EXHIBIT 8(B)
ADMINISTRATION SERVICES AGREEMENT
BETWEEN
ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC.
AND
INVESTORS BANK & TRUST COMPANY
ADMINISTRATION SERVICES AGREEMENT
AGREEMENT made as of April 15, 1998 by and between ALLMERICA FINANCIAL
INVESTMENT MANAGEMENT SERVICES, INC., a Massachusetts corporation ("AFIMS"),
and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company (the
"Bank").
WHEREAS, AFIMS serves as investment manager for The Palladian Trust (the
"Fund"), a registered investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), consisting of the separate portfolios
listed on APPENDIX A hereto; and
WHEREAS, AFIMS desires to retain the Bank to render certain
administrative services to the Fund and the Bank is willing to render such
services.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, it is agreed between the parties hereto as follows:
1. APPOINTMENT.
AFIMS hereby appoints the Bank to act as Administrator of the Fund
on the terms set forth in this Agreement. The Bank accepts such appointment
and agrees to render the services herein set forth for the compensation
herein provided.
2. DELIVERY OF DOCUMENTS.
AFIMS has furnished the Bank with copies properly certified or
authenticated of each of the following: (a) The Fund's
incorporating documents filed with the state of Commonwealth of Massachusetts
on September 8, 1993 and all amendments thereto (the "Articles");
(b) The Fund's by-laws and all amendments thereto (the "By-Laws");
(c) The Fund's agreements with all service providers which include
any investment advisory agreements, sub-investment advisory agreements,
custody agreements, distribution agreements and transfer agency agreements
(collectively, the "Agreements");
(d) The Fund's most recent Registration Statement on Form N-1A
(the "Registration Statement") under the Securities Act of 1933 and under the
1940 Act and all amendments thereto; and
(e) The Fund's most recent prospectus and statement of additional
information (the "Prospectus"); and
(f) Such other certificates, documents or opinions as may mutually
be deemed necessary or appropriate for the Bank in the proper performance of
its duties hereunder.
Upon request, AFIMS will promptly furnish, or cause to be furnished
the Bank copies of all amendments of or supplements to the foregoing.
Furthermore, each party to this Agreement will notify the other promptly of
any matter which may materially affect the performance by the Bank of its
services under this Agreement.
PAGE 1
3. DUTIES OF ADMINISTRATOR.
Subject to the supervision and direction of the Board of Directors
of the Fund, the Bank, as Administrator, will assist in conducting various
aspects of the Fund's administrative operations and undertakes to perform the
services described in APPENDIX B hereto. The Bank may, from time to time,
perform additional duties and functions which shall be set forth in an
amendment to such APPENDIX B executed by both parties. At such time, the fee
schedule included in APPENDIX C hereto shall be appropriately amended.
In performing all services under this Agreement, the Bank shall act
in conformity with the Fund's Articles and By-Laws and the 1940 Act and other
laws as applicable, as the same may be amended from time to time, and the
investment objectives, investment policies and other practices and policies
set forth in the Fund's Registration Statement, as the same may be amended
from time to time. Notwithstanding any item discussed herein, the Bank has no
discretion over the Fund's assets or choice of investments.
4. DUTIES OF THE FUND.
(a) The Fund agrees to make its legal counsel available to the Bank
for instruction with respect to any matter of law arising in connection with
the Bank's duties hereunder, and the Fund further agrees that the Bank shall
be entitled to rely on such instruction without further investigation on the
part of the Bank.
5. FEES AND EXPENSES.
(a) For the services to be rendered and the facilities to be
furnished by the Bank, as provided for in this Agreement, AFIMS will
compensate the Bank in accordance with the fee schedule attached as APPENDIX
C hereto. Such fees do not include out-of-pocket disbursements (as delineated
on the fee schedule or other expenses with the prior approval of the Fund's
management) of the Bank for which the Bank shall be entitled to xxxx AFIMS
separately and for which AFIMS shall reimburse the Bank.
(b) The Bank shall not be required to pay any expenses incurred by
the Fund or AFIMS.
6. LIMITATION OF LIABILITY.
(a) The Bank agrees to indemnify and hold AFIMS and its directors,
officers, employees, agents and representatives harmless from and against any
and all losses, damages, liabilities, claims, costs and expenses, including
reasonable attorneys' fees and expenses, resulting from any claim, demand,
action or suit related to the Bank's performance of, or failure to perform,
its obligations under this Agreement. Notwithstanding the foregoing, the
Bank shall not be liable for any losses, damages, liabilities, claims, costs
or expenses suffered by AFIMS or the Fund in connection with the performance
of the Bank's obligations and duties under this Agreement, except those
resulting from the Bank's willful misfeasance, bad faith or gross negligence
in the performance of such obligations and duties.
AFIMS agrees to indemnify and hold the Bank and its directors, officers,
employees, agents and representatives harmless from and against any and all
losses, damages, liabilities, claims, costs, and expenses including
reasonable attorneys' fees and expenses, resulting from any claim, demand,
action or suit related to AFIMS's performance of, or failure to perform, its
obligations under this Agreement and not resulting from willful misfeasance,
bad faith or gross negligence of the Bank.
(b) The Bank may apply to the AFIMS at any time for instructions
and may consult counsel for AFIMS, or its own counsel, Xxxxxx, Xxxxx and
Xxxxxxx, and with accountants and other
PAGE 2
experts with respect to any matter arising in connection with its duties
hereunder, and the Bank shall not be liable or 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 Bank
shall not be liable for any act or omission taken or not taken in reliance
upon any document, certificate or instrument which it reasonably believes to
be genuine and to be signed or presented by the proper person or persons.
The Bank shall not be held to have notice of any change of authority of any
officers, employees, or agents of the Fund until receipt of written notice
thereof has been received by the Bank from the Fund.
(c) In the event the Bank is unable to perform, or is delayed in
performing, its obligations under the terms of this Agreement because of acts
of God, strikes, legal constraint, government actions, war, emergency
conditions, interruption of electrical power or other utilities, equipment or
transmission failure or damage reasonably beyond its control or other causes
reasonably beyond its control, the Bank shall not be liable to the Fund or
AFIMS for any damages resulting from such failure to perform, delay in
performance, or otherwise from such causes. Notwithstanding the foregoing,
Investors Bank has and shall maintain appropriate back-up and disaster
recovery facilities and shall use it best efforts to provide all required
information and services hereunder to the Fund and AFIMS as soon as possible
after any such delay in performance.
7. TERMINATION OF AGREEMENT.
(a) The initial term of this Agreement shall commence upon the
date first noted above and continue through December 31, 1998 (the "Initial
Term"), unless earlier terminated as provided herein. After the expiration
of the Initial Term, the term of this Agreement shall automatically renew for
successive one-year terms (each a "Renewal Term") unless notice of
non-renewal is delivered by the non-renewing party to the other party no
later than ninety days prior to the expiration of the Initial Term or any
Renewal Term, as the case may be.
(i) Either party hereto may terminate this Agreement prior to
the expiration of the Initial Term in the event the other party violates any
material provision of this Agreement, provided that the violating party does
not cure such violation within ninety days of receipt of written notice from
the non-violating party of such violation.
(ii) Either party may terminate this Agreement during any
Renewal Term upon ninety days written notice to the other party. Any
termination pursuant to this paragraph 7(a)(ii) shall be effective upon
expiration of such ninety days, provided, however, that the effective date of
such termination may be postponed, at the request of AFIMS, to a date not
more than one hundred twenty days after delivery of the written notice in
order to give AFIMS an opportunity to make suitable arrangements for a
successor administrator.
(b) At any time after the termination of this Agreement, the Fund
or AFIMS may, upon written request, have reasonable access to the records of
the Bank relating to its performance of its duties as Administrator.
8. MISCELLANEOUS.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to AFIMS or the Bank shall be sufficiently
given if addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate in writing.
To AFIMS:
Allmerica Financial Investment Management Services, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
PAGE 3
To the Bank:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxxxxx X. X'Xxxxxxx, Director, Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable without the written
consent of the other party.
(c) This Agreement shall be construed in accordance with the laws
of the Commonwealth of Massachusetts, without regard to its conflict of laws
provisions.
(d) This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and which collectively shall
be deemed to constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
9. CONFIDENTIALITY.
All books, records, information and data pertaining to the
business of the other party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall remain confidential,
and shall not be voluntarily disclosed to any other person, except as may be
required in the performance of duties hereunder or as otherwise required by
law.
10. USE OF NAME.
AFIMS shall not use the name of the Bank or any of its affiliates
in any prospectus, sales literature or other material relating to the Fund in
a manner not approved by the Bank prior thereto in writing; provided however,
that the approval of the Bank shall not be required for any use of its name
which merely refers in accurate and factual terms to its appointment
hereunder or which is required by the Securities and Exchange Commission or
any state securities authority or any other appropriate regulatory,
governmental or judicial authority; PROVIDED FURTHER, that in no event shall
such approval be unreasonably withheld or delayed.
(The remainder of this page intentionally left blank.)
PAGE 4
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the
date first written above.
ALLMERICA FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.
By: /S/ XXXXXX X. XXXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
INVESTORS BANK & TRUST COMPANY
By: /S/ XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Director, Client Management
PAGE 5
APPENDICES
Appendix A....................... Portfolios
Appendix B....................... Services
Appendix C....................... Fee Schedule
APPENDIX A
Portfolios of the Palladian Trust covered under this Agreement:
- Value Portfolio
- GROWTH PORTFOLIO
- INTERNATIONAL GROWTH PORTFOLIO
- STRATEGIC INCOME PORTFOLIO
- GLOBAL INTERACTIVE/TELECOMM PORTFOLIO
APPENDIX B
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
Monitor portfolio compliance in Perform tests of certain specific Continuously monitor A/C - Provide consultation
accordance with the current portfolio activity designed from portfolio activity and Fund as needed on compliance
Prospectus and SAI. provisions of the Fund's operations in conjunction issues.
Prospectus and SAI. Follow-up on with 1940 Act, Prospectus,
potential violations. SAI and any other applicable
laws and regulations.
Monitor testing results and
FREQUENCY: DAILY approve resolution of
compliance issues.
Provide compliance summary package. Provide a report of compliance Review report. A/C - Provide consultation
testing results. as needed.
FREQUENCY: MONTHLY
Perform asset diversification Perform asset diversification Continuously monitor A - Provide consultation
testing to establish qualification tests at each tax quarter end. portfolio activity in as needed in establishing
as a RIC and to meet requirements of Follow-up on issues. conjunction with IRS positions to be taken in
Section 817(h). requirements. Review test tax treatment of
results and take any particular issues. Review
necessary action. Approve quarter end tests on a
tax positions taken. current basis.
FREQUENCY: QUARTERLY
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
Perform qualifying income testing to Perform qualifying income testing Continuously monitor A- Consult as needed on
establish qualification as a RIC. (on book basis income, unless portfolio activity in tax accounting positions
material differences are conjunction with IRS to be taken. Review in
anticipated) on quarterly basis requirements. Review test conjunction with year-end
and as may otherwise be results and take any audit.
FREQUENCY: QUARTERLY necessary. Follow-up on issues. necessary action. Approve
tax positions taken.
Prepare the Fund's annual expense Prepare preliminary expense Provide asset level
budget. Establish daily accruals. budget. Notify fund accounting projections. Approve
of new accrual rates. expense budget.
FREQUENCY: ANNUALLY
Monitor the Fund's expense budget. Monitor actual expenses updating Provide asset level C/A - Provide consultation
budgets/ expense accruals. projections quarterly. as requested.
Provide vendor information
as necessary. Review
expense analysis and approve
budget revisions.
FREQUENCY: MONTHLY
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
Monitor Performance-Based Management Calculate Incentive Fee Coordinate a meeting to
Fee adjustment, according to agreed- review existing calculation
upon methodology. Coordinate methodology and support, and
review by management. Notify to agree to changes (if
FREQUENCY: MONTHLY Fund Accounting of adjusting any). Review and approve
entries. calculations of Management
Fee.
Receive and coordinate payment of Propose allocations of invoice Approve invoices and
fund expenses. among Funds and obtain authorized allocations of payments.
approval to process payment. Send invoices to IBT in a
FREQUENCY: AS OFTEN AS NECESSARY timely manner.
Calculate periodic dividend rates to Calculate amounts available for Establish and maintain C - Review dividend
be declared in accordance with distribution. Coordinate review dividend and distribution resolutions in conjunction
management guidelines. by management and/or auditors. policies. Approve with Board approval.
Notify custody and transfer agent distribution rates per share
of authorized dividend rates in and aggregate amounts. A - Review and concur with
accordance with Board approved Obtain Board approval when proposed distributions
policy. Report dividends to required.
FREQUENCY: QUARTERLY Board as required.
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
Calculate total return information Provide total return Review total return
on Funds as defined in the current calculations. information.
Prospectus and SAI.
FREQUENCY: MONTHLY
Prepare responses to major industry Prepare, coordinate as necessary, Identify the services to
questionnaires. and submit responses to the which the Funds report.
appropriate agency. Provide information as
FREQUENCY: AS OFTEN AS NECESSARY requested.
Prepare disinterested trustee Form Summarize amounts paid to Provide social security
1099-Misc. trustees during the calendar numbers and current mailing
year. Prepare and mail Form address for trustees.
1099-Misc. Review and approve
FREQUENCY: ANNUALLY information provided for
Form 1099-Misc.
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
FINANCIAL REPORTING
Prepare financial information for Prepare selected portfolio and Review financial
presentation to Fund Management and financial information for information.
Board of Directors. inclusion in board material.
FREQUENCY: QUARTERLY
Coordinate the annual audit and Coordinate the creation of Provide past financial A - Perform audit and
semi-annual preparation and printing templates reflecting client- statements and other issue opinion on annual
of financial statements and notes selected standardized appearance information required to financial statements.
with management, fund accounting and and text of financial statements create templates, including
the fund auditors. and footnotes. Draft and manage report style and graphics. A/C - Review reports.
production cycle. Coordinate Approve format and text as
with IBT fund accounting the standard. Approve
electronic receipt of portfolio production cycle and assist
and general ledger information. in managing to the cycle.
Assist in resolution of Coordinate review and
accounting issues. Using approval by portfolio
templates, draft financial managers of portfolio
statements, coordinate auditor listings to be included in
and management review, and clear financial statements.
comments. Coordinate printing of Prepare appropriate
reports and XXXXX conversion with management letter and
outside printer and filing with coordinate production of
the SEC via XXXXX. Management Discussion and
FREQUENCY: ANNUALLY/SEMI-ANNUALLY Analysis. Review and
approve entire report. Make
appropriate representations
in conjunction with audit.
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
LEGAL
-----------------------------------
Prepare and file Form N-SAR. Prepare form for filing. Obtain Provide appropriate C - Review initial filing.
any necessary supporting responses. Provide A - Provide annual audit
documents. File with SEC via applicable Exhibits to internal control letter to
XXXXX. attach to filing. Review and accompany the annual
authorize filing. filing.
FREQUENCY: SEMI-ANNUALLY
Assist the preparation and filing of Accumulate capital stock Review and approve capital A/C - Review informally
Form 24f-2 Notice. information. stock worksheet. when requested
FREQUENCY: ANNUALLY
Respond to regulatory audits. Compile and provide documentation Coordinate with regulatory C - Provide consultation
pursuant to audit requests. auditors to provide as needed.
Assist client in resolution of requested documentation and
FREQUENCY: AS NEEDED (AT LEAST audit inquiries. resolutions to inquiries.
ANNUALLY)
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
TAX
-----------------------------------
Prepare income tax provisions. Calculate investment company Provide transaction A - Provide consultation
taxable income, net tax exempt information as requested. as needed in establishing
interest, net capital gain and Identify Passive Foreign positions to be taken in
spillback dividend requirements. Investment Companies tax treatment of
Identify book-tax accounting (PFICs). Approve tax particular issues.
differences. Track required accounting positions to be Perform review in
information relating to taken. Approve provisions. conjunction with the year-
accounting differences. end audit.
FREQUENCY: ANNUALLY
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
TAX (CONT.)
-----------------------------------
Calculate excise tax distributions Calculate required distributions Provide transaction A - Provide consultation
to avoid imposition of excise information as requested. as needed in establishing
tax. Identify Passive Foreign positions to be taken in
- Calculate capital gain net Investment Companies tax treatment of
income and foreign currency (PFICs). Approve tax particular issues. Review
gain/loss through October accounting positions to be and concur with proposed
31. taken. Review and approve distributions per share.
- Calculate ordinary income and all income and distribution
distributions through a calculations, including
specified cut off date . projected income and
- Project ordinary income dividend shares. Approve
from cut off date to distribution rates per share
December 31. and aggregate amounts.
- Ascertain dividend shares. Obtain Board approval when
Identify book-tax accounting required.
differences. Track required
information relating to
accounting differences.
Coordinate review by management
and fund auditors. Notify
custody and transfer agent of
authorized dividend rates in
accordance with Board approved
FREQUENCY: ANNUALLY policy. Report dividends to
Board as required.
SUGGESTED FUND AUDITOR OR
FUNCTION INVESTORS BANK & TRUST AFIMS COUNSEL
----------------------------------- --------------------------------- ---------------------------- --------------------------
TAX (CONT.)
-----------------------------------
Prepare tax returns Prepare excise and RIC tax Review and sign tax return. A - Review and sign tax
returns. return as preparer.
FREQUENCY: ANNUALLY
Prepare Form 1099 Obtain yearly distribution Review and approve
information. Calculate 1099 information provided for
reclasses and coordinate with Form 1099.
transfer agent.
FREQUENCY: ANNUALLY
Prepare other year-end tax-related Obtain yearly income distribution Review and approve
disclosures information provided.
information. Calculate
disclosures (i.e., dividend
received deductions,
foreign tax credits, tax-exempt
FREQUENCY: ANNUALLY income, income by jurisdiction)
and coordinate with transfer agent.
APPENDIX C
APPENDIX C
AFIMS / THE PALLADIAN TRUST
ANNUAL FEE SCHEDULE FOR THE FIVE PALLADIAN FUNDS:
ADMINISTRATION SERVICES PROVIDED THROUGH AFIMS
FUND ADMINISTRATION
A. FUND ADMINISTRATION EXCLUDING LEGAL SERVICES
The following basis point charges apply to all assets for which Investors
Bank provides Fund Administration (excluding legal services).
ANNUAL FEE
--------------
FIRST $600 MILLION OF NET ASSETS 6 BASIS POINTS
NET ASSETS IN EXCESS OF $600 MILLION 4 BASIS POINTS
The yearly minimum fee for fund administration, excluding legal services, for
each fund is $55,000.
MISCELLANEOUS
A. OUT OF POCKET EXPENSES
These charges consist of:
- Telephone (Fax and Transmission) - Forms and Supplies
- Outside Legal Fees for Contract Changes - Third Party Audit
- Extraordinary Travel Expenses - Ad Hoc Reports
- Data Transmissions -Postage/delivery
- Microfiche
- Financial Statement Printing, Edgarization
B. SYSTEMS
The details of any systems work will be determined after a thorough business
analysis. System's work will be billed on a time and material basis.
Investors Bank provides an allowance of 10 systems hours for data extract set
up and reporting extract set up. Additional hours will be billed on a time
and material basis.
E. PAYMENT
The above fees will be due in full upon invoicing to AFIMS.
