ADMINISTRATION AGREEMENT
Mercantile-Safe Deposit & Trust Company
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Dear Sirs:
M.S.D. & T. Funds, Inc., a Maryland corporation (the "Company"), herewith
confirms its agreement with Mercantile-Safe Deposit & Trust Company
("Administrator") as follows:
The Company desires to employ its capital by investing and reinvesting the
same in investments of the type and in accordance with the limitations specified
in its Articles of Incorporation and in its Prospectuses and Statement of
Additional Information as from time to time in effect, copies of which have been
or will be submitted to Administrator, and in resolutions of the Company's Board
of Directors. The Company desires to employ Administrator as the administrator
for each of the investment portfolios of the Company identified on Schedule A
hereto (the "Funds"). Additional Funds may be added to those covered by this
Agreement from time to time by the parties executing a new Schedule A which
shall become effective upon its execution and shall supersede any Schedule A
having an earlier date. Each class and subclass of shares in each of the Funds
are hereinafter called "Shares."
1. SERVICES AS ADMINISTRATOR
-------------------------
Subject to the direction and control of the Board of Directors of the
Company, Administrator will assist in supervising all aspects of the operations
of the Funds except those performed by it in its capacity as investment adviser
for the Funds under the Investment Advisory Agreement, by the accountant for the
Funds under the Fund Accounting Agreement, by the distributor for the Funds
under the Distribution Agreement, by the custodian for the Funds under the
Custodian Agreement, and by the transfer agent for the Funds under the Transfer
Agency Agreement.
Administrator will maintain office facilities (which may be in the offices
of Administrator or a corporate affiliate but shall be in such location as the
Company shall reasonably determine); furnish statistical and research data,
clerical and bookkeeping services and stationery and office supplies; compile
data for, prepare for execution by the Company and file all the Company's
federal and state tax returns and required tax filings other than those required
to be made by the Company's custodian and transfer agent; assist to the extent
requested by the
Company's counsel with the preparation of its Registration Statements (on
Form N-1A or any replacement therefor), notices of annual or special meetings of
Shareholders and proxy materials relating to such meetings; compile data for,
and, subject to approval by the Company's Treasurer, prepare and file timely
reports to the Company's Shareholders of record and the Securities and Exchange
Commission ("SEC") including, but not necessarily limited to, Annual and Semi-
Annual Reports to Shareholders, Semi-Annual Reports on Form N-SAR (or any
replacement form therefor) and Notices to the SEC required pursuant to Rule 24f-
2 under the Investment Company Act of 1940 (the "1940 Act"); keep and maintain
pursuant to Rule 31a-1 under the Investment Company Act of 1940 the financial
accounts and records of the Funds not maintained pursuant to the Fund Accounting
Agreement between the Company and The Winsbury Service Corporation; provide such
information to the Company as the parties shall agree upon with respect to
regulatory matters, including monitoring regulatory and legislative developments
which may affect the Company and assisting in the strategic response to such
developments, counseling and assisting the Company in routine regulatory
examinations or investigations of the Company, and working closely with outside
counsel to the Company in response to any litigation or non-routine regulatory
matters; and generally assist in all aspects of the operations of the Funds. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Administrator
hereby agrees that all records which it maintains for the Company are the
property of the Company and further agrees to surrender promptly to the Company
any of such records upon the Company's request. Administrator further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any records
it maintains which are required to be maintained by Rule 31a-1 under the 1940
Act. Administrator may delegate some or all of its obligations under this
Agreement, but shall remain liable to the Company for the performance thereof.
2. FEES AND EXPENSES
-----------------
In consideration of services rendered and expenses assumed pursuant to this
Agreement, the Administration will be entitled to a fee, computed daily and
payable monthly, from each Fund calculated at the annual rate of .125% of the
Company's aggregate average daily net assets. The fee allocable to and payable
by each Fund shall be the several (and not joint or joint and several)
obligation of such Fund.
For the purpose of determining fee payable to Administrator, the value of
the net assets of the Funds shall be computed with the frequency and in the
manner described in the Prospectuses for the Funds or Statement of Additional
Information as from time to time in effect for the computation of the value of
such net
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assets in connection with the determination of the redemption value of the
Shares of the Funds.
Administrator will from time to time employ or associate with itself such
person or persons as Administrator may believe to be particularly fitted to
assist it in the performance of this Agreement. If deemed appropriate by
Administrator, such person or persons may be officers and employees who are
employed by both Administrator and the Company. The compensation of such person
or persons shall be paid by Administrator and no obligation may be incurred on
behalf of the Company in such respect. Other expenses to be incurred in the
operation of the Funds -- including taxes, interest, brokerage fees and
commissions, if any, fees of Directors who are not officers, directors,
partners, shareholders or employees of Administrator or the investment adviser
(if other than the Administrator) or distributor for the Funds, Securities and
Exchange Commission fees and state blue sky registration and qualification
expenses, advisory and administration fees, costs of performing the pricing of
portfolio securities, transfer and dividend disbursing agents' fees, insurance
premiums, outside auditing and legal expenses, costs of maintenance of trust
existence, typesetting and printing prospectuses for regulatory purposes and for
distribution to current Shareholders of the Funds, costs of Shareholders' and
Directors' reports and meetings and any extraordinary expenses -- will be borne
by the Funds; provided, however, that the Funds will not bear the cost of any
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activity which is primarily intended to result in the distribution of Shares of
the Funds.
3. PROPRIETARY AND CONFIDENTIAL INFORMATION
----------------------------------------
Administrator agrees on behalf of itself and its 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, and not to use such records and information for any purpose other
than 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 Administrator
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.
4. LIABILITY
---------
Administrator shall exercise its best judgment in rendering the services to
be provided to each Fund. Each Fund agrees as an inducement to Administrator
and to others who may assist it in providing services to the Funds that
Administrator and such other persons shall not be liable for any alleged or
actual error of judgment, act or omission, or mistake of law or for any alleged
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or actual loss suffered by such Fund or the Company, and each Fund and the
Company agree to indemnify and hold harmless Administrator and such other
persons against and from any claims, liabilities, actions, suits, proceedings,
judgments or damages (and expenses as and when incurred in connection therewith,
including the reasonable cost of investigating or defending same, including, but
not limited to attorneys' fees) arising out of any such alleged or actual error
of judgment, act or omission, or mistake of law or loss; provided that nothing
herein shall be deemed to protect or purport to protect Administrator or any
other such person against any liability to the Company or to its security
holders to which Administrator or they would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder, or by reason of reckless disregard of the obligations and duties
hereunder.
5. TERM
----
Unless sooner terminated, this Agreement shall continue with respect to
each Fund until July 20, 1994 and thereafter shall continue automatically for
successive 12-month periods, provided such continuance with respect to each Fund
is specifically approved at least annually by the Company's Board of Directors
or vote of the lesser of (a) 67% of the shares of such Fund represented at a
meeting if holders of more than 50% of the outstanding shares of the Fund are
present in person or by proxy or (b) more than 50% of the outstanding shares of
such Fund, provided that in either event its continuance also is approved by a
majority of the Company's Directors who are not "interested persons" (as defined
in the 0000 Xxx) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable at any time with respect to any Fund or all Funds without penalty, on
60 days' notice, by Administrator or by the Company's Board of Directors or by
vote of the lesser of (a) 67% of the shares of such Fund represented at a
meeting if holders of more than 50% of the outstanding shares of the Fund are
present in person or by proxy or (b) more than 50% of the outstanding shares of
such Fund. This Agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act).
6. HEADINGS
--------
Paragraph headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
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7. ASSIGNMENT
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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.
8. GOVERNING LAW
-------------
This Agreement shall be governed by and provisions shall be construed in
accordance with the laws of the State of Maryland.
9. COUNTERPARTS
------------
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, kindly so
indicate by signing and returning to us the enclosed copy hereof, whereupon it
shall become a binding agreement between us on this 28th day of May, 1993.
Very truly yours,
M.S.D. & T. FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Title: President
---------
Accepted:
MERCANTILE-SAFE DEPOSIT & TRUST COMPANY
By: [signature illegible]
---------------------
Title: _____________________
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
BETWEEN MERCANTILE-SAFE DEPOSIT & TRUST COMPANY
AND M.S.D. & T. FUNDS, INC.
DATED MAY 28, 1993
NAME OF FUND
------------
Prime Money Market Fund
Government Money Market Fund
Tax-Exempt Money Market Fund
Value Equity Fund
Intermediate Fixed Income Fund
Maryland Tax-Exempt Bond Fund
Tax-Exempt Money Market Fund (Trust)
International Equity Fund
M.S.D. & T. FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Title: President
--------------------
Date: 5/28/93
---------------------
MERCANTILE-SAFE DEPOSIT & TRUST COMPANY
By: [signature illegible]
Title:_____________________________
Date:______________________________
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