ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of April 3, 1995, by and between
THE SHAREHOLDER SERVICES GROUP, INC. a Massachusetts corporation ("TSSG"), and
the Trusts or Series of Trusts named in Annex 1 hereto, each a Massachusetts
business trust (the "Funds").
WHEREAS, each Fund is registered as a diversified, open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, each Fund desires to retain TSSG to render certain administrative
services to the Fund and TSSG is willing to render such services;
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual convenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Funds hereby appoints TSSG to act as Administrator of
the Funds on the terms set forth in this Agreement. TSSG accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Funds have furnished or shall furnish to TSSG
upon request copies properly certified or authenticated of each of the
following:
(a) Resolutions of each Fund's Trustees authorizing the appointment of
TSSG to provide certain administrative services to the Fund and approving this
Agreement;
(b) Each Fund's Declaration of Trust filed with the Massachusetts
Secretary of State and all amendments thereto (the "Declaration");
(c) Each Fund's By-Laws and all amendments thereto (the "By-Laws");
(d) The Investment Advisory Agreement between Northstar Investment
Management Corp. (the "Adviser") and the Funds (the "Advisory Agreements");
(e) The Custody Agreements between the Custodian for each Fund (the
"Custodian") and each of the Funds (the "Custody Agreements");
(f) The Transfer Agency and Registrar Agreement between The Shareholder
Services Group, Inc. (the "Transfer Agent") and the Funds dated as of December
6, 1994, as amended;
(g) Each Fund's Registration Statement on Form N1-A (the "Registration
Statement") under the Securities Act of 1933 and under the 1940 Act, and all
amendments thereto; and
(h) The Exemptive Order pursuant to which the Funds offer multiple classes
of shares and the accounting procedures utilized in connection with the multiple
class arrangement; and
(i) Each Fund's most recent prospectus (the "Prospectus").
Each Fund will furnish TSSG from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing. Furthermore, each Fund will provide TSSG with any other documents
that TSSG may reasonably request and will notify TSSG as soon as possible of any
matter materially affecting the performance of TSSG of its services under this
Agreement.
3. DUTIES AS ADMINISTRATOR. Subject to the supervision and direction of
the Trustees of each Fund, TSSG, as Administrator, will assist in supervising
various aspects of the Fund's administrative operations and undertakes to
perform the following specific services:
A. FUND ACCOUNTING
(a) Accounting and bookkeeping services for each class of shares of each
Fund (including the maintenance of such accounts, books and records of each Fund
as may be required by Section 3l(a) of the 1940 Act and the rules thereunder),
as more fully set forth in the description of TSSG's services contained in
Schedule A to this Agreement;
(b) Valuing each Fund's assets and calculating the net asset value of the
shares of the Fund at the close of trading on the New York Stock Exchange in
accordance with the Prospectus and the multiple class accounting procedures, as
more fully set forth in the description of TSSG's services contained in Schedule
A to this Agreement, or if standard valuation procedures cannot be executed,
TSSG shall give prompt notification thereof to the affected Fund and such
securities shall be valued in accordance with the internal procedures approved
by the Trustees of such Fund;
(c) Reconciling, on a daily basis, the accounting records of the Funds
against the records of the Funds maintained and provided by the Funds' Transfer
Agent, and reconciling, on a monthly basis, the accounting records of the Funds
against the records of the Funds maintained and provided by the Funds'
Custodian.
(d) Maintaining office facilities (which may be in the offices of TSSG or
a corporate affiliates) for purposes of providing the services described above,
and
(e) Furnishing statistical and research data, data processing services,
clerical services, and internal legal, executive and administrative services and
stationery and office supplies in connection with the services described above.
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B. BLUE SKY
(a) Effecting and maintaining (through the daily monitoring of sales of
shares of each Fund), as the case may be, the registration or qualification of
shares of the Fund for sale under the securities laws of all fifty states and
such other jurisdictions indicated for each Fund from time to time;
(b) Filing with each appropriate jurisdiction the appropriate materials
relating to each Fund, such filings to be made promptly after receiving such
materials from the Fund, including Post-Effective Amendments to the Fund's
Registration Statement; Annual and Semi-Annual Reports to Shareholders, Notices
pursuant to Rule 24f-2 under the 1940 Act; definitive copies of the Fund's
Prospectus and Statement of Additional Information and any Supplements thereto;
Amendments to the Declaration of Trust, By-Laws, or Distribution Agreement; and
Notices of Annual or Special Meetings of Shareholders and related Proxy
materials which propose the merger, reorganization or liquidation of a Fund;
(c) Conveying to each Fund any comments received on such filings and, if
desired by the Fund, responding to such comments in such manner as authorized by
the Fund; and
(d) In connection with the foregoing, providing the services of certain
persons who may be appointed as officers of the Fund by the Fund's Board of
Trustees.
(e) Remittance to the respective jurisdictions of registration fees for
the shares of any Fund, and of any fees for qualifying or continuing the
qualification of any Fund. TSSG may request the funds necessary for the payment
of fees in advance of the date when the fees become due, or may advance such
amounts on behalf of the Fund and invoice the Fund for such out-of-pocket
expenses.
C. OTHER SERVICES
In addition to the foregoing and at the request of each Fund for such additional
consideration as the parties shall agree, TSSG may also under render the
following services:
(a) Accumulating information for and, subject to approval by the Fund's
Treasurer, preparing reports to the Fund's shareholders of record and the SEC
including, but not necessarily limited to, Annual Reports and Semi-Annual
Reports on Form N-SAR;
(b) Preparing and furnishing the Fund with performance information
(including yield and total return information) calculated in accordance with
applicable U.S. securities laws and reporting to external databases such
information as may reasonably be requested.
In performing all services under this Agreement, TSSG shall act in
conformity with the Fund's Articles and By-Laws, the 1940 Act, and the
Investment Advisers Act of 1940, as the same may be amended from time to time;
and the investment objective, investment policies and
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other practices and policies set forth in the Fund's Registration Statement, as
such Registration Statement and practices and policies may be amended from time
to time.
4. ALLOCATION OF EXPENSES. TSSG shall bear all expenses in connection
with the performance of its services under this Agreement except as otherwise
specially provided herein.
(a) TSSG will from time to time employ or associate with itself such
person or persons as TSSG may believe to be particularly suited to assist it in
performing services under this Agreement. Such person or persons may be officers
and employees who are employed by both TSSG and one or more Funds. The
compensation of such person or persons shall be paid by TSSG and no obligation
shall be incurred on behalf of any Fund in such respect.
(b) TSSG shall not be required to pay any of the following expenses
incurred by the Fund: taxes and fees payable to Federal, state and other
governmental agencies; outside auditing expenses; outside legal expenses; or
other expenses not specified in this Section 4 which may be properly payable by
any Fund.
(c) For the services to be rendered, the facilities to be furnished and
the payments to be made by TSSG, as provided for in this Agreement, each Fund
will pay TSSG monthly the fees set forth in Schedule B to this Agreement. Upon
any termination of this Agreement before the end of any month, the fee for such
part of a month shall be prorated according to the proportion which such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
TSSG, the value of each Fund's net assets shall be computed at the times and in
the manner specified in each Fund's Registration Statement.
(d) TSSG will xxxx the Funds as soon as possible after the end of each
calendar month, and said xxxxxxxx will be detailed in accordance with the
out-of-pocket schedule. The Fund will promptly pay to TSSG the amount of such
billing.
5. LIMITATION OF LIABILITY. TSSG shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Funds in connection
with the performance of its obligations and duties under this Agreement, except
a loss resulting from TSSG's willful misfeasance, bad faith or gross negligence
in the performance of such obligations and duties, or by reason of its reckless
disregard thereof. The Funds will indemnify TSSG against and hold it harmless
from any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim, demand, action
or suit not resulting from the willful misfeasance, bad faith or gross
negligence of TSSG in the performance of such obligations and duties or by
reason of its reckless disregard thereof.
6. TERMINATION OF AGREEMENT.
(a) This Agreement shall be effective on the date first written above and
shall continue for one (l) year (the "Initial Term"), unless earlier terminated
pursuant to the terms of this
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Agreement. Thereafter, this Agreement shall automatically be renewed for
successive one year term ("Renewal Term").
(b) Either party may terminate this Agreement at the end of the Initial
Term or at the end of any subsequent Renewal Term upon not less than ninety (90)
days or more than one hundred-eighty (180) days prior written notice to the
other party.
(c) In the event a termination notice is given by any Fund, all expenses
associated with movement of records and materials and conversion thereof will be
borne by the Fund.
(d) If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. If TSSG is the Non-Defaulting Party, its termination of
this Agreement shall not constitute a waiver of any other rights or remedies of
TSSG with respect to services performed prior to such termination of rights of
TSSG to be reimbursed for out-of-pocket expenses. In all cases, termination by
the Non-Defaulting Party shall not constitute a waiver by the Non-Defaulting
Party of any other rights it might have under this Agreement or otherwise
against the Defaulting Party.
7. AMENDMENT TO THIS AGREEMENT. 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.
8. MISCELLANEOUS.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to any Fund or TSSG shall be sufficiently given
if addressed to the party and received by it at its office set forth below or at
such other place as it may from time to time designate in writing.
To the Funds:
c/o Northstar Administrators
Two Pickwick Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
To TSSG:
The Shareholder Services Group, Inc.
Exchange Place - 025-004B
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx, Esq.
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(b) This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable without the written consent of the other
party.
(c) This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
(d) This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original and which collectively shall be deemed
to constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
9. CONFIDENTIALITY. All books, records, information and data pertaining
to the business of the Fund that are exchanged or received pursuant to the
performance of TSSG's duties under this Agreement shall remain confidential and
shall not be voluntarily disclosed to any other person, except as specifically
authorized by any Fund or as may be required by law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date,
first written above.
THE SHAREHOLDER SERVICES GROUP. INC.
By:
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Division Manager
NWNL NORTHSTAR SERIES TRUST
By:
--------------------------------------------
Name:
Title: Sr. Vice President
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NORTHSTAR ADVANTAGE FUNDS
NORTHSTAR ADVANTAGE HIGH YIELD FUND
By:
---------------------------------------------
Name and Title
NORTHSTAR ADVANTAGE INCOME FUND
By:
---------------------------------------------
Name and Title
NORTHSTAR ADVANTAGE GROWTH FUND
By:
---------------------------------------------
Name and Title
NORTHSTAR ADVANTAGE SPECIAL
By:
---------------------------------------------
Name and Title
NORTHSTAR ADVANTAGE STRATEGIC INCOME FUND
By:
---------------------------------------------
Name and Title
NORTHSTAR ADVANTAGE GOVERNMENT SECURITIES FUND
By:
---------------------------------------------
Name and Title
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ANNEX 1
NORTHSTAR SERIES TRUST
(To Be Renamed Northstar Advantage Trust)
NWNL NORTHSTAR HIGH YIELD BOND FUND
(To Be Renamed Northstar Advantage High Total Return Fund)
NWNL NORTHSTAR INCOME AND GROWTH FUND
(To Be Renamed Northstar Advantage Income and Growth Fund)
NWNL NORTHSTAR MULTI-SECTOR BOND FUND
(To Be Renamed Northstar Advantage Multi-Sector Bond Fund)
* NORTHSTAR ADVANTAGE HIGH YIELD FUND
* NORTHSTAR ADVANTAGE INCOME FUND
* NORTHSTAR ADVANTAGE GROWTH FUND
* NORTHSTAR ADVANTAGE SPECIAL FUND
* NORTHSTAR ADVANTAGE STRATEGIC INCOME FUND
* NORTHSTAR ADVANTAGE GOVERNMENT SECURITIES FUND
* BLUE SKY SERVICES ONLY.
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SCHEDULE A
FUND ACCOUNTING SERVICES
These services include:
- Portfolio and General Ledger Accounting
- Daily Pricing
- Daily Multiple Classes of Shares Valuation and NAV Calculation
- Client Reporting
PORTFOLIO AND GENERAL LEDGER ACCOUNTING
The Shareholder Services Group performs Portfolio and General ledger Accounting
in accordance with Section 31 of the Investment Company Act of 1940. Our
PC-based mutual fund accounting system was created to provide real-time,
on-line, multi-currency, multi-class accounting and reporting. The system is a
personal computer-based, networked system, which:
- Processes multi-currency transactions with real-time general ledger
posting and on-line inquiry;
- Contains shared master files, exchange rate files and security price
files;
- Provides on-line, real-time valuation including the calculation of Net
Asset Values;
- Is designed for flexibility to handle new security types and
regulatory changes;
- Provides functionality for capital stock, expenses, distributions and
NAV calculations at the class level.
The fund accounting process meets all current regulatory, tax and financial
statement reporting requirements and was designed with the flexibility to handle
new security types and regulatory changes. Each transaction type utilizes
standardized posting rules and controls to ensure accuracy. Our multi-currency
tax lot accounting process allows clients to use FIFO, LIFO or Specific Lot
Costing method when using tax lot basis accounting.
The system offers multi-currency reports that calculate the costs in local and
base. The system is able to produce Portfolio, Trade, Foreign Exchange,
Valuation, General Ledger and other specialized reports and inquiry screens.
This flexibility is passed along to our clients in that we are able to work with
them to create all required reports.
DAILY PRICING
Mutual Fund pricing is processed on a daily basis. Market prices are received
from our vendors and are input to the database via automated feed, thereby
enhancing the accuracy of input of market quotations to the fund's portfolio.
All prices are verified by reviewing up-to-the-minute news stories and the
latest corporate action notifications. Additionally, all price changes are
compared to market indices for reasonableness. Once prices are verified, they
are released from the database to the fund for valuation by the Fund
Accountants.
Security price quotations are supplied electronically by the following
commercial vendors to The Shareholder Services Group:
Interactive Data Corporation Reuters
Xxxxxxx Xxxxx Standard & Poor's
Xxxxxx Data Corporation Telerate
Quotron
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The Fund Accounting system supports an Account Master File that contains source
identifiers. These identifiers are used to define the selected pricing vendor,
as well as the pricing preferences for each portfolio.
DAILY VALUATION AND N.A.V. CALCULATION
Fund Net Assets, including portfolio holdings, currency, receivables and
payables for investments, receivables and payables for foreign exchange
contracts and income receivables are valued daily by the Fund Accounting group.
The valuation and calculation of the Net Asset Value of each fund undergoes
multiple reviews by the Fund Accountant, Senior Fund Accountant and Unit
Manager. Standard Quality Control and Proof procedures are performed daily at
the fund level before Net Asset Values are released to NASDAQ and/or the
Transfer Agent. Net Asset Values are reported to NASDAQ by 5:40 p.m. EST and to
the fund's transfer agent by 6:00 p.m. EST.
CLIENT REPORTING
Fund Accounting reports cash availability, trade status and corporate actions
information to the client. The standard report package includes, but is not
limited to:
- Portfolio and Currency Valuation
- Daily Trial Balance
- Pending Settlement Reports
- Interest Journal
- Amortization/Accretion Journal
- Daily Transaction Reports
- Working Appraisal
- Interest and Dividend Receivable Reports
CLIENT REPORTING (CONTINUED)
All accounting reports include both base and local currency. Comprehensive
reporting is available on Portfolio Activity, Currency Transactions, Accrued
Income, Broker Commissions, Currency Gain and Loss and Subscriptions and
Redemptions.
CUSTOMIZED REPORTING IS DEVELOPED TO ACCOMMODATE YOUR SPECIFIC NEEDS. We are
committed to providing flexible reporting systems that enable us to accommodate
special requests. Recent changes, as a result of client requests, have included
various reports on Government Bond funds by issuer and coupon, interest
summarization, modified pricing reports and wash sale analysis reports.
We have also developed Tax-Exempt Income Reporting, which enables our clients to
receive a variety of data on tax-exempt securities including daily rate changes,
pay frequencies, accrual periods, verification of interest bought/sold and the
identification of due xxxx requirements. Like our standard report package, all
customized reports may be delivered via hard copy or electronic transmission.
QUALITY ASSURANCE PROCEDURES
The source of quality service to our clients is based upon efficient and
effective system processing and detailed control procedures to ensure
completeness and accuracy of accounting transactions and valuations. Our
Standardized Daily Workflow and Proof Package, Monthly Management Report and
Daily Standard Control Procedures are used to provide consistent and accurate
service.
FUND ACCOUNTING: STANDARDIZED DAILY WORKFLOW
The following Daily Workflow depicts the basic operations performed by Fund
Accounting each day. This standardization of tasks provides control and ensures
accuracy and efficiency.
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TIME TASK DESCRIPTION
---- ---- -----------
9:00-9:30 Cash Reconciliation Reconcile prior day ending
cash balance per Custodian's
records and the Accounting
System to the prior day ending
cash balance, per the reported
Cash Availability.
9:30-10:00 Cash Availability Combine all activity affecting
the fund's cash account and
produce a net cash amount
available for investment.
Communicate investable cash to
the Advisor.
9:00-12:30 Foreign Currency Settlements Foreign currency balances are
reconciled daily between the
custody system and the Fund
Accounting Currency Balances.
9:30-10:30 Capital Stock Entry Verify daily transactions from
the Transfer Agent. Input
transactions to the Fund
Accounting System.
10:30-11:00 Expense Accruals Standard daily expense
accruals are calculated by the
Fund Accounting System and
verified by the Fund
Accountant.
11:00-3:30 Trade Entry Upon receipt of instructions
from the Investment Advisor,
the Fund Accountant reviews,
records and transmits buys,
sells and Foreign Exchange
Contracts to the Custodian.
1:30-2:00 Income and Corporate Actions Upon availability of the
current day's Foreign Exchange
Rates, the Fund Accountant can
run the income and corporate
actions process via the Fund
Accounting System.
2:00-5:00 Valuation As Portfolio prices are
released to the Fund
Accounting System, the Fund
Accountant runs the Valuation
process and completes reviews
of market Prices.
2:00-5:35 Report Production The Fund Accountant generates
daily reports needed to review
and confirm the system
generated NAV Calculation.
3:30-5 40 Managerial Review The Unit Manager reviews the
daily control package
completed by the Fund
Accountant. Throughout the day
the Senior Fund Accountant has
also reviewed the package and
monitored the status of the
Fund.
The Unit Manager verifies the
changes in market value to the
various market indexes.
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Using the Trial Balance, the
Unit Manager identifies and
verifies the impact of current
day fund activity on a per
share basis.
5:40-6:00 Fund End of Day Upon verification of the NAV
calculation, the Unit Manager
runs the Fund End of Day
processing in which the Fund
Accounting System checks that
Valuation has been run and
Capital Stock Activity has
been recorded for the day.
This process makes all
temporary postings permanent.
QUALITY ASSURANCE PROCEDURES (CONTINUED)
Our Standardized Daily Proof package covers all Balance Sheet and Capital
Accounts. Fund Accountants are required to complete the package daily for
managerial review.
DAILY STANDARD CONTROL PROCEDURES
The procedures are used to ensure the integrity of the Security Master File, to
verify the accuracy in processing Corporate Actions and to ensure that the Daily
Proof package and managerial review of the Net Asset Value calculation is
performed, documented and communicated.
MONTHLY MANAGEMENT REPORT
Client managers provide you with the flexibility for implementing individually
tailored reporting and for monitoring the resolution of your inquiries. Each
client receives a monthly management report for their funds containing:
- An Executive Summary of the month's activity
- Statistical reporting related to NAV, subscription and redemption
activity, trade settlements, distributions, compliance, past-due
income and cash availability
- Key dates, such as ex-dividend dates and Client deliverables, such as
report delivery, planned conference calls and audit timelines.
- Project update relating to the status of client inquiries and
requests.
- A contact list of managers and fund accountants assigned to your
portfolios.
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SCHEDULE B
FEE SCHEDULE FOR
ADMINISTRATIVE SERVICES
A. FUND ACCOUNTING SERVICES
Portfolio and General Ledger Accounting Daily, Monthly, and Year-to-Date Reporting
Daily Pricing of all Securities Daily Reporting of Choice One Data
Daily Valuation and N.A.V. Calculation
I. CHARGES/OUT OF POCKET EXPENSES
First $750 Million of net assets 8 Basis Points
Next $1.25 Billion of net assets 6 Basis Points
Excess of $2 Billion of net assets 4 Basis Points
All reasonable Out-of-Pocket expenses to include, but not limited to, such items
as telephone, wire charges, courier services, etc. Because most securities are
held by more than one client pricing charges are passed through to our clients
on a prorated basis.
B. BLUE SKY
- Electronically receiving shares sold by state by fund on a daily basis
from the transfer agent.
- Monitoring daily the shares sold versus shares registered for each
fund in each state to insure the fund does not sell more than they are
registered for and thus incur state fines.
- Filing annual registration renewals for each fund in each state.
- Filing post effective amendments to SEC filings and other required
fund documents with the states.
- Passing on inquiries and correspondence related to filings from the
states to clients and assisting with responses to the states.
- Initial filings for new funds with the states.
- Working with each state's Blue Sky Staff to resolve issues and
streamline the funds registration process.
I FEES/OUT-OF-POCKET EXPENSES:
Per Portfolio, Per Class, Per Annum $5,000 flat fee
Fee for Classes A, B and C $2,000
Fee for Class T $l,000
Data Transmission charges, initial transfer, agent hookup charges,
Federal Express, mail and delivery charges.
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C. OTHER SERVICES
FINANCIAL AND PERFORMANCE REPORTING:
- Coordinate Financial Statement Preparation (annuals, semi-annuals,
etc.) from drafts to finished reports
- Copy and distribute shareholder report drafts
- N-SAR Reporting
- Provide fund performance statistics including: Total Return, SEC
Yield, Dividend Summary, and Quarter End Reports on fund services to
client's advisory and marketing departments, database service firms,
and general media.
- Initial set-up of new funds with database service companies.
FEES/OUT-OF-POCKET EXPENSES:
Per Portfolio, Per Annum To Be Negotiated
All reasonable out of pocket expenses.
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