EXHIBIT 6 (B)(1)
ADMINISTRATION AGREEMENT
AGREEMENT dated July 1, 1995 between First Funds, a Massachusetts business
trust which may issue one or more series of shares of beneficial interest (the
Trust), with respect to the separate series of the Trust as listed in Appendix B
(the Portfolios), and ALPS Mutual Funds Services, Inc., a Colorado corporation
and a registered broker-dealer under the Securities Exchange Act of 1934 (the
Administrator)
WHEREAS, the Trust wishes to employ the services of the Administrator; and
WHEREAS, the Administrator wishes to provide such services under the
conditions set forth below.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and the Administrator agree as follows:
1. Appointment. The Trust hereby appoints and employs the Administrator and
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the Administrator accepts the appointment as agent to perform the services
described herein.
2. Trust Administration. Subject to the direction and control of the Board
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of Trustees of the Trust ('Trustees"), the Administrator shall assist in
supervising aspects of the Trust's operation of the Portfolios not otherwise
supervised by the Trust's investment adviser, transfer agent, custodian,
auditors, counsel or other agents.
To the extent not otherwise the responsibility of, or provided by, the
Trust or other agents of the Trust, the Administrator shall provide: (i) office
space, equipment and facilities for maintaining the Trust's organization and for
performing administrative services hereunder; (ii) non-investment related
statistical and research data and such other reports, evaluations, and
information as the Trust may request from time to time; (iii) monthly compliance
testing and reporting based on the Investment Company Act of 1940 (the "1940
Act"), the Internal Revenue Code of 1986, as amended, and the investment
guidelines as outlined in each Portfolio's Prospectus and Statement of
Additional Information (such testing does not include testing for ERISA
compliance in respect of employee benefit plans invested in the Portfolios);
(iv) Code of Ethics reporting for the Trust's defined Access Persons, such
reporting to exclude all employees of the investment adviser or sub-adviser of
the Trust; (v) internal clerical, accounting and legal services; and (vi)
stationery and office supplies. The Administrator shall (a) prepare and file
with the Securities and Exchange Commission ("SEC") and applicable state
securities administrators the Portfolios' Registration Statement, Prospectuses
and Statements of Additional Information and Annual and Semi-Annual Reports to
Shareholders of the Portfolios, and cause such filings, together with any other
filings made with the SEC which may be relied upon by investors to make an
investment decision, to be reviewed and approved by Administrator's outside
counsel, at Administrator's expense, prior to such filing; and (b) coordinate
execution and filing by the Portfolios of all federal and state tax returns and
required tax filings other than those required to be made by the Trust's
transfer agent and custodian, and required filings with the SEC including timely
notices required pursuant to Rule 24f-2 under the 1940 Act, and Semi-Annual
Reports on Form N-SAR; and (c) prepare and file registrations, renewals and
other documents related to registration and qualification of the shares and the
Trust with state Blue Sky authorities with the advice and consultation of the
Trustees and the Trust's counsel. The Administrator shall also: (i) maintain the
Trust's existence, and during such times as the shares of the Portfolios are
publicly offered, maintain the registration and qualification of the Portfolios'
shares under federal and state law; (ii) to the extent not to be maintained by
the Trust's Portfolio accounting agent, keep and maintain the financial accounts
and records of the Trust; (iii) develop and implement procedures for monitoring
compliance with SEC, IRS and Prospectus and Statement of Additional Information
requirements; and (iv) generally assist as requested from
time to time by the Trustees in other aspects of the Trust's operations, as
appropriate, including monitoring performance of the Trust's other agents.
In compliance with the requirements of Rule 31a-3 of the 1940 Act, the
Administrator hereby agrees that all records which it maintains with respect to
each Portfolio for the Trust are the property of the Trust, and further agrees
to surrender promptly to the Trust any of such records upon the Trust's request.
Administrator further agrees to preserve for the periods prescribed by Rule 31a-
2 under the 1940 Act the records subject to Rule 31a-1 under the 1940 Act that
are maintained by the Administrator.
In performing its services as Administrator, Administrator shall comply
with all applicable laws, rules and regulations including without limitation all
rules and regulations made or adopted pursuant to the Securities Act of 1933, as
amended ("1933 Act"), the 1940 Act, the SEC, the NASD, or state securities
commissions.
In connection with all documents and filings to be prepared by it under
this Section 2, Administrator represents that all such Registration Statements
and Prospectuses filed on behalf of the Trust with the SEC under the 1933 Act
and the 1940 Act, as applicable, with respect to the shares, will be prepared in
conformity with the requirements of said Acts and rules and regulations of the
SEC thereunder. As used in this Agreement, the terms "Registration Statement"
and "Prospectus" shall mean any registration statement and prospectus (together
with the related Statements of Additional Information) filed with the SEC with
respect to any of the shares and any amendments and supplements thereto which at
any time shall have been filed with the SEC. Administrator further represents
that any Registration Statement and Prospectus, when such Registration Statement
becomes effective, will contain all statements required to be stated therein in
conformity with the 1933 and 1940 Acts and the rules and regulations of the SEC;
that all statements of fact contained in any such Registration Statement and
Prospectus will be materially true and correct when such Registration Statement
becomes effective; and that neither any Registration Statement nor any
Prospectus when such Registration Statement becomes effective, will include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements contained therein not
misleading.
Administrator agrees to advise the Trustees promptly in writing:
(a) of any request by the SEC for amendments to the Registration Statement
or Prospectuses then in effect;
(b) in the event of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or Prospectuses then in effect
or the initiation of any proceeding for that purpose;
(c) of the happening of any event which makes untrue any statement of a
material fact made in the Registration Statement or Prospectuses in order to
make the statements therein not misleading; and
(d) of all the actions of the SEC with respect to any Registration
Statement or Prospectus which may from time to time be filed with the SEC.
3. Fees. As compensation for the services, facilities and personnel which
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the Administrator is to provide or cause to be provided pursuant to Paragraph 2,
each Portfolio of the Trust shall pay to the Administrator out of said
Portfolio's net assets, an annual fee, which shall be computed and accrued daily
and paid in arrears on the first business day of every month, at the annual rate
as referenced in Appendix A to this Agreement.
For the purpose of determining fees payable to the Administrator, the value
of the net assets of each Portfolio of the Trust shall be computed in the manner
described in the Portfolios' Prospectuses and Statements
of Additional Information from time to time in effect. The fee for any partial
month under this Agreement shall be calculated on a proportional basis.
The Administrator may, from time to time, employ or associate with itself
such person or persons as it may believe to be particularly fitted to assist it
in the performance of this Agreement. Such person or persons may be officers and
employees who are employed by both the Administrator and the Trust. The
compensation of such person or persons shall be paid by the Administrator.
The services of the Administrator provided hereunder are not to be deemed
exclusive and the Administrator shall be free to render similar services to
others and engage in other activities. The Administrator shall be free to enter
other agreements with the Portfolios or the Trust for providing additional
services to the Portfolio or the Trust which are not covered by this Agreement,
and to receive additional compensation for such services. Such services may
include, but are not limited to, distribution of shares, pricing and bookkeeping
and transfer agent services. The Administrator will make available, at the
Administrator's expense, for consideration by the Trustees, officers or
employees of the Administrator to serve as Treasurer and Secretary of the Trust,
and such assistant officers as the Trustees may deem necessary or appropriate.
4. Seed Capital. Administrator will replace the seed capital (in the amount
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of $100,000.00) of Fidelity Management & Research Corp. which had been initially
invested to activate the Portfolios of First Funds.
5. Expenses. The Administrator shall bear all expenses in connection with
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its performance of services hereunder, including but not limited to legal fees
and expenses in providing the services and preparing the documents described in
Section 2 of this Agreement. The Portfolios will pay, or contract with persons
not parties to this Agreement to pay for, all its expenses other than those
expressly stated to be payable by the Administrator hereunder, which expenses
payable by each Portfolio shall include, without limitation, (i) interest and
taxes; (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments; (iii) fees and
expenses of the Trustees; (iv) legal expenses (other than legal fees and
expenses, including legal fees related to Blue Sky filings for the Trust, which
the Administrator at its sole discretion, may incur from time to time in
utilizing outside law firms in fulfillment of its duties of Administration
hereunder) and audit expenses; (v) custodian, pricing and bookkeeping, registrar
and transfer agent fees and expenses; (vi) state and jurisdiction registration
fees, sales report fees, fees (if any) for filing of Prospectuses and/or
Statements of Additional Information related to the Blue Sky registration and
qualification of the Trust and the Portfolios' shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing proxy
material to shareholders of each Portfolio; (viii) all other expenses incidental
to holding meetings of the Portfolios' shareholders, including proxy
solicitations therefor; (ix) expenses of typesetting Prospectuses and Statements
of Additional Information and supplements thereto; (x) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; (xi) insurance premiums for fidelity
bonds and other coverage to the extent approved by the Trustees; (xii)
association membership dues authorized by the Trustees; and (xiii) such
nonrecurring or extraordinary expenses as may arise, including those relating to
actions, suits, or proceedings to which the Trust is a party or to which the
Portfolios' assets are subject and the legal obligation which the Trust may have
to indemnify the Trustees and officers with respect thereto.
The Administrator has no obligation to reimburse the Trust or its
Portfolios for (or to have deducted from its fees) any Trust or Portfolio
expense in excess of expense limitations, if any, imposed by state securities
authorities having jurisdiction over the Trust.
6. Limitation of Liability. The Administrator shall not be liable for any
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damages or loss suffered by the Trust in connection with the matters to which
this Agreement relates, except for a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance, or
reckless disregard, of its duties under this Agreement. Any person, even though
also an officer, director, employee, or agent of the Administrator, who may be
or become an officer, Trustee, employee or agent of the Trust, shall be deemed,
when rendering services to or acting on any business of the Trust in any such
capacity (other than services or business in connection with the Administrator's
duties under this Agreement), to be rendering such service to or acting solely
for the Trust, and not as an officer, director, employee, or agent or one under
the control or direction of the Administrator even though paid by it.
7. Proprietary and Confidential Information. Administrator agrees on behalf
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of itself and its officers, directors, agents and employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Trust and prior, present or potential shareholders,
and not to use such records and information for any purpose other than
performance of its responsibilities and duties hereunder. If the Administrator
is requested or required by, but not limited to, oral questions,
interrogatories, request for information or documents, subpoena, civil
investigation, demand or other action, proceeding or process or as otherwise
required by law, statute, regulation, writ, decree, or the like to disclose such
information, the Administrator will provide the Trust with prompt written notice
of any such request or requirement so that the Trust may seek an appropriate
protective order or other appropriate remedy and/or waive compliance with this
provision. If such order or other remedy is not sought, or obtained, or waiver
not received, the Administrator may without liability hereunder, disclose to the
person, entity or agency requesting or requiring the information, that portion
of the information that is legally required in the opinion of Administrator's
counsel.
8. Term. This Agreement became effective as of July 1, 1995, and shall
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continue until June 30, 1997 the ("Initial Term"). This Agreement shall continue
automatically for successive annual periods ending June 30 of each year,
provided such continuance is specifically approved at least annually (i) by the
Trustees, (ii) by a vote of a majority of the outstanding shares (as defined in
the 1940 Act), and provided further that in either event such continuance is
also approved by the majority of the Trustees who are not parties to the
Agreement or "interested persons" (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. During the Initial Term, this Agreement may only be
terminated (i) for "cause" by the Trustees, or (ii) by vote of a majority (as
defined in the 0000 Xxx) of the outstanding shares of each Portfolio, or (iii)
by the Administrator on not less than sixty days' prior notice. After the
Initial Term of this Agreement, this Agreement may be terminable with respect to
a Portfolio, on not less than sixty days' notice by the Trustees, the
Administrator, or by vote of a majority of the outstanding shares of the
Portfolios (as defined by the 1940 Act).
Termination for "cause" shall mean:
(i) willful misfeasance, bad faith, gross negligence or reckless disregard
on the part of the Administrator with respect to its obligations and duties
hereunder or under the Distribution Agreement of even date herewith between
Administrator and the Trust (the Distribution Agreement);
(ii) regulatory, administrative, or judicial proceedings against
Administrator which result in a determination that it has violated any rule,
regulation, order, or law and which in the reasonable judgment of the Trustees,
including a majority of the Trustees who are not interested persons (as defined
in the 0000 Xxx) of any party to this Agreement, which substantially impairs the
performances of Administrator's obligations and duties hereunder or under the
Distribution Agreement;
(iii) financial difficulties on the part of Administrator which are
evidenced by the authorization or commencement of, or involvement by way of
pleading, answer, consent, or acquiescence in, a voluntary or involuntary case
under Title 11 of the United Stated Code, as from time to time in effect, or any
applicable law
other than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors;
(iv) failure by the Administrator to maintain net capital of at least
$250,000 and to provide to the Trustee at least annually an audited financial
statement documenting the existence of such net capital;
(v) failure by the Administrator to keep in effect professional liability
insurance satisfactory to the Trustees naming the Administrator as insured and
providing coverage with respect to the Administrator's activities on behalf of
the Trust in the amount of at least $1,000,000, and to provide to the Trustees
at least annually a certificate of insurance evidencing that such insurance is
in full force and effect; or
(v) any other circumstance which in the reasonable judgment of the
Trustees, including a majority of the Trustees who are not interested persons
(as defined in the 0000 Xxx) of any party to this Agreement, substantially
impairs on an on-going basis the performance of Administrator's obligations and
duties hereunder or under the Distribution Agreement.
9. Governing Law, Shareholder and Trustee Limitation of Liabilities. This
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Agreement shall be governed by the law of the State of Tennessee. The
Administrator is hereby expressly put on notice of the limitations of
shareholder and Trustee liability as set forth in the Declaration of Trust of
the Trust and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the Trust and its assets. The
Administrator agrees that it shall not seek satisfaction of any such obligation
from the shareholders or any individual shareholder of the Trust, nor from the
Trustees or any individual Trustee of the Trust. The Administrator understands
that the rights and obligations of each series of the Trust under the Trust's
Declaration of Trust are separate and distinct from those of any and all other
series.
The captions in 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. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
ALPS MUTUAL FUNDS SERVICES, INC.
/s/ By: Xxxxxx Xxxxxxxxx
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Title: Chairman
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FIRST FUNDS
/s/ By: Xxxxxxx Xxxxxxx
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Title: President
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