ADMINISTRATION AGREEMENT
AGREEMENT made this 26th day of July, 2000 between Pilgrim GNMA Income
Fund, Inc. (the "Fund"), a Maryland corporation, and Pilgrim Group, Inc. (the
"Administrator"), a Delaware corporation.
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Fund desires to avail itself of the services of the
Administrator for the provision of administrative services for the Fund; and
WHEREAS, the Administrator is willing to render such services to the Fund;
NOW, THEREFORE, in consideration of the premises, the promises and mutual
covenants herein contained, it is agreed between the parties as follows:
1. APPOINTMENT. The Fund hereby appoints the Administrator, subject to the
direction of the Board of Directors, for the period and on the terms set forth
in this Agreement, to provide administrative services, as described herein, with
respect to the Fund. The Administrator accepts such appointment and agrees to
render the services set forth herein.
2. SERVICES OF THE ADMINISTRATOR. Subject to the general supervision of the
Board of Directors of the Fund, the Administrator shall provide the following
administrative services:
(a) Provide all administrative services reasonably necessary for the
operation of the Fund other than the investment advisory services performed by
the investment adviser or sub-adviser, including, but not limited to, (i)
coordinating all matters relating to the operation of the Fund, including any
necessary coordination among the investment adviser, custodian, transfer agent,
dividend disbursing agent, and portfolio accounting agent (including pricing and
valuation of the portfolio), accountants, attorneys, and other parties
performing services or operational functions for the Fund; (ii) maintaining or
supervising the maintenance by third parties engaged by the Fund of such books
and records of the Fund as may be required by applicable federal or state law;
(iii) preparing or supervising the preparation by third parties selected by the
Fund of all federal, state, and local tax returns and reports required by
applicable law; (iv) preparing and filing, with the assistance of counsel, and
arranging for the distribution of proxy materials and periodic reports to
shareholders as required by applicable law; (v) preparing and arranging for the
filing, with the assistance of counsel, of registration statements and other
documents with the Securities and Exchange Commission (the "SEC") and other
federal and state regulatory authorities as may be required by applicable law;
(vi) taking such other action with respect to the Fund as may be required by
applicable law, including without limitation the rules and regulations of the
SEC and other regulatory agencies; (vii) providing the Fund, at the
Administrator's expense, with adequate personnel, office space, communications
facilities, and other facilities necessary for operation of the Fund as
contemplated in this Agreement; (viii) arranging for meetings of the Fund's
Board of Directors and, in connection therewith, providing the Board with
necessary or appropriate information for its meetings; (ix) providing
non-investment related statistical and research data and such other reports,
evaluations and information as the Fund may request from time to time; (x)
maintaining the Fund's existence, and during such time as shares of the Fund are
publicly offered, maintaining the registration and qualification of the Fund's
shares under federal and state law; and (xi) responding to inquiries from
shareholders or their agents or representatives relating to the Fund,
concerning, among other things, exchanges among funds, or referring any such
inquiries to the Fund's officers or transfer agent. Nothing in this provision
shall be deemed to inhibit the Fund or its officers from engaging, at the
expense of the Fund, other persons to assist in providing administrative
services to the Fund including, but not limited to, accounting agents,
recordkeeping agents, proxy solicitation agents, attorneys, accountants,
consultants and others.
(b) Render to the Board of Directors of the Fund such periodic and special
reports as the Board may reasonably request;
(c) Make available its officers and employees to the Board of Directors and
officers of the Fund for consultation and discussions regarding the
administration of the Fund and the services provided to the Fund under this
Agreement; and
(d) Develop and implement, if appropriate, management and shareholder
services designed to enhance the value or convenience of the Fund as an
investment vehicle.
3. CONFORMITY WITH APPLICABLE LAW. The Administrator, in the performance of
its duties and obligations under this Agreement, shall act in conformity with
the Registration Statement of the Fund and with the instructions and directions
of the Board of Directors of the Fund and will conform to, and comply with, the
requirements of the 1940 Act and all other applicable federal and state laws and
regulations.
4. EXCLUSIVITY. The services of the Administrator to the Fund under this
Agreement are not to be deemed exclusive, and the Administrator, or any
affiliate thereof, shall be free to render similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of the Fund) and to engage in other activities, so
long as its services hereunder are not impaired thereby.
5. EXPENSES. During the term of this Agreement, the Administrator will pay
all expenses incurred by it in connection with its activities under this
Agreement, except such expenses as are assumed by the Fund under this Agreement
and such expenses as are assumed by the investment adviser pursuant to an
Investment Management Agreement. The Fund shall be responsible for all of the
other expenses of its operations, including, without limitation, the
administration fee payable hereunder; advisory fees; brokerage commissions;
interest; legal fees and expenses of attorneys; fees of auditors, transfer
agents and dividend disbursing agents, custodians and shareholder servicing
agents; fees of accountants and accounting services; the expense of obtaining
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quotations for calculating the Fund's net asset value; taxes, if any, and the
preparation of the Fund's tax returns; cost of stock certificates and any other
expenses (including clerical expenses) of issue, sale, repurchase or redemption
of shares; expenses of registering and qualifying shares of the Fund under
federal and state laws and regulations; salaries of personnel involved in
placing orders for the execution of the Fund's portfolio transactions; expenses
of printing and distributing reports, notices and proxy materials to existing
shareholders; expenses of printing and filing reports and other documents filed
with governmental agencies; expenses in connection with shareholder and director
meetings; expenses of printing and distributing prospectuses and statements of
additional information to existing shareholders; fees and expenses of Directors
of the Fund who are not "interested persons" of the Fund as that term is defined
in the Investment Company Act of 1940; trade association dues; insurance
premiums; and extraordinary expenses such as litigation expenses. To the extent
the Administrator incurs any costs or performs any services which are an
obligation of the Fund, as set forth herein, the Fund shall promptly reimburse
the Administrator for such costs and expenses. To the extent the services for
which the Fund is obligated to pay are performed by the Administrator, the
Administrator shall be entitled to recover from the Fund only to the extent of
its costs for such services.
6. COMPENSATION. For the services provided by the Administrator pursuant to
this Agreement, the Fund will pay to the Administrator the annual fee set forth
in Schedule A hereto.
7. LIABILITY OF THE ADMINISTRATOR. The Administrator may rely on
information reasonably believed by it to be accurate and reliable. Except as may
otherwise be required by the 1940 Act or the rules thereunder, neither the
Administrator nor its stockholders, officers, directors, employees, or agents
shall be subject to any liability for, or any damages, expenses, or losses
incurred in connection with, any act or omission connected with or arising out
of any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance of the
Administrator's duties, or by reason of reckless disregard of the
Administrator's obligations and duties under this Agreement. The liability
incurred by the Administrator pursuant to this paragraph 7 in any year shall be
limited to the revenues of the Administrator derived from the Fund in that
fiscal year of the Fund. The Administrator shall look solely to Fund property
for satisfaction of claims of any nature against the Fund or a director,
officer, employee or agent of the Fund arising in connection with the affairs of
the Fund.
8. CONTINUATION AND TERMINATION. This Agreement shall become effective on
the date first written above, subject to the condition that the Fund's Board of
Directors, including a majority of those Directors who are not interested
persons (as such term is defined in the 0000 Xxx) of the Administrator, shall
have approved this Agreement. Unless terminated as provided herein, the
Agreement shall continue in full force and effect for two (2) years from the
effective date of this Agreement, and shall continue from year to year
thereafter so long as such continuance is specifically approved at least
annually by the vote of a majority of the Board of Directors of the Fund,
including a majority of the Board of Directors of the Fund who are not parties
to this Agreement or "interested persons" (as defined in the 0000 Xxx) of the
Fund or the Administrator.
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This Agreement may be terminated by the Fund at any time, without the
payment of any penalty, by vote of a majority of the Board of Directors of the
Fund on sixty (60) days' written notice to the Administrator, or by the
Administrator at any time, without the payment of any penalty, on sixty (60)
days' written notice to the Fund.
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
10. APPLICABLE LAW.
(a) This Agreement shall be governed by the laws of the State of Arizona,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 Act, the Investment Advisers Act of 1940, or any rules or order of the
SEC thereunder.
(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(c) The captions of this Agreement are included for convenience only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PILGRIM GNMA INCOME FUND, INC.
/s/ Xxxxxxx X. Xxxxxx
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By: Xxxxxxx X. Xxxxxx
Senior Vice President
PILGRIM GROUP, INC.
/s/ Xxxxx X. Xxxxxxxx
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By: Xxxxx X. Xxxxxxxx
Senior Executive Vice President
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SCHEDULE A
ADMINISTRATIVE FEE
0.10% of the Fund's average daily net assets
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