AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT ("Agreement")
originally entered into as of February 3, 1999, amended as of August 12, 1999;
and further amended and restated as of this 11th day of November, 1999, between
E*TRADE Funds (a Delaware business trust, hereinafter referred to as the
"Company"), on behalf of the series listed on Exhibit A hereto, as amended from
time to time (each a "Fund" and collectively, the "Funds"), and E*TRADE Asset
Management, Inc. (a Delaware corporation, hereinafter referred to as the
"Administrator").
WHEREAS, the Company is a registered investment company under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, the Administrator is able to act as administrator of the Fund;
WHEREAS, the Company wishes to retain the Administrator to render
administrative services with respect to each of the Funds listed on Exhibit A
hereto (as the same may be amended by the mutual written consent of the parties
from time to time), and the Administrator has agreed to act as administrator for
each of the Funds.
NOW, THEREFORE, for good and valuable consideration, the receipt whereof
is hereby acknowledged, and the mutual performance of undertakings herein, it is
agreed by and between the parties hereto as follows:
1. Services to be Provided by the Administrator. The Administrator, as
administrator for the Funds, will, at its own expense:
(a) Furnish to the Funds the services of its employees and agents in the
management and conduct of the corporate business and affairs of the Funds;
(b) If requested, provide the services of its officers as administrative
executives of the Funds and the services of any trustees of the Funds who
are "interested persons" of the Administrator or its affiliates, as that
term is defined in the Act, subject in each case to their individual
consent to serve and to applicable legal limitations;
(c) Provide office space, secretarial and clerical services and wire and
telephone services (not including toll charges, which will be reimbursed
by the Funds under Section 2 below), and monitor and review the Funds'
contracted services and expenditures;
(d) Prepare or supervise the preparation of periodic reports to the Funds'
shareholders and prepare and file, with such advice of counsel as
reasonably deemed necessary by the Administrator, such documents and other
papers as may be required to comply with the rules, regulations and
requirements of the Securities and Exchange Commission ("SEC") and other
governmental agencies, whether state or federal, except that the Funds
shall bear the expenses provided for in Section 2 hereof (special
services, if any, rendered to individual shareholders or groups of
shareholders shall not be included in the services to be rendered by the
Administrator pursuant to this paragraph, but the Administrator shall be
reimbursed for the actual cost of such services pursuant to the provisions
of Section 2 below);
(e) Coordinate the services provided to the Funds by investment advisors,
transfer and dividend disbursing agents, custodians, sub-administrators,
shareholder servicing agent, independent auditors and legal counsel; and
(f) Report to the Trustees of the Company concerning its activities
pursuant to this Agreement at regular meetings of the Trustees and at such
other times as the Trustees may request.
2. Expenses.
(a) Expenses of the Administrator. The Administrator shall bear expenses
incurred by it which are necessary for the performance of its duties and
activities specified in this Agreement, except such expenses as are assumed by
the Funds under this Agreement. The Administrator (or its affiliates, as
applicable) will also pay the compensation and expenses of all officers and
executive employees of the Company who are directors, officers or employees of
the Administrator or of its affiliates and will make available or cause to be
made available, without expense to the Funds, the services of such of the
directors, officers and employees of the Administrator or its affiliates as may
fully be elected officers or trustees of the Company, subject to their
individual consent to serve and to any limitations imposed by law.
(b) Expenses of Each Fund. The Company and each Fund shall bear the
expense of fees of its investment advisors, legal fees related to litigation,
the Administrator's compensation under this Agreement, and any expenses of any
"master" fund in which a Fund invests.
(c) Expenses of the Funds Subject to Cap. Except as described below, the
Funds shall bear all of their other expenses incurred in their operation and not
specifically assumed by the Administrator. The expenses assumed by the Funds
shall include, without limitation: organizational expenses of the Funds; fees
and expenses incurred in connection with the Funds' memberships in investment
company organizations; interest expenses, taxes and governmental fees;
distribution fees; brokerage commissions and other expenses incurred in
acquiring or disposing of the Funds' portfolio securities; expenses of
registering and qualifying the Funds' shares for sale with the SEC and with
various state securities authorities; the expenses of qualifying the Funds to do
business in jurisdictions where such qualification is required; the cost of
preparing share certificates or any other expenses, including clerical and
administrative expenses, related to the issue, redemption and repurchase of Fund
shares; insurance premiums; expenses of obtaining quotations on the Funds'
portfolio securities and pricing of the Funds' shares; expenses of shareholders'
meetings; expenses of preparing and distributing reports, proxies and
prospectuses to existing shareholders, transfer agency, dividend disbursing,
custody, auditing and legal fees (other than litigation), provided, however,
that the Administrator shall pay such expenses or reimburse each Fund for such
expenses to the extent such expenses allocated to such Fund equal or exceed the
maximum amount per Fund as specified in Exhibit B hereto.
(d) Expenses of the Funds Subject to Waiver. The Funds shall bear all
expenses and fees of the Company's Trustees who are not "interested persons" of
the Company, as that term is defined in the 1940 Act, and any independent legal
counsel retained to advise such Trustees. To the extent that such expenses and
fees of such Trustees and such independent legal counsel allocated to a Fund
equal or exceed 0.005% of such Fund's average daily net assets, the
Administrator's fee payable by such Fund under Section 3 of this Agreement will
be reduced by an amount equal to the amount by which such expenses exceed
0.0049% of such Fund's average daily net assets (but not below zero).
3. Compensation. For the services provided and the expenses assumed by the
Administrator, each of the Funds shall pay to the Administrator a fee, computed
daily and to be paid on the last business day of each month equal on an annual
basis to the amount of the average daily net assets of such Fund as listed
opposite that Fund's name in Exhibit A, attached hereto.
The term "average daily net assets of the Fund" is defined as the average
of the values placed on the net assets of the Fund as of the close of the New
York Stock Exchange, on each day on which the net asset value of the portfolio
of the Fund is determined consistent with the provisions of Rule 22c-1 under the
1940 Act or, if the Fund lawfully determines the value of the net assets of its
portfolio as of some other time on each business day, as of such time. The value
of the net assets of the Fund shall be determined pursuant to the applicable
provisions of the Fund's then current registration statement under the 1940 Act
and the Securities Act of 1933 ("Registration Statement"). If, pursuant to such
provisions, the determination of net asset value is suspended for any particular
business day, then for the purposes of this Section 3, the value of the net
assets of the Fund shall be deemed to be the value of such net assets as last
determined in accordance with the Registration Statement. If the determination
of the net asset value of the Fund has been suspended pursuant to the
Registration Statement for a period including a month for which payment pursuant
to this Agreement is due, the Administrator's compensation payable at the end of
such month shall be computed on the basis of the value of the net assets of the
Fund as last determined (whether during or prior to such month).
4. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Administrator hereby agrees that all records which it
maintains or causes to be maintained for the Funds are the property of the Funds
and further agrees to surrender promptly to the Funds any of such records upon
the Company's request. The Administrator further agrees to preserve or cause to
be preserved 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.
5. Sub-contracts. The Administrator may, from time to time, at its own
expense, employ or associate with itself such person or persons as it believes
necessary to assist it in carrying out its obligations under this Agreement.
6. Compliance. The Administrator shall observe and comply with the
Certificate of Trust and organizing documents of the Company, the applicable
provisions of the Registration Statement, federal securities laws, all lawful
resolutions of the Company's Trustees and other lawful orders and directions
given to it from time to time by the Trustees. All activities engaged in by the
Administrator hereunder shall be at all times subject to the control of and
review by the Trustees.
7. Limitations of Liability.
(a) Except as may otherwise be required by the 1940 Act or the rules
thereunder or other applicable law, neither the Administrator nor its
shareholders, officers, directors, employees or agents shall be subject to any
liability for, or any damages, expenses or losses incurred in connection with,
any act or omission connected with or arising out of any services rendered under
this Agreement, except by reason of willful misfeasance, bad faith or negligence
in the performance of the Administrator's duties or by reason of reckless
disregard of the Administrator's obligations and duties under this Agreement.
Notwithstanding the foregoing, the Administrator shall not be liable to the
Company or the Funds for the acts and omissions of any party engaged by the
Administrator to assist it in carrying out its obligations under this Agreement
except to the extent that such party is liable to the Administrator for such
acts and omissions pursuant to the contract under which the Administrator shall
have retained such party. Any person, even though also employed by the
Administrator, who may be or become an employee of and paid by the Company shall
be deemed, when acting within the scope of his employment by the Company, to be
acting in such employment solely for the Company and not as the employee or
agent of the Administrator.
(b) The Administrator shall look only to the assets of a particular
Fund for the performance of the Agreement by the Company with respect to such
Fund, and neither the Trustees nor any of the Company's shareholders, officers,
employees or agents, whether past, present or future, shall be personally liable
therefor.
8. Non-Exclusivity. Nothing in this Agreement will in any way limit or
restrict the Administrator or any of its officers, directors, employees, agents
or affiliates from providing administrative services or other services to any
other person or entity pursuant to any contract or otherwise; and no such
performance of administrative or other services or taking of any such action or
doing of any such thing, shall be in any manner restricted or otherwise affected
by any aspect of any relationship of the Administrator to the Company or the
Funds or be deemed to violate or give rise to any duty or obligation of the
Administrator to the Company, except as otherwise imposed by law.
9. Duration and Termination. This Agreement shall continue in effect with
respect to each Fund as indicated on Exhibit C hereto, if not sooner terminated.
This Agreement shall continue in effect with respect to each Fund for successive
12-month periods, unless terminated, provided that each such continuance is
specifically approved at least annually by (a) the vote of a majority of the
entire Board of Trustees of the Funds, or by the vote of a majority of the
outstanding voting securities of the Funds (as defined in the 1940 Act), and (b)
the vote of a majority of those Trustees who are not parties to this Agreement
or interested persons (as such term is defined in the 0000 Xxx) at a meeting
called for the purpose of voting on such approval. This Agreement may be
terminated at any time without payment of any penalty, by the Company upon the
vote of a majority of the Company's Board of Trustees or by a majority of the
outstanding voting securities of the Fund, or by the Administrator, in each
case, on sixty (60) days' written notice to the other party. This Agreement
shall automatically terminate in the event of its assignment (as such term is
defined in the 1940 Act).
10. Reliance on Information. In discharging the functions specified in
this Agreement, the Administrator may, without inquiry, rely and act upon all
notices, information or other communications reasonably believed to have been
supplied to it by any one or more of the Trustees or agents of the Company.
11. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought.
12. Miscellaneous.
a. This Agreement shall be construed in accordance with the laws of the
State of Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, as amended, or rules or orders of the SEC
thereunder.
b. The captions of this Agreement are included for convenience only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect.
c. If any provisions 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
d. The Administrator shall for all purposes herein be deemed to be an
independent contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Company or the Funds in any
way or otherwise be deemed an agent of the Company or the Funds.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
E*TRADE FUNDS (on behalf of
the series listed on Exhibit
A)
By:
---------------------------
Name: Xxxxx Xxxxxx
Title: President
E*TRADE ASSET MANAGEMENT, INC.
By:
---------------------------
Name: Xxxxxx X. Xxx Xxxxxxxx
Title: Vice President,
Operations
EXHIBIT A
to the
AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
Exhibit A to this Amended and Restated Administrative Services Agreement
dated as of November 11, 1999, between E*TRADE Funds and E*TRADE Asset
Management, Inc.
Name of Fund Fee
E*TRADE S&P 500 Index Fund 0.25%
E*TRADE Extended Market Index Fund 0.26%
E*TRADE Bond Index Fund 0.25%
E*TRADE Technology Index Fund 0.60%
E*TRADE International Index Fund 0.28%
E*TRADE E-Commerce Index Fund 0.70%
E*TRADE FUNDS E*TRADE ASSET MANAGEMENT, INC.
By: By:
-------------------------------- --------------------------------
Name: Name
Title: Title:
EXHIBIT B
to the
AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
Exhibit B to this Amended and Restated Administrative Services Agreement
dated as of November 11, 1999, between E*TRADE Funds and E*TRADE Asset
Management, Inc.
The Administrator is responsible for expenses listed in Section 2(c) of
this Agreement otherwise payable by each Fund to the extent those expenses, when
added to the expenses of such Fund in Section 2(d) of this Agreement, equal or
exceed 0.005% of such Fund's average daily net assets.
Name of Fund
E*TRADE S&P 500 Index Fund
E*TRADE Extended Market Index Fund
E*TRADE Bond Index Fund
E*TRADE Technology Index Fund
E*TRADE International Index Fund
E*TRADE E-Commerce Index Fund
E*TRADE FUNDS E*TRADE ASSET MANAGEMENT, INC.
By: By:
-------------------------------- --------------------------------
Name: Name
Title: Title:
EXHIBIT C
to the
AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
Exhibit C to this Amended and Restated Administrative Services Agreement
dated as of November 11, 1999, between E*TRADE Funds and E*TRADE Asset
Management, Inc.
Fund End of Initial Term
E*TRADE S&P 500 Index Fund February 3, 2001
E*TRADE Extended Market Index Fund August 12, 2001
E*TRADE Bond Index Fund August 12, 2001
E*TRADE Technology Index Fund August 12, 2001
E*TRADE International Index Fund October 19, 2001
E*TRADE E-Commerce Index Fund October 19, 2001
E*TRADE FUNDS E*TRADE ASSET MANAGEMENT, INC.
By: By:
-------------------------------- --------------------------------
Name: Name
Title: Title:
