EXHIBIT (H)(5)
MASTER FUND SUB-ACCOUNTING AND SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the 30th day of June, 2005, by and between New
York Life Investment Management LLC ("NYLIM"), and Investors Bank & Trust
Company, a Massachusetts trust company (the "Bank").
WHEREAS, NYLIM is the manager and/or administrator of the Funds listed on
Appendix A (each a "Fund", collectively "the Funds"), and, each Fund is an
open-end investment company registered under the Investment Company Act of 1940,
as amended (the "1940 Act") and is authorized to issue shares of common stock
(the "Shares") in separate series with each such series representing interests
in a separate portfolio of securities and other assets; and
WHEREAS, the Bank provides services as a fund accounting agent and
administrator of registered investment companies; and
WHEREAS, NYLIM provides certain administration and accounting services to
the series of the Funds and NYLIM wishes to continue to perform such services;
and
WHEREAS, NYLIM and the Bank desire to enter into an agreement pursuant to
which the Bank shall provide fund sub-accounting and sub-administrative services
on behalf of those certain investment portfolios of the Funds listed on Appendix
A hereto (each hereinafter, a "Portfolio"), as such Appendix A may be amended
from time to time
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. APPOINTMENT.
NYLIM hereby retains the Bank as sub-administrator and fund sub-accountant
of the Portfolios for the period and on the terms set forth in this Agreement.
The Bank accepts such appointment and agrees to render the services herein set
forth, for the compensation as may be agreed to from time to time in writing
between the parties.
2. DEFINITIONS.
Whenever used herein, the terms listed below will have the following
meaning:
2.1 Authorized Person. Authorized Person will mean any of the persons duly
authorized to give Proper Instructions or otherwise act on behalf of NYLIM, and
set forth in a certificate in such form as may be acceptable to the Bank, it
being understood that upon the occurrence of any change in the information set
forth in the most recent certification on file (including without limitation any
person named in the most recent certification who is no longer an Authorized
Person as designated therein), NYLIM will provide a new or amended certification
setting forth the change and the new, additional or omitted names or signatures.
The Bank will be entitled to rely and act upon any Proper Instruction given to
it by NYLIM which has been signed by Authorized Persons named in the most recent
certification received by the Bank.
2.2 Proper Instructions. Unless otherwise provided in this agreement, the
Bank shall act only upon Proper Instructions. Proper Instructions shall mean
instructions (which may be continuing
1
instructions) to the Bank regarding the provision of services under this
Agreement given by an Authorized Person, such instructions to be given in such
form and manner as the Bank and a Fund shall agree upon from time to time. Oral
instructions will be considered Proper Instructions if the Bank reasonably
believes them to have been given by an Authorized Person. NYLIM shall cause all
oral instructions to be promptly confirmed in writing by an Authorized Person.
The Bank shall act upon and comply with any subsequent Proper Instruction which
modifies a prior instruction and the sole obligation of the Bank with respect to
any follow-up or confirming instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such confirmation
and to report such discrepancy to an Authorized Person. NYLIM shall be
responsible, at its own expense, for taking any action, including any
reprocessing, necessary to correct any such discrepancy or error, and to the
extent such action requires the Bank to act, NYLIM shall give the Bank specific
Proper Instructions as to the action required. Proper Instructions may include
communication effected directly between electro-mechanical or electronic
devices. The Bank shall make available to NYLIM, typically by 7:00 p.m. EST each
business day, all transaction activity posted on such Fund's account(s) on such
business day, together with historical transaction activity for such Fund.
3. SERVICES AS PORTFOLIO ACCOUNTANT.
(a) Subject to the direction and control of NYLIM, as manager and/or
administrator of the Funds, and utilizing information provided by each Fund and
its current and prior agents and service providers, the Bank will, all as set
forth in Appendixes B and C hereto: (1) calculate daily net asset values of the
Portfolio (i) in accordance with each Fund's operating documents and valuation
procedures adopted by the Board of Trustees/Directors of each Fund as provided
to the Bank, (ii) based on security valuations provided or directed by each
Fund, each Fund's investment adviser, and pricing service(s) as provided herein,
and (iii) based on expense accrual amounts provided by the Fund or a
representative or agent of the Fund; (2) maintain all general ledger accounts
and related sub-ledgers needed as a basis for the calculation of each
Portfolio's net asset value; (3) communicate at an agreed-upon time the net
asset values for each Portfolio to parties as agreed upon from time to time, and
(4) assist NYLIM in conducting various aspects of the Funds' administrative
operations. The duties of the Bank shall be confined to those expressly set
forth therein, and no implied duties are assumed by or may be asserted against
the Bank hereunder. The Bank represents and warrants that it will use reasonable
best efforts in performing its duties outlined in Appendixes B and C hereto and
will perform such duties in compliance with the requirements of the federal
securities laws, and in conformity with industry practices.
(b) NYLIM shall use its reasonable best efforts to cause the officers,
directors, investment adviser(s) and sub-advisers, legal counsel, independent
accountants, administrator, transfer agent, and other service providers and
agents, past or present, for each Portfolio to cooperate with the Bank and to
provide the Bank with such information, documents and advice relating to the
Portfolio and the Fund as necessary and/or appropriate or as requested by the
Bank, in order to enable the Bank to perform its duties hereunder. In connection
with its duties hereunder, the Bank shall (without investigation or
verification) be entitled and is hereby instructed to, rely upon any and all
Proper Instructions, advice, information or documents provided to the Bank by
any Authorized Person. The Bank shall be entitled to rely on any document that
it reasonably believes to be genuine and to have been signed or presented by an
Authorized Person. The Bank shall not be held to have notice of any change of
authority of any Authorized Person until receipt of written notice thereof from
the Fund. As used in this Agreement, the term "investment adviser" includes all
sub-advisers or persons performing similar services to the Funds. Upon
termination of this Agreement, the Bank will deliver all records related to the
services performed under this agreement.
(c) To the extent required by Rule 31a-3 under the 1940 Act, the Bank
hereby agrees that all records which it maintains for each Fund pursuant to its
duties hereunder are the property of the Fund and
2
further agrees to surrender promptly to the Fund any of such records upon the
Fund's request. Subject to the terms of Section 6, and where applicable, the
Bank further agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act the records which are maintained by the Bank for the Fund.
(d) The Bank shall employ one or more pricing services, as directed by
NYLIM, on behalf of each Fund, to determine valuations of portfolio securities.
NYLIM shall identify to the Bank the pricing service(s) to be utilized on behalf
of each Fund. The Bank shall value the securities at prices provided by such
services. For those securities where prices are not provided by the pricing
service(s) utilized by the Bank, each Fund's Board of Directors/Trustees or its
Valuation Committee shall approve, in good faith, the method for determining the
fair value of the securities and provide a copy of the Fund's Valuation
Procedures to the Bank. The Fund's investment adviser shall determine or obtain
the valuation of the securities in accordance with those procedures and shall
deliver to the Bank the resulting prices for use in connection with its marking
to market the value of a Portfolio's portfolio securities. The Bank is
authorized to rely on the prices provided by such service(s) or by the Fund's
investment adviser(s) or other authorized representative of the Fund without
investigation or verification.
(e) Each party will comply with all applicable requirements of the 1940
Act, the Internal Revenue Code of 1986, as amended, the USA PATRIOT ACT of 2002,
the Sarbanes Oxley Act of 2002, and with respect to such laws, rules and
regulations promulgated thereunder, and the policies and limitations of each
Portfolio relating to the portfolio investments as set forth in the Prospectus
and Statement of Additional Information, or as otherwise directed in Proper
Instructions. The Bank' monitoring and other functions hereunder shall not
relieve the Board and the investment adviser(s) of their primary day-to-day
responsibility for assuring such compliance.
(f) The Bank shall use its reasonable best efforts to cause its employees
who are deemed to be "access persons" under a Fund's code of ethics to report
all personal securities transactions as required by such code of ethics.
4. FUND EVALUATION AND YIELD CALCULATION.
(a) Fund Evaluation. The Bank shall compute and, unless otherwise directed
by the Board of a Fund, determine as of the close of regular trading on the New
York Stock Exchange on each day on which said Exchange is open for unrestricted
trading and as of such other days, or hours, if any, as may be authorized by the
Board of a Fund, the net asset value and the public offering price of a share of
capital stock of each Fund, such determination to be made in accordance with the
provisions of the Articles and By-laws of the Fund and the Prospectus and
Statement of Additional Information relating to the Fund, as they may from time
to time be amended, and any applicable resolutions of the Board at the time in
force and applicable; and promptly to notify the Fund, the proper exchange and
the NASD or such other persons as the Fund may request of the results of such
computation and determination. In computing the net asset value hereunder, the
Bank may rely in good faith upon information furnished to it by any Authorized
Person in respect of (i) the manner of accrual of the liabilities of the Fund
and in respect of liabilities of a Fund not appearing on its books of account
kept by the Bank, (ii) reserves, if any, authorized by the Board or that no such
reserves have been authorized, (iii) the source of the quotations to be used in
computing the net asset value, (iv) the value to be assigned to any security for
which no price quotations are available, and (v) the method of computation of
the public offering price on the basis of the net asset value of the shares, and
the Bank shall not be responsible for any loss occasioned by such reliance or
for any good faith reliance on any quotations received from a source pursuant to
(iii) or (iv) above.
(b) Yield Calculation. The Bank will compute the performance results of the
Portfolios (the "Yield Calculation") in accordance with the provisions of
Release No. 33-6753 and Release No. IC-
3
16245 (February 2, 1988) (the "Releases") promulgated by the Securities and
Exchange Commission, and any subsequent amendments to, published interpretations
of or general conventions accepted by the staff of the Securities and Exchange
Commission with respect to such releases or the subject matter thereof
("Subsequent Staff Positions"), and as may be defined in the Funds' prospectuses
and statements of additional information, subject to the terms set forth below:
(i) The Bank shall compute the Yield Calculation for each Portfolio
for the stated periods of time as shall be mutually agreed upon, and communicate
in a timely manner the result of such computation to NYLIM.
(ii) In performing the Yield Calculation for a Portfolio, the Bank
will derive the items of data necessary for the computation from the records it
generates and maintains for the Portfolio pursuant Section 16 hereof. The Bank
shall have no responsibility to review, confirm, or otherwise assume any duty or
liability with respect to the accuracy or correctness of any such data supplied
to it by NYLIM, the Fund, any of the Fund's designated agents or any of the
Fund's designated third party providers.
(iii) At the request of the Bank, a Fund shall provide, and the Bank
shall be entitled to rely on, written standards and guidelines to be followed by
the Bank in interpreting and applying the computation methods set forth in the
Releases or any Subsequent Staff Positions as they specifically apply to a
Portfolio. In the event that the computation methods in the Releases or the
Subsequent Staff Positions or the application to a Portfolio of a standard or
guideline is not free from doubt or in the event there is any question of
interpretation as to the characterization of a particular security or any aspect
of a security or a payment with respect thereto (e.g., original issue discount,
participating debt security, income or return of capital, etc.) or otherwise or
as to any other element of the computation which is pertinent to the Fund,
NYLIM, the Fund or any of the Fund's designated agents shall have the full
responsibility for making the determination of how the security or payment is to
be treated for purposes of the computation and how the computation is to be made
and shall inform the Bank thereof on a timely basis. The Bank shall have no
responsibility to make independent determinations with respect to any item which
is covered by this Section, and shall not be responsible for its computations
made in accordance with such determinations so long as such computations are
mathematically correct.
(iv) NYLIM shall keep the Bank informed of all publicly available
information and of any non-public advice, or information obtained by the Fund
from its independent auditors or by its personnel or the personnel of its
investment adviser, or Subsequent Staff Positions related to the computations to
be undertaken by the Bank pursuant to this Agreement and the Bank shall not be
deemed to have knowledge of such information (except as contained in the
Releases) unless it has been furnished to the Bank in writing.
5. FEES; DELEGATION; EXPENSES.
(a) For the services rendered by the Bank hereunder, NYLIM will pay to the
Bank such fees at such rate as shall be agreed upon in writing by the parties
from time to time. NYLIM will also pay or reimburse the Bank from time to time
for any necessary and proper disbursements, expenses and charges made or
incurred by the Bank in the performance of this Agreement (including any duties
listed on any Schedule hereto, if any, but excluding Bank's overhead) including
any indemnities for any loss, liabilities or expense to the Bank as provided
herein. The Bank will also be entitled to reimbursement by NYLIM for all
reasonable expenses incurred in conjunction with termination of this Agreement
and any conversion or transfer work done in connection therewith, except with
respect to a termination by NYLIM due to a breach by Bank of this Agreement.
4
(b) Fees and expenses will be calculated monthly. Fees and expenses are
owed between Bank and NYLIM. No claim, including a lien, shall be permitted
against a Portfolio by Bank. NYLIM will have sixty (60) days after the receipt
of an invoice to dispute any charge that appears on such invoice. After such
sixty (60) day period, the invoice will be deemed to be complete and accurate
and may no longer be disputed.
(c) The Bank shall not be required to pay or finance any costs and expenses
incurred in the operation of a Portfolio, including, but not limited to:
security pricing services; outside auditing and legal expenses; expenses in
connection with the electronic transmission of documents and information;
research and statistical data services; fees and expenses associated with
internet, e-mail and other related activities; and extraordinary expenses.
6. PROPRIETARY AND CONFIDENTIAL INFORMATION.
Both parties hereto agree than any non-public information obtained
hereunder concerning the other party or a Fund is confidential and may not be
disclosed without the consent of the other party or the Fund, as the case may
be, except as may be required by applicable law or at the request of a
governmental agency. The parties further agree that a breach of this provision
would irreparably damage the other party and accordingly agree that each of them
is entitled, in addition to all other remedies at law or in equity, to an
injunction or injunctions without bond or other security to prevent breaches of
this provision.
The Bank agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of NYLIM and of each Fund and
nonpublic personal information of the Funds' "customers" (each as defined in
Rule 3 of Regulation S-P) (collectively, "Confidential Information"), not to use
such Confidential Information for any purpose other than performance of its
responsibilities and duties hereunder, and not to disclose such Confidential
Information except where the Bank may be exposed to civil or criminal
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities or court process, when subject to governmental or
regulatory audit or investigation, or when so requested by NYLIM on behalf of a
Fund. In case of any requests or demands for inspection of the records of a
Portfolio, the Bank will endeavor to notify NYLIM promptly and to secure
instructions from a representative of NYLIM as to such inspection. Records and
information which have become known to the public through no wrongful act of the
Bank or any of its employees, agents or representatives, and information which
was already in the possession of the Bank prior to receipt thereof, shall not be
subject to this paragraph. The parties agree that they shall abide by the
provisions of the Xxxxx-Xxxxx-Xxxxxx Act ("GLB") and other applicable privacy
laws and shall each establish commercially reasonable controls to ensure the
confidentiality of the Confidential Information and to ensure that the
Confidential Information is not disclosed contrary to the provisions of this
Agreement, GLB or any other applicable privacy laws and regulations.
7. LIMITATION OF LIABILITY.
(a) Notwithstanding anything in this Agreement to the contrary, in no event
shall the Bank or any of its officers, directors or employees (collectively, the
"Bank Indemnified Parties") be liable to NYLIM or any third party, and NYLIM
shall indemnify and hold the Bank and the Bank Indemnified Parties harmless from
and against any and all loss, damage, liability, actions, suits, claims, and
reasonable costs and expenses, including reasonable legal fees, (a "Claim")
arising as a result of any act or omission of the Bank or any Bank Indemnified
Party under this Agreement, except to the extent any such Claim results from the
negligence, willful misfeasance, bad faith or reckless disregard of its duties
on the part of the Bank or any Bank Indemnified Party. Without limiting the
foregoing, neither the Bank nor the Bank Indemnified Parties shall be liable
for, and the Bank and the Bank Indemnified Parties shall be indemnified against,
any Claim arising as a result of:
5
(i) Any act or omission by the Bank or any Bank Indemnified Party in
good faith reliance upon the terms of this Agreement, any Officer's Certificate,
Proper Instructions, resolution of the Board of Directors/Trustees of a Fund,
telegram, telecopier, notice, request, certificate or other instrument
reasonably believed by the Bank to be genuine; or
(ii) Information relied on in good faith by the Bank and supplied by
any Authorized Person in connection with the calculation of (i) the net asset
value and public offering price of the shares of capital stock of a Fund or (ii)
yield calculations;
(b) The Bank agrees to indemnify and hold harmless NYLIM and its affiliates
and their officers and employees ("NYLIM Indemnified Parties") from and against
any and all Claims to the extent resulting from the negligence, willful
malfeasance, bad faith, reckless disregard of its duties or breach of this
Agreement on the part of the Bank, except to the extent any such Claim results
from the negligence or willful malfeasance of the NYLIM Indemnified Parties.
(c) Notwithstanding anything to the contrary in this Agreement, neither
party shall be liable to the other party or any third party for lost profits or
lost revenues or any special, consequential, punitive or incidental damages of
any kind whatsoever in connection with this Agreement or any activities
hereunder.
8. TERM AND TERMINATION.
(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
written notice of non-renewal is delivered by the non-renewing party to the
other party no later than ninety days if NYLIM is the non-renewing party, and
one hundred eighty days, if Bank is the non-renewing party prior to the
expiration of the Initial Term or any Renewal Term, as the case may be.
Either party hereto may terminate this Agreement prior to the expiration of
the Initial Term or any Renewal Term in the event the other party violates any
material provision of this Agreement, provided that the terminating party gives
written notice of such violation to the other party and such party does not cure
such violation within 90 days of receipt of such notice. The Bank's right to
termination shall be limited to the Portfolio in respect of which a violation
occurred. Termination by either party with respect to a Fund or a Portfolio will
not affect the terms of this Agreement with respect to other Funds or
Portfolios. This Agreement shall automatically terminate with respect to a Fund
sixty (60) days after that Fund's Board of Directors/Trustees votes in person or
by consent to terminate the agreement(s) between the Fund and NYLIM pursuant to
which NYLIM provides the Fund with administrative and accounting services.
(b) Notwithstanding anything herein to the contrary, upon the termination
of this Agreement or the liquidation of a Portfolio or the Fund, the Bank shall
deliver the records of the Portfolio and/or Fund as the case may be, in the form
maintained by the Bank (to the extent permitted by applicable license
agreements) to NYLIM on behalf of the Fund or person(s) designated by the Fund
at NYLIM's cost and expense and thereafter NYLIM, the Fund or its designee shall
be solely responsible for preserving the records for the periods required by all
applicable laws, rules and regulations. NYLIM shall be responsible for all
expenses associated with the movement (or duplication) of records and materials
and conversion thereof to a successor fund accounting agent, including all
reasonable trailing expenses incurred by the Bank, except for a termination by
NYLIM due to a breach of this Agreement by Bank. In addition, in the event of
termination of this Agreement, or the proposed liquidation or merger of a
Portfolio, and NYLIM requests the Bank to provide additional services to those
outlined in this
6
Agreement in connection therewith, the Bank shall provide such services and be
entitled to such compensation as the parties may mutually agree.
(c) NYLIM may terminate this Agreement upon 30 days' notice in the event
(i) Bank is finally convicted of violating any securities law, banking law or
other applicable law, (ii) Bank fails to cure a curable material SAS 70
exception relating to the services performed by Bank hereunder within 90 days,
or (iii) any other event or incident occurs which adversely affects the ability
of the Bank to perform the services required of it hereunder in a material
respect. Any such termination will be deemed to be a termination by NYLIM for a
breach of this Agreement by Bank.
9. NOTICES.
Any notice or other instrument in writing authorized or required by this
Agreement to be given to either party hereto will be sufficiently given if
addressed to such party and delivered via (i) United States Postal Service
registered mail, (ii) telecopier with written confirmation, (iii) hand delivery
with signature to such party at its office at the address set forth below,
namely:
(a) In the case of notices sent to NYLIM to:
Xxxxxxx Xxxxxxx
Managing Director, Fund Accounting & Administration
New York Life Investment Management LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxxxxxx X. X. Xxxxxxxx
Managing Director & Associate General Counsel
New York Life Investment Management LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxx, Director - Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
or at such other place as such party may from time to time designate
in writing.
10. AMENDMENTS.
This Agreement may not be altered or amended, except by an instrument in
writing, executed by both parties.
11. PARTIES.
This Agreement will be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement will not be assignable by
7
NYLIM without the written consent of the Bank or by the Bank without the written
consent of NYLIM; and provided further that termination proceedings pursuant to
Section 8 hereof will not be deemed to be an assignment within the meaning of
this provision.
12. GOVERNING LAW.
This Agreement and all performance hereunder will be governed by the laws
of the Commonwealth of Massachusetts, without regard to conflict of laws
provisions.
13. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
14. ENTIRE AGREEMENT.
This Agreement, together with its Appendices, constitutes the sole and
entire agreement between the parties relating to the subject matter herein and
does not operate as an acceptance of any conflicting terms or provisions of any
other instrument and terminates and supersedes any and all prior agreements and
undertakings between the parties relating to the subject matter herein.
15. LIMITATION OF FUNDS.
The Bank agrees that the obligations assumed by NYLIM hereunder shall be
limited in all cases to the assets of NYLIM and that the Bank shall not seek
satisfaction of any such obligation from the officers, agents, employees,
trustees, or shareholders of the Funds, or any portfolio of a Fund.
16. MAINTENANCE AND AVAILABILITY OF RECORDS.
The Bank will prepare and maintain records with respect to transactions for
which the Bank is responsible pursuant to the terms and conditions of this
Agreement, and in compliance with the applicable rules and regulations of the
1940 Act. The books and records pertaining to a Fund that are in possession of
the Bank shall be the property of the Fund.
The books and records of the Bank pertaining to its actions under this
Agreement and reports by the Bank or its independent accountants concerning its
accounting system, and internal accounting controls will be open to inspection
and audit at all times during the Bank's normal business hours, upon reasonable
notice, by external auditors employed by the appropriate Fund. Such books and
records shall include reports of sufficient scope and in sufficient detail as
may reasonably be required by a Fund to provide reasonable assurance that any
material compliance inadequacies would be disclosed by the inspection or audit,
and, if there are no such inadequacies, the appropriate reports shall so state.
The books and records relating to a Fund will be preserved by the Bank in
the manner and in accordance with the applicable rules and regulations under the
1940 Act. The Bank shall surrender these books and records to the Fund or NYLIM
promptly upon request. Upon reasonable request of the Fund, the Bank shall,
during the term of this agreement, provide copies of any books and records to
the Fund or NYLIM at NYLIM's expense.
8
17. COMPLIANCE PROGRAM
The Bank agrees to assist the NYLIM and each Fund's Chief Compliance
Officer ("CCO") in complying with each Fund's obligations under Rule 38a-1 under
the 1940 Act, including but not limited to: (a) periodically providing the Funds
with information about, and any available independent third-party reports on,
the Bank's compliance program ("Bank's Compliance Program"); (b) reporting any
material deficiencies in the Bank's Compliance Program to the Funds within a
reasonable time; (c) reporting any material changes to the Bank's Compliance
Program to the Funds within a reasonable time, and (d) providing the Funds with
such periodic certifications regarding the foregoing as may reasonably be
requested by the Funds and the CCO. The Bank understands that the Boards of
Directors/Trustees of the Funds are required to approve the Bank's Compliance
Program on at least an annual basis, and acknowledges that this Agreement is
conditioned upon the Board of Directors/Trustees approval of the Bank's
Compliance Program. In this regard, the Bank shall use reasonable efforts to
make available information, including information on the Bank's internal
controls and procedures, reasonably required by the CCO to allow the CCO and the
Funds to comply with the requirements of relevant rules, regulations and
guidance regarding the duties of a CCO, the Funds and their Board of
Directors/Trustees for registered investment companies.
18. ASSIGNMENT; DELEGATION.
This Agreement will be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement will not be assignable by a party without the written
consent of the other party.
19. USE OF NAME.
Neither party shall use the name of the other in any prospectus, sales
literature or other material in a manner not approved by the other party prior
thereto in writing; provided however, that the approval of a party shall not be
required for any use of its name or that of its affiliates 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.
20. BUSINESS RECOVERY.
The Bank represents and warrants that it has and will continue to have in
place a commercially reasonable business recovery program.
21. FORCE MAJEURE.
Notwithstanding anything otherwise to the contrary in this Agreement, no
party shall be liable to the other for any loss or liability arising from any
acts of God, earthquakes, fires, floods, storms or other disturbances of nature,
epidemics, strikes, riots, nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, nuclear fusion,
fission or radiation, the interruption, loss or malfunction of utilities,
transportation or computers (hardware or software) and computer facilities, the
unavailability of energy sources and other similar happenings or events, except
to the extent that any such loss or liability results from the failure of the
Bank to (a) maintain a commercially reasonable business recovery program, and
(b) act reasonably to mitigate, as soon as practicable, the specific occurrence
or event..
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the day and year first above
written.
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By:
------------------------------------
Xxxxxxxxxxx X. Xxxxx
Executive Vice President
INVESTORS BANK & TRUST COMAPNY
By:
-------------------------------------
Name:
Title:
10
APPENDIX A
TO THE
MASTER FUND SUB-ACCOUNTING AND SUB-ADMINISTRATION AGREEMENT
BY AND BETWEEN
NEW YORK LIFE INVESTMENT MANAGEMENT
AND
INVESTORS BANK & TRUST COMPANY
(AS OF JUNE 30, 2005)
FUND PORTFOLIO
---- ---------
THE MAINSTAY FUNDS Blue Chip Growth Fund
Capital Appreciation Fund
Common Stock Fund
Convertible Fund
Diversified Income Fund
Equity Index Fund
Global High Income Fund
Government Fund
High Yield Corporate Bond Fund
International Equity Fund
Large Cap Growth Fund
MAP Fund
Mid Cap Growth Fund
Mid Cap Value Fund
Money Market Fund
Small Cap Growth Fund
Small Cap Value Fund
Tax Free Bond Fund
Total Return Fund
Value Fund
ECLIPSE FUNDS Mid Cap Opportunity Fund
Small Cap Opportunity Fund
Balanced Fund
ECLIPSE FUNDS INC All Cap Growth Fund
All Cap Value Fund
Asset Manager Fund
Cash Reserves Fund
Conservative Allocation Fund
Floating Rate Fund
Growth Allocation Fund
Indexed Bond Fund
Intermediate Term Bond Fund
Large Cap Opportunity Fund (as of July 29, 2005)
Moderate Allocation Fund
Moderate Growth Allocation Fund
S&P 500 Index Fund
Short Term Bond Fund
FUND PORTFOLIO
---- ---------
MAINSTAY VP SERIES FUND, INC. Balanced Portfolio
Basic Value Portfolio
Bond Portfolio
Capital Appreciation Portfolio
Cash Management Portfolio
Common Stock Portfolio
Convertible Portfolio
Developing Growth Portfolio
Floating Rate Portfolio
Government Portfolio
Growth Portfolio
High Yield Corporate Bond Portfolio
Income and Growth Portfolio
International Equity Portfolio
Mid Cap Core Portfolio
Mid Cap Growth Portfolio
Mid Cap Value Portfolio
S&P 500 Index Portfolio
Small Cap Growth Portfolio
Total Return Portfolio
Value Portfolio
MCMORGAN FUNDS Balanced Fund
Equity Investment Fund
Fixed Income Fund
High Yield Fund
Intermediate Fixed Income Fund
Principal Preservation Fund
X-0
XXXXXXXX X
TO THE
MASTER FUND SUB-ACCOUNTING AND SUB-ADMINISTRATION AGREEMENT
BY AND BETWEEN
NEW YORK LIFE INVESTMENT MANAGEMENT
AND
INVESTORS BANK & TRUST COMPANY
Summary of Fund Accounting Functions
- Maintain tax lots for investments.
- Maintain general ledger accounts.
- Calculate and accrue all expenses.
- Book purchases, redemptions and transfers of fund shares.
- Calculate gains and losses (security and currency).
- Determine fund's net income.
- Prepare and post statement of assets and liabilities & statement of
operations.
- Compute market value of the fund using pre-approved pricing vendors.
- Calculate the fund's daily Net Asset Value.
- Forward reports to fund management daily, weekly or monthly.
- Prepare monthly proof packages.
- Assist independent auditors including provision of detailed account
analysis and fiscal year summaries.
- Perform all necessary allocations for multi-tiered structures, if
applicable.
Summary of Administration Functions
I. REPORTING & COMPLIANCE
A. Compliance
- SEC/Tax Compliance
Monitor compliance with investment portfolio restrictions
- Develop a compliance responsibility matrix, consistent with
prospectus and SAI
- Perform daily compliance testing
- Notify portfolio manager and compliance officer of any potential
compliance violations and monitor resolution
- Provide a monthly compliance summary package
- Report to CCO/Board on compliance matters
B-1
Monitor compliance with fund procedures, including:
- Valuation
- Liquidity
- Redemptions in Kind
- Derivatives
- Asset Segregation
- Securities Lending
- Amortized Cost
- Correction of non-money market pricing errors
- Perform compliance testing to establish qualification as RIC
Perform asset diversification testing at quarter end
Review qualifying income status on a quarterly basis
- Perform daily compliance testing and provide daily reporting of
testing results
- Coordinate audits by internal auditors
B. Periodic Management Reporting
- Prepare quarterly financial information for inclusion in Board book
Portfolio of investments
Financial highlights
Summary of reportable transactions (Rule 17a-7, Rule 17e-1, etc.)
Report to Board on financial matters
C. Expense Administration
- Preparation and monitoring
Prepare and monitor the fund's expense budget
- Review prior periods' history and current asset projections and
develop an operating expense budget
- Calculate expense budgets based upon varying asset projections
- Notify fund accounting of changes in accrual rates
- Monitor fund expenses
Calculate asset based fees/reimbursements consistent with payment
cycles
Review multiple class expense differentials
Prepare detail fund expense analysis on a quarterly basis
Update expense budget periodically during the year
- Payment
Receive and coordinate payments of fund expenses
- Propose allocation of invoices among Funds
- Obtain authorized approval to process payment
- Coordinate payment with fund accounting
D. Performance Reporting
- Calculate Portfolio Performance
Prepare total return, yield and other performance information for
designated periods
Prepare monthly report for review by management
B-2
E. Dividend Calculations
- Periodic dividends based on book income
Calculate periodic dividends to be declared in accordance with
management guidelines
- Calculate dividend projections, if applicable, in accordance with
client methodology, including multiple class allocations
- Provide dividend calculation worksheets
- Coordinate notification with fund accounting and transfer agent
- Reconcile dividends declared with amount recorded
- Report dividend information to the Board of Directors
- Tax-adjusted dividends
Maintain "book-to-tax" adjustment records
- Identify book-tax accounting differences
- Track required information related to accounting differences
- Consult and coordinate tax positions taken with auditors and
management Income tax distribution requirements
- Calculate spillback dividend requirements 60 day notice
requirements
- Calculate and include in financial statements: dividend
received deduction, foreign tax credit, long term
capital gain, exempt income percentage and QDI Excise
tax distribution requirements
- Calculate required distributions to avoid imposition of
excise tax penalty
- Project ordinary income from calculated date to 12/31
- Ascertain dividend shares
F. Form N-SAR
- Coordinate the preparation and filing of Form N-SAR
Prepare form for filing
Obtain any necessary supporting documents
Coordinate applicable responses from management and legal
Coordinate XXXXX filing process
XX.XXX
A. Tax Return Preparation
- Prepare income tax returns
Calculate provisions
Draft returns for auditor review and signature as paid preparer
- Prepare excise tax returns
Calculate provisions
Draft returns for auditor review
B. Year-End Shareholder Tax Reporting
- Tax year end reporting
Dividends received deduction
Foreign Tax Credit
Tax-Exempt Income
Coordinate with the transfer agent
B-3
Provide information to meet 60-day notice requirements
III. FINANCIAL REPORTING
A. Financial Reporting Preparation
- Coordinate audits by the Funds' independent public accountants
- Coordinate the preparation and printing of financial statements and
notes
Draft and manage production cycle
Coordinate the creation of templates for style and content of
statements and notes
Prepare financial statements and notes
Coordinate auditor, legal and management review
Coordinate printing and distribution of reports to shareholders
- Coordinate the preparation and filing of Form N-CSR
Prepare form for filing
Obtain any necessary supporting documents
Coordinate applicable responses from management and legal
- Coordinate XXXXX filing process
B. 24f-2 Notice
- Coordinate the preparation and filing of registration notice under
Rule 24f-2
- Accumulate sales, redemption and other information
- Draft notice
- Coordinate payment with fund accounting
- Coordinate XXXXX filing process
IV.INFORMATION TECHNOLOGY
A. Develop and transmit daily files and/or feeds to NYLIM's in-house systems
as identified in further due diligence and subsequent design sessions
V. BOARD BOOK SUPPORT
A. Prepare supporting material for inclusion in Board book
B. Summary of reportable transactions (Rule 17a-7, Rule 17e-1, 10f-3, 144A,
etc.)
C. Graphs
D. Fund performance-charts/graphs
E. Brokerage commission analysis
F. Dividend summary
G. Prepare Forms 1099-Misc. for Board members
H. Calculate expense tables and provide other supporting financial information
for post effective amendments
B-4
APPENDIX C
TO THE
MASTER FUND SUB-ACCOUNTING AND SUB-ADMINISTRATION AGREEMENT
BY AND BETWEEN
NEW YORK LIFE INVESTMENT MANAGEMENT
AND
INVESTORS BANK & TRUST COMPANY
SUMMARY OF ADMINISTRATION FUNCTIONS
SUGGESTED FUND AUDITOR (A) OR
FUNCTION INVESTORS BANK NYLIM FUND COUNSEL (C)
-------- -------------- ----- -----------------------------
MANAGEMENT REPORTING &
TREASURY ADMINISTRATION
Monitor portfolio compliance Perform tests of certain specific Continuously monitor portfolio A/C - Provide consultation as
in accordance with the portfolio activity designed from activity and Fund operations in needed on compliance issues.
current Prospectus, SAI, the provisions of the Fund's conjunction with the 1940 Act,
1940 Act, and any other Prospectus, SAI and other Prospectus, SAI and any other
applicable laws and applicable laws and regulations applicable laws and
regulations. as identified in Compliance regulations. Oversee compliance
Testing Matrix. Timely report program for the Funds. Approve
FREQUENCY: DAILY potential violations to Adviser. IBT Compliance Testing Matrix.
Follow-up on potential Monitor testing results and
violations. approve resolutions of
compliance issues.
Provide compliance summary Provide a report of compliance Review report. A/C - Provide consultation as
package. testing results. needed.
FREQUENCY: MONTHLY
SUGGESTED FUND AUDITOR (A) OR
FUNCTION INVESTORS BANK NYLIM FUND COUNSEL (C)
-------- -------------- ----- -----------------------------
Perform asset diversification Perform asset diversification Review test results and take A - Provide consultation as
testing to establish tests at each tax quarter end. any necessary action. Approve needed in establishing
qualification as a RIC. Timely report potential tax positions taken. positions to be taken in tax
violations to Fund Management. treatment of particular issues.
FREQUENCY: QUARTERLY Follow-up on issues. Review quarter end tests on a
current basis.
Perform qualifying income Perform qualifying income testing Review test results and take A - Consult as needed on tax
testing to establish (on book basis income, unless any necessary action. Approve accounting positions to be
qualification as a RIC. material differences are tax positions taken. taken. Review in conjunction
anticipated) on quarterly basis with year-end audit.
FREQUENCY: QUARTERLY and as may otherwise be
necessary. Timely report
potential violations to Fund
Management. Follow-up on issues.
Calculate total return Provide total return Review total return information.
information on Funds as calculations. Provide after-tax
defined in the current calculations in connection with
Prospectus and SAI. post-effective amendment filings.
FREQUENCY: MONTHLY
Prepare the Funds' annual Prepare preliminary expense Provide asset level
expense budget. Establish budget. Notify mutual fund projections. Approve expense
daily accruals. accounting of new accrual rates. budget.
FREQUENCY: ANNUALLY
C-2
SUGGESTED FUND AUDITOR (A) OR
FUNCTION INVESTORS BANK NYLIM FUND COUNSEL (C)
-------- -------------- ----- -----------------------------
Monitor the Funds' expense Monitor actual expenses updating Provide asset level projections A/C - Provide consultation as
budget. Review the Funds' budgets/expenses accruals. If quarterly. Provide vendor requested.
multi-class expense applicable, review expense information as necessary.
differentials. differentials among classes to Review expense analysis and
ensure consistency with Rule approve budget revisions.
FREQUENCY: MONTHLY 18f-3 or the Funds' exemptive
application and the Funds'
private letter ruling or
published ruling.
Receive and coordinate Propose allocations of invoices Approve invoices and
payment of Fund expenses. among Funds and obtain authorized allocations of payments. Send
approval to process payment. invoices to IBT in a timely
FREQUENCY: AS OFTEN AS manner.
NECESSARY
Calculate periodic dividend Calculate amounts available for Establish and maintain dividend C - Review dividend resolutions
rates to be declared in distribution. Coordinate review and distribution policies. in conjunction with Board
accordance with management by Fund Management and/or Approve distribution rates per approval.
guidelines. auditors. Notify custody and share and aggregate amounts.
transfer agent of authorized Obtain Board approval when A - Review and approve dividend
FREQUENCY: ACCORDING TO dividend rates in accordance with required. calculation methodology for
DIVIDEND POLICY Board approved policy. Report multi-class funds. Provide
dividends to Board as required. consultation as requested.
Obtain Board approval when
required.
C-3
SUGGESTED FUND AUDITOR (A) OR
FUNCTION INVESTORS BANK NYLIM FUND COUNSEL (C)
-------- -------------- ----- -----------------------------
Prepare Director and vendor Summarize amounts paid during the Provide social security numbers
Form 1099-MISC, as needed. calendar year to Directors and and current mailing address for
vendors. Prepare and mail Form Directors.
FREQUENCY: ANNUALLY 1099-MISC. Obtain social security
numbers and current mailing
address for Directors.
Prepare selected information Prepare selected information for Review information.
for presentation to Fund inclusion in board material.
Management and Board of
Directors as NYLIM may
reasonably request from time
to time.
FREQUENCY: QUARTERLY
Prepare and file Form N-SAR. Prepare form for filing. Obtain Provide appropriate responses. C - Review initial filing.
any necessary supporting Review and authorize filing.
FREQUENCY: documents. File with SEC via A - Provide annual audit
SEMI-ANNUALLY XXXXX. internal control letter to
accompany the annual filing.
FINANCIAL REPORTING
C-4
SUGGESTED FUND AUDITOR (A) OR
FUNCTION INVESTORS BANK NYLIM FUND COUNSEL (C)
-------- -------------- ----- -----------------------------
Coordinate the annual audit Serve as project manager for Approve format and text as A - Perform audit and issue
and semi-annual and quarterly creation, production and standard. Approve production opinion on annual financial
preparation and printing of dissemination of Funds' financial calendar and assist in managing statements.
financial statements and statements. Acquire past to the schedule. Prepare
notes with Fund Management, financial statements and other appropriate management letter. A/C - Review reports.
IBT mutual fund accounting information required to create Review and approve entire
and the Fund auditors. templates, including report style report. Make appropriate
and graphics. Draft and manage representations in conjunction
FREQUENCY: SEMI-ANNUALLY production calendar. Coordinate with audit.
with IBT fund accounting the
electronic receipt of portfolio
and general ledger information to
create financial statements.
Coordinate resolution of
accounting issues. Coordinate
typesetting of Management
Discussion and Analysis with rest
of financial statements. Using
templates, draft financial
statements, coordinate auditor
and management review, and clear
comments. Where applicable,
coordinate typesetting, printing
of reports and XXXXX conversion
with printer and filing with the
SEC via XXXXX.
C-5
SUGGESTED FUND AUDITOR (A) OR
FUNCTION INVESTORS BANK NYLIM FUND COUNSEL (C)
-------- -------------- ----- -----------------------------
Coordinate the preparation Draft Form N-CSR, Form N-Q and Review and approve Form N-CSR C - Review Form N-CSR and Form
and filing of Form N-CSR and certifications and coordinate and Form N-Q. Forward signed N-Q
Form N-Q. management review. Coordinate Form N-CSR, Form N-Q and
Xxxxx conversion with outside certifications to IBT prior to
FREQUENCY: SEMI-ANNUALLY printer and filing with the SEC filing of report.
via Xxxxx.
TAX
Prepare income tax Calculate investment company Approve tax accounting A - Provide consultation as
provisions. taxable income, net tax exempt positions to be taken. Approve needed in establishing
interest, net capital gain and provisions. Identify securities positions to be taken in tax
FREQUENCY: ANNUALLY spillback dividend requirements. to be treated by the Funds as treatment of particular issues.
Identify book-tax accounting PFICs. Perform review in conjunction
differences. Track required with the year-end audit.
information relating to
accounting differences. Identify
lists of potential Passive
Foreign Investment Companies
(PFICs) based on published ICI
survey.
C-6
SUGGESTED FUND AUDITOR (A) OR
FUNCTION INVESTORS BANK NYLIM FUND COUNSEL (C)
-------- -------------- ----- -----------------------------
Calculate excise tax Identify list of potential PFICs Approve tax accounting A - Provide consultation as
distributions. based on published ICI survey. positions to be taken. Review needed in establishing
Calculate required distributions and approve all income and positions to be taken in tax
FREQUENCY: ANNUALLY to avoid imposition of excise distribution calculations, treatment of particular issues.
tax. Calculate capital gain net including projected income and Review and concur with proposed
income and foreign currency dividend shares. Approve distributions per share.
gain/loss through October 31. distribution rates per share
Calculate ordinary income and and aggregate amounts. Obtain
distributions through a specified Board approval when required.
cut off date. Project ordinary Identify securities to be
income from cut off date to treated by the Funds as PFICs.
December 31. Ascertain dividend
shares. Identify book-tax
accounting differences. Track
required information relating to
accounting differences.
Coordinate review by Fund
Management and fund auditors.
Notify custody and transfer agent
of authorized dividend rates in
accordance with Board approved
policy. Report dividends to Board
as required.
Prepare tax returns Prepare excise and RIC tax Review and sign tax return. A - Review and sign tax return
returns. as preparer.
FREQUENCY: ANNUALLY
C-7
SUGGESTED FUND AUDITOR (A) OR
FUNCTION INVESTORS BANK NYLIM FUND COUNSEL (C)
-------- -------------- ----- -----------------------------
Prepare Form 1099-DIV Obtain yearly distribution Review and approve information
information. Calculate 1099-DIV provided.
FREQUENCY: ANNUALLY reclasses and coordinate with
transfer agent.
Prepare other year-end Obtain yearly income distribution Review and approve information
tax-related disclosures. information. Calculate provided.
disclosures (i.e. dividend
FREQUENCY: ANNUALLY received deductions, foreign tax
credits, tax-exempt income,
income by jurisdiction) and
coordinate with transfer agent.
C-8
