ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 22nd day of May, 2000, by and among
WHATIFI FUNDS, a Delaware business trust (the "Trust") having its principal
place of business at 790 Eddy Street, Suite B, San Francisco, California 94109,
WHATIFI ASSET MANAGEMENT, INC. (the "Adviser"), a Delaware corporation having
its principal place of business at 790 Eddy Street, Suite B, San Francisco,
California 94109, and BISYS FUND SERVICES OHIO, INC. (the "Administrator"), an
Ohio corporation organized under the laws of the State of Ohio and having its
principal place of business at 3435 Stelzer Road, Columbus, Ohio 43219.
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares of beneficial interest or common
stock ("Shares");
WHEREAS, the Adviser is a registered investment adviser that has been
retained by the Trust, pursuant to an Investment Advisory Agreement, dated May
22, 2000, to provide various investment advisory services to the Trust; and
WHEREAS, the Trust and the Adviser desire the Administrator to provide,
and the Administrator is willing to provide, management and administrative
services to each series of the Trust, all as now or hereafter may be established
from time to time ("Portfolios"), on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Trust and the Adviser
hereby retain the Administrator to act as the administrator of the Portfolios
and to furnish the Portfolios with the management and administrative services as
set forth in Article 2 below. The Administrator hereby accepts such engagement
to perform the duties set forth below.
The Administrator 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 Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 2. Administrative Services. The Administrator 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 Trust,
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. The
Administrator shall provide the Board of Trustees/ Directors of the Trust
(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.
The Administrator shall provide the Trust 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 Portfolios and such other services as the Administrator
shall, from time to time, determine to be necessary to perform its obligations
under this Agreement. In addition, at the request of the Directors, the
Administrator shall make reports to the Trust's Directors concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Trust expenses and control all
disbursements for the Trust, and as appropriate, compute the
Trust's yields, total return, expense ratios, portfolio
turnover rate and, if required, portfolio average
dollar-weighted maturity;
(b)assist Trust 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
as may be required in order to comply with Federal and state
securities law) as may be necessary or desirable to register
the Trust's Shares with state securities authorities, monitor
the sale of Trust Shares for compliance with state securities
laws, and file with the appropriate state securities
authorities the registration statements and reports for the
Trust and the Trust's Shares and all amendments thereto, as
may be necessary or convenient to register and keep effective
the Trust and the Trust's Shares with state securities
authorities to enable the Trust to make a continuous offering
of its Shares;
(d) develop and prepare, with the assistance of the Trust'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 Trust 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 Trust with, among
others, the Trust's investment adviser, distributor,
custodian, transfer agent and fund accountant;
(f) supervise the Trust's transfer agent with respect to the
payment of dividends and other distributions to
Shareholders;
(g) calculate performance data of the Portfolios for
dissemination to information services covering the
investment company industry;
(h) coordinate and supervise the preparation and filing of the
Trust's tax returns;
(i) examine and review the operations and performance of the
various organizations providing services to the Trust or any
Portfolio of the Trust, including, without limitation, the
Trust's investment adviser, distributor, custodian, fund
accountant, transfer agent, outside legal counsel and
independent public accountants, 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 Trust'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 Trust's
Directors to serve as officers of the Trust, who will be
responsible for the management of certain of the Trust's
affairs as determined by the Trust's Directors;
(m) advise the Trust and its Directors on matters concerning
the Trust and its affairs;
(n) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Trust
in accordance with the requirements of Rules 17g-1 and
17d-1(7) under the 1940 Act as such bonds and policies are
approved by the Trust's Directors;
(o) monitor and advise the Trust 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
Trust and each Portfolio to the extent administrative services
and functions are not provided to the Trust or such Portfolio
pursuant to the Trust's or such Portfolio's investment
advisory agreement, distribution agreement, custodian
agreement, transfer agent agreement and fund accounting
agreement;
(q) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Trust and the Administrator shall determine desirable; and
(r) prepare and file with the SEC the semi-annual report for
the Trust on Form N-SAR and all required notices pursuant to
Rule 24f-2.
The Administrator shall perform such other services for the Trust that
are mutually agreed upon by the parties from time to time. 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 Trust
will pay the Administrator's out-of-pocket expenses.
ARTICLE 3. Allocation of Charges and Expenses.
----------------------------------
(A) The Administrator. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator 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 Trust as well as all Directors of the
Trust who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Trust retained by the Directors of the Trust
to perform services on behalf of the Trust.
(B) The Trust and the Adviser. The Trust and the Adviser assume and
shall pay or cause to be paid all other expenses of the Trust 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 the
Administrator or the Adviser or any affiliated corporation of the Administrator
or the Adviser, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Trust.
ARTICLE 4. Compensation of the Administrator.
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Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Adviser shall pay to the Administrator compensation at an annual
rate specified in the Omnibus Fee Agreement by and among the Trust, the Adviser
and the Administrator dated as of May 22, 2000 (the "Fee Agreement").
The Adviser shall also reimburse the Administrator for its reasonable
out-of-pocket expenses, including the travel and lodging expenses incurred by
officers and employees of the Administrator in connection with attendance at
Board meetings.
Notwithstanding the foregoing, the Trust hereby agrees that, in the
event the Adviser shall fail at any time to (i) make timely payment of fees that
are due and payable under the Fee Agreement, (ii) reimburse the Administrator
for expenses incurred in accordance with this Article 4 within a reasonable time
following the receipt of an invoice for such expenses, or (iii) make any other
payment in a timely manner that shall become due and payable to the
Administrator hereunder, then the Trust shall immediately make or cause to be
made a payment of such fees and/or reimbursable expenses.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Administrator'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 the Administrator'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. Limitation of Liability of the Administrator. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby. (As used in this Article 5, the term "Administrator" shall include
directors, officers, employees and other agents of the Administrator as well as
the Administrator itself.)
So long as the Administrator acts in good faith and with due diligence
and without negligence, the Trust assumes full responsibility and shall
indemnify the Administrator and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of the
Administrator's actions taken or nonactions with respect to the performance of
services hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or hold the
Administrator harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust, but failure to do so in good faith shall not affect the rights
hereunder.
The Trust shall be entitled to participate at its own expense or, if it
so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the Trust elects to assume the defense
of any such claim, the defense shall be conducted by counsel chosen by the Trust
and satisfactory to the Administrator, whose approval shall not be unreasonably
withheld. In the event that the Trust elects to assume the defense of any suit
and retain counsel, the Administrator shall bear the fees and expenses of any
additional counsel retained by it. If the Trust does not elect to assume the
defense of a suit, it will reimburse the Administrator for the reasonable fees
and expenses of any counsel retained by the Administrator.
The Administrator may apply to the Trust at any time for instructions
and may consult counsel for the Trust or its own counsel and with accountants
and other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. The Administrator will not be held to have
notice of any change of authority of any officers, employees or agents of the
Trust until receipt of written notice thereof from the Trust.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator 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 Trust are or may be or become interested in the
Administrator, as officers, employees or otherwise and that partners, officers
and employees of the Administrator and its counsel are or may be or become
similarly interested in the Trust, and that the Administrator may be or become
interested in the Trust as a Shareholder or otherwise.
ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
be as specified in Schedule A hereto.
ARTICLE 8. Assignment. This Agreement shall not be assignable by any
party without the written consent of the other parties; provided, however, that
the Administrator may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder. The
Administrator shall not, however, be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that the Administrator 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.
ARTICLE 9. Amendments. This Agreement, or any term thereof, may be modified
only by a written amendment, signed by the party against whom enforcement of
such modification is sought.
ARTICLE 10. Certain Records. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. 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 the Administrator
on behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Administrator 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 Trust has
agreed to indemnify the Administrator against such liability.
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 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 Trust or the Adviser, at 790
Eddy Street, Suite B, San Francisco, California 94109, Attention: President: and
if to BISYS, at 3435 Stelzer Road, Columbus, Ohio 43219, Attention: President,
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. 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, 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
WHATIFI FUNDS
By: /s/ Harris A. Fricker
Harris A. Fricker
Title: President
WHATIFI ASSET MANAGEMENT, INC.
By: /s/ Harris A. Fricker
Harris A. Fricker
Title: President
BISYS FUND SERVICES OHIO, INC.
By: /s/ Mark A. Dillon
Mark A. Dillon
Title: Director
SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
BY AND AMONG
WHATIFI FUNDS,
WHATIFI ASSET MANAGEMENT, INC.
AND
BISYS FUND SERVICES OHIO, INC.
Portfolios: This Agreement shall apply to all Portfolios of WhatifI Funds,
either now or hereafter created (individually, the "Portfolio", and
collectively, the "Portfolios"). The current Portfolios of the Trust are
set forth below:
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Term: Pursuant to Article 7, the term of this Agreement shall
commence on the date first written above and shall remain in
effect for a three (3) year period ("Initial Term").
Notwithstanding the foregoing, this Agreement may be
terminated without penalty at any time (i) by either party
upon the provision of at least ninety (90) days advance
written notice of termination to the other party or (ii) by
mutual agreement of the parties.
After such termination, for so long as the Administrator, with
the written consent of the Trust and the Adviser 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 the
Administrator and unpaid by the Adviser upon such termination
shall be immediately due and payable upon and notwithstanding
such termination. The Administrator shall be entitled to
collect from the Adviser, in addition to the compensation
described in this Schedule A, the amount of all of the
Administrator's cash disbursements for services in connection
with the Administrator's activities in effecting such
termination, including without limitation, the delivery to the
Trust and/or its designees of the Trust's property, records,
instruments and documents.
