ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") made as of the ___ day
of ______, 2004 by and between Old Mutual Advisor Funds, a Delaware statutory
trust (the "Trust"), and Old Mutual Fund Services, a Pennsylvania business trust
(the "Administrator").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and registered as such under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Administrator to provide
administrative services to the Trust and each of its several series which are
identified in Schedule A hereto (the "Funds"), in the manner and on the terms
and conditions hereinafter set forth; and
WHEREAS, the Trust and the Administrator propose to engage a
sub-administrator (the "Sub-Administrator") to provide certain administrative
services to the Trust and the Funds, subject to the approval of the Trust's
Board of Trustees;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE ADMINISTRATOR.
The Administrator shall oversee the administration of the Trust's and
each Fund's business and affairs as set forth herein and shall provide certain
services required for effective administration of the Trust and the Funds. In
connection therewith, the Administrator shall:
1.1. OFFICE AND OTHER FACILITIES. Furnish, without cost to the
Trust, or provide and pay the cost of, such office facilities, furnishings, and
office equipment as are necessary for the performance of the Administrator's
duties to the Trust under this Agreement.
1.2. PERSONNEL. Provide, without additional remuneration from
or other cost to the Trust, the services of individuals competent to perform all
of the Administrator's obligations under this Agreement, except as otherwise
provided in Section 2.1.2 hereof.
1.3. AGENTS. Assist the Trust in selecting, coordinating the
activities of, supervising and acting as liaison with any other person or agent
engaged by the Trust, including, but not limited to, the Trust's depository
agent or custodian, consultants, transfer agent, sub-transfer agents,
intermediaries with respect to mutual fund alliance programs, dividend
disbursing agent, Sub-Administrator, independent accountants, and independent
legal counsel. The Administrator shall also monitor the functions of such
persons and agents, including without limitation the compliance of the Trust and
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the Trust's custodians with Rules 17f-5 and 17f-7 under the 1940 Act, if
appropriate.
1.4. DIRECTORS AND OFFICERS. Authorize and permit the
Administrator's directors, officers, and employees that may be elected or
appointee as directors or officers of the Trust to serve in such capacities,
without remuneration from or additional cost to the Trust, except as otherwise
provided in Section 2.1.2 hereof.
1.5. BOOKS AND RECORDS. Maintain customary records, on behalf
of the Trust, in connection with the performance of the Administrator's duties
under this Agreement. The Administrator also will monitor and oversee the
performance of the agents specified in Section 1.3. above, to ensure that all
financial, accounting, corporate, and other records required to be maintained
and preserved by the Trust or on its behalf will be maintained in accordance
with applicable laws and regulations.
1.6. COST OVERSIGHT. Monitor and review activities and
procedures of the Trust and its agents identified in Section 1.3. above, in
order to identify and seek to obtain possible service improvements and cost
reductions. In connection therewith, the Administrator shall, on a quarterly
basis, prepare and submit to the Trust a PRO FORMA budget or similar document
concerning the estimated costs of providing the services to the Trust and shall
monitor and periodically report to the Trust's Board of Trustees information and
analysis about the actual expenses incurred in providing such services.
1.7. ACCOUNTING AND COMPLIANCE POLICIES AND PROCEDURES. Assist
in developing, reviewing, maintaining, and monitoring the effectiveness of Trust
accounting and compliance policies and procedures, including portfolio valuation
procedures, expense allocation procedures, and personal trading procedures, and
the Trust's Code of Ethics. The Administrator also will assist and coordinate
participation by the Trust and its agents in any audit by its outside auditors
or any examination by federal or state regulatory authorities or any
self-regulatory organization. The Administrator also will oversee and coordinate
the activities of Trust accountants, outside counsel, and other experts in these
audits or examinations.
1.8. SYSTEMS. Assist in developing, implementing, and
monitoring the Trust's use of automated systems for the purchase, sale,
redemption and transfer of Trust shares and the payment of Rule 12b-1 service
fees to broker-dealers and others that provide personal services, distribution
support services, and/or account maintenance services to shareholders, and for
recording and tracking such transactions and/or payments. The Administrator also
will assist in developing, implementing, and monitoring the Trust's use of
automated communications systems with brokers, dealers, custodians, and other
service providers, including without limitation trade clearance systems.
1.9. REPORTS TO THE TRUST. Furnish to or place at the disposal
of the Trust such information, reports, evaluations, analysis, and opinions
relating to its administrative functions and the administrative functions
performed by the Sub-Administrator, as the Trust may, at any time or from time
to time, reasonably request or as the Administrator may deem helpful to the
Trust. The Administrator also will assist in the preparation of agendas and
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other materials for meetings of the Trust's Board of Trustees and will attend
such meetings.
1.10. REPORTS AND FILINGS. Provide appropriate assistance in
the development and/or preparation of all reports and communications by the
Trust to Trust shareholders and all reports and filings necessary to maintain
the registrations and qualifications of the Trust's shares under federal
securities law.
1.11. SHAREHOLDER INQUIRIES. Respond to all inquiries from
Trust shareholders or otherwise answer communications from Trust shareholders if
such inquiries or communications are directed to the Administrator. If any such
inquiry or communication would be more properly answered by one of the agents
listed in Section 1.3. above, the Administrator will coordinate, as needed, the
provision of their response.
2. ALLOCATION OF EXPENSES.
2.1. EXPENSES PAID BY THE ADMINISTRATOR.
2.1.1. IN GENERAL. The Administrator shall bear all of its own
expenses in connection with the performance of its duties under this Agreement.
2.1.2. SALARIES AND FEES OF DIRECTORS AND OFFICERS. Except as
otherwise provided below, the Administrator shall pay all salaries, expenses,
and fees, if any, of the directors, officers, and employees of the Administrator
who are trustees, officers, or employees of the Trust.
Notwithstanding the foregoing, the Trust shall reimburse the
Administrator at the end of each calendar quarter for the reasonable portion of
the compensation of attorneys employed by the Administrator attributable to work
for the Trust, as determined from time to time by the Trust's Board of Trustees.
Compensation for this purpose shall include salary, cash bonus, and benefits and
shall exclude any equity participation and profit sharing paid to such
attorneys. Determinations of the reasonable portion of such compensation
allocable to the Trust shall be made by the Trust's Board of Trustees
periodically, but at least as often as annually.
2.1.3. WAIVER OR ASSUMPTION AND REIMBURSEMENT OF TRUST
EXPENSES BY THE ADMINISTRATOR. The waiver or assumption and reimbursement by the
Administrator of any expense of the Trust that the Administrator is not required
by this Agreement to waive, or assume or reimburse, shall not obligate the
Administrator to waive, assume, or reimburse the same or any similar expense of
the Trust on any subsequent occasion, unless so required pursuant to a separate
agreement between the Trust and the Administrator.
2.2. EXPENSES PAID BY THE TRUST. The Trust shall bear all
expenses of its organization, operation, and business not specifically waived,
assumed, or agreed to be paid by the Administrator as provided in this Agreement
or any other agreement between the Trust and the Administrator, and as described
in the Trust's then-current Prospectus(es) and Statement(s) of Additional
Information.
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3. FEES.
3.1. COMPENSATION RATE. As compensation for all services
rendered, facilities provided, and expenses paid and any expense waived or
assumed and reimbursed by the Administrator, the Trust shall pay the
Administrator a fee per Fund at the annual rate of 0.123% of the average daily
net assets of each Fund. To the extent that Old Mutual Capital, Inc. defers
advisory fees or absorbs operating expenses of a portfolio, the Adviser may seek
payment of such deferred fees or reimbursement of such absorbed expenses within
two (2) fiscal years after the fiscal year in which fees were deferred or
expenses absorbed.
3.2. METHOD OF COMPUTATION. The Administrator's fee shall
accrue on each calendar day and the sum of the daily fee accruals shall be paid
monthly to the Administrator by the fifth (5th) business day of the next
calendar month. The daily fee accruals shall be computed by multiplying the
fraction of one (1) over the number of calendar days in the year by the
applicable annual rates described in Section 3.1. above, and multiplying this
product by the net assets of the Funds, as determined in accordance with the
current Prospectus(es) of the Trust, as of the close of business on the last
preceding business day on which the Trust was open for business.
3.3. PRORATION OF FEE. If this Agreement becomes effective or
terminates before the end of any month, the fee for the period from the
effective date to the end of such month or from the beginning of such month to
the date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full month in which such effectiveness
or termination occurs.
4. ADMINISTRATOR'S USE OF THE SERVICES OF OTHERS.
The Administrator may at its own cost employ, retain, or otherwise
avail itself of the services or facilities of other persons or organizations for
the purpose of providing the Administrator or the Trust with such information,
advice, or assistance as the Administrator may deem necessary, appropriate, or
convenient for the discharge of its obligations hereunder or otherwise helpful
to the Administrator, including consulting, monitoring, and evaluation services
concerning the Trust and the Funds.
5. OWNERSHIP AND CONFIDENTIALITY OF RECORDS.
All records required to be maintained and preserved by the Trust,
pursuant to rules or regulations of the Securities and Exchange Commission under
Section 31(a) of the 1940 Act, and maintained and preserved by the Administrator
on behalf of the Trust, are the property of the Trust and shall be surrendered
by the Administrator promptly on request by the Trust. The Administrator shall
not disclose or use any record or information obtained pursuant to this
Agreement in any manner whatsoever except as expressly authorized by this
Agreement and applicable law. The Administrator shall keep confidential any
information obtained in connection with its duties hereunder and shall disclose
such information only if the Trust has authorized such disclosure or if such
disclosure is expressly required by applicable law or federal or state
regulatory authorities.
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6. REPORTS TO THE ADMINISTRATOR.
The Trust shall furnish or otherwise make available to the
Administrator such Prospectuses, Statements of Additional Information, financial
statements, proxy statements, reports, and other information relating to the
business and affairs of the Trust, as the Administrator may, at any time or from
time to time, reasonably require in order to discharge its obligations under
this Agreement.
7. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Administrator
or any affiliated person of the Administrator to render corporate administrative
services to other investment companies or to engage in other business
activities; however, so long as this Agreement or any extension, renewal, or
amendment hereof shall remain in effect or until the Administrator shall
otherwise consent, the Administrator shall be the only administrator to the
Trust.
8. LIMITATION OF LIABILITY OF THE ADMINISTRATOR AND INDEMNIFICATION BY
THE TRUST.
8.1. LIMITATION OF LIABILITY.
8.1.1. Neither the Administrator nor any of its directors,
officers, employees or agents performing services for the Trust, at the
direction or request of the Administrator in connection with the Administrator's
discharge of its obligations undertaken or reasonably assumed with respect to
this Agreement, shall be liable for any act or omission in the course of or in
connection with the Administrator's services hereunder, including any error of
judgment or mistake of law or for any loss suffered by the Trust, in connection
with the matters to which this Agreement relates; provided, that nothing herein
contained shall be construed to protect the Administrator or any such person
against any liability to the Trust or its shareholders to which the
Administrator or such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its or their
duties on behalf of the Trust.
8.1.2. The Administrator's directors, officers, employees and
agents performing services for the Trust shall be covered errors and omissions
and directors and officers liability insurance, as appropriate, under a policy
maintained by the Administrator or an affiliate of the Administrator.
8.1.3. The Administrator may apply to the Board of Trustees of
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 act taken or omitted by
it in good faith in accordance with such instruction or with the opinion of such
counsel, accountants, or other experts.
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8.1.4. The Administrator shall at all times have the right to
mitigate or cure any and all losses, damages, costs, charges, fees,
disbursements, payments and liabilities to the Trust and its shareholders.
8.1.5. The Trust's obligations set forth in this Agreement are
limited to the Trust, its portfolios and their assets, and shall not operate to
bind any Trust shareholder or Trustee or otherwise limit any benefits set forth
in the Delaware General Corporation Law that may be applicable to such persons.
8.2. INDEMNIFICATION BY THE TRUST.
8.2.1 As long as the Administrator acts in good faith and with
due diligence and without gross negligence, the Trust shall indemnify the
Administrator and hold it harmless from and against any and all actions, suits,
and claims, including claims of third parties, whether groundless or otherwise,
and from and against any and all losses, damages (excluding consequential,
punitive or other indirect damages), costs, charges, reasonable counsel fees and
disbursements, payments, expenses, and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of the administrative
services or any other service rendered to the Trust hereunder. The indemnity and
defense provisions set forth herein shall indefinitely survive the termination
of this Agreement.
8.2.2. 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 Board of Trustees
of 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 Board of
Trustees of 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.
8.2.3. The Administrator shall secure and maintain a fidelity
bond, or be covered by an affiliate's blanket fidelity bond, in at least the
amount required by Rule 17g-1 under the 1940 Act for joint insurance bonds of
investment companies.
9. INDEMNIFICATION BY THE ADMINISTRATOR.
9.1. The Administrator shall indemnify the Trust, its officers
and trustees and hold them harmless from and against any and all actions, suits,
and claims, including claims of third parties, whether groundless or otherwise,
and from and against any and all losses, damages (excluding consequential,
punitive or other indirect damages), costs, charges, reasonable counsel fees and
disbursements, payments, expenses, and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of the administrative
services or any other service rendered to the Trust hereunder and arising or
based upon the willful misfeasance, bad faith, or gross negligence of the
Administrator, its directors, officers, employees, and agents in the performance
of its or their duties on behalf of the Trust. The indemnity and defense
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provisions set forth herein shall indefinitely survive the termination of this
Agreement.
9.2. 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
Administrator may be asked to indemnify or hold the Trust, its officers, and
trustees harmless, the Administrator shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Trust will use all reasonable care to identify and notify
the Administrator promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Administrator, but failure to do so in good faith shall not affect the
rights hereunder.
10. FORCE MAJEURE.
In the event the Administrator is unable to perform its obligations or
duties under the terms of this Agreement because of any act of God, strike,
riot, act of war, equipment failure, power failure or damage of the causes
reasonably beyond its control, the Administrator shall not be liable for any and
all losses, damages, costs, charges, counsel fees, payments, expenses or
liability to any other party (whether or not a party to this Agreement)
resulting from such failure to perform its obligations or duties under this
Agreement or otherwise from such causes. This provision, however, shall in no
way excuse the Administrator from being liable to the Trust for any and all
losses, damages, costs, charges, counsel fees, payments and expenses incurred by
the Trust due to the non-performance or delay in performance by the
Administrator of its duties and obligation under this Agreement if such
non-performance or delay in performance could have been reasonably been
prevented by the Administrator through back-up systems and other procedures
commonly employed by other administrators in the mutual fund industry, provided
that the Administrator shall have the right, at all times, to mitigate or cure
any losses, including by making adjustments or corrections to any current or
former shareholder accounts.
11. RETENTION OF SUB-ADMINISTRATOR.
The Administrator may retain a Sub-Administrator to perform corporate
administrative services to the Trust. The retention of a Sub-Administrator shall
be at the cost and expense of the Administrator. The Administrator shall pay and
shall be solely responsible for the payment of the fees of the Sub-Administrator
for the performance of its services for the Trust.
12. TERM OF AGREEMENT.
The term of this Agreement shall begin on the day and year first
written above, and unless sooner terminated as hereinafter provided, shall
continue in effect for an initial period that will expire on two years from the
date listed above. Thereafter, this Agreement shall continue in effect from year
to year, subject to the termination provisions and all other terms and
conditions hereof. The Administrator shall furnish to the Trust, promptly upon
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its request, such information as may be reasonably necessary to evaluate the
terms of this Agreement or any extension, renewal, or amendment thereof.
The assignment (as that term is defined in Section (2)(a)(4) of the
1940 Act and rules thereunder) of this Agreement or any rights or obligations
thereunder shall be prohibited by either party without the written consent of
the other party. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
13. TERMINATION OF AGREEMENT.
This Agreement may be terminated by any of the parties hereto, without
the payment of any penalty:
(a) for a material breach of this Agreement, upon thirty (30)
days prior written notice to the other parties; provided, that this Agreement
shall not terminate if such material breach is cured within such thirty (30) day
period.
(b) following the initial term of this Agreement, for any
reason upon ninety (90) days' prior written notice to the other parties;
provided, that in the case of termination by the Trust such action shall have
been authorized by resolution of the Board of Trustees of the Trust or by a vote
of a majority of the outstanding voting securities of the Trust or, in the case
of termination with respect to a particular Fund, by a resolution of the Board
of Trustees of the Trust or by a vote of a majority of the outstanding voting
securities of such Fund. In the case of termination by the Administrator, such
termination shall not be effective until the Trust and the Administrator shall
have contracted with one or more persons to serve as successor Administrator(s)
for the Trust and such person(s) shall have assumed such position.
14. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto provided, that no material amendment shall be effective unless
authorized by resolution of the Board of Trustees of the Trust or by a majority
of the outstanding voting securities of the Trust or, in the case of an
amendment to this Agreement with respect to a particular Fund, by a resolution
of the Board of Trustees of the Trust or a vote of majority of the outstanding
voting securities of such Fund.
15. MISCELLANEOUS.
15.1. NOTICES. Any notice under this Agreement shall be given
in writing, addressed and delivered, or mailed postpaid, (i) if to the
Administrator, to Old Mutual Fund Services, [Address], Attention: President, and
(ii) if to the Trust, to Old Mutual Advisor Funds, [Address], Attention:
President.
15.2. CAPTIONS. The captions contained in this Agreement are
included for convenience of reference only and in no way define or delineate any
of the provisions hereof or otherwise affect their construction or effect.
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15.3. INTERPRETATION. Nothing herein contained shall be deemed
to require the Trust to take any action contrary to its Declaration of Trust or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Trustees
of its responsibility for and control of the conduct of the affairs of the
Trust.
15.4. DEFINITIONS. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act shall be resolved by reference to such term
or provision of the 1940 Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any such
court by rules, regulations, or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
relaxed by a rule, regulation, or order of the Securities and Exchange
Commission, whether of special or of general application, such provision shall
be deemed to incorporate the effect of such rule, regulation, or order.
15.5. SEVERABILITY. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule, or otherwise, the
remainder of this Agreement shall not be affected thereby.
15.6. GOVERNING LAW. Except insofar as the 1940 Act or other
federal laws and regulations may be controlling, this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
OLD MUTUAL FUND SERVICES OLD MUTUAL ADVISOR FUNDS
By:__________________________ By:___________________________
Name:_______________________ Name:__________________________
Title:________________________ Title:___________________________
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SCHEDULE A
DATED _________, 2004
TO THE ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL FUND SERVICES
DATED __________, 2004
Old Mutual Advisor Funds consists of the following Funds, each of which
is subject to this Agreement:
OM Asset Allocation Conservative Portfolio
OM Asset Allocation Balanced Portfolio
OM Asset Allocation Moderate Portfolio
OM Asset Allocation Growth Portfolio
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