ADMINISTRATION AGREEMENT
LIFE & ANNUITY TRUST
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
THIS AGREEMENT is made as of this 1st day of May, 1998, by and between the
Life & Annuity Trust, a Delaware business trust ("Life & Annuity") and Xxxxx
Fargo Bank, N.A., a national banking association ("Xxxxx Fargo").
WHEREAS, Life & Annuity is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, Life & Annuity desires to retain Xxxxx Fargo to render certain
administrative services to Life & Annuity's investment portfolios listed in
Appendix A (individually, a "Fund" and collectively, the "Funds"), and Xxxxx
Fargo is willing to render such services; and
WHEREAS, Life & Annuity is retaining Xxxxxxxx Inc. pursuant to a separate
Co-Administration Agreement with Life & Annuity and Xxxxx Fargo to provide
certain other administrative services.
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed by the parties as follows:
1. Appointment. Life & Annuity hereby appoints Xxxxx Fargo to act as
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Administrator of the Funds, and Xxxxx Fargo hereby accepts such appointment and
agrees to render such services and duties set forth in Paragraph 3, for the
compensation and on the terms herein provided. Each new investment portfolio
established in the future by Life & Annuity shall automatically become a "Fund"
for all purposes hereunder as if it were listed in Appendix A, absent written
notification to the contrary by either Life & Annuity or Xxxxx Fargo.
2. Delivery of Documents. Life & Annuity shall furnish to, or cause to be
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furnished to, Xxxxx Fargo originals of, or copies of, all books, records, and
other documents and papers related in any way to the administration of Life &
Annuity.
3. Duties as Administrator. Xxxxx Fargo shall, at its expense, provide
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the following administrative services in connection with the operations of Life
& Annuity and the Funds:
(a) track authorized vs. issued shares;
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(b) furnish statistical and research data;
(c) coordinate (or assist in) the preparation and filing with the U.S.
Securities and Exchange Commission of registration statements, notices, reports,
and other material required to be filed under applicable laws;
(d) coordinate (or assist in) the preparation of reports and other
information materials regarding the Funds including proxies and other
shareholder communications, and review prospectuses;
(e) prepare expense table information for annual updates;
(f) provide legal and regulatory advice to the Funds in connection with its
other administrative functions;
(g) provide office facilities and clerical support for the Funds;
(h) develop and implement procedures for monitoring compliance with
regulatory requirements and compliance with the Funds' investment objectives,
policies and restrictions;
(i) provide liaison with the Funds' independent auditors;
(j) prepare and file tax returns;
(k) review payments of Fund expenses;
(l) prepare expense budgeting and accruals;
(m) provide communication, coordination, and supervision services with
regard to the Funds' transfer agent, custodian, fund accountant, co-
administrator, and other service organizations that render recordkeeping or
shareholder communication services;
(n) provide information to the Funds' distributor concerning fund
performance and administration;
(o) assist Life & Annuity in the development of additional investment
portfolios;
(p) provide reports to the Funds' board of trustees regarding its
activities;
(q) assist in the preparation and assembly of meeting materials, including
comparable fee information, as required, for the Funds' board of trustees; and
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(r) provide any other administrative services reasonably necessary for the
operation of the Funds other than those services that are to be provided by
Xxxxxxxx pursuant to its Co-Administration Agreement with Life & Annuity and
Xxxxx Fargo, and by Life & Annuity's transfer and dividend disbursing agent,
custodian, and fund accountant, provided that nothing in this Agreement shall be
deemed to require Xxxxx Fargo to provide any services that may not be provided
by it under applicable banking laws and regulations.
In performing all services under this agreement, Xxxxx Fargo shall: (a) act
in conformity with Life & Annuity's Declaration of Trust and By-Laws, the 1940
Act, and any other applicable laws as may be amended from time to time; and Life
& Annuity's registration statement under the Securities Act of 1933 and the 1940
Act, as may be amended from time to time; (b) consult and coordinate with legal
counsel to Life & Annuity as necessary and appropriate; and (c) advise and
report to Life & Annuity and its legal counsel, as necessary and appropriate,
with respect to any compliance or other matters that come to its attention.
In connection with its duties under this Paragraph 3, Xxxxx Fargo may, at
its own expense, enter into sub-administration agreements with other service
providers, provided that each such service provider agrees with Xxxxx Fargo to
comply with all relevant provisions of the 1940 Act, the Investment Advisers Act
of 1940, any other applicable laws as may be amended from time to time, and all
relevant rules thereunder. Xxxxx Fargo will provide Life & Annuity with a copy
of each sub-administration agreement it executes relating to Life & Annuity.
Xxxxx Fargo will be liable for acts or omissions of any such sub-administrators
under the standards of care described herein under Paragraph 5.
In performing its services under this agreement, Xxxxx Fargo shall
cooperate and coordinate with Xxxxxxxx as necessary and appropriate and shall
provide such information to Xxxxxxxx as is reasonably necessary or appropriate
for Xxxxxxxx to perform its obligations to Life & Annuity.
4. Compensation. In consideration of the administration services to be
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rendered by Xxxxx Fargo under this agreement, Life & Annuity shall pay Xxxxx
Fargo a monthly fee at the annual rate of 0.03% of the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining net asset value per share) of the Funds' net assets during the
preceding month. If the fee payable to Xxxxx Fargo pursuant to this Paragraph 4
begins to accrue before the end of any month or if this agreement terminates
before the end of any month, the fee for the period from the effective date to
the end of that month or from the beginning of that month to the termination
date, respectively, shall be prorated according to the proportion that the
period bears to the full month in which the effectiveness or termination occurs.
For purposes of calculating each such monthly fee, the value of each Fund's net
assets shall be computed in the manner specified in the Prospectus and Life &
Annuity's Declaration of Trust for the computation of the value of the Fund's
net assets in connection with the determination of the net asset value of Fund
shares. For purposes of this agreement, a "business day" is any day that Life &
Annuity is open for trading.
5. Limitation of Liability; Indemnification.
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(a) Xxxxx Fargo shall not be liable for any error of judgment or mistake of
law or for any loss suffered by Life & Annuity in connection with the
performance of its obligations and duties under this agreement, except a loss
resulting from Xxxxx Fargo's willful misfeasance, bad faith, or negligence in
the performance of its obligations and duties or that of its agents or sub-
administrators, or by reason of its or their reckless disregard thereof. Any
person, even though also an officer, director, employee or agent of Xxxxx Fargo,
shall be deemed, when rendering services to Life & Annuity or acting on any
business of Life & Annuity (other than services or business in connection with
Xxxxx Fargo's duties as Administrator hereunder) to be acting solely for Life &
Annuity and not as an officer, director, employee, or agent or one under the
control or discretion of Xxxxx Fargo even though paid by it.
(b) Life & Annuity, on behalf of each Fund, will indemnify Xxxxx Fargo
against and hold it harmless from any and all losses, claims, damages,
liabilities, or expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action, or suit relating to the particular
Fund and not resulting from willful misfeasance, bad faith, or negligence of
Xxxxx Fargo or its agents or sub-administrators in the performance of such
obligations and duties, or by reason of its or their reckless disregard thereof.
Xxxxx Fargo will not confess any claim or settle or make any compromise in any
instance in which Life & Annuity will be asked to provide indemnification,
except with Life & Annuity's prior written consent. Any amounts payable by Life
& Annuity under this Paragraph 5(b) shall be satisfied only against the assets
of the Fund involved in the claim, demand, action, or suit and not against the
assets of any other Fund.
6. Life & Annuity expenses. Except as provided in each of Life &
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Annuity's advisory contracts and its co-administration and distribution
agreements with Xxxxxxxx, Life & Annuity shall bear all costs of its operations,
including the compensation of its trustees who are entitled to receive
compensation; advisory and administration fees; payments of distribution-related
expenses pursuant to any Rule 12b-1 Plan under the 1940 Act; governmental fees;
interest charges; taxes; fees and expenses of its independent accountants, legal
counsel, transfer agent and dividend disbursing agent; expenses of redeeming
shares; expenses of preparing and printing prospectuses (except the expense of
printing and mailing prospectuses used for promotional purposes, unless
otherwise payable pursuant to a Rule 12b-1 Plan), shareholders' reports,
notices, proxy statements and reports to regulatory agencies; travel expenses of
trustees, officers and employees; office supplies; insurance premiums and
certain expenses relating to insurance coverage; trade association membership
dues; brokerage and other expenses connected with the execution of portfolio
securities transactions; fees and expenses of any custodian, including those for
keeping books and accounts and calculating the net asset value per share of the
Funds; expenses of shareholders' meetings; expenses relating to the issuance,
registration and qualification of shares of the Funds; pricing services, if any;
organizational expenses; and any extraordinary expenses. Expenses attributable
to one or more, but not all, of the Funds are charged against the assets of the
relevant Funds. General expenses of the Funds are allocated among the Funds in
a manner proportionate to the net assets of each Fund, on a transactional basis
or on such other basis as the Board of Trustees deems equitable.
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7. Amendment. This agreement may be amended at any time by mutual
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agreement in writing of Life & Annuity and Xxxxx Fargo, provided that the Board
of Trustees of Life & Annuity approve any such amendment in advance.
8. Administrator's other businesses. Except to the extent necessary to
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perform Xxxxx Fargo's obligations under this agreement, nothing herein shall be
deemed to limit or restrict the right of Xxxxx Fargo, or any affiliate or
employee of Xxxxx Fargo, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
9. Duration. This agreement shall become effective on its execution date
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and shall remain in full force and effect for one year or until terminated
pursuant to the provisions in Paragraph 10, and it may be reapproved at least
annually by the Board of Trustees, including a majority of the trustees who are
not interested persons of Life & Annuity or any party to this agreement, as
defined by the 1940 Act.
10. Termination of Agreement. This agreement may be terminated at any
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time, without the payment of any penalty, by a vote of a majority of the members
of Life & Annuity's Board of Trustees, on 60 days' written notice to Xxxxx
Fargo; or by Xxxxx Fargo on 60 days' written notice to Life & Annuity.
11. Expense waivers. If in any fiscal year the total expenses of a Fund
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incurred by, or allocated to, the Fund excluding taxes, interest, brokerage
commissions and other portfolio transaction expenses, other expenditures that
are capitalized in accordance with generally accepted accounting principles,
extraordinary expenses and amounts accrued or paid under a Rule 12b-1 Plan of
the Fund, but including the fees provided for in Paragraph 4 and those provided
for pursuant to the Fund's Advisory Agreement ("includible expenses"), exceed
the applicable voluntary expense waivers, if any, set forth in the Prospectus,
Xxxxx Fargo shall waive or reimburse that portion of the excess derived by
multiplying the excess by a fraction, the numerator of which shall be the
percentage at which the excess portion attributable to the fee payable pursuant
to this agreement is calculated under Paragraph 4 hereof, and the denominator of
which shall be the sum of such percentage plus the percentage at which the
excess portion attributable to the fee payable pursuant to the Fund's Advisory
Agreement is calculated (the "Applicable Ratio"), but only to the extent of the
fee hereunder for the fiscal year. If the fees payable under this agreement
and/or the Fund's Advisory Agreement contributing to such excess portion are
calculated at more than one percentage rate, the Applicable Ratio shall be
calculated separately on the basis of, and applied separately to, the portions
of the fees calculated at the different rates. At the end of each month of Life
& Annuity's fiscal year, Life & Annuity shall review the includible expenses
accrued during that fiscal year to the end of that period and shall estimate the
includible expenses for the balance of that fiscal year. If as a result of that
review and estimation it appears likely that the includible expenses will exceed
the limitations referred to in this Paragraph 11 for a fiscal year with respect
to the Fund, the monthly fee set forth in Paragraph 4 payable to Xxxxx Fargo for
such month shall be reduced, subject to a later adjustment, by an amount equal
to the Applicable Ratio times the pro rata portion (prorated on
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the basis of the remaining months of the fiscal year, including the month just
ended) of the amount by which the includible expenses for the fiscal year are
expected to exceed the limitations provided for in this Paragraph 11. For
purposes of computing the excess, if any, over the most restrictive applicable
expense limitation, the value of the Fund's net assets shall be computed in the
manner specified in Paragraph 4, and any reimbursements required to be made by
Xxxxx Fargo shall be made once a year promptly after the end of Life & Annuity's
fiscal year.
12. Life & Annuity not bound to violate its Declaration. Nothing in this
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agreement shall require Life & Annuity to take any action contrary to any
provision of its Declaration of Trust or to any applicable statute or
regulation.
13. Miscellaneous.
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(a) Any notice or other instrument authorized or required by this
agreement to be given in writing to Life & Annuity or Xxxxx Fargo 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 Life & Annuity:
Life & Annuity Trust
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
To Xxxxx Fargo:
Xxxxx Fargo Bank, N.A.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
(b) This agreement shall extend to and be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
agreement shall not be subject to assignment (as that term is defined under the
0000 Xxx) without the written consent of the other party.
(c) This agreement shall be governed by and construed in accordance
with the laws of the State of California.
(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 agreement.
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(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.
In witness whereof, the parties have caused this agreement to be executed
by their duly authorized officers as of the day and year first above written.
LIFE & ANNUITY TRUST
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Chief Operating Officer
XXXXX FARGO BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Senior Vice President
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
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Xxxxxxxxx X. Xxxxxxxxx
Vice President
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Appendix A
Life & Annuity Funds
Asset Allocation Fund
Corporate Bond Fund
Equity Value Fund
Growth Fund
Money Market Fund
Strategic Growth Fund
U.S. Government Allocation Fund
Approved: January 16, 1997
Approved as Amended: January 29, 1998 to change the fee rate and to include the
Equity Value and Strategic Growth Funds
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