Exhibit (h)(3)
CO-ADMINISTRATION AGREEMENT
THIS CO-ADMINISTRATION AGREEMENT is made as of the __ day of August, 2005
by and between LEGACY FUNDS GROUP (the "Company"), a Massachusetts business
trust having its principal office at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx, and
FIRST FINANCIAL CAPITAL ADVISORS LLC (the "Service Company"), a limited
liability company having its principal office at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxx
00000.
WHEREAS, the Company is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"), comprised of
three separate investment portfolios (individually referred to herein as a
"Portfolio" and collectively as the "Portfolios");
WHEREAS, the Company and BISYS Fund Services Ohio, Inc. ("BISYS") are
parties to an agreement (the "BISYS Co-Administration Agreement") pursuant to
which BISYS provides certain administrative services to the Company and the
Portfolios;
WHEREAS, the Company desires to retain Service Company to provide to the
Company and the Portfolios certain administrative services that are not provided
by BISYS under the BISYS Co-Administration Agreement;
WHEREAS, the Service Company is willing to perform such services, and the
Company is willing to retain the Service Company, on the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter contained, the Company and the Service Company agree as follows:
1. Retention of the Service Company.
The Company hereby appoints the Service Company, subject to the
supervision, direction and control of the Company's Board of Trustees, to
furnish the Company and its Portfolios with the services described in Schedule A
hereto (the "Services"). The rights and obligations of BISYS and the Service
Company as co-administrators to the Company are several and not joint. Neither
BISYS nor the Service Company shall be responsible for the performance of the
duties and responsibilities of the other, nor shall one accede to the rights of
the other, the remedies of the other, or be liable for the actions of the other.
2. Allocation of Charges and Expenses.
The Service Company shall furnish at its own expense the executive,
supervisory and clerical personnel necessary to perform the Services. The
Service Company 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
Company as well as all Trustees of the Company who are affiliated persons of the
Service Company or any affiliated company of the Service Company.
The Company will pay or cause to be paid all other expenses of the
Company not otherwise allocated to BISYS under the BISYS Co-Administration
Agreement, 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 Trustees who are not
affiliated persons of the Service Company or BISYS or any affiliated corporation
of the Service Company or BISYS, insurance, interest, brokerage costs,
litigation and other extraordinary or nonrecurring expenses, and all fees and
charges of investment advisers to the Company.
3. Compensation of the Service Company.
The Company shall pay the Service Company, for the services to be
provided by the Service Company under this Agreement, on the first business day
of each month a fee at the annual rate of .05 of 1% of the value of each
Portfolio's average daily net assets. Net asset value shall be computed on such
days and at such time or times as described in the Company's then-current
Prospectus and Statement of Additional Information. The fee for the period from
the date of the commencement of the public sale of a Portfolio's shares to the
end of the month during which such sale shall have been commenced shall be
pro-rated according to the proportion which such period bears to the full
monthly period, and upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be pro-rated 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 pupose of determining fees payable to Service Company, the
value of the Portfolios' net assets shall be computed in the manner specified in
the Company's charter documents for the computation of the value of the
Portfolios' net assets.
4. Limitation of Liability of the Service Company and the Company.
(a) The duties of the Service Company shall be confined to those expressly
set forth in this Agreement, and no implied duties are assumed by or may be
asserted against it under this Agreement. The Service Company 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 under this Agreement, 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 under this Agreement, except as may otherwise be provided under
provisions of applicable law which cannot be waived or modified by this
Agreement. (As used in this Section 4, the term "the Service Company" shall
include directors, officers, employees and other agents of the Service Company
as well as the Service Company itself, to the extent such persons' conduct
relates to the performance of the Services under this Agreement.) Any officer,
director, employee or agent of the Service Company who is or who becomes an
officer, Trustee, employee or agent of the Company shall be deemed, when engaged
in rendering the Services under this Agreement in such capacity, to be rendering
services directly to or for the Company.
(b) So long as the Service Company acts in good faith and with due
diligence and without negligence, the Company shall indemnify Service Company
and hold it harmless from and against any and all actions, suits and claims,
whether groundless or otherwise, and from and
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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 Service
Company's actions taken or nonactions with respect to the performance of
Services.
(c) 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 Company may be asked to indemnify or hold the
Service Company harmless, the Company shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Service Company will use all reasonable care to identify and
notify the Company promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Company, but failure to do so in good faith shall not affect the rights
hereunder, except to the extent the Company is materially prejudiced thereby. As
to any matter eligible for indemnification, Service Company shall act reasonably
and in accordance with good faith business judgment and shall not effect any
settlement or confess judgment without the consent of the Company, which consent
shall not be withheld or delayed unreasonably.
(d) The Company 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 Company elects to assume the defense
of any such claim, the defense shall be conducted by counsel chosen by it and
reasonably satisfactory to the Service Company. In the event that the Company
elects to assume the defense of any suit and retain counsel, the Service Company
shall bear the fees and expenses of any additional counsel retained by it. The
Company shall not effect any settlement without the consent of the Service
Company (which shall not be withheld or delayed unreasonably by the Service
Company) unless such settlement imposes no liability, responsibility or other
obligation upon the Service Company and relieves it of all fault. If the Company
does not elect to assume the defense of suit, it will reimburse the Service
Company for the reasonable fees and expenses of any counsel retained by the
Service Company. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
(e) The Service Company may apply to Company at any time for instructions
and may consult with counsel for Company and with accountants and other experts
with respect to any matter arising in connection with the Service Company's
duties, and the Service Company shall not be liable nor 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. The Service
Company shall notify Company at any time the Service Company believes that it is
in need of the advice of counsel (other than counsel in the regular employ of
the Service Company or any affiliated companies) with regard to the Service
Company's responsibilities and duties pursuant to this Agreement. After so
notifying Company, the Service Company, at its discretion, shall be entitled to
seek, receive and act upon advice of legal counsel of its choosing, such advice
to be at the expense of Company unless relating to a matter involving the
Service Company's willful misfeasance, bad faith, negligence or reckless
disregard of the Service Company's responsibilities and duties.
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(f) In performing the Services, the Service Company may rely conclusively
upon the terms of the Prospectus and Statement of Additional Information of the
Company relating to the relevant Funds, as well as the minutes of Board meetings
(if applicable) and other records of the Company. The Service Company 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.
(g) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL THE SERVICE COMPANY, ITS AFFILIATES OR ANY OF ITS OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE FOR EXEMPLARY, PUNITIVE,
SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SIMILAR DAMAGES, INCLUDING LOST
REVENUE AND/OR PROFITS, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE
PARTIES, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER
PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
5. Activities of the Service Company.
The services of Service Company to be rendered hereunder are not to be
deemed to be exclusive. The Service Company is free to render such services to
others and to have other businesses and interests. It is understood that
Trustees, officers, employees and shareholders of the Company are or may be or
become interested in the Service Company, as officers, employees or otherwise
and that directors, officers and employees of the Service Company and its
counsel are or may be or become similarly interested in the Company, and that
the Service Company may be or become interested in the Company as a shareholder
or otherwise.
6. Duration of this Agreement.
As to each Portfolio, this Agreement shall continue until April 1,
2007, and thereafter shall continue automatically for successive annual periods
ending on April 1st of each year, provided such continuance is specifically
approved at least annually by (i) the Company's Board or (ii) vote of a majority
(as defined in the 0000 Xxx) of the Portfolio's outstanding voting securities,
provided that in either event its continuance also is approved by a majority of
the Company's Board members 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. As to each Portfolio, this
Agreement is terminable without penalty, on 60 days' notice, by the Company's
Board or by vote of holders of a majority of the Portfolio's shares or, upon not
less than 90 days' notice, by Service Company.
7. Assignment.
This Agreement shall not be assignable by either party without the
written consent of the other party. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
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8. Amendments.
No provision of this Agreement may be changed, waived, discharged or
terminated, except by an instrument in writing signed by the parties hereto.
9. Certain Records.
The Service Company 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 Service Company shall be the property of
the Company and will be made available to or surrendered promptly to the Company
upon its request.
In case of any request or demand for the inspection of such records by
another party, the Service Company shall notify the Company and follow the
Company's instructions as to permitting or refusing such inspection; provided
that the Service Company may exhibit such records to any person in any case
where it is advised by counsel to the Company that the Company may be held
liable for failure of the Service Company to do so, or the Service Company could
be held in contempt for failure to do so.
10. 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 Commission.
11. 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
address set forth above, or at such other address as such party may from time to
time specify in writing to the other party.
12. Governing Law and Matters Relating to the Company as a Massachusetts
Business Trust.
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. It is expressly agreed that the obligations of the Company hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Company personally, but shall bind only the trust
property of the Company. The execution and delivery of this Agreement have been
authorized by the Trustees, and this Agreement has been signed and delivered by
an authorized officer of the Company, acting as such, and neither such
authorization by the Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on them personally, but shall bind only the trust property of the
Company as provided in the Company's Declaration of Trust.
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13. Counterparts.
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.
14. Confidentiality/ Privacy.
The Service Company agrees on behalf of itself and its employees to
treat confidentially and as the proprietary information of the Company, all
records and other information relative to the Company 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.
The Service Company acknowledges that nonpublic personal financial
information relating to consumers or customers of the Company provided by, or at
the direction of the Company to the Service Company, or collected or retained by
the Service Company to perform the Services shall be considered confidential
information. Service Company shall not give, sell or in any way transfer such
confidential information to any person or entity, except at the direction of the
Company or as required or permitted by law. The Service Company shall have in
place and maintain physical, electronic and procedural safeguards reasonably
designed to protect the security, confidentiality and integrity of, and to
prevent unauthorized access to or use of records and information relating to
consumers or customers of the Company. The Service Company acknowledges and
agrees to comply with the Company's statement of its privacy policies and
practices as required by the Commission's Regulation S-P.
15. Force Majeure.
Neither party to this Agreement will be responsible or liable for its
failure or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its control,
including, without limitation: any interruption, loss or malfunction of any
utility, any transportation service, the Internet, the World Wide Web, or any
other public technology infrastructure; inability to obtain transportation or a
delay in mails; governmental or securities exchange action, statute, ordinance,
rulings, regulations or direction; war, terrorism, strike, riot, emergency,
civil disturbance, vandalism, explosions, freezes, floods, fires, tornadoes,
hurricanes, acts of God or public enemy, revolutions, or insurrection.
16. Representations and Warranties of the Company.
The Company represents and warrants to the Service Company that:
(a) The Company is a trust duly incorporated and validly existing under the
laws of its state of organization, and has full capacity and authority to enter
into this agreement and to carry out its obligations hereunder;
(b) It has all necessary authorizations, licenses and permits to carry out
its business as currently conducted;
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(c) It is in compliance in all material respects with all laws and
regulations applicable to its business and operations; and
(d) This Agreement has been duly authorized by the Company and, when
executed and delivered by the Company, will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the right and remedies of
creditors and secured parties.
17. Representations and Warranties of the Service Company.
The Service Company represents and warrants to the Company that:
(a) It is a limited liability company duly organized and validly existing
under the laws of the state of its organization, and has full capacity and
authority to enter into this agreement and to carry out its obligations
hereunder;
(b) It has all necessary authorizations, licenses and permits to carry out
its business as currently conducted;
(c) It is, and shall continue to be, in compliance in all material respects
with all provisions of law applicable to it in connection with its services
hereunder;
(d) The various procedures and systems which it has implemented with regard
to safekeeping from loss or damage attributable to fire, theft or any other
cause of the blank checks, records, and other data and its equipment,
facilities, and other property used in the performance of its obligations
hereunder are reasonable and adequate and that it will make such changes therein
from time to time as are reasonably required for the secure performance of its
obligations hereunder; and
(e) This Agreement has been duly authorized by it and, when executed and
delivered by it, will constitute a legal, valid and binding obligation of it,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the right and remedies of creditors and secured parties.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL REPRESENTATIONS
AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY,
SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
(IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) CONCERNING THE
SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO THE SERVICES PROVIDED UNDER THIS
AGREEMENT BY THE SERVICE COMPANY ARE COMPLETELY DISCLAIMED.
18. Insurance.
The Service Company shall maintain a fidelity bond covering larceny
and embezzlement and an insurance policy with respect to directors and officers
errors and omissions
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coverage, in amounts that are appropriate in light of its duties and
responsibilities hereunder. Upon the request of the Company, the Service Company
shall provide evidence that coverage is in place. The Service Company shall
notify the Company should its insurance coverage with respect to professional
liability or errors and omissions coverage be reduced or canceled. Such
notification shall include the date of cancellation or reduction and the reasons
therefore. The Service Company shall notify the Company promptly of any material
claims against it with respect to services performed under this Agreement,
whether or not they may be covered by insurance, and shall notify the Company
promptly should the total outstanding claims made by the Service Company under
its insurance coverage materially impair, or threaten to materially impair, the
adequacy of its coverage.
19. Compliance with Rule 38a-1.
The Service Company shall maintain policies and procedures that are
reasonably designed to prevent violations of the federal securities laws, and
shall employ personnel to administer the policies and procedures who have the
same requisite level of skill and competence required to effectively discharge
its responsibilities. The Service Company shall also provide the Company's chief
compliance officer with periodic reports regarding its compliance with the
federal securities laws, and shall promptly provide special report in the event
of any material violation of the federal securities laws.
20. Miscellaneous.
(a) Paragraph headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the parties hereto
as to the subject matter covered by this Agreement, and supercedes all prior
negotiations, understandings and agreements bearing upon the subject matter
covered herein.
(c) 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
THE LEGACY FUNDS GROUP
By:
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Title:
---------------------------------
FIRST FINANCIAL CAPITAL ADVISORS LLC
By:
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SCHEDULE A
SERVICES
(a) Review contractual Company expenses, yields, total return, expense ratios,
portfolio turnover rate and portfolio average dollar-weighted maturity;
(b) (i) Review the annual update to the Company's registration statement on Form
N-lA, (ii) review supplements to the Company's registration statement, (iii)
review Notices of Annual or Special Meetings of shareholders and proxy materials
relating thereto, (iv) assist with the solicitation and tabulation of proxies in
connection with meetings of shareholders and (v) assist with the printing and
distribution of prospectuses, supplements and proxy materials, and (vi) produce
and distribute materials for board meetings pertaining to the responsibilities
of the Service Company or the Company's investment adviser, as requested;
(c) Review 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 Company's shares with state securities authorities;
(d) Develop and prepare communications to shareholders, including certain
components of the annual report to shareholders, assist with the mailing of
prospectuses, notices, proxy statements, proxies and other reports to Company
shareholders, and monitor the proxy solicitation process for all shareholder
meetings, including the tabulation of shareholder votes;
(e) Review contracts on behalf of the Company with, among others, the Company's
investment adviser, distributor, custodian, transfer agent and fund accountant;
(f) Monitor the Company's transfer agent with respect to the payment of
dividends and other distributions to shareholders;
(g) Review performance data of the Portfolios for dissemination to information
services companies covering the investment company industry and identify those
information services companies to be in receipt of such data;
(h) Review the preparation and filing of the Company's tax returns;
(i) Examine and review the operations and performance of the various
organizations providing services to the Company or any Portfolio of the Company,
including, without limitation, the Company's investment adviser, distributor,
custodian, fund accountant, transfer agent, outside legal counsel and
independent public accountants, and at the request of the Trustees, 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 Company's semi-annual
and annual reports to shareholders;
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(k) Assist with the design, development, and operation of the Portfolios,
including new classes, investment objectives, policies and structure;
(l) Advise the Company and its Trustees on industry developments and other
matters concerning the operation of the Company and its Portfolios;
(m) Review the status of the Company and its Portfolios as registered investment
companies under the Internal Revenue Code of 1986, as amended; and
(n) Furnish advice and recommendations with respect to other aspects of the
business and affairs of the Portfolios as the Company shall determine desirable.
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