ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT ("Agreement") made as of November 17, 1999 by and
between X.XXX FUNDS, a business trust organized under the laws of Delaware (the
"Trust"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company
(the "Bank").
WHEREAS, the Trust is a registered investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), consisting of each of the
separate series listed on Appendix A hereto (as such Appendix A may be amended
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from time to time) (each a "Fund" and collectively, the "Funds");
WHEREAS, pursuant to an Investment Advisory Agreement between the Trust
and X.xxx Asset Management, Inc (the "Adviser"), dated November 17, 1999, the
Adviser has agreed to provide or procure administrative services for the Trust;
and
WHEREAS, the Adviser desires to retain the Bank to render certain
administrative services to the Trust, the Bank is willing to render such
services, and the Trust desires to approve the Bank's appointment as
administrator.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
it is agreed between the parties hereto as follows:
1. Appointment. The Adviser hereby appoints the Bank to act as
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Administrator of the Trust on the terms set forth in this Agreement, and the
Trust hereby approves such appointment. The Bank accepts such appointment and
agrees to render the services herein set forth for the compensation herein
provided.
2. Delivery of Documents. The Trust has furnished the Bank with copies
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properly certified or authenticated of each of the following:
(a) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Bank to provide certain administrative services to the Trust
and each of its Funds and approving this Agreement;
(b) The Trust's formation documents filed with the State of Delaware
on June 6, 1999 and all amendments thereto (the "Articles");
(c) The Trust's by-laws and all amendments thereto (the "By-Laws");
(d) The Trust'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");
(e) The Trust's most recent Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 as amended, (the
"1933 Act") and under the 1940 Act and all amendments thereto; and
(f) The Trust's most recent definitive prospectus and statement of
additional information (the "Prospectus"); and
(g) Such other certificates, documents or opinions as may mutually
be deemed reasonable, necessary and appropriate for the Bank to request in the
proper performance of its duties hereunder.
The Trust will promptly furnish the Bank with copies of all amendments of
or supplements to the foregoing.
Furthermore, either party will notify the other as soon as reasonably
practicable of any matter which may materially affect the performance its
services under this Agreement.
3. Duties of Administrator. Subject to the supervision and direction of
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the Board of Trustees of the Trust, the Bank, as Administrator, will conduct
and perform various aspects of the Trust's administrative operations described
in Appendix B hereto. The Bank may, from time to time, perform additional
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duties and functions which shall be set forth in an amendment to such Appendix
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B executed by both parties. At such time, the fee schedule included in Appendix
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C hereto shall be appropriately amended as agreed to in writing by both
-
parties.
In performing all services under this Agreement, the Bank shall act
in conformity with the Trust's Articles and By-Laws and the 1933 Act, the
Securities and Exchange Act of 1934, as amended and the 1940 Act, 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 Trust'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 Trust's assets or
choice of investments and cannot be held liable for any problem relating to
such investments, except as such problem relates to the services required to be
provided by the Bank under this Agreement.
4. Duties of the Trust.
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(a) The Trust is solely responsible (through its transfer agent or
otherwise) for (i) providing accurate daily reports ("Daily Sales Reports")
which will enable the Bank as Administrator to monitor the total number of
shares sold in each state on a daily basis and (ii) identifying any exempt
transactions ("Exempt Transactions") which are to be excluded from the Daily
Sales Reports.
(b) The Trust agrees to make its legal counsel reasonably available
to the Bank for advice with respect to any matter of law arising in connection
with the Bank's duties hereunder, and the Trust 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.
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(a) For the services to be rendered and the facilities to be
furnished by the Bank, as provided for in this Agreement, the Adviser will
compensate the Bank in accordance with the fee schedule attached as Appendix C
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hereto. Such fees do not include out-of-pocket disbursements (as delineated in
the fee schedule), or other expenses of the Bank with the prior approval of the
Trust's management for which the Bank shall be entitled to xxxx the Trust
separately and for which the Trust shall reimburse the Bank.
(b) The Bank shall not be required to pay any expenses incurred by
the Trust.
6. Limitation of Liability.
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(a) The Bank, its directors, officers, employees and agents shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust or any third party in connection with the performance of
the Bank's obligations and duties under this Agreement, except a loss resulting
from willful misconduct, bad faith or negligence in the performance of such
obligations and duties, or by reason of its reckless disregard thereof.
(b) The Trust will indemnify the Bank, its directors, officers,
employees and agents against and hold it and them harmless from any and all
losses, claims, damages, liabilities or expenses (including legal fees and
expenses) resulting from any claim, demand, action or suit (i) arising out of
the actions or omissions of the Trust, including, but not limited to,
inaccurate Daily Sales Reports and misidentification of Exempt Transactions;
(ii) arising out of the offer or sale of any securities of the Trust in
violation of (x) any requirement under the federal securities laws or
regulations, (y) any requirement under the securities laws or regulations of
any state, or (z) any stop order or other determination or ruling by any
federal or state agency with respect to the offer or sale of such securities;
except for any claim, demand, action or suit resulting from the willful
misconduct, bad faith or negligence of the Bank in the performance of its
obligations and duties, or by reason of its reckle disregard thereof.
(c) The Adviser will indemnify the Bank, its directors, officers,
employees and agents against and hold it and them harmless from any and all
losses, claims, damages, liabilities or expenses (including legal fees and
expenses) resulting from any claim, demand, action or suit arising out of the
actions or omissions of the Adviser, except for any claim, demand, action or
suit resulting from the willful misconduct, bad faith or negligence of the Bank
in the performance of its obligations and duties, or by reason of its reckless
disregard thereof.
(c) The Bank will indemnify each of the Trust and the Advisor, and
its directors, officers, employees and agents against and hold it and them
harmless from any and all losses, claims, damages, liabilities or expenses
(including legal fees and expenses) resulting from the willful misconduct, bad
faith or negligence of the Bank in the performance of its obligations and
duties under this Agreement, or by reason of the Bank's reckless disregard
thereof.
(d) The Bank may apply to the Trust or the Adviser at any time for
written instructions and may consult counsel for the Trust or the Adviser, and
with accountants and other experts employed by the Trust or Adviser 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 written instruction, or with the written
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 Trust or Adviser until receipt of written notice
thereof has been received by the Bank.
(e) 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 Trust or
Adviser for any damages resulting from such failure to perform, delay in
performance, or otherwise from such causes.
(f) The Bank represents that the occurrence in or use by the Bank's
own proprietary internal systems (the "Systems") of dates on or after January
1, 2000 (the "Millennial
Dates") will not adversely affect the performance of the Systems with respect
to date dependent data, computations, output or other
functions (including, without limitation, calculating, computing and
sequencing) and that the Systems will create, store and generate output data
related to or including Millennial Dates without errors or omissions ("Year
2000 Compliance"). The Bank shall promptly notify the Trust of any lack of Year
2000 Compliance of which it becomes aware that impact the Bank's services
hereunder.
The parties to this Agreement acknowledge that the Bank can make no
certification as to the Year 2000 Compliance of third-party systems utilized by
the Bank in its day to day operations or with which the Systems interact or
communicate, from which the Systems receive data or to which the Systems send
data. The parties further acknowledge that while the Bank has contacted such
third-party providers regarding Year 2000 Compliance and will use reasonable
efforts to monitor the status of such third-party providers' Year 2000
Compliance, failure by such third-party providers to achieve timely Year 2000
Compliance could adversely affect the Bank's performance of its obligations
hereunder. The Bank shall promptly notify the Trust of any lack of Year 2000
Compliance of any third-party provider of which it becomes aware that impacts
the Bank's services hereunder.
(g) Notwithstanding anything to the contrary in this Agreement, in no
event shall the Bank be liable for special, incidental or consequential
damages, even if advised of the possibility of such damages.
7. Termination of Agreement.
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(a) The term of this Agreement shall be three years commencing upon
the date hereof (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 sixty (60) days prior to the expiration of the
Initial Term or any Renewal Term, as the case may be.
(i) Either party hereto may immediately terminate this Agreement
prior to the expiration of the Initial Term (x) in the event the other party
violates any material provision of this Agreement or is unable to continue to
fulfill its obligation and duties under the Agreement; provided that a
violating party shall for its first material violation of this Agreement have
the opportunity to cure such violation within forty-five (45) days of receipt
of written notice from the non-violating party of such violation, or (y) after
the second anniversary hereof, upon ninety (90) days written notice to the
other party.
(ii) Either party may terminate this Agreement during any
Renewal Term upon sixty (60) days written notice to the other party. Any
termination pursuant to this paragraph 7(a)(ii) shall be effective upon
expiration of such sixty (60) days, provided, however, that the effective date
of such termination may be postponed, at the request of the Trust, to a date
not more than one hundred twenty (120) days after delivery of the written
notice in order to give the Trust an opportunity to make suitable arrangements
for a successor administrator.
(b) The Trust may, upon written request, have reasonable access to
the records of the Bank relating to its performance of its duties as
Administrator. At all times such records shall be the property of the Trust.
8. Miscellaneous.
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(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Trust 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 the Trust:
X.xxx Funds
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx X. Story
Facsimile: (000) 000-0000
With a copy to: Xxxxx A Hearth, Paul, Hastings, Xxxxxxxx &
Xxxxxx LLP
Facsimile: (000) 000-0000
To the Adviser:
X.xxx Asset Management, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx X. Story
Facsimile: (000) 000-0000
With a copy to: Xxxxx A Hearth, Paul, Hastings, Xxxxxxxx &
Xxxxxx LLP
Facsimile: (000) 000-0000
To the Bank:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Director, Client Management
Facsimile: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxx, Assistant General Counsel
Facsimile: (000) 000-0000
(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
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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. The Trust shall not use the name of the Bank or
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any of its affiliates in any prospectus, sales literature or other material
relating to the Trust 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 Bank shall
not use the name of the Trust or any of its affiliates in any sales literature
or other material relating to the Bank and its services in a manner not
approved by the Trust prior thereto in writing; provided however, that the
approval of the Trust 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.
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.
X.XXX FUNDS
By: /s/ Xxxx X. Story
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Name: Xxxx X. Story
Title: Executive Vice President
X.XXX ASSET MANAGEMENT, INC.
By: /s/ Xxxx X. Story
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Name: Xxxx X. Story
Title: President
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Senior Director
APPENDICES
Appendix A.............................. Funds
Appendix B.............................. Services
Appendix C.............................. Fee Schedule
Appendix A
FUNDS OF X.XXX FUNDS
Funds Effective Date
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1) X.xxx Premier S&P 500 Fund November 17, 1999
2) X.xxx U.S.A. Bond Fund November 17, 1999
3) X.xxx U.S.A. Money Market Fund November 17, 1999
4) X.xxx International Index Fund March 27, 2000
X.XXX FUNDS
By: /s/ Xxxx X. Story
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Name: Xxxx X. Story
Title: Executive Vice President
X.XXX ASSET MANAGEMENT, INC.
By: /s/ Xxxx X. Story
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Name: Xxxx X. Story
Title: President
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Senior Director
Appendix B
SERVICES
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
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MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
--------------------------
Monitor portfolio Perform tests of certain specific Oversee BGI's continuous A/C - Provide consultation as
compliance in accordance portfolio activity designed from monitoring of portfolio needed on compliance issues.
with the current provisions of the Fund's activity and Fund
Prospectus and SAI. Prospectus and SAI. Follow-up on operations in conjunction
potential violations. with 1940 Act, Prospectus,
FREQUENCY: BI-MONTHLY SAI and any other
applicable laws and
regulations. Monitor
testing results and
approve resolution of
compliance issues.
Provide compliance Provide a report of compliance Review report. A/C - Provide consultation as
summary package. testing results. needed.
FREQUENCY: MONTHLY
Perform asset Perform asset diversification Oversee BGI's continuous A - Provide consultation as
diversification testing to tests at each tax quarter end. monitoring of portfolio needed in establishing positions
establish qualification as Follow-up on issues. activity in conjunction to be taken in tax treatment of
a RIC. with IRS requirements. particular issues. Review
Review test results and quarter end tests on a
FREQUENCY: QUARTERLY take any necessary action. current basis.
Approve tax positions
taken.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
-------------------------- ------------------------------------ -------------------------- ---------------------------------
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MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
(Continued)
--------------------------
Perform qualifying income Perform qualifying income testing Oversee BGI's continuous A- Consult as needed on tax
testing to establish (on book basis income, unless monitoring of portfolio accounting positions to be
qualification as a RIC. material differences are activity in conjunction taken. Review in conjunction
anticipated) on quarterly basis with IRS requirements. with year-end audit.
FREQUENCY: QUARTERLY and as may otherwise be Review test results and
necessary. Follow-up on issues. take any necessary action.
Approve tax positions
taken.
Prepare the Fund's Prepare preliminary expense Provide asset level
annual expense budget. budget. Notify fund accounting projections. Approve
Establish daily accruals. of new accrual rates. expense budget.
FREQUENCY: ANNUALLY
Monitor the Fund's Monitor actual expenses updating Provide asset level C/A - Provide consultation as
expense budget. budgets/ expense accruals. projections quarterly. requested.
Provide vendor
FREQUENCY: QUARTERLY information as
necessary. Review expense
analysis and approve
budget revisions.
Receive and coordinate Propose allocations of invoice Approve invoices and
payment of fund expenses. among Funds and obtain authorized allocations of payments.
approval to process payment. Send invoices to IBT in a
FREQUENCY: AS NECESSARY timely manner.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
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MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
(Continued)
--------------------------
Calculate periodic Calculate amounts available for Establish and maintain C - Review dividend resolutions
dividend rates and capital distribution. Coordinate review dividend and distribution in conjunction with Board
gains distributions to be by management and/or auditors. policies. Approve approval.
declared in accordance Notify custody and transfer agent distribution rates per
with management guidelines. of authorized dividend rates in share and aggregate A - Review and concur with
accordance with Board approved amounts. Obtain Board proposed distributions, annual
FREQUENCY: QUARTERLY/ policy. Report dividends to approval when required. and excise only.
ANNUALLY Board as required.
Calculate total return Provide total return Review total return
information on Funds as calculations. Returns consist information.
defined in the current of monthly, quarterly, YTD,
Prospectus and SAI. since inception and average Identify the services
annual since inception. to which the Funds
FREQUENCY: MONTHLY report. Provide
Prepare, coordinate as information as requested.
Prepare responses to necessary, and submit responses
major industry to the appropriate agency.
questionnaires.
FREQUENCY: AS OFTEN AS
NECESSARY
Prepare disinterested Summarize amounts paid to Provide social security
trustee Form 1099-Misc. trustees during the calendar numbers and current
year. Prepare and mail Form mailing address for
FREQUENCY: ANNUALLY 1099-Misc. trustees. Review and
approve information
provided for Form 1099-
Misc.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
-------------------------- ------------------------------------ -------------------------- ---------------------------------
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FINANCIAL REPORTING
--------------------------
Prepare financial Prepare information as required. Review financial
information for information.
presentation to Fund
Management and Board of
Directors.
FREQUENCY: AS NEEDED
Coordinate the annual Coordinate the creation of Provide information A - Perform audit and issue
audit and semi-annual templates reflecting client- required to create opinion on annual financial
preparation and printing selected standardized templates, including statements.
of financial statements appearance and text of report style and graphics.
and notes with financial statements and Approve format and text A/C - Review reports.
management, fund footnotes. Draft and manage as standard. Approve
accounting and the production cycle. Coordinate production cycle and
fund auditors. with IBT fund accounting the assist in managing to the
electronic receipt of portfolio cycle. Coordinate review
FREQUENCY: ANNUALLY/ and general ledger information. and approval by portfolio
SEMI-ANNUALLY Assist in resolution of managers of portfolio
accounting issues. Using listings to be included
templates, draft financial in financial statements.
statements, coordinate auditor Prepare appropriate
and management review, and clear management letter and
comments. Coordinate printing of coordinate production of
with reports and XXXXX Management Discussion
conversion outside printer and and Analysis. Review
filing with the SEC via XXXXX. and approve entire report.
Make appropriate
representations in
conjunction with audit.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
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LEGAL
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Prepare and file Form Prepare form for filing. Obtain Provide appropriate C - Review initial filing.
N-SAR. any necessary supporting responses. Provide A - Provide annual audit internal
documents. File with SEC via applicable Exhibits to control letter to accompany the
FREQUENCY: SEMI-ANNUALLY XXXXX. attach to filing. Review annual filing.
and authorize filing.
Assist the preparation Accumulate capital stock Review and approve A/C - Review informally when
and filing of Form 24f-2 information. capital stock worksheet. requested.
Notice.
FREQUENCY: ANNUALLY
Respond to regulatory or Compile and provide Coordinate with C - Provide consultation as
auditor examinations and documentation pursuant to regulatory authorities needed.
requests. examinations, audits and and auditors to provide
requests from regulators or requested
FREQUENCY: AS NEEDED auditors. Assist client and documentation and
(AT LEAST ANNUALLY) legal counsel in resolution of resolutions to inquiries.
regulatory and audit inquiries.
Proxy material/shareholder Prepare drafts of proxy material Review and approve proxy. C - Review and approve proxy.
meetings. for review, file materials or
coordinate filing with the SEC and
FREQUENCY: AS NEEDED coordinate printing. Assist proxy
solicitation firm and prepare
scripts. Attend meeting and
prepare minutes.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
-------------------------- ------------------------------------ -------------------------- ---------------------------------
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LEGAL
(Continued)
--------------------------
Prepare amendments to Coordinate the preparation and Review and approve. C - Review and approve filings.
Registration Statement. filing of post-effective
amendments. Coordinate with A/C - Provide consents as
FREQUENCY: ANNUAL UPDATES outside printers the XXXXX appropriate.
(INCLUDES UPDATING conversion, filing with the SEC
FINANCIAL HIGHLIGHTS, and printing of prospectus.
EXPENSE TABLES, RATIOS)
PLUS ONE ADDITIONAL
FILING PER FISCAL YEAR.
Prepare prospectus/SAI Coordinate the preparation and Review and approve. C - Review and approve
supplements. filing of prospectus and SAI filings.
supplements. File with the
FREQUENCY: AS OFTEN AS SEC via XXXXX. A/C - Provide consents as
REQUIRED appropriate.
Prepare agenda and board Maintain annual calendar of Review and approve board C - Review agenda, board material
materials for quarterly required quarterly and annual materials. and board and committee minutes.
board meetings. approvals. Prepare agenda, Ensure board material contains
resolutions and other board all required information that the
FREQUENCY: QUARTERLY materials for quarterly board members of the board must review
meetings. Prepare supporting and/or approve to perform their
information and materials when duties as directors/trustees.
necessary. Assemble, check
and distribute books in
advance of meeting. Attend
board and committee meetings
and prepare minutes.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
-------------------------- ------------------------------------ -------------------------- ---------------------------------
--------------------------
LEGAL
(Continued)
--------------------------
Furnish Trust officers. Furnish appropriate personnel as Furnish appropriate
officers of the Trust. personnel as officers of
FREQUENCY: AS NEEDED the Trust.
Assist in updating of Make annual filing of fidelity Obtain required fidelity
fidelity bond insurance insurance material with the SEC. bond insurance coverage.
coverage. Monitor level of fidelity
bond insurance maintained
FREQUENCY: ANNUALLY in accordance with
required coverage.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
-------------------------- ------------------------------------ -------------------------- ---------------------------------
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TAX
--------------------------
Prepare income tax Calculate investment company Provide transaction A - Provide consultation as
provisions. taxable income, net tax exempt information as requested. needed in establishing positions
interest, net capital gain and Approve tax accounting to be taken in tax treatment of
FREQUENCY: ANNUALLY spillback dividend requirements. positions to be taken. particular issues. Perform
Identify book-tax accounting Approve provisions. review in conjunction with the
differences. Track required PFIC's to be identified year-end audit.
information relating to at the Portfolio (HUB)
accounting differences. level.
Calculate excise tax Calculate required distributions Provide transaction A - Provide consultation as
distributions. to avoid imposition of excise tax. information as requested. needed in establishing positions
- Calculate capital gain net Passive Foreign to be taken in tax treatment of
FREQUENCY: ANNUALLY income and foreign currency Investment Companies particular issues. Review and
gain/loss through October 31. (PFICs) to be identified concur with proposed
- Calculate ordinary income and at the Portfolio (HUB) distributions.
distributions through a level. Approve tax
specified cut off date. accounting positions to
- Project ordinary income from be taken. Review and
cut off date to December 31. approve all income and
- Ascertain dividend shares. distribution
Identify book-tax accounting calculations, including
differences. Track required projected income and
information relating to accounting dividend shares. Approve
differences. Coordinate review by distribution rates per
management and fund auditors. share and aggregate
Notify custody and transfer agent amounts. Obtain Board
of authorized dividend rates in approval when required.
accordance with Board approved
policy. Report dividends to Board
as required.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
-------------------------- ------------------------------------ -------------------------- ---------------------------------
--------------------------
TAX
(Continued)
--------------------------
Prepare tax returns. Prepare excise and RIC tax returns. Review and sign tax A - Review and sign tax return
return. as preparer.
FREQUENCY: ANNUALLY
Prepare Form 1099. Obtain yearly distribution Review and approve
information. Calculate 1099 information provided for
FREQUENCY: ANNUALLY reclasses and coordinate with Form 1099.
transfer agent.
Prepare other year-end Obtain yearly income distribution Review and approve
tax-related disclosures. information. Calculate information provided.
disclosures (i.e., dividend
FREQUENCY: ANNUALLY received deductions, foreign tax
credits, tax-exempt income, income
by jurisdiction) and coordinate
with transfer agent.
SUGGESTED FUND AUDITOR
FUNCTION INVESTORS BANK & TRUST X.XXX OR COUNSEL
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--------------------------
BLUE SKY
--------------------------
Maintain effective Blue Maintain records of fund sales for Identify states in which C- Provide consultation as
Sky notification filings client designated states via PW filings are to be made. needed on Blue Sky issues.
for states in which Fund Blue2 compliance system. File
Management intends to annual notification renewal Identify exempt C- Provide consultation on
solicit sales of fund documents and annual sales reports. transactions to transfer product and institutional
shares. File amendments to increase dollar agent for appropriate exemptions.
amounts authorized for sales by exclusion from blue sky
FREQUENCY: ON-GOING funds, based upon client reporting.
instruction. File notifications to
states for new funds and/or classes,
mergers and liquidations. Provide
periodic reports on state
authorization amounts and sales
amounts. Determine state filing
requirements by using CCH Blue Sky
Law Reporter, ICI memoranda and
state securities commission
directives (both written and oral).
File amendments to File updated registration Inform IBT of filings C- Provide consultation as
registration statement statements, prospectus, SAIs, prior to SEC filing. needed on Blue Sky filing issues.
with the applicable supplements thereto, and annual
state securities reports to shareholders upon
commissions in approval/authorization by client.
coordination with SEC
filing.
FREQUENCY: ANNUAL
UPDATES (INCLUDES
REGISTRATION
STATEMENT, PROSPECTUS,
SAI) PLUS AN ADDITIONAL
FILING PER FISCAL YEAR
Appendix C
X.XXX FUNDS
ANNUAL FEE SCHEDULE
NOVEMBER 17, 1999
A. TRUST ACCOUNTING, CUSTODY AND CALCULATION OF N.A.V.
The Annual Fee for Trust Accounting, Custody and Calculation of N.A.V. for
three Feeder Funds will be charged according to the following schedule. The
following schedule is exclusive of transaction costs and out-of-pocket
expenses.
ANNUAL FEE
ANNUAL FEE PER FEEDER FUND $12,000
For each additional class added beyond the first one class there will be an
annual fee of $6,000 for the above services.
B. TRUST ADMINISTRATION, COMPLIANCE, FINANCIAL STATEMENT PREPARATION, LEGAL
ADMINISTRATION, AND BLUE SKY.
The Annual Fee for Trust Administration, Financial Statement Preparation,
Legal Administration, and Blue Sky for three Feeder Trusts will be charged
according to the following schedule.
ANNUAL FEE
ANNUAL FEE PER FEEDER FUND
$50,000
For each additional class added beyond the first one class there will be an
annual fee of $10,000 for the above services.
C. MISCELLANEOUS
1. OUT-OF-POCKET
For purposes of this Agreement, out-of-pocket charges consist of:
- Telephone
- Ad Hoc Reporting
- Third Party Review
- Forms and Supplies
- Printing/Postage/Delivery
- Systems Development/Reports/Transmissions
- Equipment Rental
- Legal costs associated with substantial alterations of IBT's
standard agreements
2. BALANCE CREDITS
The use of balance credit against fees (excluding out-of-pocket charges)
for collected fund balances arising out of the custody relationship is
permitted. The monthly earnings allowance is equal to 75% of the 90-day
T-xxxx rate.
3. SYSTEMS
The details of any systems work required to service this fund will be
determined after a thorough business analysis. All systems work, including
creating customized reports and establishing systems/communications
interfaces with X.xxx, other providers, etc., will be billed on a time and
materials basis.
4. BILLING AND PAYMENT
The above fees will be charged against the Funds' custodian checking
account five business days after the invoice is mailed to the fund.
All charges will be billed monthly. The fee schedule will be effective upon
start-up of the Funds.
