EXHIBIT 23(h)(2)
FORM OF
MUTUAL FUNDS SERVICE AGREEMENT
- FUND ADMINISTRATION SERVICES
- FUND ACCOUNTING SERVICES
MLIG VARIABLE INSURANCE TRUST
_______________________, 2002
MUTUAL FUNDS SERVICE AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
------- ----
1. Appointment............................................ 1
2. Representations and Warranties......................... 1
3. Delivery of Documents.................................. 3
4. Services Provided...................................... 4
5. Fees and Expenses...................................... 5
6. Limitation of Liability and Indemnification............ 7
7. Term and Termination................................... 10
8. Notices................................................ 10
9. Waiver................................................. 11
10. Force Majeure.......................................... 11
11. Amendments............................................. 11
12. Severability........................................... 11
13. Governing Law.......................................... 11
14. Confidentiality........................................ 12
15. No Agency Relationship................................. 12
16. Changes in Accounting Procedures....................... 12
Signatures..................................................... 12
MUTUAL FUNDS SERVICE AGREEMENT
TABLE OF CONTENTS (CONTINUED)
PAGE
----
Schedule A -- Fees and Expenses......................................... A-1
Schedule B -- General Description of Fund Administration and Compliance
Services............................................... B-1
Schedule C -- Description of Fund Accounting Services................... C-1
MUTUAL FUNDS SERVICE AGREEMENT
AGREEMENT made as of __________________, 2002 by and between
MLIG Variable Insurance Trust ("Fund"), a Delaware business trust, and X.X.
Xxxxxx Investor Services Co. ("X.X. Xxxxxx"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to contract with X.X. Xxxxxx to
provide certain administrative, accounting and compliance services with
respect to the Fund, including its constituent portfolios (the "Portfolios"
and each a "Portfolio") and any classes of shares thereof.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. APPOINTMENT. The Fund hereby appoints X.X. Xxxxxx to provide
administrative, accounting and compliance services for the Fund, as described
hereinafter, subject to the supervision of the Board of Trustees of the Fund
(the "Board") and the Fund's investment manager, Xxxxxx Advisors, LLC
("Adviser"), for the period and on the terms set forth in this Agreement. X.X.
Xxxxxx accepts such appointment and agrees to furnish the services herein set
forth in return for the compensation as provided in Section 5 of and Schedule
A to this Agreement.
2. REPRESENTATIONS AND WARRANTIES.
(a) X.X. Xxxxxx represents and warrants to the Fund
that:
(i) X.X. Xxxxxx is a corporation, duly
organized and existing under the laws of the State of Delaware;
(ii) X.X. Xxxxxx is duly qualified to carry on
its business in the Commonwealth of Massachusetts;
(iii) X.X. Xxxxxx is empowered under applicable
laws and by its Articles of Incorporation and By-Laws to enter into and
perform this Agreement;
1
(iv) all requisite corporate proceedings have
been taken to authorize X.X. Xxxxxx to enter into and perform this Agreement;
(v) X.X. Xxxxxx has, and will continue to have,
access to the facilities, personnel and equipment required to fully perform its
duties and obligations hereunder;
(vi) no legal or administrative proceedings
have been instituted or threatened which would impair X.X. Xxxxxx'x ability to
perform its duties and obligations under this Agreement; and
(vii) X.X. Xxxxxx'x entrance into this Agreement
shall not cause a material breach or be in material conflict with any other
agreement or obligation of X.X. Xxxxxx or any law or regulation applicable to
X.X. Xxxxxx;
(b) The Fund represents and warrants to X.X. Xxxxxx
that:
(i) the Fund is a business trust, duly
organized and existing and in good standing under the laws of Delaware;
(ii) the Fund is empowered under applicable laws
and by its Declaration of Trust ("Charter Document") and By-Laws to enter into
and perform this Agreement;
(iii) all requisite proceedings have been taken
to authorize the Fund to enter into and perform this Agreement and all such
proceedings remain in full force and effect;
(iv) the Fund is an investment company properly
registered under the 1940 Act;
(v) a registration statement under the
Securities Act of 1933, as amended ("1933 Act") and the 1940 Act on Form N-1A
has been filed and will be effective and will remain effective during the term
of this Agreement, and any filings under the laws of the states necessary to
maintain the Fund's good standing in its jurisdiction of organization and
necessary to qualify the Fund's shares for sale have been made and will
continue to be made on a timely basis during the term of this Agreement;
(vi) no legal or administrative proceedings
have been instituted or threatened which would impair the Fund's ability to
perform its duties and obligations under this Agreement;
(vii) the Fund's registration statements comply
in all material respects with the 1933 Act and the 1940 Act (including the
rules and regulations thereunder) and none of the Fund's prospectuses and/or
statements of additional information contain any untrue statement
2
of material fact or omit to state a material fact necessary to make the
statements therein not misleading; and
(viii) the Fund's entrance into this Agreement
shall not cause a material breach or be in material conflict with any other
agreement or obligation of the Fund or any law or regulation applicable to it.
3. DELIVERY OF DOCUMENTS. The Fund will promptly furnish to
X.X. Xxxxxx such copies, properly certified or authenticated, of contracts,
documents and other related information that X.X. Xxxxxx may request or
requires to properly discharge its duties. Such documents may include but are
not limited to the following:
(a) Resolutions of the Board authorizing the
appointment of X.X. Xxxxxx to provide certain services to the Fund and
approving this Agreement;
(b) The Fund's Charter Document;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form
N-8A under the 1940 Act as filed with the Securities and Exchange Commission
("SEC");
(e) The Fund's registration statement including
exhibits, as amended, on Form N-1A (the "Registration Statement") under the
1933 Act and the 1940 Act, as filed with the SEC;
(f) Copies of the Investment Management Agreement
between the Fund and its Adviser (the "Management Agreement");
(g) Copies of each Investment Sub-Advisory Agreement
between the Adviser and each of the sub-advisers (collectively the
"Sub-Advisers" and each a "Sub-Adviser");
(h) Opinions of counsel and auditors' reports;
(i) The Fund's prospectus(es) and statement(s) of
additional information relating to all funds, series, portfolios and classes,
as applicable, and all amendments and supplements thereto (such Prospectus(es)
and Statement(s) of Additional Information and supplements thereto, as
presently in effect and as from time to time hereafter amended and
supplemented, herein called the "Prospectuses"); and
(i) Such other agreements as the Fund may enter into
from time to time including securities lending agreements, futures and
commodities account agreements, brokerage agreements, and options agreements.
4. SERVICES PROVIDED.
3
(a) X.X. Xxxxxx will provide the following services
subject to the control, direction and supervision of the Board and the Adviser
and in compliance with the objectives, policies and limitations set forth in
the Fund's Registration Statement, Charter Document and By-Laws; applicable
U.S. laws and regulations; and all resolutions and policies implemented by the
Board, of which X.X. Xxxxxx has been notified by the Fund:
(i) Fund Administration and Compliance
Services, and
(ii) Fund Accounting Services
A detailed description of each of the above services is contained in Schedules B
and C, respectively, to this Agreement.
(b) X.X. Xxxxxx will also:
(i) provide, without additional cost to the
Fund except for reasonable and documented out-of-pocket expenses, office
facilities with respect to the provision of the services contemplated herein
(which may be in the offices of X.X. Xxxxxx or a corporate affiliate of X.X.
Xxxxxx);
(ii) provide, without additional remuneration
from or other cost to the Fund except for reasonable and documented
out-of-pocket expenses, the services of individuals to serve as officers of
the Fund as may be directed by the Board from time to time and elected by the
Board for such purpose;
(iii) provide or otherwise obtain, without
additional cost to the Fund except for reasonable and documented out-of-pocket
expenses, personnel sufficient for provision of the services contemplated
herein;
(iv) furnish, without additional cost to the
Fund except for reasonable and documented out-of-pocket expenses, equipment
and other materials, which are necessary or desirable for provision of the
services contemplated herein; and
(v) keep records relating to the services
provided hereunder in such form and manner as X.X. Xxxxxx may deem appropriate
or advisable. To the extent required by Section 31 of the 1940 Act and the
rules thereunder, X.X. Xxxxxx agrees that all such records prepared or
maintained by X.X. Xxxxxx relating to the services provided hereunder are the
property of the Fund and will be preserved for the periods prescribed under
Rule 31a-2 under the 1940 Act, maintained at the Fund's expense, and made
available in accordance with such Section and rules.
5. FEES AND EXPENSES.
4
(a) As compensation for the services rendered to the
Fund pursuant to this Agreement the Fund shall pay X.X. Xxxxxx monthly fees
determined as set forth in Schedule A to this Agreement. Such fees are to be
billed monthly and shall be due and payable upon receipt of the invoice. Upon
any termination of the provision of services under this Agreement before the
end of any month, the fee for the part of the month before such termination
shall be prorated according to the proportion which such part bears to the
full monthly period and shall be payable upon the date of such termination.
(b) For the purpose of determining fees calculated as a
function of the Fund's assets, the value of the Fund's assets and net assets
shall be computed as required by its currently effective Prospectus, generally
accepted accounting principles, and resolutions of the Board.
(c) The Fund may request additional services,
additional processing, or special reports, with such specifications and
requirements documentation as may be reasonably required of X.X. Xxxxxx. In
addition, significant regulatory and legal changes and changes in the Fund's
status may necessitate additional services, processing or reports. In either
instance, if X.X. Xxxxxx elects to provide such services or arrange for their
provision, it shall be entitled to additional fees and expenses at its
customary rates and charges as agreed on in advance by the Fund and X.X.
Xxxxxx. X.X. Xxxxxx will provide such services until it has received prior
approval by the Fund.
(d) X.X. Xxxxxx will bear its own expenses in
connection with the performance of the services under this Agreement except as
provided herein or as agreed to by the parties. The Fund agrees to promptly
reimburse X.X. Xxxxxx for the cost of any additional equipment or supplies
ordered for the Fund by X.X. Xxxxxx provided that (i) such equipment or
supplies have been specifically requested by the Fund, (ii) approved in
advance by the Fund, and (iii) the cost for such equipment or supplies is at a
rate that has been approved in advance by the Fund. Other expenses to be
incurred in the operation of the Fund and to be borne by the Fund, include,
but are not limited to: taxes; interest; brokerage fees and commissions;
salaries and fees of officers and trustees who are not officers, directors,
shareholders or employees of X.X. Xxxxxx, or the Fund's Adviser or
distributor; SEC and state Blue Sky registration and/or qualification fees,
levies, fines and other charges; XXXXX filing fees, processing services and
related fees; postage and mailing costs; costs of share certificates; advisory
and administration fees; charges and expenses of pricing and data services,
independent public accountants and custodians; insurance premiums including
fidelity bond premiums; legal expenses; consulting fees; customary bank
charges and fees; costs
5
of maintenance of trust existence; expenses of typesetting and printing of
Prospectuses for regulatory purposes and for distribution to current
shareholders of the Fund (the Fund's distributor to bear the expense of all
other printing, production, and distribution of Prospectuses and marketing
materials unless such costs would be paid for under a plan adopted in
accordance with Rule 12b-1 under the 1940 Act ("Rule 12b-1 Plan")); expenses
of printing and production costs of shareholders' reports and proxy statements
and materials; expenses of proxy solicitation, proxy tabulation and Fund
shareholder meetings; costs and expenses of Fund stationery and forms; costs
and expenses of special telephone and data lines and devices; costs associated
with Fund, shareholder, and Board meetings; trade association dues and
expenses; reprocessing costs to X.X. Xxxxxx caused by third party errors;
copying charges; overtime work by X.X. Xxxxxx when necessitated by unusual
client requests and pre-approved by the Fund; microfilm and storage costs;
audio response unit costs; corporate action services; agreed upon service
termination and conversion costs; any expenses necessitated by regulatory or
legal changes; and any extraordinary expenses and other customary Fund
expenses. In addition, X.X. Xxxxxx may utilize one or more independent pricing
services to obtain securities prices and to act as backup to the primary
pricing services designated by the Fund, in connection with determining the
net asset values of the Fund. The Fund will reimburse X.X. Xxxxxx for the
Fund's share of the cost of such services based upon the actual usage, or a
pro-rata estimate of the use, of the services for the benefit of the Fund.
(e) All fees, out-of-pocket expenses, or additional
charges of X.X. Xxxxxx shall be billed on a monthly basis and shall be due and
payable upon receipt of the invoice.
(f) X.X. Xxxxxx will render, after the close of each
month in which services have been furnished, a statement reflecting all of the
charges for such month. Charges remaining unpaid after sixty (60) days shall
bear interest in finance charges equivalent to, in the aggregate, the Prime
Rate (as determined by X.X. Xxxxxx) plus two percent per year and all costs
and expenses of effecting collection of any such sums, including reasonable
attorney's fees, shall be paid by the Fund to X.X. Xxxxxx.
(g) In the event that the Fund is more than ninety (90)
days delinquent in its payments of monthly xxxxxxxx in connection with this
Agreement (with the exception of specific amounts which may be contested in
good faith by the Fund), this Agreement may be terminated upon thirty (30)
days' written notice to the Fund by X.X. Xxxxxx. The Fund must notify J.P.
6
Xxxxxx in writing of any contested amounts within sixty (60) days of receipt of
a billing for such amounts. Disputed amounts are not due and payable while they
are being investigated.
6. LIMITATION OF LIABILITY AND INDEMNIFICATION.
(a) X.X. Xxxxxx shall not be liable for any error of
judgment or mistake of law or for any loss or expense suffered by the Fund or
third parties, in connection with the matters to which this Agreement relates,
except for a loss or expense caused by, resulting from or attributable to X.X.
Xxxxxx'x willful misfeasance, bad faith or negligence, or from X.X. Xxxxxx'x
reckless disregard of its obligations and duties under this Agreement or
refusal or failure to comply with the material terms of this Agreement or its
breach of any material representation or warranty under this Agreement. In no
event shall X.X. Xxxxxx be liable for any consequential, punitive, special or
indirect damages, penalties or expenses of any kind whatsoever (including but
not limited to lost profits), even if X.X. Xxxxxx has been advised of the
likelihood of such loss or damage and regardless of the form or action. This
provision shall survive termination of this Agreement.
(b) Except to the extent that X.X. Xxxxxx may be held
liable pursuant to Section 6(a) above, X.X. Xxxxxx shall not be responsible
for, and the Fund shall indemnify and hold X.X. Xxxxxx and its directors,
officers, agents and employees (collectively the "Indemnitees") harmless from
and against any and all claims, liabilities, losses, damages (excluding
consequential, punitive, special or indirect damages, penalties and expenses),
costs, reasonable attorneys' fees and payments sustained or incurred by, or
asserted against, the Indemnitees or any of them in the performance of
its/their duties hereunder, including but not limited to those arising out of
or attributable to:
(i) any and all actions of the Indemnitees
required to be taken pursuant to this Agreement;
(ii) the reliance on or use by the Indemnitees
of information, records, or documents which are received by the Indemnitees
and furnished to it or them by or on behalf of the Fund, and which have been
prepared or maintained by the Fund or any third party on behalf of the Fund;
(iii) the Fund's refusal or failure to
materially comply with the terms of this Agreement or the Fund's lack of good
faith, or its actions, or lack thereof, involving negligence or willful
misfeasance;
7
(iv) the material breach of any representation
or warranty of the Fund hereunder;
(v) following any instructions or other
directions reasonably believed to be requests of the Fund or otherwise duly
authorized by Authorized Personnel, as specified in Appendix 2 hereof, and
upon which X.X. Xxxxxx is authorized to rely pursuant to the terms of this
Agreement;
(vi) any delays, inaccuracies, errors in or
omissions from information or data provided to X.X. Xxxxxx by the Fund, its
Adviser and/or Sub-Advisers, and providers of other services such as data
services, corporate action services, pricing services or securities brokerage;
(vii) the offer or sale of shares by the Fund in
material violation of any requirement under the federal securities laws or
regulations or the securities laws or regulations of any state, or in
violation of any stop order or other determination or ruling by any federal
agency or any state agency with respect to the offer or sale of such shares in
such state (1) resulting from activities, actions, or omissions by the Fund or
its other service providers and agents, or (2) existing or arising out of
activities, actions or omissions by or on behalf of the Fund prior to the
effective date of this Agreement;
(viii) any failure of the Fund's registration
statement to comply with the 1933 Act and the 1940 Act (including the rules
and regulations thereunder) and any other applicable laws, or any untrue
statement of a material fact or omission of a material fact necessary to make
any statement therein not misleading in a Fund's prospectus;
(ix) the actions taken by the Fund, its Adviser
and/or Sub-Advisers, and its distributor in compliance with applicable
securities, tax, commodities and other laws, rules and regulations, or the
failure to so comply; and
(x) all actions, inactions, omissions, or
errors caused by third parties to whom the Fund or X.X. Xxxxxx has assigned
any rights and/or delegated any duties under this Agreement at the request of
or as required by the Fund, its Adviser, distributor, or sponsor.
(c) In addition to and not in limitation of paragraph
(b) immediately above, the Fund also agrees to indemnify and hold the
Indemnitees and each of them harmless from and against any and all Losses that
may be imposed on, incurred by, or asserted against, the Indemnitees or any of
them in connection with or arising out of X.X. Xxxxxx'x performance under this
Agreement, provided the Indemnitees have not acted with negligence, bad faith
or reckless
8
disregard of its or their duties or engaged in willful misconduct in
discharging its or their obligations and duties under this Agreement.
(d) In performing its services hereunder, X.X. Xxxxxx
shall be entitled to rely on any oral or written instructions, notices or
other communications, including electronic transmissions, from the Fund and
its custodians, officers, trustees, Advisers and Sub-Advisers, investors,
agents and other service providers which X.X. Xxxxxx reasonably believes to be
genuine, valid and authorized, provided such notices, instructions and
communications are provided solely by the Authorized Persons specified in
Appendix 2 hereof. X.X. Xxxxxx shall also be entitled to consult with and rely
on the advice and opinions of outside legal counsel and public accountants
retained by the Fund, as necessary or appropriate.
(e) In order that the indemnification provisions
contained in this section shall apply, it is understood that if in any case
the Fund may be asked to indemnify or hold the Indemnitees harmless, the Fund
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Indemnitees will
use all reasonable care to notify the Fund promptly concerning any situation
which presents or appears likely to present the probability of a claim for
indemnification. The Fund shall have the option to defend the Indemnitees
against any claim which may be the subject of this indemnification. In the
event that the Fund so elects and X.X. Xxxxxx consents, the Fund shall take
over complete defense of the claim, and the Indemnitees shall in such
situation initiate no further legal or other expenses for which it shall seek
indemnification under this section. The Indemnitees shall in no case confess
any claim or make any compromise in any case in which the Fund will be asked
to indemnify the Indemnitees except with the Fund's prior written consent.
7. TERM AND TERMINATION. This Agreement shall become effective
as of the date hereof and will continue in effect for a period of two years.
Subsequent to the initial two year term, the Agreement may continue from year
to year thereafter, if approved by the Fund's Board of Trustees. This
Agreement may be terminated by either party upon giving 120 days prior written
notice to the other party or such shorter period as is mutually agreed upon by
the parties. In addition, this Agreement may be immediately terminated by
either party ("Terminating Party") if the Terminating Party shall determine,
in its sole judgment, exercised in good faith, that the other party
("Terminated Party") is in material breach of its duties under this Agreement,
have suffered a material adverse change in its business, operations, financial
9
condition, or prospects since the date of this Agreement or is the subject of
material adverse publicity; but no termination shall be effective under this
Section 8 until the Terminated Party has been afforded ten (10) business days
to respond to a statement by the Terminating Party concerning the reason for
notice of termination hereunder. This Agreement also may be amended by mutual
written consent of the parties.
If, in connection with termination of the Agreement, a successor
administrator to any of X.X. Xxxxxx'x duties or responsibilities hereunder is
designated by the Fund by written notice to X.X Xxxxxx, X.X. Xxxxxx will
promptly, upon such termination and at the reasonable and documented expense
of the Fund transfer to such successor administrator all relevant books,
records, correspondence and other data established or maintained by X.X.
Xxxxxx under this Agreement in a form acceptable to the Fund. If such form
differs from the form in which X.X. Xxxxxx has maintained those books,
records, correspondence and other data, the Fund shall pay any documented
expenses associated with transferring those documents in that format, and X.X.
Xxxxxx will cooperate in the transfer of such duties and responsibilities,
including by providing the assistance of its personnel in the establishment of
books, records, correspondence and other data by such successor administrator,
for which the Fund will pay any documented expenses.
8. NOTICES. Any notice required or permitted hereunder shall be
in writing and shall be deemed effective on the date of personal delivery (by
private messenger, courier service or otherwise) or upon confirmed receipt of
telex or facsimile, whichever occurs first, or upon receipt if by mail to the
parties at the following address (or such other address as a party may specify
by notice to the other):
If to the Fund:
Attention:
Fax:
If to X.X. Xxxxxx:
X.X. Xxxxxx Investor Services Co.
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
10
9. WAIVER. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver nor shall it deprive such party of the right thereafter to
insist upon strict adherence to that term or any term of this Agreement. Any
waiver must be in writing signed by the waiving party.
10. FORCE MAJEURE. In the event X.X. Xxxxxx 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
or other causes reasonably beyond its control, X.X. Xxxxxx shall not be liable
for any loss, damage, cost, charge, counsel fee, payment, expense 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.
11. AMENDMENTS. This Agreement may be modified or amended from
time to time by mutual written agreement between the parties. 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.
12. SEVERABILITY. If any provision of this Agreement is invalid
or unenforceable, the balance of the Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance it shall
nevertheless remain applicable to all other persons and circumstances.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK.
14. CONFIDENTIALITY. X.X. Xxxxxx agrees that, except as
otherwise required by law or in connection with any required disclosure to a
banking or other regulatory authority or for purposes of performing its
obligation hereunder, it will keep confidential all records and information in
its possession relating to the Fund or its shareholders and will not disclose
any confidential information except at the request or with the written consent
of the Fund.
15. NO AGENCY RELATIONSHIP. Nothing herein contained shall be
deemed to authorize or empower X.X. Xxxxxx to act as agent for the Fund, or to
conduct business in the name of, or for the account of the Fund, except as
specifically provided in this Agreement.
16. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by
the Board that affects accounting practices and procedures under this
Agreement shall be effective upon written
11
receipt and acceptance by X.X. Xxxxxx, which acceptance shall not be
unreasonably delayed or refused.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the date first written
above.
MLIG VARIABLE INSURANCE TRUST
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
X.X. XXXXXX INVESTOR SERVICES CO.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
12
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE A
FEES AND EXPENSES
FUND ADMINISTRATION, ACCOUNTING AND COMPLIANCE FEES
The following fees shall remain in effect for at least 2 years from the date
of effectiveness of this Agreement.
A. For the services rendered under this Agreement, the Fund
shall pay to the Administrator an annual fee based on the
following schedule:
0.10 of 1% on the first $2.4 billion in average daily net
assets, plus 0.075 of 1% of the remaining average daily net
assets in excess of $2.4 billion; plus 0.055 of 1% of the
remaining average daily net assets in excess of $4.8
billion.
B. The foregoing calculations are based on the average daily
net assets of the Fund. The fees will be computed, billed
and payable monthly. The charge per year for the Fund will
be $30,000 per Portfolio plus the amount specified in A.
above.
C. Approved and documented out-of-pocket expenses will be
computed, billed and payable monthly, which include but are
not limited to:
D. The annual sum of $330,000 for Regulatory Services.
A-1
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE B
GENERAL DESCRIPTION OF FUND ADMINISTRATION
AND COMPLIANCE SERVICES
X.X. Xxxxxx'x Fund Administration and Compliance Services are designed and
intended to address the Fund's routine financial and tax reporting, portfolio
compliance and general administration needs. X.X. Xxxxxx will work closely
with the Fund's experts, such as its public accountants and legal counsel,
with respect to these services.
I. ROUTINE FINANCIAL REPORTING SERVICES
A. Semi-annual and annual reports. Prepare for review and
approval by Fund's officers, financial information for the
Fund's semi-annual reports, annual reports and financial
statements for routine prospectus updates.
B. Regular N-SAR filings. Prepare for review and approval by
Fund's officers, Form N-SAR. Upon approval of the N-SAR by
the Fund's Adviser and officers, X.X. Xxxxxx will file the
Form N-SAR with the SEC through the SEC's XXXXX filing
system.
X. XXXXX filings. Prepare for review and approval by Fund's
officers, the electronic filing copies (via the SEC's
electronic filing system ("XXXXX")) of the Fund's
semi-annual and annual reports, financial data schedules,
and Form N-SAR. The Fund will bear the costs of filing and
of formatting ("EDGARizing") all financial statements and
documents for filing.
D. Annual Statement Schedule D. Provide information to assist
the Adviser in preparation of Annual Statement Schedule D,
in Excel format, for inclusion in the insurance companies'
Separate Accounts Annual Statement.
E. Calculate average annual total returns for each Portfolio.
F. Calculate per share net earnings and other per share amounts
reflective of operations at such time as required by the
nature and characteristics of each Portfolio.
II. ROUTINE TAX SERVICES
A. Tax filings. Working with the Fund's independent public
accountants or other professionals, assist with the
preparation and filing of (1) the Fund's federal tax returns
on Form 1120 RIC, Form 8613 and Form 8610 and (2) such state
and local returns as directed by the Fund.
B. 1099-MISC. Provide Form 1099-MISC to persons other than
corporations (i.e., trustees) to whom the Fund paid more
than $600 during the year.
B-1
C. Supplementary tax information. Prepare for review by the
Fund's officers, supplementary information for shareholders'
tax purposes as directed by the Fund.
D. Sixty-Day Letters. Provide sixty-day letters, including
dividends received deductions percentage, foreign tax
credits, long-term capital gains, wash loss information, and
any exempt percentages to the Fund and the Adviser within
sixty days from the end of each calendar quarter, if
appropriate.
III. ROUTINE COMPLIANCE
X.X. Xxxxxx will provide assistance to the Fund and its Adviser with respect
to compliance with federal tax and securities laws. Responsibility for such
compliance services are subject to the development of a more precise
allocation of duties and responsibilities between X.X. Xxxxxx, the Adviser and
other relevant service providers. In addition, X.X. Xxxxxx'x provision of
compliance services is designed to assist the Fund and its Adviser but is not
intended as an assumption by X.X. Xxxxxx of the Adviser's fiduciary duties and
legal responsibilities to the Fund.
A. Portfolio compliance. Monitor and periodically test the
Fund's compliance with such investment restrictions and
other regulatory requirements, as may be agreed to between
the Adviser, X.X. Xxxxxx and the Fund (e.g., issuer or
industry diversification, etc.).
B. Code of Ethics Compliance. Monitor to be sure that code of
ethics compliance certificates are prepared by Sub-Advisers
quarterly.
B. Section 851 Tax Compliance. Monitor and periodically test,
including on required quarterly testing dates, each
Portfolio's compliance with the requirements of Section 851
of the Internal Revenue Code ("Code") and applicable
Treasury regulations for qualification as a regulated
investment company.
C. Section 817(h) Tax Compliance. Monitor and periodically
test each Portfolio's compliance with the requirement of
Section 817(h) of the Code.
D. Policies and Procedures Compliance. Assist the Adviser with
monitoring each Portfolio's compliance with Fund Board
directives, such as "Approved Issuers Listings for
Repurchase Agreements" and Rule 17a-7, Rule 17e-1 and Rule
12d3-1 policies and procedures.
B-2
IV. REGULATORY AFFAIRS AND CORPORATE GOVERNANCE
A. Prospectus/SAI updates. Assistance with the preparation and
filing of post-effective amendments to the Fund's
registration statement for annual update purposes; prepare
and file stickers or supplements with respect to routine
items for existing Portfolios.
B. Board materials. Prepare agenda, prepare minutes of each
Fund Board meeting, collect background information, prepare
all routine Board materials for regular quarterly Board
meetings, and distribute such materials to all necessary
parties.
C. Corporate Calendar. Maintain general corporate calendar of
Board meetings and routine SEC filings.
D. Insurance Policies. Prepare and file of any regulatory
filings.
E. Prepare and file with the SEC Rule 24f-2 Notices at the Fund
level. X.X. Xxxxxx shall not be responsible for preparing
any legal opinions required in connection with Rule 24f-2
Notices.
F. Prepare and update documents, such as the Charter Document
and By Laws.
G. Examinations. Provide support and counsel with respect to
routine regulatory examinations or investigations of the
Fund and work closely with the Fund's legal counsel in
response to any non-routine regulatory matters. Also,
coordinate all communications and data collection with
regard to any regulatory examinations and yearly audits by
independent accountants.
H. Maintain continuing awareness of significant regulatory and
legislative developments which may affect each Portfolio;
update the Board and the Adviser on those developments and
provide related planning assistance where reasonably
requested or appropriate.
V. BLUE SKY COMPLIANCE
A. Prepare and file with the New York state securities
authorities any and all required compliance filings relating
to the registration and/or qualification of the securities
of the Fund so as to enable the Fund to make a continuous
offering of its shares in New York state.
B. Monitor the status of all New York state regulatory filings
and maintain all necessary registrations and/or
qualifications in New York state.
B-3
VI. GENERAL ADMINISTRATION
A. Board Materials. Prepare or compile performance and expense
information, financial reports, and compliance data and
information for inclusion in the Fund's regular quarterly
Board meeting materials.
B. Dividend distributions. Calculate dividend distributions in
accordance with distribution policies detailed in the Fund's
prospectuses or Board resolutions. Assist Fund management
in making final determinations of distribution amounts.
C. Expense accruals. Prepare Fund, Portfolio or class expense
projections, establish accruals and review on a periodic
basis, including expenses based on a percentage of average
daily net assets (e.g., advisory, sub-advisory and
administrative fees) and expenses based on actual charges
annualized and accrued daily (audit fees, registration fees,
trustees' fees, etc.).
D. Expense payments. Arrange, if directed by the appropriate
Fund officers, for the payment of the Fund's and each
Portfolio's or each class' expenses.
E. Reports to statistical service providers. Report Fund
performance to outside statistical service providers as
directed by Fund management.
F. Non-executive officers. Furnish appropriate non-executive
officers for the Fund, such as assistant treasurers and
secretaries, if requested by the Fund and approved by the
Board of Trustees.
G. Tax ID Numbers. For new Portfolios and classes, obtain
Taxpayer Identification Number and CUSIP numbers, as
necessary. Assist the Adviser in estimating organizational
costs and expenses for new Portfolios and monitor against
actual disbursements.
H. Back-Up Systems. X.X. Xxxxxx will maintain back-up systems
as commonly employed by other administrators in the mutual
fund industry.
B-4
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE C
DESCRIPTION OF FUND ACCOUNTING SERVICES
X.X. Xxxxxx shall provide the following accounting services to the Fund:
A. Maintenance of the books and records for the Fund's assets,
including records of all securities transactions.
B. Maintain portfolio records on a trade date+1 basis using
security trade information communicated from the Fund's
Adviser and Sub-Advisers.
C. Calculation of each Portfolio's or class' net asset value in
accordance with the Prospectus and Statement of Additional
Information for the relevant Portfolio or Class, and after
the Portfolio or class meets eligibility requirements,
transmission to such entities as may be directed by the
Fund.
D. Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share
activity as reported by the transfer agent on a timely
basis.
E. Determine net investment income (earnings) for each
Portfolio as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each
valuation date.
F. Maintain a general ledger and other accounts, books, and
financial records for the Fund in the form as agreed upon.
G. Prepare monthly reports that document the adequacy of
accounting detail to support month-end ledger balances.
H. On a daily basis, reconcile cash and investment balances of
each Portfolio with the custodian.
I. On a daily basis, transmit a copy of the portfolio valuation
to the Adviser and each relevant Sub-Adviser.
J. On a daily basis, review the impact of current day's
activity on a per share basis, review changes in market
value.
K. Account for all dividends and interest received and
distributions made by each Portfolio.
L. Coordinate with the Fund's independent auditors with respect
to the annual audit, and as otherwise requested by the Fund.
C-1
M. Consult with the Fund's officers, independent public
accountants and other appropriate persons in establishing
the accounting policies of the Fund.
N. As mutually agreed upon, X.X. Xxxxxx will provide domestic
and/or international reports.
O. Calculation of "SEC Yield" (See Appendix 1).
X-0
XXXXXXXX 0
XXX XXXXX XXXXXXXXXXX
(1) X.X. Xxxxxx shall compute the yield, or tax equivalent
yield, for the Fund for the periods of time as agreed to by
the parties; and
(2) X.X. Xxxxxx shall have no responsibility to review, confirm
or otherwise assume any duty with respect to the accuracy or
correctness of any data, including but not limited to
security attributes, pricing data, and tax equivalent data,
supplied to it by the Fund and any of the Fund's agents, the
Adviser, Sub-Advisers, or by third party providers. X.X.
Xxxxxx is entitled to rely on information or data provided
to it by the Fund's agents, the Adviser, Sub-Advisers, or by
third party providers and will not be liable for any loss or
expense suffered by the Fund caused by such reliance.
APPENDIX 2
AUTHORIZED PERSONNEL
The following personnel are authorized to give written or oral
instructions to X.X. Xxxxxx, subject to the provisions of Section 6(b)(vi):
1.
2.
3.
4.
5.
It is the sole responsibility of the Fund to notify X.X. Xxxxxx of
any changes to this list in writing.
X.X. XXXXXX INVESTOR SERVICES CO. MLIG VARIABLE INSURANCE TRUST
By: By:
------------------------------- ---------------------------
