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Exhibit (9)(a)
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of June 1, 1997 (the
"Agreement"), by and between FIRST DATA INVESTOR SERVICES GROUP, INC., a
Massachusetts corporation ("FDISG"), and THE GALAXY VIP FUND, a Massachusetts
business trust (the "Company").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain FDISG to render certain
administrative services with respect to each investment portfolio listed in
Schedule A hereto, as the same may be amended from time to time by the parties
hereto (collectively, the "Funds"), and FDISG is willing to render such
services;
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints FDISG to act as
Administrator of the Company for the period and on the terms set forth in this
Agreement. FDISG accepts such appointment and agrees to render the services
herein set forth for the compensation herein provided. In the event that the
Company decides to retain FDISG to act as Administrator hereunder with respect
to one or more portfolios other than the Funds, the Company shall notify FDISG
in writing. If FDISG is willing to render such services, it shall notify the
Company in writing whereupon such portfolio shall become a Fund hereunder.
2. Delivery of Documents. The Company has furnished FDISG with copies
properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Trustees authorizing
the appointment of FDISG to provide certain administrative services required by
the Company for each Fund and approving this Agreement;
(b) The Company's Declaration of Trust (the "Declaration of
Trust") filed with the Commonwealth of Massachusetts and all amendments thereto;
(c) The Company's Code of Regulations and all amendments
thereto (the "Code of Regulations");
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(d) The Investment Advisory Agreement between Fleet Investment
Advisors Inc. (the "Adviser") and the Company and all amendments thereto (the
"Advisory Agreement");
(e) The Global Custody Agreement between The Chase Manhattan
Bank (the "Custodian") and the Company and all amendments thereto (the "Custody
Agreement");
(f) The Distribution Agreement between First Data
Distributors, Inc. (the "Distributor") and the Company and all amendments
thereto (the "Distribution Agreement");
(g) The Company's Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and under the 1940
Act (File Nos. 33-49290 and 811-6726), as declared effective by the Securities
and Exchange Commission ("SEC"), relating to shares of beneficial interest of
the Company, and all amendments thereto;
(h) Each Fund's most recent prospectus and statement of
additional information and all amendments and supplements thereto (collectively,
the "Prospectuses"); and
(i) Procedures adopted by the Board of Trustees relating to
the pricing and valuation of the portfolio securities of each Fund.
The Company will furnish FDISG from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing. Furthermore, the Company will provide FDISG with any other documents
that FDISG may reasonably request and will notify FDISG as soon as possible of
any matter materially affecting the performance by FDISG of its services under
this Agreement.
3. Duties as Administrator.
(a) Subject to the supervision and direction of the Board of
Trustees of the Company, FDISG, as Administrator, will assist in supervising
various aspects of the Company's administrative operations and undertakes to
perform the following specific services:
(i) Maintaining office facilities (which may be in
the offices of FDISG or a corporate affiliate) and furnishing officers for the
Company;
(ii) Furnishing statistical and research data,
clerical, accounting and bookkeeping services (including the maintenance of such
accounts, books and records of the Company as may be required by Section 31(a)
of the 1940 Act and the rules thereunder) and stationery and office supplies;
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(iii) Providing internal auditing and legal services
(as described in Schedule D to this Agreement) and internal and executive
administrative services;
(iv) Performing all functions ordinarily performed
by the office of a treasurer, and furnishing the services and facilities
ordinarily incident thereto, including calculating the net asset value of the
shares of each Fund and the net income available for distribution in conformity
with each Fund's current Prospectus and resolutions of the Board of Trustees,
which resolutions have been provided to FDISG;
(v) Preparing those portions of the Company's Annual
and Semi-Annual Reports to shareholders and semi-annual reports to the SEC on
Form N-SAR that pertain to each Fund and coordinating and filing such reports;
(vi) Compiling data for and preparing for execution
those portions of the Company's federal and state tax returns and required tax
filings that pertain to each Fund and filing such returns and filings when
completed (other than those filings made by the Custodian);
(vii) Assisting the Adviser, at the Adviser's request,
in monitoring and developing compliance procedures for the Company which will
include, among other matters, procedures to assist the Adviser in monitoring
compliance with each Fund's investment objective, policies, restrictions, tax
matters and applicable laws and regulations;
(viii) Performing "Blue Sky" compliance functions,
including maintaining notice filings, registrations or "Blue Chip" exemptions
(if available) in all U.S. jurisdictions requested in writing by the Company,
monitoring sales of shares in all such jurisdictions and filing such additional
notice or applying for such additional or amended registrations as may be
reasonably anticipated to be necessary to permit continuous sales of the shares
of the Funds in all such jurisdictions, filing sales literature and advertising
materials to the extent required, with such Blue Sky authorities, and making and
filing all other applications, reports, notices, documents and exhibits in
connection with the foregoing;
(ix) Performing custody liaison operations, including
maintaining the day-to-day operational contact with the Custodian, calculating
daily cash availability, authorizing and monitoring cash movements, processing
corporate actions, supporting income and security settlements processed by the
Custodian and recorded by FDISG;
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(x) Compiling data for notices to the SEC required
with respect to the registration of each Fund's shares pursuant to Rules 24e-2
and 24f-2 under the 1940 Act;
(xi) Arranging for and bearing the cost of
processing purchase and redemption orders with respect to each Fund's shares;
and
(xii) Furnishing all other services identified on
Schedule D attached hereto and incorporated herein which are not otherwise
specifically set forth above.
(b) In addition to the duties set forth herein, FDISG shall
perform such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing by the Company and
FDISG.
(c) In compliance with the requirements of Rule 31a-3 under
the 1940 Act, FDISG hereby agrees that all records which it maintains for the
Company are the property of the Company, and further agrees to surrender
promptly to the Company any of such records upon the Company's request. FDISG
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained under Rule 31a-1 of the 1940 Act.
(d) In computing the net asset value of each Fund, FDISG may
utilize one or more independent pricing services approved from time to time by
the Board of Trustees of the Company to obtain securities prices. Each Fund will
pay its share of the cost of such services based upon its actual use of the
services.
(e) In performing its duties under this Agreement, FDISG: (a)
will act in accordance with the Company's Declaration of Trust, Code of
Regulations, Prospectuses and with the instructions and directions of the
Company and will conform to and comply with the requirements of the 1940 Act and
all other applicable federal or state laws and regulations; and (b) will consult
with legal counsel to the Company, as necessary and appropriate. Furthermore,
FDISG shall not have or be required to have any authority to supervise the
investment or reinvestment of the securities or other properties which comprise
the assets of the Company or any of its Funds and shall not provide any
investment advisory services to the Company or any of its Funds.
4. Compensation and Allocation of Expenses. FDISG shall bear all
expenses in connection with the performance of its services under this
Agreement, except as indicated below.
(a) FDISG will from time to time employ or associate with
itself such person or persons as FDISG may believe to be
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particularly suited to assist it in performing services under this Agreement.
Such person or persons may be officers and employees who are employed by both
FDISG and the Company. The compensation of such person or persons shall be paid
by FDISG and no obligation shall be incurred on behalf of the Company in such
respect.
(b) FDISG shall not be required to pay any of the following
expenses incurred by the Company: membership dues in the Investment Company
Institute or any similar organization; investment advisory fees and expenses;
interest on borrowed money; fees of Trustees of the Company who are not
affiliated with FDISG; outside auditing expenses; outside legal expenses; taxes;
brokerage fees and commissions; SEC fees and state Blue Sky qualification fees;
custodian, transfer and dividend disbursing agents' fees; certain insurance
premiums; costs of maintenance of corporate existence; typesetting and printing
of Prospectuses for regulatory purposes and for distribution to current
shareholders of the Funds; costs of shareholders' reports and corporate
meetings; or other expenses not specified in this Section 4 which may be
properly payable by the Company. The Funds will not bear, directly or
indirectly, the cost of any activity which is primarily intended to result in
the distribution of Fund shares.
(c) The Company on behalf of each of the Funds will compensate
FDISG for the performance of its obligations hereunder in accordance with the
fees set forth in the written Fee Schedule attached hereto as Schedule B and
incorporated herein.
(d) The Company on behalf of each of the Funds will pay to
FDISG domestic and/or global custody fees and expenses for each Fund as set
forth in Schedule B. FDISG shall be the party responsible for payment of all
fees and expenses under the terms of the Custody Agreement.
(e) The fees set forth in Schedule B do not include
out-of-pocket disbursements of FDISG for which FDISG shall be entitled to xxxx
separately. Out-of-pocket disbursements shall include, but shall not be limited
to, (i) the items specified in the written schedule of out-of-pocket expenses
attached hereto as Schedule C and incorporated herein, as the same may be
modified from time to time by written agreement of the parties hereto, and (ii)
the Special Projects outlined in Schedule D hereto.
(f) FDISG will submit a detailed xxxx to the Company as soon
as practicable after the end of each calendar month for all out-of-pocket
disbursements made during such month. The Company will promptly pay to FDISG the
amount of such billing.
(g) The Company acknowledges that the fees that FDISG charges
the Company under this Agreement reflect the allocation
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of risk between the parties, including the disclaimer of warranties in Section 7
and the limitations on liability in Section 5. Modifying the allocation of risk
from what is stated here would affect the fees that FDISG charges, and in
consideration of those fees, the Company agrees to the stated allocation of
risk.
5. Limitation of Liability.
(a) FDISG shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company in connection with the
performance of its obligations and duties under this Agreement, except a loss
resulting from FDISG's willful misfeasance, bad faith or negligence in the
performance of such obligations and duties, or by reason of its reckless
disregard thereof.
(b) Each party shall have the duty to mitigate damages for
which the other party may become responsible.
(c) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, IN NO EVENT SHALL EITHER PARTY, ITS AFFILIATES OR ANY OF ITS OR THEIR
DIRECTORS, TRUSTEES, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE TO
THE OTHER PARTY FOR CONSEQUENTIAL DAMAGES.
6. Indemnification.
(a) The Company shall indemnify and hold FDISG harmless from
and against any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against FDISG or for which FDISG may be held to be liable
(a "Claim") arising out of or attributable to any of the following, unless such
Claim resulted from a negligent act or omission to act or bad faith by FDISG in
the performance of its duties hereunder:
(i) FDISG's reasonable reliance on, or reasonable
use of information, data, records and documents received by FDISG from the
Company, or any authorized third party acting on behalf of the Company, in the
performance of FDISG's duties and obligations hereunder; and
(ii) the Company's refusal or failure to comply with
the terms of this Agreement or any Claim which arises out of the Company's
negligence or misconduct or the breach of any representation or warranty by the
Company made herein.
(b) In any case in which the Company may be asked to indemnify
or hold FDISG harmless, FDISG will notify the Company promptly after identifying
any situation which it believes
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presents or appears likely to present a claim for indemnification against the
Company although the failure to do so shall not prevent recovery by FDISG and
shall keep the Company advised with respect to all developments concerning such
Indemnification Claim. The Company shall have the option to defend FDISG against
any Indemnification Claim and, in the event that the Company so elects, such
defense shall be conducted by counsel chosen by the Company and satisfactory to
FDISG, and thereupon the Company shall take over complete defense of the Claim
and FDISG shall sustain no further legal or other expenses in respect of such
Indemnification Claim. FDISG will not confess any Indemnification Claim or make
any compromise in any case in which the Company will be asked to provide
indemnification, except with the Company's prior written consent. Subject to
subsection (c) hereof, the obligations of the parties hereto under this Section
6 shall survive the termination of this Agreement.
(c) Any Indemnification Claim under this Agreement must be
made prior to the earlier of:
(i) one year after FDISG becomes aware of the event
for which indemnification is claimed; or
(ii) one year after the earlier of the termination
of this Agreement or the expiration of the term of this Agreement.
(d) Except for remedies that cannot be waived as a matter of
law (and injunctive or provisional relief), the provisions of this Section 6
shall be FDISG's sole and exclusive remedy for claims or other actions or
proceedings to which the Company's indemnification obligations pursuant to this
Section 6 may apply.
7. EXCLUSION OF WARRANTIES. THIS IS A SERVICE AGREEMENT. EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, FDISG DISCLAIMS ALL OTHER REPRESENTATIONS
OR WARRANTIES, EXPRESS OR IMPLIED, MADE TO THE COMPANY OR ANY OTHER PERSON.
8. Termination of Agreement.
(a) This Agreement shall be effective on the date first
written above and shall continue for a period of one (1) year (the "Initial
Term"), unless earlier terminated pursuant to the terms of this Agreement.
Thereafter, this Agreement shall continue automatically for additional terms of
one (1) year ("Renewal Terms") each.
(b) Either party may terminate this Agreement at the end of
the Initial Term or at the end of any subsequent Renewal Term upon not than less
than sixty (60) days prior written notice to the other party.
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(c) The Company may terminate this Agreement in the event that
the negligent action or negligent omission to act on the part of FDISG causes
damages to the Company or its shareholders in excess of one hundred thousand
dollars ($100,000). "Damages to the Company" are defined as damages caused by a
single event, or cumulative series of events related to the same matter, which
generates a monetary loss. The Company's right to terminate under this Section
8(c) shall remain effective in the event FDISG has made the Company whole with
respect to the damages caused. Unless the Company provides FDISG with written
notice of the Company's intent to exercise its option under this Section 8(c)
within 30 days after the Company becomes aware of the occurrence, the Company
shall have waived its option to terminate under this provision.
(d) If a party hereto is guilty of a material failure to
perform its duties and obligations hereunder (a "Defaulting Party"), such other
party (the "Non-Defaulting Party") may give written notice thereof to the
Defaulting Party, and if such material breach shall not have been remedied
within thirty (30) days after such written notice is given, then the
Non-Defaulting Party may terminate this Agreement by giving thirty (30) days
written notice of such termination to the Defaulting Party. If FDISG is the
Non-Defaulting Party, its termination of this Agreement shall not constitute a
waiver of any other rights or remedies of FDISG with respect to services
performed prior to such termination or rights of FDISG to be reimbursed for
out-of-pocket expenses. In all cases, termination by the Non-Defaulting Party
shall not constitute a waiver by the Non-Defaulting Party of any other rights it
might have under this Agreement or otherwise against the Defaulting Party.
(e) The Company shall have the right to terminate this
Agreement at any time if the company reorganizes into another entity, liquidates
or otherwise ceases to exist. In the event the Company terminates the Agreement
pursuant to this Section 8(e), the Company shall reimburse FDISG for all
reasonable costs associated with such termination.
(f) In the event this Agreement is terminated by the Company
pursuant to Sections 8(c) or 8(d) hereof, all reasonable expenses associated
with movement of records and materials and conversion thereof to a successor
administrator will be borne by FDISG and the Company shall not be responsible
for FDISG's costs associated with such termination. In the event of termination
of this Agreement pursuant to any other Section of this Agreement, all
reasonable expenses associated with conversion to a successor administrator will
be borne by the Company.
9. Modifications and Waivers. No change, termination, modification,
or waiver of any term or condition of this Agreement shall be valid unless in
writing signed by each party.
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No such writing shall be effective as against the Company unless said writing is
executed by the President of the Company. No such writing shall be effective as
against FDISG unless said writing is executed by a Senior Vice President,
Executive Vice President or President of FDISG. A party's waiver of a breach of
any term or condition in the Agreement shall not be deemed a waiver of any
subsequent breach of the same or another term or condition.
10. No Presumption Against Drafter. FDISG and the Company have
jointly participated in the negotiation and drafting of this Agreement. The
Agreement shall be construed as if drafted jointly by the Company and FDISG, and
no presumptions arise favoring any party by virtue of the authorship of any
provision of this Agreement.
11. Publicity. Neither FDISG nor the Company shall release or publish
news releases, public announcements, advertising or other publicity relating to
this Agreement or to the transactions contemplated by it without prior review
and written approval of the other party; provided, however, that either party
may make such disclosures as are required by legal, accounting or regulatory
requirements after making reasonable efforts in the circumstances to consult in
advance with the other party.
12. Severability. The parties intend every provision of this Agreement
to be severable. If a court of competent jurisdiction determines that any term
or provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
13. Miscellaneous.
(a) Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Company or FDISG shall be
sufficiently given if addressed to the 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.
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To the Company:
Xxxx X. X'Xxxxx, President
The Galaxy VIP Fund
c/o Hasbro, Inc.
000 Xxxxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxx 00000
with a copy to:
W. Xxxxx XxXxxxxx, III, Esq.
Drinker Xxxxxx & Xxxxx LLP
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
To FDISG:
First Data Investor Services Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to FDISG's General Counsel
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns and is not intended to confer upon any other person any rights or
remedies hereunder. This Agreement may not be assigned or otherwise transferred
by either party hereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that FDISG
may, in its sole discretion, assign all its right, title and interest in this
Agreement to an affiliate, parent or subsidiary, provided that, in the
reasonable judgment of the Board of Trustees of the Company acting in its sole
discretion: (i) the financial capacity of such assignee is not materially less
than that of FDISG; (ii) the nature and quality of the services to be provided
hereunder are not materially adversely affected by such assignment; and (iii)
the quality and capability of the personnel and facilities of the assignee are
not materially less than those of FDISG. FDISG may, in its sole discretion,
engage subcontractors to perform any non-material or non-substantive obligations
contained in this Agreement that it is otherwise required to perform hereunder,
provided that FDISG shall be responsible for all compensation payable to such
subcontractors and shall remain responsible for the acts and omissions of such
subcontractors to the same extent that it is hereunder.
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(c) The laws of the Commonwealth of Massachusetts, excluding
the laws on conflicts of laws, shall govern the interpretation, validity, and
enforcement of this Agreement. All actions arising from or related to this
Agreement shall be brought in the state and federal courts sitting in the City
of Boston, and FDISG and the Company hereby submit themselves to the exclusive
jurisdiction of those courts.
(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.
(f) The names "The Galaxy VIP Fund" and "Trustees of The
Galaxy VIP Fund" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated May 27, 1992 which is hereby referred to and a copy
of which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Company. The obligations of
"The Galaxy VIP Fund" entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Company personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Company must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Company.
14. Confidentiality.
(a) The parties agree that the Proprietary Information
(defined below) and the contents of this Agreement (collectively "Confidential
Information") are confidential information of the parties and their respective
licensers. The Company and FDISG shall exercise at least the same degree of
care, but not less than reasonable care, to safeguard the confidentiality of the
Confidential Information of the other as it would to protect its own
Confidential Information. The Company and FDISG may use the Confidential
Information only to exercise their respective rights or perform their respective
duties under this Agreement. Except as otherwise required by law and except as
disclosed in the Company's Registration Statement or filed as an exhibit
thereto, the Company and FDISG shall not duplicate, sell or disclose to others
the Confidential Information of the other, in whole or in part, without the
prior written permission of the other party.
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The Company and FDISG may, however, disclose Confidential Information to their
respective employees who have a need to know the Confidential Information to
perform work for the other, provided that the Company and FDISG shall use
reasonable efforts to ensure that the Confidential Information is not duplicated
or disclosed by their respective employees in breach of this Agreement. The
Company and FDISG may also disclose the Confidential Information to independent
contractors, auditors and professional advisors, provided they first agree in
writing to be bound by the confidentiality obligations substantially similar to
this Section 14. Notwithstanding the previous sentence, in no event shall either
the Company or FDISG disclose the Confidential Information to any competitor of
the other without specific, prior written consent.
(b) Proprietary Information means:
(i) any data or information that is completely
sensitive material, and not generally known to the public, including, but not
limited to, information about product plans, marketing strategies, finance,
operations, customer relationships, customer profiles, sales estimates, business
plans, and internal performance results relating to the past, present or future
business activities of the Company or FDISG, their respective subsidiaries and
affiliated companies and the customers, clients and suppliers of any of them;
(ii) any scientific or technical information,
design, process, procedure, formula, or improvement that is commercially
valuable and secret in the sense that its confidentiality affords the Company or
FDISG a competitive advantage over its competitors; and
(iii) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source code,
object code, flow charts, databases, inventions, know-how, show-how and trade
secrets, whether or not patentable or copyrightable.
(c) Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment, prototypes and
models, and any other tangible manifestation of the foregoing of either party
which now exist or come into the control or possession of the other.
15. Force Majeure. No party shall be liable for any default or delay
in the performance of its obligations under this Agreement if and to the extent
such default or delay is caused, directly or indirectly, by circumstances beyond
such party's reasonable control. In any such event, the non-performing party
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shall be excused from any further performance and observance of the obligations
so affected only for so long as such circumstances prevail and such party
continues to use commercially reasonable efforts to recommence performance or
observance as soon as practicable.
16. Entire Agreement. This Agreement, including all Schedules hereto,
constitutes the entire Agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof.
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.
FIRST DATA INVESTOR SERVICES GROUP, INC.
By:/s/Xxxxxxx X.Xxxxxxx
-----------------------
Name:Xxxxxxx X. Xxxxxxx
---------------------
Title:EVP; General Counsel
--------------------
THE GALAXY VIP FUND
By:/s/Xxxx X. X'Xxxxx
------------------
Name:Xxxx X. X'Xxxxx
----------------
Title:President
---------------
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SCHEDULE A
Money Market Fund
Equity Fund
Asset Allocation Fund
High Quality Bond Fund
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SCHEDULE B
FEE SCHEDULE
For the services to be rendered, the facilities to be furnished and the
payments to be made by FDISG, as provided for in this Agreement, the Company, on
behalf of each Fund, will pay FDISG on the first business day of each month a
fee for the previous month at the rates listed below. Upon any termination of
this Agreement before the end of any month, the fee for such part of a month
shall be prorated according to the proportion which such period bears to the
full monthly period and shall be payable upon the date of termination of this
Agreement.
All asset-based fees shall be calculated daily and paid monthly. Net
assets shall be computed in accordance with the Funds' Prospectuses and the
resolutions of the Company's Board of Trustees.
ADMINISTRATION FEES:
FDISG shall be paid an annual administration fee at the annual rate of
.085% of the first $1.0 billion of the Funds' combined average daily net assets,
.078% of the next $1.5 billion of combined average daily net assets, .073% of
combined average daily net assets in excess of $2.5 billion and a percentage
rate to be negotiated by the parties of the combined average daily net assets in
excess of $5 billion. The minimum aggregate fee for the Funds will be $100,000.
FUND ACCOUNTING FEES:
FDISG shall be paid an annual fund accounting fee for each Fund based
on the average net assets of each Fund as follows:
Assets Fee
------ --------
Net assets under $50 million $ 25,000
Net assets of $50 million but less than $200 million $ 35,000
Net assets of $200 million but less than $500 million $ 50,000
Net assets of $500 million but less than $1 billion $ 85,000
Net assets in excess of $1 billion $125,000
The annual fund accounting fee for a Fund possessing more than 25% in
non-domestic assets will be 150% of the annual fund accounting fees described
above.
DOMESTIC AND/OR GLOBAL CUSTODY FEES:
Domestic and/or global custody fees for each Fund are comprised of an
annual account fee, annual holding fees and transaction fees (domestic custody)
and/or an annual account maintenance fee and asset and transaction fees per
country
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(global custody) as more particularly set forth in Exhibit 1 to this Schedule B,
plus out-of-pocket charges including but not limited to taxes, insurance,
telephone and script fees.
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EXHIBIT 1 TO SCHEDULE B
CUSTODY
DOMESTIC CUSTODY
The fees for Domestic Custody are comprised of three separate charges
as follows:
ANNUAL ACCOUNT FEE
Assets less than $100 million $ 5,000
Assets $100 - 500 million $ 7,500
Assets greater than $500 million $15,000
ANNUAL HOLDING FEE
Book Entry (DTC, FBE, etc.) $ 24.00
Physical $ 60.00
PTC $ 72.00
Euroclear/Cedel 3 basis points
TRANSACTION FEE
DTC $ 8.00
Fed Book Entry $ 8.00
Physical/Commercial Paper $ 22.00
Interfund Trades $ 5.00
Options $ 25.00
Futures $ 25.00
Repurchase Agreements $ 15.00
Note: Euroclear/Cedel holdings charge is based upon dollar
value of holdings (i.e. asset based charge).
GLOBAL CUSTODY
The fees for Global Custody are comprised of three separate charges as
follows:
ANNUAL ACCOUNT MAINTENANCE FEE
Fees are based on average net assets per Fund and include
management of custodian network, collection and settlement of
principal and income items and monitoring the quality of
services provided. Fees are billable on a monthly basis at the
rate of 1/12 of the annual fee.
Fund Net Assets Annual Fee
Up to $100 million $25,000
$100 to $250 million $35,000
$250 to $500 million $45,000
Over $500 million Negotiable
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ASSET AND TRANSACTION FEES PER COUNTRY
Basis Point Transaction
County Charge Charge
------ ------ ------
Argentina 22 $ 75
Australia 7 $ 30
Austria 12 $ 60
Belgium 7 $ 30
Canada 7 $ 30
Chile 20 $100
China 40 $100
Denmark 16 $ 60
Finland 16 $ 60
France 7 $ 30
Germany 7 $ 30
Greece 26 $120
Hong Kong 12 $ 60
India 40 $100
Indonesia 26 $120
Ireland 7 $ 30
Italy 7 $ 00
Xxxxx (debt) 12 $ 00
Xxxxx (equity) 7 $ 30
Malaysia 22 $120
Mexico 16 $ 60
Netherlands 7 $ 30
New Zealand 12 $ 00
Xxxxxx 00 $ 60
Philippines 22 $120
Singapore 22 $120
South Korea 20 $100
Spain 26 $120
Sweden 7 $ 30
Switzerland 7 $ 30
Taiwan 32.75 $120
Thailand 22 $120
Turkey 26 $120
United Kingdom 7 $ 30
Venezuela 22 $120
Out-of-pocket charges, including but not limited to, taxes, insurance,
telephone, script fees, will be invoiced at cost.
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SCHEDULE C
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include the following:
- Postage of Board meeting materials and other materials to the
Company's Board members and service providers (including
overnight or other courier services)
- Telecommunications charges (including FAX) with respect
to communications with the Company's directors,
officers and service providers
- Duplicating charges with respect to filings with
federal and state authorities and Board meeting
materials
- Courier services
- Pricing services
- Equity and bond price quotes ($.20 and $.50 per quote
per day, respectively)
- Money market price quotes ($.50 per quote per week)
- Forms and supplies for the preparation of Board
meetings and other materials for the Company
- Vendor set-up charges for Blue Sky services
- Customized programming requests
- Such other expenses as are agreed to in writing by
FDISG and the Company
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20
SCHEDULE D
FUND ACCOUNTING AND ADMINISTRATIVE SERVICES
ROUTINE PROJECTS
- Daily, Weekly, and Monthly Reporting
- Portfolio and General Ledger Accounting
- Daily Pricing of all Securities
- Daily Valuation and NAV Calculation
- Comparison of NAV to market movement
- Review of price tolerance/fluctuation report
- Research items appearing on the price exception report
- Weekly cost monitoring along with xxxx-to-market valuations in accordance
with Rule 2a-7
- Preparation of monthly ex-dividend monitor
- Daily cash reconciliation with the custodian bank
- Daily updating of price and rate information to the Insurance Agent
- Daily support and report delivery to Portfolio Management
- Daily calculation of Fund advisor fees and waivers
- Daily calculation of distribution rates
- Daily maintenance of each Fund's general ledger including expense accruals
- Daily price notification to other vendors as required
- Calculation of SEC yields and total returns
- Preparation of month-end reconciliation package
- Monthly reconciliation of Fund expense records
- Preparation of monthly pay down gain/loss summaries
- Preparation of all annual and semi-annual audit work papers
- Preparation and printing of financial statements
- Providing shareholder tax information to Transfer Agent
- Producing drafts of IRS and state tax returns
- Treasury Services including:
Provide officers for the Company
Expense accrual monitoring
Determination of dividends
Prepare materials for review by the Board, e.g., 2a-7,
10f-3, 17a-7, 17e-1, Rule 144a
- Tax and financial counsel
- IRS and SEC compliance testing including Section 817(h)
- Updating projections of annual expenses
- Preparation of monthly Fund portfolio profile reports
- Preparation of various management reports
- Reporting of Fund statistics to ICI
- Sending of Rule 24f-2 or 24e-2 notices to the SEC in
conjunction with the Company's counsel
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DISTRIBUTION AND LEGAL, REGULATORY AND BOARD OF TRUSTEES SUPPORT
ROUTINE PROJECTS
- Review and filing of Form N-SAR
- Review and filing of Annual and Semi-Annual Financial Reports
- Assistance in Preparation of Fund Registration Statements
- Review of all Sales Material and Advertising
- Consultations regarding legal issues as needed
- Assist with marketing strategy and product development
- Assist in preparation of proxy statements
- Develop or assist in developing guidelines or procedures to
improve overall compliance by each Fund and its agents
- Maintain legal liaison with, and provide advice to, the
Company regarding its relationships with various agents with respect to
their activities on behalf of the Company
- Monitor and, to the extent necessary and appropriate,
participate in the preparation of
- documents and the overall handling of litigation matters by
outside counsel and non-routine regulatory investigations
SPECIAL PROJECTS*
- Proxy material preparation
- N-14 preparation (merger document)
- Preparation of Post-Effective Amendments and Prospectus
Supplements
- Prospectus simplification
- Exemptive order applications
- Extraordinary non-recurring projects
- Basic sales, mutual funds, and product training to branch and
sales representatives
*Charged on a project-by-project basis upon the Company's prior
written approval.
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