ADMINISTRATION & TRANSFER AGENT AGREEMENT
July 31, 2006
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,
the Equity Growth Fund, the Balanced Fund, the Retirement Income Fund, and the
Cornerstone Stock 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.
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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
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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 July 31, 2006 and, unless sooner
terminated as provided herein, shall continue until December 31, 2006 and
thereafter shall continue automatically with respect to each Fund for
successive annual periods ending on December 31st of each year, provided such
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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: /S/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Its: President
Accepted:
ADVANCE CAPITAL GROUP, INC.
By: /S/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Its: Vice President
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