MUTUAL FUNDS SERVICE AGREEMENT
o FUND ADMINISTRATION SERVICES
o FUND ACCOUNTING SERVICES
o TRANSFER AGENCY SERVICES
THE CHASE MANHATTAN BANK, N.A.
DECEMBER 29, 1995
MUTUAL FUNDS SERVICE AGREEMENT
Table of Contents
SECTION/PARAGRAPH PAGE
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1. Appointment ............................................................. 1
2. Representations and Warranties .......................................... 1
3. Delivery of Documents ................................................... 2
4. Services Provided ....................................................... 3
5. Fees; Expenses; Expense Reimbursement ................................... 4
6. Proprietary and Confidential Information ................................ 6
7. Duties, Responsibilities and Limitation of Liability .................... 6
8. Term .................................................................... 8
9. Notices ................................................................. 8
10. Assignability ........................................................... 9
11. Waiver .................................................................. 9
12. Force Majeure ........................................................... 9
13. Use of Name ............................................................. 10
14. Amendments .............................................................. 10
15. Severability ............................................................ 10
16. Governing Law ........................................................... 10
Signatures .................................................................. 11
Schedule A Fees and Expenses................................................ A-1
Schedule B Fund Administration Services Description......................... B-1
Schedule C Fund Accounting Services Description............................. C-1
Schedule D Transfer Agency Services Description............................. D-1
MUTUAL FUNDS SERVICE AGREEMENT
AGREEMENT made as of December 29, 1995 by and between The Lipper Funds,
Inc. (the "Fund"), a Maryland corporation, and The Chase Manhattan Bank, N.A.
("Chase"), a nationally chartered banking association.
WITNESSETH:
WHEREAS, the Fund is registered as an open-end investment company under the
Investment Company Act Of 1940, as amended (the "1940 Act");
WHEREAS, the Fund is comprised of several investment portfolios with
separate investment objectives and policies; and
WHEREAS, the Fund wishes to retain Chase to provide certain fund
administration, fund accounting and transfer agent services with respect to the
Fund, such services to be performed by Chase Global Fund Services Company, an
affiliate of Chase;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints Chase to provide fund
administration, fund accounting and transfer agent services for the Fund,
subject to the supervision of the Board of Directors of the Fund (the "Board"),
for the period and on the terms set forth in this Agreement. Chase accepts such
appointment and agrees to furnish the services herein set forth in return for
the compensation as provided in Paragraph 5 of and Schedule A to this Agreement.
2. REPRESENTATIONS AND WARRANTIES.
(a) Chase represents and warrants to the Fund that:
(i) Chase is a bank duly organized and existing and in good standing
under the laws of the United States;
(ii) Chase is duly qualified to carry on its business in the State of
New York;
(iii) Chase is empowered under applicable laws and by its charter
documents and by-laws to enter into and perform this Agreement;
(iv) all requisite corporate proceedings have been taken to authorize
Chase to enter into and perform this Agreement;
(v) Chase has, and will continue to have, access to the facilities,
personnel and equipment required to fully perform its duties and obligations
hereunder,
(vi) no legal or administrative proceedings have been instituted or
threatened which would impair Chase's ability to perform its duties and
obligations under this Agreement; and
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(vii) Chase's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or obligation of
Chase or any law or regulation applicable to Chase.
(b) The Fund represents and warrants to Chase that:
(i) the Fund is a corporation, duly organized and existing and in
good standing under the laws of Maryland;
(ii) the Fund is empowered under applicable laws and by its charter
documents and by-laws to enter into and perform this Agreement;
(iii) all requisite proceedings have been taken to authorize the Fund
to enter into and perform this Agreement;
(iv) the Fund is an investment company registered under the 1940 Act;
(v) a registration statement under the Securities Act of 1933, as
amended ("1933 Act") and the 1940 Act on Form N-lA has been filed with the
Securities and Exchange Commission ("SEC") and will be effective and will remain
effective during the term of this Agreement;
(vi) no legal or administrative proceedings have been instituted or
threatened which would impair the Fund's ability to perform its duties and
obligations under this Agreement; and
(vii) the Fund's entrance into this Agreement will not cause a
material breach or be in material conflict with any other agreement or
obligation of the Fund or any law or regulation applicable to it.
3. DELIVERY OF DOCUMENTS. The Fund will promptly furnish to Chase such
copies, properly certified or authenticated, of contracts, documents and other
related information that Chase may reasonably request or require to properly
discharge its duties. Such documents may include but are not limited to the
following:
(a) Resolutions of the Board authorizing the appointment of chase to
provide certain fund administration, fund accounting and transfer agency
services to the Fund and approving this Agreement;
(b) The Fund's charter documents;
(c) The Fund's by-laws;
(d) The Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the SEC;
(e) The Fund's registration statement including exhibits, as amended, on
Form N-lA (the "Registration Statement") under the 1933 Act and the 1940 Act, as
filed with the SEC.
(f) Copies of the Investment Advisory Agreements between the Fund and
its investment advisers (the "Advisory Agreements");
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(g) Auditors, reports;
(h) The Fund's Prospectus(es) and Statement(s) of Additional Information
relating to all investment portfolios of the Fund and all amendments and
supplements thereto (such Prospectus(es) and Statement(s) of Additional
Information and supplements thereto, as presently in effect and as from time to
time hereafter amended and supplemented, herein called the "Prospectuses"); and
(i) Such other agreements as the Fund may enter into from time to time
including securities lending agreements, futures and commodities account
agreements, brokerage agreements, and options agreements.
4. SERVICES PROVIDED.
(a) Chase will provide the following services subject to the control,
direction and supervision of the Board and in compliance with the objectives,
policies and limitations set forth in the Fund's Registration Statement, charter
document and by-laws; applicable laws and regulations; and all resolutions and
policies implemented by the Board:
(i) Fund Administration
(ii) Fund Accounting
(iii) Transfer Agency
A detailed description of each of the above services is contained in Schedules
B, C and D respectively, to this Agreement.
(iv) Dividend Disbursing. Chase will serve as the Fund's dividend
disbursing agent. Chase will prepare and mail checks, place wire transfers and
credit income and capital gain payments to shareholders. The Fund will advise
Chase of the declaration of any dividend or distribution and the record and
payable date thereof at least five (5) days prior to the record date. Chase
will, on or before the payment date of any such dividend or distribution, notify
the Fund's Custodian of the estimated amount required to pay any portion of such
dividend or distribution payable in cash, and on or before the payment date of
such distribution the Fund will instruct its Custodian to make available to
Chase sufficient funds for the cash amount to be paid out. If a shareholder is
entitled to receive additional shares by virtue of any such distribution or
dividend, appropriate credits will be made to each shareholder's account.
(b) Chase will also:
(i) provide office facilities with respect to the provision of the
services contemplated herein (which may be in the offices of Chase or a
corporate affiliate of Chase );
(ii) provide the services of individuals to serve as officers of the
Fund who will be designated by Chase and, subject to Board approval, elected by
the Board;
(iii) provide or otherwise obtain personnel sufficient, in Chase's
reasonable discretion, for provision of the services contemplated herein;
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(iv) furnish equipment and other materials, which Chase, in its
reasonable discretion, believes as necessary or desirable for provision of the
services contemplated herein; and
(v) keep records relating to the services provided hereunder in such
form and manner as set forth in Schedules B, C and D as Chase may otherwise deem
appropriate or advisable, all in accordance with the 1940 Act. To the extent
required by section 31 of the 1940 Act and the rules thereunder, Chase agrees
that all such records prepared or maintained relating to the services provided
hereunder are the property of the Fund and will be preserved for the periods
prescribed under Rule 3la-2 under the 1940 Act, and made available in accordance
with such Section and rules. Chase further agrees to surrender promptly to the
Fund upon its request and cease to retain in its records and files those records
and documents created and maintained pursuant to this Agreement.
5. FEES; EXPENSES; EXPENSE REIMBURSEMENT.
(a) As compensation for the services rendered to the Fund pursuant to
this Agreement the Fund shall pay Chase monthly fees determined as set forth in
Schedule A to this Agreement. Upon any termination of this Agreement before the
end of any month, the fee for the part of the month before such termination
shall be prorated according to the proportion which such part bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement.
(b) For the purpose of determining fees calculated as a function of the
Fund's assets, the value of the Fund's assets and net assets shall be computed
as required by its currently effective Prospectus, generally accepted accounting
principles, and resolutions of the Board.
(c) Chase may, in its sole discretion, from time to time employ or
associate with such person or persons as may be appropriate to assist Chase in
the performance of this Agreement. Such person or persons may be officers and
employees who are employed or designated as officers by both Chase and the Fund.
The compensation of such person or persons for such employment shall be paid by
Chase and no obligation will be incurred by or on behalf of the Fund in such
respect.
(d) The Fund may request additional services, additional processing, or
special reports. The Fund shall submit such requests in writing together with
such specifications and requirements documentation as may be reasonably required
by Chase. If Chase elects to provide such services or arrange for their
provision, it shall be entitled to additional fees and expenses at an agreed
upon rate and charge.
(e) Chase will bear all of its own expenses in connection with the
performance of the services under this Agreement except as otherwise expressly
provided herein. The Fund agrees to promptly reimburse Chase for any equipment
and supplies specially ordered by the Fund through Chase and for any other
expenses not contemplated by this Agreement that Chase may incur on the Fund's
behalf at the Fund's written request or as consented to in writing by the Fund.
The Fund will bear its own expenses associated with operation of the Fund,
including, but not limited to: taxes; interest; brokerage fees and commissions;
salaries and fees of officers and directors of the Fund who are not officers,
directors, shareholders or employees of Chase or its affiliates, or the Fund's
investment advisers or distributor; SEC and state Blue Sky registration and
qualification fees, levies, fines and other charges; ▇▇▇▇▇ filing fees; advisory
fees; charges and expenses of pricing services, including back up to the Fund's
primary pricing services; independent public accountants and custodians;
insurance premiums for the Fund's insurance coverages, including fidelity bond
premiums; legal expenses; costs of maintenance of corporate existence; expenses
of typesetting and printing of prospectuses for regulatory purposes
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and for distribution to current shareholders of the Fund; expenses of
typesetting and printing shareholders' reports and proxy statements and
materials; expenses incurred in the transmission of filings (e.g. N-SARs,
Registration Statements and proxy materials) to the SEC Via ▇▇▇▇▇; costs and
expenses of Fund stationery and forms; costs and expenses of special telephone
and data lines and devices; trade association dues and expenses; expenses
associated with off-site storage of Fund records, and any extraordinary expenses
and other customary Fund expenses.
(f) All fees, out-of-pocket expenses, or additional charges of Chase
shall be billed on a monthly basis and shall be due and payable within 15 days
of receipt of the invoice.
Chase will render, after the close of each month in which services have
been furnished, a statement reflecting all of the charges for such month.
Charges remaining unpaid after thirty (30) days (with the exception of specific
amounts which may be contested in good faith by the Fund) shall bear interest in
finance charges equivalent to, in the aggregate, the prime rate (as published by
Chase) and all reasonable costs and expenses of effecting collection of any such
sums, including reasonable attorney's fees, shall be paid by the Fund to Chase.
In the event that the Fund is more than sixty (60) days delinquent in
its payments of monthly ▇▇▇▇▇▇▇▇ in connection with this Agreement (with the
exception of specific amounts which may be contested in good faith by the Fund),
this Agreement may be terminated upon thirty (30) days, written notice to the
Fund by Chase. The Fund must notify Chase in writing of any contested amounts
within thirty (30) days of receipt of a billing for such amounts. Disputed
amounts are not due and payable while they are being investigated. The fees set
forth in Schedule A may be changed from time to time upon prior written
agreement of the parties.
6. PROPRIETARY AND CONFIDENTIAL INFORMATION. Chase agrees on behalf of
itself and its affiliates and employees of Chase and its affiliates, excepted as
required by law, to treat confidentially and as proprietary information of the
Fund, all records and other information relating to the Fund and its prior,
present or potential shareholders, and to not disclose the same to any person or
use such records and information for any purpose other than performance of
Chase's responsibilities and duties hereunder, except at the request or with the
prior written consent of the Fund.
7. DUTIES, RESPONSIBILITIES, AND LIMITATION OF LIABILITY.
(a) In the performance of its duties hereunder, Chase shall be obligated
to act in good faith and use its best judgment in performing the services
provided for under this Agreement. In performing its services hereunder, Chase
shall be entitled to rely on any oral or written instructions, notices or other
communications, including electronic transmissions, from the Fund and its
officers and directors, agents and other service providers which Chase
reasonably believes to be genuine, valid and authorized. Chase shall also be
entitled to consult with and rely in good faith on the advice and opinions of
outside legal counsel retained by the Fund, as necessary or appropriate.
(b) Chase shall not be liable for any error of judgment or mistake of
law or for any loss or expense suffered by the Fund, in connection with the
matters to which this Agreement relates, except for a loss or expense caused by
or resulting from willful misfeasance, bad faith or negligence on Chase's (or
any agent or subcontractor of Chase's) part in the performance of its duties or
from reckless disregard by Chase (or any agent or subcontractor of Chase's) of
Chase's obligations and duties under this Agreement. In the event of any loss to
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the Fund by reason of Chase (or any agent or subcontractor of Chase) to perform
the services provided under this Agreement, Chase shall be liable to the Fund
only to the extent of the Fund's direct damages to be determined based on the
market value of the loss at the date of discovery and without reference to any
special or consequential damages. Notwithstanding the foregoing, Chase shall not
be liable to the Fund for any loss or expense caused by or resulting from any
agent or subcontractor used by Chase at the request of the Fund. Any person,
even though also an officer, director, partner, employee or agent of Chase, who
may be or become an officer, director, partner, employee or agent of the Fund,
shall be deemed when rendering services to the Fund or acting on any business of
the Fund (other than services or business in connection with or related to
Chase's duties hereunder) to be rendering such services to or acting solely for
the Fund and not as an officer, director, partner, employee or agent or person
under the control or direction of Chase even though paid by Chase.
(c) Subject to Paragraph 7(b) above, Chase shall not be responsible for,
and the Fund shall indemnify and hold Chase harmless from and against, any and
all losses, damages, costs, reasonable attorneys' fees and expenses, payments,
expenses and liabilities arising out of or attributable to:
(i) all actions of Chase or its officers or agents required to be
taken pursuant to this Agreement;
(ii) the reasonable reliance on or use by Chase or its officers or
agents of information, records, or documents which are received by Chase or its
officers or agents and furnished to it or them by or on behalf of the Fund, and
which have been prepared or maintained by the Fund or any third party on behalf
of the Fund;
(iii) the Fund's refusal or failure to comply with the terms of this
Agreement or the Fund's lack of good faith or in actions, or lack thereof,
involving negligence or willful misfeasance;
(iv) the breach in any material respect of any representation or
warranty of the Fund hereunder;
(v) the taping or other form of recording of telephone conversations
or other forms of electronic communications with investors and shareholders of
the Fund, or reliance by Chase on telephone or other electronic instructions of
any person acting on behalf of a Fund shareholder or shareholder account for
which telephone or other electronic services have been authorized, provided that
Chase employed reasonable procedures to confirm that Chase reasonably believes
such instructions are genuine;
(vi) the reliance on or the carrying out by Chase or its officers or
agents of any proper instructions reasonably believed to be duly authorized, or
requests of the Fund or recognition by Chase of any share certificates which are
reasonably believed to bear the proper signatures of the officers of the Fund
and the proper countersignature of any transfer agent or registrar of the Fund;
(vii) any delays, inaccuracies, errors in or omission from date
provided to Chase by the Fund, any of its affiliates, agents subcontractors or
pricing services;
(viii) the offer or sale of shares by the Fund in violation of any
requirement under the Federal securities laws or regulations or the securities
laws or regulations of any state, or in violation of any stop order or other
determination or ruling by any Federal agency or any state agency with respect
to the offer or sale of such shares in such state (1) resulting from activities,
actions, or omissions by the Fund or its other service
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providers and agents, or (2) existing or arising out of activities, actions or
omissions by or on behalf of the Fund prior to the effective date of this
Agreement;
(ix) any failure of the Fund's registration statement to comply in
any material respect with the 1933 Act and the 1940 Act (including the rules and
regulations thereunder) and any other applicable laws, or any untrue statement
of a material fact or omission of a material fact necessary to make any
statement therein not misleading in the Fund's prospectus; and
(x) actions taken by the Fund, its investment advisers, and its
distributor in violation of applicable securities, tax, commodities and other
laws, rules and regulations.
Notwithstanding the preceding sentence or anything else contained in this
Agreement, nothing contained herein shall protect or require the indemnification
of Chase for any losses, damages, expenses or liabilities caused by or resulting
from Chase's (or any agent or subcontractor other than one used by Chase at the
request of the Fund) willful misfeasance, bad faith, negligence or reckless
disregard of its obligations and duties hereunder.
8. TERM. This Agreement shall become effective on the date first
hereinabove written. This Agreement may be modified or amended from time to time
by mutual written agreement between the parties hereto. This Agreement shall
continue in effect unless terminated by either party on 60 days' prior written
notice. Upon termination of this Agreement, the Fund shall pay to Chase such
compensation and any out-of-pocket or other reimbursable expenses which may be
due or payable under the terms hereof as of the date of such termination.
9. NOTICES. Any notice required or permitted hereunder shall be in writing
and shall be deemed to be effective when delivered in person or by certified
mall, return receipt requested, to the parties at the following addresses (or
such other address as a party may specify, by notice to the other):
If to the Fund:
Attn: The Lipper Funds, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to Chase:
The Chase Manhattan Bank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Notice shall be effective upon receipt if by mail, on the date of personal
delivery (by private messenger, courier service or otherwise) or upon confirmed
receipt of telex or facsimile, whichever occurs first.
10. ASSIGNABILITY. Except as expressly provided in this Section 10, neither
this Agreement nor any rights or obligation hereunder may be assigned by either
of the parties hereto without the prior consent in writing of the other party.
Chase may, after notice to the Fund, in its own discretion and without prior
consent of
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the Fund, whenever and on such terms and conditions as Chase deems necessary or
appropriate, delegate or assign its duties and obligations hereunder to
subsidiaries or affiliates of Chase or may subcontract non-affiliated third
parties; provided that Chase, subject to the limitations set forth in paragraph
7(b), shall remain liable hereunder for any act or omission of any such entity
as if performed by Chase. This Agreement shall be binding on and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Any purported assignment in violation of this Agreement shall be void
and of no effect.
11. WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
12. FORCE MAJEURE. Chase shall not be responsible or liable for any failure
or delay in performance of its obligation under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its control, including
without limitation, acts of God, earthquakes, fires, floods, wars, acts of civil
or military authorities, or governmental actions, nor shall any such failure or
delay give the Fund the right to terminate this Agreement.
13. USE OF NAME. The Fund and Chase agree not to use the other's name nor
the names of such other's affiliates, subcontractors or permitted assignees in
any prospectus, sales literature, or other printed material written in a manner
not previously approved by the other or such other's affiliates, subcontractors
or permitted assignees except where required by the SEC or other regulatory
authorities.
14. AMENDMENTS. This Agreement may be modified or amended from time to time
by mutual written agreement between the parties. No provision of this Agreement
may be changed, discharged, or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, discharge
or termination is sought.
15. SEVERABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE LAWS
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------- -------------------------------
Name: Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- -----------------------------
Title: Executive Vice President
-------------------------------- ----------------------------
THE CHASE MANHATTAN BANK, N.A.
Attest: /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- -------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- -----------------------------
Title: Senior Vice President
-------------------------------- ----------------------------
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SCHEDULE A
FEES AND EXPENSES
FUND ACCOUNTING AND ADMINISTRATION
For mutual fund accounting and administration services the Funds shall pay to
Chase a fee based on the following schedule:
20 basis points on the first $200 million in assets, plus
10 basis points on the next $200 million in assets, plus
5 basis points on assets in excess of $400 million.
This calculation is based on the combined daily net assets of all of the Funds
and is payable monthly.
There will be a minimum annual fee of $70,000 per fund, exclusive of Out of
Pocket Expenses and Custody Safekeeping and Transaction Fees.
"Out of Pocket" expenses including the cost of security pricing services, travel
and lodging for Fund officers to attend Board meetings, and preparation and
mailing of Board materials and will be billed to the Funds on a monthly basis.
TRANSFER AGENCY AND SHAREHOLDER SERVICING
Each Fund will be billed $20 for each shareholder account maintained in the
system.
"Out of Pocket" expenses including the costs for telephone services (800 numbers
and remote dial access to our systems), postage, forms, envelopes, pre-printed
statements and confirms, and proxy processing will be billed to the fund on a
monthly basis.
The above fee schedule applies only to the initial five funds sponsored by
Lipper & Co. Additional funds will be subject to review.
10
SCHEDULE B
GENERAL DESCRIPTION OF FUND ADMINISTRATION SERVICES
I. FINANCIAL AND TAX REPORTING
A. Prepare agreed upon management reports and Board of Directors materials
such as unaudited financial statements and distribution summaries.
B. Report Fund performance to outside services as directed by Fund
management.
C. Calculate dividend and capital gain distributions in accordance with
distribution policies detailed in the Fund's prospectus(es). Assist Fund
management in making final determinations of distribution amounts.
D. Estimate and recommend year-end dividend and capital gain distributions
necessary to establish each series of the Fund's status as a regulated
investment company ("RIC") under Section 4982 of the Internal Revenue Code
of 1986, as amended (the "Code") regarding minimum distribution
requirements.
E. Work with the Fund's public accountants or other professionals, prepare
and file Fund's Federal tax return on Form 1120-RIC along with all state
and local tax returns where applicable. Prepare and file Federal Excise
Tax Return (Form 8613).
F. Prepare and file Fund's Form N-SAR with the SEC.
G. Prepare and coordinate printing of Fund's Semiannual and Annual Reports to
Shareholders.
H. Notify shareholders as to what portion, if any, of the distributions made
by the Fund during the prior fiscal year were exempt-interest dividends
under Section 852 (b)(5)(A) of the Code.
I. Provide Form 1099-MISC to persons other than corporations (e.g.,
Directors) to whom the Fund paid more than $600 during the year.
J. Prepare and file California State Expense Limitation Report and similar
reports if required by other states, if applicable.
K. Provide financial information for Fund proxies, prospectuses and
Statement(s) of Additional Information.
11
II. PORTFOLIO COMPLIANCE
A. Assist with monitoring each series of the Fund's compliance with
investment restrictions (e.g., issuer or industry diversification,
etc.) listed in the current prospectus(es) and Statement(s) of
Additional Information, although primary responsibility for such
compliance shall remain with the Fund's investment adviser or
investment manager.
B. Assist with monitoring each series of the Fund's compliance With the
requirements of Section 851 of the Code for qualification as a RIC
(i.e., 90% Income. 30% Income - Short Three, Diversification Tests).
C. Assist with monitoring investment manager's compliance with Board
directives such as "Approved Issuers Listings for Repurchase
Agreements", Rule 17a-7, Rule 17e-1, Rule 10f-3 and Rule 12d-3
procedures.
D. Mail quarterly requests for "Securities Transaction Reports" to the
Fund's Directors and Officers and "access persons" under the terms of
the Fund's Code of Ethics and SEC regulations, and generally assist in
monitoring compliance with such Code of Ethics.
III. REGULATORY AFFAIRS AND CORPORATE GOVERNANCE
A. Prepare and file via ▇▇▇▇▇ post-effective amendments to the Fund's
registration statement on Form N-1A and supplements as needed.
B. Prepare and file proxy materials and administer shareholder meetings.
C. Prepare, file and monitor all state registrations of the Fund's
securities, including annual renewals, registering new series of the
Fund, preparing and filing sales reports, filing copies of the
registration statement and final prospectus and statement of
additional information, increasing registered amounts of securities in
individual states and monitoring blue sky compliance.
D. Prepare Board materials and agendas for all Board and Board Committee
meetings and minutes of such meetings.
E. Assist with the review and monitoring of fidelity bond and errors
and omissions insurance coverage and make any related regulatory
filings.
F. Prepare and update documents such as charter document, by-laws, and
foreign qualification filings.
G. Prepare and file notices pursuant to Rule 24f-2.
12
H. Review and provide comments on all sales literature (e.g.,
advertisements, brochures and shareholder communications) with respect
to each series.
I. Assist in identifying and monitoring pertinent regulatory and
legislative developments which may affect the Fund and. in response to
the results of such monitoring, coordinate and provide support to the
Fund and the Funds investment adviser with respect to those
developments and results, including support with respect to routine
regulatory examinations or investigations of the Fund, and with
respect to such matters, to work in conjunction with outside counsel,
auditors and other professional organizations engaged by the Fund.
J. File copies of financial reports to shareholders with the SEC under
Rule 30b2-1.
IV. GENERAL ADMINISTRATION
A. Furnish officers of the Fund, subject to Board approval.
B. Prepare Fund and series expense projections, establish accruals and
review on a periodic basis, including expenses based on a percentage
of each series of the Fund's average daily net assets (advisory and
administrative fees) and expenses based on actual charges annualized
and accrued daily (audit fees, registration fees, directors' fees,
etc.).
C. For new series of the Fund obtain Employer or Taxpayer Identification
Number and CUSIP numbers. Estimate organizational costs and expenses
and monitor against actual disbursements.
D. Coordinate all communications and data collection with regard to any
regulatory examinations and yearly audits by independent accountants.
E. Make staff of Chase and affiliates available to the Fund to assist in
or respond to any reasonable requests for Fund-or-industry related
information.
13
SCHEDULE C
DESCRIPTION OF FUND ACCOUNTING SERVICES
I. GENERAL DESCRIPTION
Chase shall provide the following accounting services to the Fund:
A. Maintenance of the books and records and accounting controls for the
Fund's assets, including records of all securities transactions;
B. Daily pricing of all securities. Calculation of each series of the
Fund's Net Asset Value in accordance with the prospectus and
transmission to NASDAQ and to such other entities as directed by the
Fund;
C. Accounting for dividends and interest received and distributions made
by the Fund,
D. Production of transaction data, financial reports and such other
periodic and special reports as the Board may reasonably request;
E. Liaison with the Fund's independent auditors; and
F. A listing of reports that will be available to the Fund is included
below.
II. DOMESTIC SERIES OF THE FUND ACCOUNTING DAILY REPORTS
A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C. Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
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3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
III. INTERNATIONAL SERIES OF THE FUND ACCOUNTING DAILY REPORTS
A. General Ledger
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report by ▇▇▇▇▇▇
▇. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
C. Currency Reports
1. Currency Purchase /Sales Journal
2. Currency Valuation Report
D. Pricing Reports
1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
15
4. NAV Report
5. NAV Proof Report
E. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax
F. Other Reports
1. Exchange Rate Report
IV. MONTHLY ACCOUNTING REPORTS
A. Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
B. International Reports
1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report
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SCHEDULE D
DESCRIPTION OF TRANSFER AGENCY SERVICES
The following is a general description of the transfer agency services
Chase shall provide to the Fund.
A. SHAREHOLDER RECORDKEEPING. Maintain records showing for each Fund
shareholder the following: (i) name, address, appropriate tax
certification and tax identifying number; (ii) number of shares of
each series of the Fund; (iii) historical information including, but
not limited to, dividends paid and date and price of all transactions
including individual purchase and redemptions appropriate supporting
documents; and (iv) any dividend reinvestment order, application,
dividend to a specific address and correspondence relating to the
current maintenance of the account.
B. SHAREHOLDER ISSUANCE. Record the issuance of shares of each series of
the Fund. Except as specifically agreed in writing between Chase and
the Fund, Chase shall have no obligation when countersigning and
issuing and/or crediting shares to take cognizance of any other laws
relating to the issue and sale of such shares except insofar as
policies and procedures of the Stock Transfer Association recognize
such laws.
C. PURCHASE ORDERS. Process all orders for the purchase of shares of the
Fund in accordance with the Fund's current prospectus, including
electronic transmissions, which the Fund acknowledges it has
authorized. Upon receipt of any check or other payment for purchase of
shares of the Fund from an investor, chase will (i) stamp the order or
other documentation with the date and time of receipt, (ii) forthwith
process the same for collection, (iii) determine the amounts thereof
due the Fund, and notify the Fund of such determination and deposit,
such notification to be given on a daily basis of the total amounts
determined and deposited to the Fund's custodian bank account during
such day. Chase shall then credit the share account of the investor
with the number of shares to be purchased made on the date such
payment is received, as set forth in the Fund's current prospectus,
and shall promptly mail a confirmation of said purchase to the
investor, all subject to any instructions which the Fund may give to
Chase with respect to the timing or manner of acceptance of orders for
shares relating to payments so received by it. Any purchase order
received by Chase, which is deemed by Chase not in good order will be
rejected immediately.
D. REDEMPTION ORDERS. Receive and stamp with the date and time of receipt
all requests for redemptions or repurchase of shares held in
certificate or non-certificate form, and process redemptions and
repurchase requests as follows: (i) if such certificate or redemption
request complies with the applicable standards approved by the Fund,
Chase shall on each business day, notify the Fund of the total number
of shares presented and covered by such requests received by Chase on
such day; (ii) on or prior to the seventh calendar day succeeding any
such requests received by Chase subject to instructions from the Fund,
Chase shall transfer monies to such account as designated by Chase for
such payment to the redeeming shareholder of the applicable redemption
or repurchase price; (iii) if any such certificate or request for
redemption of repurchase does not comply with applicable standards,
Chase shall promptly notify the investor of such fact, together with
the reason therefor, and shall effect such redemption at the Fund's
price next determined after receipt of documents complying with said
standards of, at such other time as the Fund shall so direct.
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E. TELEPHONE ORDERS. Process redemptions, exchanges and transfers of Fund
shares upon telephone instructions from qualified shareholders in
accordance with the procedures set forth in the Fund's current
prospectus. Chase will employ reasonable procedures, such as requiring
a form of personal identification, so that Chase reasonably believes
that such telephones instructions are genuine. Chase shall be
permitted to redeem, exchange and/or transfer Fund shares from any
account for which such services have been authorized, including
electronic transmissions.
F. TRANSFER OF SHARES. Upon receipt by Chase of documentation in proper
form to effect a transfer of shares, including in the case of shares
for which certificates have been issued the share certificates in
proper form for transfer, Chase will register such transfer on the
Fund's shareholder records maintained by Chase pursuant to
instructions received from the transferor, cancel the certificates
representing such shares, if any, and if so requested, countersign,
register, issue and mail by first class mail new certificates for the
same or a smaller whole number of shares.
G. SHAREHOLDER COMMUNICATIONS. Address and mail all communications by the
Fund to its shareholders promptly following the delivery by the Fund
of the material to be mailed.
H. PROXY MATERIALS. Prepare shareholder lists, mail and certify as to the
mailing of proxy materials, receive the tabulated proxy cards, render
periodic reports to the Fund on the progress of such tabulation, and
provide the Fund with inspectors of election at any meeting of
shareholders and prepare agendas and minutes for such meetings.
I. SHARE CERTIFICATES. If a shareholder of the Fund requests a
certificate representing his/her shares, Chase, as transfer agent,
will countersign and mail, a share certificate to the investor at
his/her address as it appears on the Fund's transfer books. Chase
shall supply, at the expense of the Fund a supply of blank share
certificates. The certificates shall be properly signed, manually or
by facsimile, as authorized by the Fund, and shall bear the Fund's
seal or facsimile; and notwithstanding the death, resignation or
removal of any officers of the Fund authorized to sign certificates,
Chase may, until otherwise directed by the Fund, continue to
countersign certificates which bear the manual or facsimile signature
of such officer.
J. RETURNED CHECKS. In the event that any check or other order for the
payment of money is returned unpaid for any reason, chase will take
such steps, including redepositing the check for collection or
returning the check to the investor, as Chase may, at its reasonable
discretion, deem appropriate and notify the Fund of such action, or as
the Fund may instruct. However, the Fund remains ultimately liable for
any returned checks of its shareholders.
K. SHAREHOLDER CORRESPONDENCE. Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such other
shareholder correspondence as may from time to time be mutually agreed
upon.
L. TAX REPORTING. Chase shall issue appropriate shareholder tax forms on
an annual basis.
M. ESCHEATMENT. All Fund assets shall be subject to the escheatment laws
of the Commonwealth of Massachusetts, including those which relate to
reciprocal agreements with other states.
N. SUB-TRANSFER AGENTS. Chase shall cooperate with the Fund and any
outside service provider selected by the Fund in connection with the
establishment of sub-transfer agency and sub-administration
arrangements.
O. TELEPHONE SERVICES. Chase shall provide and administer a toll-free
number to be available for shareholder inquiries.
18