Exhibit 99.(h)(1)(b)
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 1st day of October 1999, by and between Kobrick
Investment Trust (the "Trust"), a Massachusetts business trust, and Nvest
Services Company, Inc., a Massachusetts corporation ("NSC").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to employ NSC to provide certain administrative
services to the Trust in the manner and on the terms set forth in this
Agreement, and NSC wishes to perform such services;
NOW, THEREFORE, in consideration of the premises and covenants hereinafter
contained, the parties hereby agree as follows:
1. APPOINTMENT AND ACCEPTANCE. The Trust hereby employs NSC to act as
Administrator of the Trust on the terms set forth in this agreement. NSC hereby
accepts such employment and agrees to furnish the services and to assume the
obligations herein set forth for the compensation herein provided. The Trust
will initially consist of the portfolios and/or classes of shares (each a "Fund"
and collectively, the "Funds") listed on Schedule A to this Agreement. In the
event that the Trust establishes one or more additional Funds with respect to
which it wishes to employ NSC to act as Administrator hereunder, the Trust shall
notify NSC in writing. Upon written acceptance by NSC, such Fund shall become
subject to the provisions of this Agreement to the same extent as the existing
funds, except to the extent that such provisions (including those relating to
the compensation and expenses payable by the Trust and its Funds) may be
modified with respect to each additional Fund in writing by the Trust and NSC at
the time of the addition of the Fund.
2. SERVICES PROVIDED BY NSC.
(a) NSC shall perform or arrange for the performance of the various
administrative and clerical services listed in Schedule B hereto. The
administrative services provided hereunder shall be subject to the
control, supervision and direction of the Trust and the review and
comment by the Trust's auditors and legal counsel and shall be performed
in accordance with procedures which may be established from time to time
between the Trust and NSC. NSC shall provide the office space,
facilities, equipment and the personnel required by it to perform the
services contemplated herein.
(b) In providing any or all of the services listed in Schedule B hereto, and
in satisfaction of its obligations to provide such services, NSC may enter
into agreements with one or more other third parties to provide such
services to the Trust; provided, however, that NSC shall be as fully
responsible to the Trust, and the Funds for the acts and omissions of any
such third party service providers as it would be for its own acts or
omissions hereunder.
3. COMPENSATION AND EXPENSES.
(a) For the services provided by NSC to the Trust hereunder, the Trust shall
pay NSC the greater of the following:
(1) an annual fee payable in equal monthly installments equal to $70,000
per outstanding Fund; or
(2) a monthly fee (accrued daily) based on the Funds' average daily net
assets during the calendar month, such fee being calculated at the
annualized rates set forth below:
AVERAGE DAILY NET ASSETS ANNUALIZED FEE RATE
AS A % OF AVERAGE DAILY NET ASSETS
--------------------------- ----------------------------------
$0 - $100,000,000 0.070%
$100,000,000 - $400,000,000 0.050%
Over $400,000,000 0.030%
(b) In addition, the Funds shall reimburse NSC for its reasonable
out-of-pocket expenses as well as any other advances incurred by NSC with
the consent of the Funds with respect to its provision of services
hereunder. It is agreed that the expense for Blue Sky administrative
services performed and vendor will be paid by the Funds.
(c) For any period less than a full calendar month, any fees payable to NSC
for such period shall be pro-rated for such lesser period. All of the
foregoing fees and expenses will be billed monthly in arrears by NSC. The
Trust shall pay such fees and reimburse such expenses promptly upon
receipt of an invoice therefor and, in no event, later than five (5)
business days after receipt of the invoice.
(d) The Funds agree promptly to reimburse NSC for any equipment and supplies
specially ordered by or for the Trust through NSC at the Funds' request or
with the Funds' consent and for any other expenses not contemplated by
this Agreement that NSC may incur on the Funds' behalf at the Funds'
request or with the Funds' consent.
(e) The Funds will bear all expenses that are incurred in their operation
and not specifically assumed by NSC. Expenses to be borne by the Funds,
include, but are not limited to: organizational expenses; cost of
services of independent accountants and outside legal and tax counsel
(including such counsel's review of the Trust's registration statement,
proxy materials, federal and state tax qualification as a regulated
investment company and other reports and materials prepared by NSC under
this Agreement); cost of any services contracted for by the Funds
directly from parties other than NSC; cost of trading operations and
brokerage fees, commissions and transfer taxes in connection with the
purchase and sale of securities for the Funds; investment advisory fees;
taxes, insurance premiums and other fees and expenses applicable to its
operation; costs incidental to any meetings of shareholders including,
but not limited to, legal and accounting fees, proxy filing fees and the
costs of preparation, printing and mailing of any proxy materials; costs
incidental to Board meetings, including fees and expenses of Board
members; the salary and expenses of any officer, director/trustee or
employee of the Trust; costs incidental to the preparation, printing and
distribution of the Trust's registration statements and any amendments
thereto and shareholder reports; cost of typesetting and printing of
prospectuses; cost of preparation and filing of the Fund's tax returns,
Form N-1A and Form N-SAR, and all notices, registrations and amendments
associated with applicable federal and state tax and securities laws;
all applicable registration fees and filing fees required under federal
and state securities laws; fidelity bond and directors' and officers'
liability insurance; and cost of independent pricing services used in
computing the Fund's net asset value.
4. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) NSC shall not be liable to the Trust or the Funds for any error of
judgment or mistake of law or for any loss arising out of any act or
omission by NSC, or any persons engaged pursuant to Section 2(b) hereof,
including officers, agents, and employees of NSC and its affiliates, in
the performance of its duties hereunder; provided, however, that nothing
contained herein shall be construed to protect NSC against any liability
to the Trust, the Funds, or the shareholders to which NSC shall
otherwise be subject by reason of its willful misfeasance, bad faith, or
negligence in the performance of its duties or the reckless disregard of
its obligations and duties hereunder.
(b) NSC will indemnify and hold harmless the Trust, its trustees, officers,
employees, and agents and any persons who control the Trust
(collectively, the "Trust Indemnified Parties") and hold each of them
harmless from any losses, claims, damages, liabilities, or actions in
respect thereof to which the Trust Indemnified Parties may become
subject, including amounts paid in settlement with the prior written
consent of NSC, insofar as such losses, claims, damages, liabilities,
or actions in respect thereof arise out of or result from the failure
of NSC to comply with the terms of this Agreement.
NSC will reimburse the Trust for reasonable legal or other expenses
reasonably incurred by the Trust in connection with investigating or
defending against any such loss, claim, damage, liability, or action. NSC
shall not be liable to the Trust for any action taken or omitted by the
Trust in bad faith or with willful misfeasance or negligence or with
reckless disregard by the Trust of its obligations and duties hereunder.
The indemnities herein shall, upon the same terms and conditions, extend
to and inure to the benefit of each of the trustees and officers of the
Trust and any person controlling the Trust.
(c) The obligations set forth in this Section 4 shall survive the termination
of this Agreement.
5. ACTIVITIES OF NSC NOT EXCLUSIVE; DUAL INTERESTS.
(a) The services of NSC under this Agreement are not to be deemed exclusive,
and NSC and any person controlled by or under common control with NSC
shall be free to render similar services to others.
(b) It is understood that any of the trustees, officers, employees, and
agents of the Trust may be a shareholder, director, officer, employee,
or agent of, or be otherwise interested in, NSC, any affiliated person
of NSC, any organization in which NSC may have an interest, or any
organization that may have an interest in the Trust, or a Fund. Except
as otherwise provided by specific provisions of applicable law, the
existence of any such dual interest shall not affect the validity of
this Agreement or any of the transactions hereunder.
6. REPRESENTATIONS AND WARRANTIES.
(a) The Trust represents and warrants to NSC that this Agreement has been
duly authorized by the Board of Trustees of the Trust and, when
executed and delivered by the Trust, will constitute a legal, valid,
and binding obligation of the Trust, enforceable against the Trust and
its Funds in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium, and other laws of general
application affecting the rights and remedies of creditors and secured
parties.
(b) NSC represents and warrants to the Trust that this Agreement has been duly
authorized by NSC and, when executed and delivered by NSC, will constitute
a legal, valid, and binding obligation of NSC, enforceable against NSC in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application
affecting the rights and remedies of creditors and secured parties.
7. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) This Agreement shall become effective as of the date first above written
and, unless otherwise terminated, shall continue indefinitely; provided,
however, that this Agreement may be terminated at any time without the
payment of any penalty by either party on not less than sixty (60) days'
written notice to the other party.
(b) NSC hereby agrees that any books and records prepared hereunder with
respect to the Trust are the property of the Trust and shall be readily
accessible to the Trust and its trustees, officers and agents during
normal business hours. NSC further agrees that, upon the termination of
this Agreement or otherwise upon request, NSC will surrender promptly to
the Trust copies of all such books and records.
8. AMENDMENTS AND WAIVERS. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved by the Trust's Board of
Trustees, and such amendment is set forth in a written instrument executed by
each of the parties hereto. At any time, any of the provisions hereof may be
waived by the written mutual consent of the parties hereto.
9. NOTICES. All notices or other communications hereunder to either party
shall be in writing and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid. Notices shall be sent to the addresses set
forth below or to such other address as either party may designate by written
notice to the other.
If to NSC:
Nvest Services Company, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
With a copy to: General Counsel
If to the Trust:
Kobrick Investment Trust
000 Xxxxxxx Xxxxxx, 00xx xxxxx
Xxxxxx, XX 00000
Attention: President
With a copy to: Chief Operating Officer
Notice shall also be deemed sufficient if given electronically or by telex,
telecopier, telegram, or other similar means of same day delivery (with a
confirming copy by mail as provided herein).
10. ADDITIONAL PROVISIONS
(a) Confidentiality. NSC shall, except as otherwise required by law or in
connection with any required disclosure to a regulatory authority, keep
confidential all records and information in its possession relating to the
Trust, the Funds, shareholders or shareholder accounts and will not disclose
the same to any person except at the request or with the consent of the
Trust. To the extent reasonable practicable, NSC shall notify the Trust of
any request for disclosure received from a regulatory authority or made by
the legal process.
(b) Year 2000. Neither party shall be held liable for computer-related problems
arising out of or associated with third party vendor computer systems or
related equipment that are incurred in connection with the change from the
years 1999 to 2000. NSC has conducted a commercially reasonable
investigation of the applicable computer systems of the Trust's fund
accounting agent, State Street Bank and Trust, and is not aware of any Year
2000 issues. NSC will notify the Trust promptly in the event it becomes
aware of any Year 2000 issues.
(c) Separate Portfolios. This Agreement shall be construed to be made by the
Trust as a separate agreement with respect to each Fund, and under no
circumstances shall the rights, obligations, or remedies with respect to a
particular Fund be deemed to constitute a right, obligation, or remedy
applicable to any other Fund.
(d) Non-Assignability. This agreement shall not be assigned by either party
hereto without the prior consent in writing of the other party, except that
NSC may assign this agreement to a successor of all or a substantial portion
of its business, or to a party controlling, controlled by or under common
control with NSC.
(e) Entire Agreement. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes any prior
arrangements, agreements, or understandings.
(f) Severability. If any term or provision of this Agreement or the application
thereof to any person or circumstance is held to be invalid or unenforceable
to any extent, the remainder of this Agreement or the application of such
provision to other persons or circumstances shall not be affected thereby
and shall be enforced to the fullest extent permitted by law.
(g) Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of The Commonwealth of Massachusetts
as then in effect.
(h) Counterparts. This Agreement may be executed by the parties hereto in one or
more counterparts, and, if so executed, the separate instruments shall
constitute one agreement.
(i) Headings. Headings used in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
KOBRICK INVESTMENT TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: President
NVEST SERVICES COMPANY, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: President
SCHEDULE A
TRUST PORTFOLIOS
1. Kobrick Capital Fund
2. Kobrick Growth Fund
3. Kobrick Emerging Growth Fund
SCHEDULE B
DESCRIPTION OF SERVICES PROVIDED
NSC shall perform or arrange for the performance of the following administration
and clerical service:
CORPORATE SECRETARIAL SERVICES
1. provide Assistant Secretaries for the Trust and other officers as
requested, subject to the general supervision of the Secretary of the
Trust;
2. maintain general corporate calendar, tracking all legal and regulatory
compliance through annual cycles;
3. prepare Board materials for quarterly Board meetings and Board committee
meetings, including agenda and background materials for annual review of
advisory and distribution fees, presentation of issues to the Board,
prepare minutes and follow-up on matters raised at meetings;
4. maintain charter documents for the Trust;
5. prepare organizational Board meeting materials for new Funds;
6. draft contracts, assisting in negotiation and planning, as appropriate,
for example advisory, distribution and selling agreements, transfer
agency and custodian agreements, 12b-1 and shareholder servicing plans
and related agreements and various other agreements and amendments;
7. prepare and file proxy solicitation materials, oversee solicitation and
tabulation efforts, conduct shareholder meetings and provide legal
presence at meetings;
REGISTRATION AND DISCLOSURE ASSISTANCE SERVICES
8. prepare and file amendments to the Funds' registration statement,
including updating prospectuses and SAIs;
9. prepare and file prospectus and SAI supplements, as needed;
10. prepare and file other regulatory documents, including N-SARs, Rule
24f-2/24e-2 Notices;
11. negotiate, obtain and file fidelity bonds and monitor compliance with
Rule 17g-1 and Rule 17d-1(7) under the 1940 Act;
12. negotiate, obtain and monitor directors' and officers' errors and
omissions policies;
13. prepare and file shareholder meeting materials and assist with all
shareholder communications;
14. coordinate and monitor state Blue Sky qualification through an
experienced vendor partner;
LEGAL CONSULTING AND PLANNING SERVICES
15. provide general legal advice on matters relating to portfolio
management, Fund operations, mutual fund sales, development of
advertising materials, changing or improving prospectus disclosure, and
any potential changes in each Fund's investment pollicies, operations,
or structure;
16. communicate significant emerging regulatory and legislative developments
to the Adviser and Board and provide related planning assistance;
17. develop or assist in developing guidelines and procedures to improve
overall compliance by the Adviser and Funds;
18. provide advice with regard to litigation matters, routine fund
examinations and investigations by regulatory agencies;
19. provide advice regarding long-term planning for the Funds, including
creation of new funds or portfolios, corporate structural changes,
mergers, acquisitions, and other asset gathering plans including new
distribution methods;
20. maintain effective communications with fund counsel and counsel to the
independent Trustees if any;
21. create and implement timing and responsibility system for outside legal
counsel when necessary to implement major projects and the legal
management of such projects;
22. monitor activities and billing practices of counsel performing services
for the Funds or in connection with related fund activities;
23. provide consultation and advice for resolving compliance questions along
with the Adviser, its counsel and fund counsel;
24. provide active involvement with the management of SEC and other
regulatory examinations;
25. advise regarding distribution arrangements for compliance with
applicable broker-dealer regulations;
26. maintain the Trust's Code of Ethics and monitor compliance of personnel;
BROKER-DEALER COMPLIANCE SERVICES
27. complete, file and maintain Form BD, state broker-dealer renewals,
annual financials, quarterly financial statements (FOCUS Reports) and
NASD annual assessments;
28. provide dynamic broker-dealer supervisory structure which is documented
and detailed in writing by the Hierarchy of Supervision, Office of
Supervisory Jurisdiction and Detached Office Manual, Registered
Representative Compliance Manual, Advertising and Sales Literature
Manual, and Continuing Education Plan;
29. deliver effective broker-dealer compliance programs, as mandated by
regulation, including annual compliance meetings, Office of Supervisory
Jurisdiction annual inspection, correspondence oversight, firm element
continuing education course evaluation/attendance monitoring, complaint
coordination, resolution and reporting, and periodic interpretive
releases and guidance on compliance developments;
30. coordinate the fingerprinting, registration and licensing of personnel
through the NASD CRD System, including conducting background checks,
processing U-4 registration applications and U-5 termination notices,
annual renewals, arranging for examination dates and continuing
education regulatory element sessions;
TRANSFER AGENT COMPLIANCE SERVICES
31. ensure that the content of confirmations, statements, annual and
semi-annual reports, disclosure statements and shareholder
administrative communications conform to regulatory requirements and are
distributed within the mandated time frames;
32. monitor and review transfer agent activity in order to evaluate the
status of regulatory compliance, protect the integrity of the funds and
shareholders, search for systemic weaknesses, and examine for potential
liability and fraud;
33. investigate and research customer and other complaints to determine
liability, facilitate resolution and promote equitable treatment of all
parties;
34. consult with transfer agent and other staff regarding prospectus and SAI
provisions and requirements, distribution issues including payment
programs, sub-transfer agent arrangements and other regulatory issues;
TREASURY FINANCIAL SERVICES
35. provide Assistant Treasurers for the Trust as requested, subject to the
general supervision of the Treasurer of the Trust;
36. generate portfolio schedules utilizing State Street Xxxxxx system;
37. create financial statements and financial highlight tables;
38. maintain and update the notes to the financials;
39. supply State Street Bank with a listing of audit reports and schedules;
40. coordinate with external auditors for annual audit;
41. review financial statements for completeness accuracy and full
disclosure;
42. coordinate ROCSOP adjustments with auditors;
43. determine and monitor expense accrual for each fund;
44. verify management and 12b-1 fees calculated by State Street;
45. review fund waivers and deferrals;
46. calculate total returns for each fund and respective classes using the
Fundstation system;
47. oversee and review custodial bank services including maintenance of
books and records;
48. provide service bureaus with funds statistical information;
49. oversee the determination and publication of the Funds' net asset
values;
50. review the calculation, submit for approval by an officer of the Funds',
and arrange for the payment of the Funds' expenses;
51. oversee and review the calculation of fees paid to the Funds' adviser,
custodian, transfer agent and distributor and submit to an officer for
Funds' approval;
TREASURY REGULATORY SERVICES
52. prepare and file annual and semi-annual N-SAR forms with the SEC;
53. provide Trustees with condensed portfolio information;
54. review securities lending activity;
55. review pricing errors;
56. review fair value pricing;
57. review stale pricing;
58. review collateral segregation;
59. provide bi-monthly summaries of pricing overrides to management;
60. provide a review of expense caps and management fee waivers to
management;
61. review short sales;
62. review derivatives positions;
63. review brokerage commissions;
64. review dividends and capital gain distributions;
TREASURY TAX SERVICES
65. provide annual tax information (Form 1099) for each fund or class of
shares to shareholders and transfer agents;
66. calculate distribution of capital gains, income and spill back
requirements;
67. provide estimates of capital gains;
68. provide 1099 information to vendors;
69. provide service bureaus, brokers and various parties with tax
information noticed;
70. prepare excise tax returns;
71. prepare income tax returns;
72. prepare tax identification number filings;
73. perform IRS sub-Chapter M testing for 25% diversification, 50%
diversification, 90% gross income, 90% income distribution requirement
(annually), and 98% excise distribution requirement (annually);
TREASURY COMPLIANCE SERVICES
74. perform oversight review to ensure investment manager compliance with
investment policies and limitations;
75. obtain and review investment manager certification on adhering to all
investment policies, restrictions and guidelines;
76. monitor SEC diversification with 75% diversification test and Section 12
diversification test;
77. review bi-monthly designated collateral on all fund derivative and
delayed delivery positions;
TREASURY SPECIAL SERVICES
78. administer daily review of securities lending with Xxxxxxx Xxxxx and
State Street Bank;
79. ensure semiannual review of Portfolios for opportunities with lending
and review of current income levels;
80. establish opportunities with investment manager and brokers for directed
commission programs;
81. monitor line of credit arrangement and payment of commitment fees;
82. maintain Trustee payments and monitor deferred compensation
arrangements;
83. provide Trustees with Form 1099 information;
84. generate expense proformas for new products;
85. negotiate with vendors to ensure new products are brought in at the
lowest costs;
86. ensure all aspects of new products are operationally ready.
