ADMINISTRATION & TRANSFER AGENT AGREEMENT
October 26, 2007
Advance Capital Group, Inc.
Xxx Xxxxx Xxxxxx, Xxx. 000
Xxxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Advance Capital I, Inc., (the "Company"), a Maryland corporation
herewith confirms its agreement with Advance Capital Group, Inc. ("ACG")
as follows:
The Company desires to employ the capital of its existing four
portfolios with two share classes of the, Equity Growth Fund, the Balanced
Fund, the Retirement Income Fund and the Core Equity Fund (the "Funds") by
investing and reinvesting the same in investments of the type and in
accordance with the limitations specified in the Company's Articles of
Incorporation and in the Funds' Prospectus as from time to time in effect,
copies of which have been or will be submitted to ACG, and resolutions of
the Company's Board of Directors. The Company desires to employ ACG as its
administrator, transfer agent and dividend disbursing agent for the Funds.
1. Services as Administrator
Subject to the direction and control of the Board of Directors of the
Company, ACG will (a) assist in maintaining office facilities (which may be
in the offices of ACG or a corporate affiliate but shall be in such location
as the Company shall reasonably determine); (b) furnish statistical and
research data, clerical services, and stationery and office supplies;
(c) prepare for periodic distribution to shareholders listings of the
Funds' portfolio securities; (d) compile data for and prepare with respect
to the Funds timely Notices to the Securities and Exchange Commission
required pursuant to Rule 24 f-2 under the Investment Company Act of 1940
(the "1940 Act"), Annual Reports on Form N-1R and Quarterly Reports on
Form N-1Q: (e) compile data for and prepare for execution and filing by
the Company 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; (f) prepare compliance filings pursuant to state
securities laws with the advice of the Company's counsel; (g) assist to
the extent requested by the Company with the Company's preparation of the
Annual and Semi-Annual Reports to Funds shareholders, the Registration
Statements for the Funds (on Form N1-A or any replacement thereof) and
proxy statements, shareholder reports and any other reports required by
law; (h) keep and maintain the Funds' financial accounts and records and
portfolio records; (i) compute daily the Funds' net asset value, net income
and net capital gains in accordance with the Company's Board of Directors
and (j) generally assist in the Funds' operations.
2. Services as Transfer Agent and Dividend Disbursing Agent
Subject to the direction and control of the Board of Directors of the
Company, ACG will (a) arrange for the processing by the Company's distributor
of share purchase and redemption orders of the Funds; (b) maintain
shareholders record accounts; (c) serve as dividend agent and perform all
duties involving calculation of dividends and capital gains distributions,
issuing of dividend and capital gains checks, authorizing payment by the
custodian and maintaining dividend payment records; (d) prepare and mail to
shareholders periodic account statements, federal tax information and daily
confirmations of transactions in Fund shares; (e) issue share certificates
upon request by shareholders; and (f) respond to telephone and mail
inquiries concerning the status of shareholder accounts.
2a. Lending of Portfolio Securities
The various Funds of the Company may lend portfolio securities, from
time to time, provided that (a) loans may only be made to financial
institutions (including, but not limited to, banks, thrift institutions,
insurance companies and broker-dealers), (b) loans will be continuously
secured by collateral consisting of cash or U.S. government securities having
a market value at least equal to the market value of the loaned portfolio
securities, (c) any lending Fund will have the right to call its loan and
obtain the return of the loaned securities at any time, (d) all loans will
be made only to borrowing counterparties that the Adviser determines to be
creditworthy and in good standing, and (e) the total market value of all
securities loaned by any Fund will not exceed 1/3 (one third) of the value
of the total assets of that Fund at the time of the loan.
The President and Vice President of the Company may execute and deliver
a Securities Lending Management Agreement with any reputable securities
lending firm for providing lending management services and carrying out
loans of portfolio securities on behalf of each of the Company's Funds.
In addition, officers of the Company, subject to approval of the Board of
Directors may execute and deliver all such agreements, certificates,
notices and documents, including (but not limited to) an operating agreement
and any related subscription agreements and investor questionnaires
necessary or appropriate to carry out the intentions of the Board.
3. Records
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
ACG agrees that all records which it maintains for the Funds are the property
of the Company and further agrees to surrender promptly to the Company any of
such records upon the Company's request. ACG further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records required
to be maintained by Rule 31a-1 under the 1940 Act.
4. Expenses; Expense Reimbursement
ACG will be reimbursed for all expenses in connection with the
performance of its services under this Agreement except as otherwise
provided herein. These costs include personnel salaries to provide Transfer
Agent functions, shareholder reporting costs, cost of subscriptions to stock
exchange data, bond pricing data and net asset value ("NAV") software. Other
expenses to be incurred in the operation of the Funds, including taxes,
interest, brokerage fees and commissions, if any, salaries and fees of
officers and directors who are not officers, directors, shareholders or
employees of ACG, or the Company's distributor for the Funds, Securities
and Exchange Commission fees and state Blue Sky qualification fees,
advisory and administration fees, charges of the custodians, certain
insurance premiums, outside auditing and legal expenses, costs of maintenance
of corporate existence, typesetting and printing of prospectuses for
regulatory purposes and for distribution to current Fund shareholders, costs
of shareholders' reports and corporate meetings and any extraordinary
expenses will be borne by the Funds.
If in any fiscal year any Fund's aggregate expenses (as defined under
the securities regulations of any state having jurisdiction over the fund)
exceed the expense limitations of any such state, ACG will reimburse such
fund for a portion of its payments under an allocation method that would
call for the Company's Investment Adviser to share equally with ACG the
dollar amount of the reimbursement (not to exceed the total amount of the
expense reimbursement previously made by the Funds to ACG in that fiscal
year). Such expense reimbursement, if any, will be estimated, reconciled
and paid on a monthly basis.
5. Proprietary and Confidential Information
ACG 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 Funds 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
ACG may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities or when so requested by the Company.
6. Limitation of Liability
ACG shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Company in connection with the matters to which
this Agreement relates, except for a loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also an officer, partner, employee or
agent of ACG, who may be or become an officer, director, employee or agent
of the Company, shall be deemed when rendering services to the Company or
acting on any business of the Company (other than services or business in
connection with ACG's duties as administrator hereunder) to be rendering
such services to or acting solely for the Company and not as an officer,
partner, employee or agent or one under the control or direction of ACG even
though paid by it.
7. Term
This Agreement shall become effective October 26, 2007 and, unless sooner
terminated as provided herein, shall continue until July 31, 2008 and
thereafter shall continue automatically with respect to each Fund for
successive annual periods ending on July 31st of each year, provided such
continuance is specifically approved at least annually (i) by the Company's
Board of Directors or (ii) by a vote of the majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act), provided that
in either event the continuance is also approved by the 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, without penalty, by the Company's Board of Directors, by vote of
a majority (as defined in the 0000 Xxx) of the outstanding voting securities
of a Fund, with respect to that Fund, or by ACG, on not less than 60 days'
written notice. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act). This Agreement shall
be governed by Michigan law.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
ADVANCE CAPITAL I, INC.
By:
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Xxxxxx X. Xxxxxxxx
Its: President
Accepted:
ADVANCE CAPITAL GROUP, INC.
By:
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Xxxxx X. Xxxxxxxx
Its: Vice President