responsibility for supervising the performance by any
investment adviser or sub-adviser of its responsibilities.
BISYS agrees to perform the services described herein in accordance
with all applicable laws, rules and regulations (including, where applicable,
Generally Accepted Accounting Principles) and in accordance with any reasonable
instructions of the Company and the Company's Certificate of Incorporation,
Bylaws, Prospectus and Statement of Additional Information.
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BISYS shall provide the Company with regulatory reporting, all
necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Directors' meetings) for handling
the affairs of the Company and such other services as BISYS shall, from time to
time, determine to be necessary to perform its obligations under this Agreement.
In addition, at the request of the Directors, BISYS shall make reports to the
Company's Directors concerning the performance of its obligations hereunder.
Without limiting the generality of the foregoing, BISYS shall:
(a) calculate contractual Company expenses and control all
disbursements for the Company, and as appropriate compute the
Company's yields, total return, expense ratios, portfolio
turnover rate and, if required, portfolio average
dollar-weighted maturity;
(b) assist Company counsel with the preparation of
prospectuses, statements of additional information,
registration statements and proxy materials;
(c) prepare such reports, applications and documents
(including reports regarding the sale and redemption of shares
of common stock of the Company ("Shares") as may be required
in order to comply with Federal and state securities law) as
may be necessary or desirable to register the Company's Shares
with state securities authorities, monitor the sale of Company
Shares for compliance with state securities laws, and prepare
and file with the appropriate state securities authorities the
registration statements and reports for the Company and the
Company's Shares and all amendments thereto, as may be
necessary or convenient to register and keep effective the
Company and the Company's Shares with state securities
authorities to enable the Company to make a continuous
offering of its Shares;
(d) develop and prepare, with the assistance of the Company's
investment adviser, communications to Shareholders, including
the annual report to Shareholders, coordinate the mailing of
prospectuses, notices, proxy statements, proxies and other
reports to Company Shareholders, and supervise and facilitate
the proxy solicitation process for all shareholder meetings,
including the tabulation of shareholder votes;
(e) administer contracts on behalf of the Company with, among
others, the Company's investment adviser, distributor,
custodian, transfer agent and fund accountant;
(f) supervise the Company's transfer agent with respect to the
payment of dividends and other distributions to Shareholders;
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(g) calculate performance data of the Portfolios for
dissemination to information services covering the investment
company industry;
(h) coordinate, provide the necessary financial/tax data for
and supervise, the preparation of the Company's tax returns;
(i) examine and review the operations and performance of the
various organizations providing services to the Company,
including, without limitation, the Company's investment
adviser, distributor, custodian, fund accountant, transfer
agent, outside legal counsel and independent public
accountants, including monitoring of all applicable
contractual fee or expense limitations and at the request of
the Directors, report to the Board on the performance of
organizations;
(j) assist with the layout and printing of publicly
disseminated prospectuses and assist with and coordinate
layout and printing of the Company's semi-annual and annual
reports to Shareholders;
(k) assist with the design, development, and operation of the
Portfolios, including new classes, investment objectives,
policies and structure;
(l) provide individuals reasonably acceptable to the Company's
Directors to serve as officers of the Company, (without
compensation, reimbursement of expenses or indemnification
from the Company, other than as set forth in this Agreement),
who will be responsible for the management of certain of the
Company's affairs as determined by the Company's Directors;
(m) advise the Company and its Directors on matters concerning
the Company and its affairs;
(n) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the
Company 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 Company's Directors and make all necessary
filings with the SEC;
(o) monitor and advise the Company and its Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986, as amended;
(p) perform all administrative services and functions of the
Company to the extent administrative services and functions
are not provided to the Company pursuant to the Company's
investment advisory agreement, distribution agreement,
custodian agreement, transfer agent agreement and fund
accounting agreement;
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(q) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Company and BISYS shall determine desirable; and
(r) prepare and file with the SEC in a timely manner (in order
to avoid interest charges) the semi-annual report for the
Company on Form N-SAR and all required notices pursuant to
Rule 24f-2.
Without limiting the foregoing, the services to be provided by BISYS
hereunder shall include the services listed in the detailed service listing
attached hereto as Schedule B. BISYS shall perform such other services for the
Company that the Company may from time to time reasonably request; provided,
however, that, to the extent that the performance of any of such other services
requires BISYS to incur material additional costs, and BISYS notifies the
Company thereof promptly after such request, such services shall be provided in
exchange for such additional compensation that is agreed upon by the parties.
Such services may include performing internal audit examinations; mailing the
annual reports of the Portfolios; preparing an annual list of Shareholders; and
mailing notices of Shareholders' meetings, proxies and proxy statements, for all
of which the Company will pay BISYS's out-of-pocket expenses.
BISYS shall enter into and shall maintain in effect with appropriate
parties one or more agreements making reasonable provisions for emergency use of
electronic data processing equipment and shall, at no additional expense to the
Company, take reasonable steps to minimize service interruptions.
BISYS shall provide on a timely basis to the Company's investment
adviser, transfer agent, accounting agent, distributor and custodian and other
persons providing services to the Company such information as such persons may
reasonably request in connection with the performance of their respective duties
and obligations with respect to the Company. BISYS will report to the Board of
Directors of the Company at each meeting of the Board of Directors and will keep
the Board of Directors informed of material developments affecting the Company.
BISYS will comply with any performance standards that may be agreed to
by BISYS and the Company from time to time.
ARTICLE 3. Allocation of Charges and Expenses.
(A) BISYS. BISYS shall furnish at its own expense the executive,
supervisory and clerical personnel necessary to perform its obligations under
this Agreement. BISYS shall also provide the items which it is obligated to
provide under this Agreement, and shall pay all compensation, if any, of
officers of the Company as well as all Directors of the Company who are
affiliated persons of BISYS or any affiliated corporation of BISYS; provided,
however, that unless otherwise specifically provided, BISYS shall not be
obligated to pay the compensation of any employee of the Company retained by the
Directors of the Company to perform services on behalf of the Company.
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(B) The Company. The Company assumes and shall pay or cause to be paid
all other expenses of the Company not otherwise allocated herein, including,
without limitation, organization costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
Federal and state securities laws, fees and out-of-pocket expenses of Directors
who are not affiliated persons of BISYS or the Investment Adviser to the Company
or any affiliated corporation of BISYS or the Investment Adviser, insurance,
interest, brokerage costs, litigation and other extraordinary or nonrecurring
expenses, and all fees and charges of investment advisers to the Company.
ARTICLE 4. Compensation of BISYS.
(A) Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by BISYS pursuant to this Agreement, the
Company shall pay to BISYS compensation at an annual rate specified in the
Omnibus Fee Agreement between the Company and BISYS dated as of August 1, 1999
(the "Fee Agreement"). Such compensation shall be calculated and accrued daily,
and paid to BISYS monthly. The Company shall also reimburse BISYS for its
reasonable out-of-pocket expenses, including the travel and lodging expenses
incurred by officers and employees of BISYS in connection with attendance at
Board meetings.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, BISYS's compensation for
that part of the month in which this Agreement is in effect shall be prorated in
a manner consistent with the calculation of the fees as set forth above. Payment
of BISYS's compensation for the preceding month shall be made promptly.
(B) Survival of Compensation Rights. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. Standard of Care; Reliance on Records and Instructions;
Indemnification. BISYS shall use its best efforts to ensure the accuracy of all
services performed under this Agreement, but shall not be liable to the Company
for any action taken or omitted by BISYS in the absence of bad faith, willful
misfeasance, negligence or from reckless disregard by it of its obligations and
duties. The Company agrees to indemnify and hold harmless BISYS, its employees,
agents, directors, officers and nominees from and against any and all claims,
demands, actions and suits, whether groundless or otherwise, and from and
against any and all judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character arising
out of or in any way relating to BISYS' actions taken or nonactions with respect
to the performance of services under this Agreement or based, if applicable,
upon reasonable reliance on information, records, instructions or requests given
or
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made to BISYS by the Company or an investment adviser of the Company and on
any records provided by any fund accountant or custodian thereof; provided,
however, that BISYS shall not be protected in relying on any information,
records, instructions or requests given, made or prepared by BISYS or any
affiliate of BISYS or any officer of the Company that is an officer or employee
of BISYS or any affiliate of BISYS; and provided, further, that this
indemnification shall not apply to actions or omissions of BISYS in cases of its
own bad faith, willful misfeasance, negligence or from reckless disregard by it
of its obligations and duties; and further provided that prior to confessing any
claim against it which may be the subject of this indemnification, BISYS shall
give the Company written notice of and a reasonable opportunity to defend
against said claim in its own name or in the name of BISYS.
Notwithstanding the foregoing, BISYS agrees to indemnify and hold
harmless the Company, its employees, agents, directors, officers and nominees
from and against any and all actions, suits, demands and claims, whether
groundless or otherwise, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and other
expenses of every nature and character arising out of or in any way relating to
BISYS's bad faith, willful malfeasance or misfeasance, negligence, or reckless
disregard by it of its obligations and duties, with respect to the performance
of services under this Agreement.
The indemnifying party shall be entitled to participate at its own
expense or, if it acknowledges its responsibility to indemnify the other party,
it may elect to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the indemnifying party elects to assume
the defense of any such claim, the defense shall be conducted by counsel chosen
by the indemnifying party and satisfactory to the indemnified party, whose
approval shall not be unreasonably withheld. In the event that the indemnifying
party elects to assume the defense of any suit and retain counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by it. If the indemnifying party does not elect to assume the defense
of a suit, it will reimburse the indemnified party for the reasonable fees and
expenses of any counsel retained by the indemnified party.
ARTICLE 6. Activities of BISYS. The services of BISYS rendered to the
Company are not to be deemed to be exclusive. BISYS is free to render such
services to others and to have other businesses and interests. It is understood
that directors, officers, employees and Shareholders of the Company are or may
be or become interested in BISYS, as officers, employees or otherwise and that
partners, officers and employees of BISYS and its counsel are or may be or
become similarly interested in the Company, and that BISYS may be or become
interested in the Company as a Shareholder or otherwise.
ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
be as specified in Schedule A hereto. In the event either party gives notice of
the termination of this Agreement as provided in Schedule A, BISYS will
cooperate and use all reasonable efforts to assist with the conversion of the
data and records maintained by it hereunder to, and the assumption of the
services provided by it hereunder by, a replacement provider of administrative
services.
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ARTICLE 8. Assignment. This Agreement shall not be assignable by either
party, nor may BISYS subcontract or delegate any of its duties hereunder,
without the written consent of the other party; provided, however, that BISYS
may, at its expense, with the prior written consent of the Company subcontract
with any entity or person concerning the provision of the services contemplated
hereunder. BISYS shall not, however, be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that BISYS shall be responsible, to the extent provided in Article 5 hereof, for
all acts of such subcontractor as if such acts were its own. This Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and permitted assigns. BISYS will give the Company
prompt written notice of the appointment of any such subcontractor. Any
assignment not in compliance with this Agreement shall be void.
ARTICLE 9. Amendments. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Directors of the Company, and (ii) by the vote of a majority of
the Directors of the Company who are not parties to this Agreement or interested
persons of any such party, cast in person at a Directors meeting called for the
purpose of voting on such approval.
For special cases, the parties hereto may amend such procedures set
forth herein as may be appropriate or practical under the circumstances, and
BISYS may conclusively assume that any special procedure which has been approved
by the Company does not conflict with or violate any requirements of its
Certificate of Incorporation or then current prospectuses, or any rule,
regulation or requirement of any regulatory body.
ARTICLE 10. Certain Records. BISYS shall maintain customary records in
connection with its duties as specified in this Agreement, and, without limiting
the foregoing, BISYS shall maintain such books and records as the Company may be
required to maintain under the 1940 Act and the rules and regulations thereunder
that are not required to be maintained by the Company's investment adviser,
distributor, transfer agent, fund accountant or custodian, including, without
limitation, books and records relating to the operations of the Company prior to
the date of this Agreement, to the extent provided to BISYS. All such records,
including any records required to be maintained and preserved pursuant to Rules
31a-1 and 31a-2 under the 1940 Act, which are prepared or maintained by BISYS on
behalf of the Company shall be prepared and maintained at the expense of BISYS,
but shall be the property of the Company and will be made available to or
surrendered promptly to the Company on request.
In case of any request or demand for the inspection of such records by
another party, BISYS shall notify the Company and follow the Company's
instructions as to permitting or refusing such inspection; provided that BISYS
may exhibit such records to any person in any case where it is advised by its
counsel that it may be held liable for failure to do so, unless (in cases
involving potential exposure only to civil liability) the Company has agreed to
indemnify BISYS against such liability. BISYS will promptly notify the Company
of any such request.
ARTICLE 11. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the
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1940 Act and the rules and regulations thereunder, subject to such exemptions as
may be granted by the Securities and Exchange Commission.
ARTICLE 12. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the following address: if to the Company at 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx, 00000; if to BISYS at 0000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000; or at such other address as such party may from time to time specify
in writing to the other party pursuant to this Section.
ARTICLE 13. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act or the rules and regulations thereunder. To the extent that the
applicable laws of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, or such rules and regulations
the latter shall control.
ARTICLE 14. Multiple Originals. This Agreement may be executed in 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.
ARTICLE 15. Instructions, Approval or Consent by the Company;
Imputation. Any reference herein to any instructions, approval or consent of the
Company shall not include any instructions, approval or consent given by any
officer of the Company that is an officer, employee or agent of BISYS or any
affiliate of BISYS, unless specifically authorized by the Board of Directors of
the Company. No information known to any such officer of the Company shall be
imputed to the Company for purposes of this Agreement.
ARTICLE 16. Year 2000. BISYS agrees to perform comprehensive tests on
the systems it utilizes to provide the services hereunder to identify any
operational issues caused by the century change. BISYS agrees to use all
commercially reasonable efforts to implement by December 31, 1999, all necessary
updates and changes to such systems, if any, to accommodate the turn of the
century. BISYS agrees to provide to the Company monthly updates on the status of
its Year 2000 readiness project and to make its personnel reasonably available
to address any questions. In particular and, without limiting the foregoing,
BISYS shall notify the Company of any circumstances known to BISYS which are
likely to cause BISYS's systems to be Year 2000 non-compliant and which would
likely have an adverse effect on the Portfolios.
In the event that the Company reasonably determines that any of the
systems BISYS utilizes to perform services hereunder will not be Year 2000
compliant and that such lack of compliance will have an adverse effect on the
Company, the Company shall provide written notice to BISYS describing, in
reasonable detail, any defect or problem relating to such system(s) promptly
upon becoming aware of any such defect or problem. BISYS agrees to use all
commercially reasonable efforts to cure any defect or deficiency that relates to
the turn of the century in any system that BISYS utilizes to provide services
hereunder. This paragraph does not alter the obligations of BISYS under the
preceding paragraph.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
M.S.B. FUND, INC.
By: /s/ M.S.B. Fund, Inc.
-----------------------------------
Title: Vice President
--------------------------------
BISYS FUND SERVICES OHIO, INC.
By: /s/ BISYS Fund Services Ohio, Inc.
-----------------------------------
Title: President
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF AUGUST 1, 1999
BETWEEN
M.S.B. FUND, INC.
AND
BISYS FUND SERVICES OHIO, INC.
Portfolios: This Agreement shall apply to all Portfolios of M.S.B. Fund,
Inc., either now or hereafter created (individually, the
"Portfolio", and collectively, the "Portfolios").
Term: Pursuant to Article 7, the term of this Agreement shall
commence on August 1, 1999, and shall remain in effect through
July 31, 2004 ("Initial Term"). Thereafter, unless otherwise
terminated as provided herein, this Agreement shall be renewed
automatically for successive one-year periods ("Rollover
Periods"). This Agreement may be terminated without penalty
(i) by provision of 90 days advance written notice of
nonrenewal prior to the end of the Initial Term or any
Rollover Period, as the case may be, (ii) by mutual agreement
of the parties or (iii) for "cause," as defined below, upon
the provision of 90 days advance written notice by the party
alleging cause. Notwithstanding the foregoing, after July 31,
2001, either party may terminate this Agreement at any time
and without penalty, upon the provision of 90 days advance
written notice to the other party.
For purposes of this Agreement, "cause" shall mean (a) a
material breach of this Agreement that has not been remedied
for thirty (30) days following written notice of such breach
from the non-breaching party; (b) a series of negligent acts
or omissions or breaches of this Agreement which, in the
aggregate, constitute, in the reasonable judgment of the
Company's Directors, a serious failure to perform
satisfactorily BISYS's obligations hereunder, (c) a service
standard deficiency (as defined by the parties in the service
standards that are agreed to by BISYS and the Company from
time to time); (d) a final, unappealable judicial, regulatory
or administrative ruling or order in which the party to be
terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; or (e) financial
difficulties on the part of the party to be terminated which
are evidenced by the authorization or commencement of, or
involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title
11 of the United States Code, as from time to time is in
effect, or any applicable law, other than said Title 11, of
any jurisdiction relating to the liquidation or reorganization
of debtors or to the modification or alteration of the rights
of creditors.
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Notwithstanding the foregoing, after such termination for so
long as BISYS, with the written consent of the Company, 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. Compensation due BISYS and
unpaid by the Company upon such termination shall be
immediately due and payable upon and notwithstanding such
termination. BISYS shall be entitled to collect from the
Company, in addition to the compensation described in this
Schedule A, the amount of all of BISYS's cash disbursements
for services in connection with BISYS's activities in
effecting such termination, including without limitation, the
delivery to the Company and/or its designees of the Company's
property, records, instruments and documents.
If, for any reason other than nonrenewal, mutual agreement of
the parties or "cause," as defined above, during the first two
years of the Initial Term of this Agreement, BISYS is replaced
as administrator, then the Company shall make a one-time cash
payment, in consideration of the fee structure and services to
be provided under this Agreement, and not as a penalty, to
BISYS equal to the balance due BISYS for the remainder of such
two-year period, assuming for purposes of calculation of the
payment that such balance shall be based upon the average
amount of the Company's assets for the twelve months prior to
the date BISYS is replaced.
In the event the Company is merged into another legal entity
in part or in whole pursuant to any form of business
reorganization (including without limitation a purchase of
assets) or is liquidated in part or in whole prior to the
expiration of the then-current term during the first two years
of the Initial Term of this Agreement, the parties acknowledge
and agree that the Company shall be entitled to terminate this
Agreement; provided, however, that the liquidated damages
provision set forth above shall be applicable in those
instances in which BISYS is not retained by the other party to
such business reorganization or any successor entity to
provide administration services consistent with this
Agreement. The one-time cash payment referenced above shall be
due and payable on the day prior to the first day in which
BISYS is replaced.
The parties further acknowledge and agree that, in the event
BISYS is replaced, as set forth above, (i) a determination of
actual damages incurred by BISYS would be extremely difficult,
and (ii) the liquidated damages provision contained herein is
intended to adequately compensate BISYS for damages incurred
and is not intended to constitute any form of penalty.
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XXXXXXXX X
TO THE ADMINISTRATION AGREEMENT
DATED AS OF AUGUST 1, 1999
BETWEEN
M.S.B. FUND, INC.
AND
BISYS FUND SERVICES OHIO, INC.
DETAILED SERVICE LISTING
ADMINISTRATION
1. Maintain and manage annual regulatory filing calendar.
2. Manage the process of printing and distributing prospectuses and prospectus
supplements. This includes, but is not limited to, decisions regarding
quantities and layout, price negotiation, invoice control and management of
the mailing process.
3. Manage the process of printing and distributing proxy materials. This
includes, but is not limited to, decisions regarding quantities,
compilation of shareholder data, price negotiation and management of the
mailing process.
4. Prepare and file Form N24-F2.
5. Obtain tax identification numbers from the IRS for each Fund portfolio.
6. Assist Fund in obtaining Fund ratings from NRSROs.
7. Obtain Fund CUSIPs.
8. Assist in the completion of trustee/officer questionnaires.
9. Assist the Fund in the preparation of appropriate documentation and records
relating to the contribution of seed money capital.
10. Maintain books and records on behalf of the Fund, as agreed upon by the
parties.
11. Make available persons to serve as officers of the Fund.
COMPLIANCE
1. Review monthly compliance reports that are prepared by the investment
adviser(s).
2. Perform independent monthly portfolio compliance testing.
3. Prepare quarterly tax compliance checklist for use by investment
adviser(s).
4. Notify appropriate Fund officers of xxxx-to-market issues pursuant to
Board-approved procedures.
5. Provide appropriate assistance with respect to SEC inspections including
(i) rendering advice regarding proposed responses (ii) compiling data and
other information in response to SEC requests for information and (iii)
communicating with SEC staff members, as necessary.
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6. Provide appropriate assistance with respect to audits conducted by the
Fund's independent accountants including (i) compiling data and other
information and (ii) communicating with independent accountants, as
necessary.
7. Consult with and advise, on a proactive basis, Fund portfolio managers with
respect to compliance matters.
8. Prepare quarterly brokerage allocation compliance checklist and supporting
documentation for use by investment adviser(s).
9. Provide on-site compliance training for investment advisory personnel, as
requested.
10. Preparation of Fund-specific compliance manual.
TAX AND FINANCIAL SERVICES
1. Prepare semi-annual/annual financial statements.
2. Prepare and file Form N-SAR
3. Calculate/distribute all standard performance information
4. Prepare annual Fund expense budget and monthly accrual analyses
5. Validate/approve Fund expenses to be paid
6. Register Fund portfolios with NASDAQ
7. Prepare financial materials for Board books.
8. Calculate declaration of income/capital gain distributions in compliance
with income/excise tax distribution requirements.
9. Review all dividend declarations to ensure that such distributions are not
"preferential" under the Internal Revenue Code.
10. Review and file federal and state income tax returns and federal excise tax
returns within statutory deadlines.
11. Prepare/distribute year-end shareholder tax information letters and Forms
1099-MISC for trustee fees/vendor payments within 30 days of calendar
year-end.
12. Provide on-site compliance/consulting for portfolio managers focused on the
impact of changes in tax laws and managing a tax-efficient mutual fund.
13. Provide on-site consulting services for conversions.
14. Provide expense budgeting consulting to review expense ratios/fee waivers.
15. Leverage BISYS' relationships with all "Big 5" accounting firms for
clients' benefit.
16. Produce and coordinate the printing and distribution of semi-annual/annual
reports.
17. Calculate Funds performance information.
BLUE SKY
1. Qualify the Fund and its shares with appropriate state blue sky authorities
upon client authorization.
2. Amend and renew sales permits as required.
3. Monitor the sales of shares in individual states on a daily basis upon
receipt of sales information and, when required, report sales to
appropriate states.
B-2
14
4. Maintain Fund blue sky filing calendars.
5. Address all blue sky audit and examination issues.
6. Conduct blue sky fee analysis, upon request.
7. Produce checks required for state filing fees.
LEGAL SERVICES
GENERAL
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1. Maintain files of registration statements, Fund contracts, Fund proxies and
other Fund legal documents.
2. Provide legal consultation with respect to product development issues.
3. Provide assistance concerning matters pertaining to Federal securities
laws, bank regulatory issues, tax-related issues and ERISA issues.
4. Provide information concerning current legal and regulatory developments.
5. Provide comments, as appropriate, concerning regulatory agency proposals.
6. Maintain appropriate insurance coverage on behalf of the Fund in the form
of (i) a Directors & Officers/Errors & Omissions professional liability and
(ii) a Fidelity Bond.
7. Prepare memoranda and other correspondence that outlines the terms and
conditions of the insurance policies described in item 6 above.
BOARD MEETING MATTERS
---------------------
1. Maintain calendar and files for all Board meetings, including the
maintenance of Fund minute books and corporate records (e.g., Articles of
Incorporation/Declaration of Trust, Bylaws).
2. Provide appropriate personnel to attend Board meetings.
3. Produce and distribute Board books.
4. Prepare relevant sections of Board materials.
5. Record minutes of Board meetings. (Counsel to the Fund will prepare agendas
and resolutions.)
REGISTRATION STATEMENTS
-----------------------
1. Manage the process of updating the registration statement by (i) reviewing
or recommending proposed disclosure changes, (ii) compiling data for
purposes of updating information, (iii) receiving disclosure comments and
communicating them to counsel to the Fund and to the financial printer and
(iv) overseeing the printing process and approving revisions that are made
by the financial printer. (Counsel to the Fund will draft and file the
registration statement.)
2. Prepare periodic supplements to Fund prospectuses or, if the parties agree,
review such supplements that are prepared by counsel to the Fund.
PROXY MATERIALS
---------------
1. Review proxy statements that are prepared by counsel to the Fund.
B-3
