EXHIBIT (h)(4)
ADMINISTRATION AGREEMENT
WITH AMERICAN DATA SERVICES, INC.
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 30th day of June 1999, and amended on March 16, 2000, by
and between the ORBITEX Group of Funds, a Delaware Business Trust, having its
principal office and place of business 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000
(the "Trust"), and American Data Services, Inc., a New York corporation having
its principal office and place of business at the Hauppauge Corporate Center,
000 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx 00000 (the "Administrator").
BACKGROUND
WHEREAS, the Trust(2) consists of various series listed in Schedule A
(collectively referred to as the "Funds") of diversified and non-diversified,
open-end management investment company registered with the United States
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Administrator is a corporation experienced in
providing administrative services to mutual funds and possesses facilities
sufficient to provide such services; and
WHEREAS, the Trust desires to avail itself of the experience,
assistance and facilities of the Administrator and to have the Administrator
perform for the Trust certain services appropriate to the operations of its
Funds and the Administrator is willing to furnish such services in accordance
with the terms hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the Trust and the Administrator hereby agree to
the following:
1. DUTIES OF THE ADMINISTRATOR.
The Administrator will provide the Trust with the necessary office
space, communication facilities and personnel to perform the following services
for the Trust:
(a) Monitor all regulatory (1940 Act and IRS) and prospectus
restrictions for compliance;
(b) Prepare and coordinate the printing of semi-annual and annual
financial statements;
(c) Prepare selected management reports for performance and
compliance analyses as agreed upon by the Trust and
Administrator from time to time;
(d) Prepare selected financial data required for trustee' meetings
as agreed upon by the Trust and the Administrator from time to
time and coordinate trustees meeting agendas with outside legal
counsel to the Trust;
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(2) The term "Trust" shall refer to the ORBITEX Group of Funds, and each
series of the ORBITEX Group of Funds that is approved by the Board of
Trustees of the ORBITEX Group of Funds for inclusion under the terms of this
agreement, and each series that is so approved shall be subject to the terms
of this Agreement without the need for an amendment of or addition to this
Agreement.
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(e) Determine income and capital gains available for distribution
and calculate distributions required to meet regulatory, income,
and excise tax requirements, to be reviewed by the Trust's
independent public accountants;
(f) Prepare the Trust's federal, state, and local tax returns to be
reviewed by the Trust's independent public accountants;
(g) Prepare and maintain the Trust's operating expense budget to
determine proper expense accruals to be charged to its Funds in
order to calculate their daily net asset value;
(h) 1940 ACT filings -
In conjunction with the Trust's outside legal counsel the
Administrator will:
- Prepare the Trust's Form N-SAR reports;
- Update all financial sections of the Trust's Statement of
Additional Information and coordinate its completion;
- Update all financial sections of the Trust's prospectus and
coordinate its completion;
- Update all financial sections of the Trust's proxy statement
and coordinate its completion;
- Prepare an annual update to Trust's 24f-2 filing
(if applicable);
(i) Monitor services provided by the Trust's custodian bank as well
as any other service providers to the Trust;
(j) Provide appropriate financial schedules (as requested by the
Trust's independent public accountants or SEC examiners),
coordinate the Trust's annual or SEC audit, and provide office
facilities as may be required;
(k) Attend management and board of trustees meetings as requested;
(l) The preparation and filing (filing fee to be paid by the Trust)
of applications and reports as necessary to register or maintain
the Trusts registration under the securities or "Blue Sky" laws
of the various states selected by the Trust or its Distributor.
The Administrator shall, for all purposes herein, be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
2. COMPENSATION OF THE ADMINISTRATOR.
In consideration of the services to be performed by the Administrator
as set forth herein for each portfolio approved for inclusion hereunder by the
Board of Trustees of the Trust, the Administrator shall be entitled to receive
compensation and reimbursement for all reasonable out-of-pocket expenses. The
Trust agrees to pay the Administrator the fees and reimbursement of
out-of-pocket expenses as set forth in the fee schedule attached hereto as
Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
(a) The Administrator shall be held to the exercise of reasonable care
in carrying out the provisions of the Agreement, but shall be without liability
to the Trust for any action taken or omitted by it in good faith without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties
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hereunder. It shall be entitled to rely upon and may act upon the accounting
records and reports generated by the Trust, advice of the Trust, or of counsel
for the Trust and upon statements of the Trust's independent accountants, and
shall be without liability for any action reasonably taken or omitted pursuant
to such records and reports or advice, provided that such action is not, to the
knowledge of the Administrator, in violation of applicable federal or state laws
or regulations, and provided further that such action is taken without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties.
(b) The Administrator shall not be liable to the Trust for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder except as
hereinafter set forth. Nothing herein contained shall be construed to protect
the Administrator against any liability to the Trust or its security holders to
which the Administrator shall otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties on
behalf of the Trust, reckless disregard of the Administrator's obligations and
duties under this Agreement or the willful violation of any applicable law.
(c) Except as may otherwise be provided by applicable law, neither the
Administrator nor its stockholders, officers, directors, employees or agents
shall be subject to, and the Trust shall indemnify and hold such persons
harmless from and against, any liability for and any damages, expenses or losses
incurred by reason of the inaccuracy of information furnished to the
Administrator by the Trust or its authorized agents or in connection with any
error in judgment or mistake of law or any act or omission in the course of,
connected with or arising out of any services to be rendered hereunder, except
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, by reason of reckless disregard of the
Administrator's obligations and duties under this Agreement or the willful
violation of any applicable law.
4. REPORTS.
(a) The Trust shall provide to the Administrator on a quarterly basis a
report of a duly authorized officer of the Trust representing that all
information furnished to the Administrator during the preceding quarter was
true, complete and correct to the best of its knowledge. The Administrator shall
not be responsible for the accuracy of any information furnished to it by the
Trust, and the Trust shall hold the Administrator harmless in regard to any
liability incurred by reason of the inaccuracy of such information.
(b) The Administrator shall provide to the Board of Trustees of the
Trust, on a quarterly basis, a report, in such a form as the Administrator and
the Trust shall from time to time agree, representing that, to its knowledge,
the Trust was in compliance with all requirements of applicable federal and
state law, including without limitation, the rules and regulations of the
Securities and Exchange Commission and the Internal Revenue Service, or
specifying any instances in which the Trust was not so in compliance. Whenever,
in the course of performing its duties under this Agreement, the Administrator
determines, on the basis of information supplied to the Administrator by the
Trust, that a violation of applicable law has occurred, or that, to its
knowledge, a possible violation of applicable law may have occurred or, with the
passage of time, could occur, the Administrator shall promptly notify the Trust
and its counsel of such violation.
5. ACTIVITIES OF THE ADMINISTRATOR.
The Administrator shall be free to render similar services to others so
long as its services hereinunder are not impaired thereby.
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6. RECORDS.
The records maintained by the Administrator shall be the property of
the Trust, and shall be surrendered to the Trust, at the expense of the Trust,
promptly upon request by the Trust, provided that all service fees and expenses
charged by the Administrator in the performance of its duties hereunder have
been fully paid to the satisfaction of the Administrator, in the form in which
such accounts and records have been maintained or preserved. The Administrator
agrees to maintain a back-up set of accounts and records of the Trust (which
back-up set shall be updated on at least a weekly basis) at a location other
than that where the original accounts and records are stored. The Administrator
shall assist the Trust's independent auditors, or, upon approval of the Trust,
any regulatory body, in any requested review of the Trust's accounts and
records. The Administrator shall preserve the accounts and records as they are
required to be maintained and preserved by Rule 31a-1.
7. CONFIDENTIALITY.
The Administrator agrees that it will, on behalf of itself and its
officers and employees, treat all transactions contemplated by this Agreement,
and all other information germane thereto, as confidential and such information
shall not be disclosed to any person except as may be authorized by the Trust.
8. DURATION AND TERMINATION OF THE AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, upon
ninety (90) days prior written notice.
Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Trust. Additionally, the Administrator reserves the right to charge for any
other reasonable expenses associated with such termination.
9. ASSIGNMENT.
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 by the Trust without the prior written consent
of the Administrator, or by the Administrator without the prior written consent
of the Trust.
10. NEW YORK LAWS TO APPLY.
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
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11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
12. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when delivered in person or by certified
mail, return receipt requested, and shall be given to the following addresses
(or such other addresses as to which notice is given):
To the Trust: To the Administrator:
M. Fyzul Khan Xxxxxxx Xxxxx
Secretary President
ORBITEX Group of Funds American Data Services, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx 000 Xxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ORBITEX Group of Funds AMERICAN DATA SERVICES, INC.
By: By:
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Xxxxx X. Xxxxxx, President Xxxxxxx Xxxxx, President
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SCHEDULE A
FUND LISTING
Orbitex Internet Fund
Orbitex Emerging Technology Fund
Orbitex Strategic Infrastructure Fund
Orbitex Health & Biotechnology Fund
Orbitex Financial Services Fund
Orbitex Focus 30 Fund
SCHEDULE B
ADMINISTRATIVE SERVICE FEE SCHEDULE
ADMINISTRATIVE SERVICE FEE
For the services rendered by the Administrator in its capacity as
administrator, the Trust shall pay the Administrator within ten (10) days after
receipt of an invoice from the Administrator at the beginning of each month, a
fee equal to the greater of the following, for each series of the Trust approved
by the Board of Trustees of the Trust for inclusion hereunder:
NET ASSET CHARGE (except for the Cash Reserves Fund) (based upon prior month
average net assets):
Assets up to $100 million...................... 10 basis points (.10%)
Assets from $100 million to $250 million....... 8 basis points (.08%)
Assets from $250 million to $500 million 5 basis points (.05%)
Greater than $500 million on................... 3 basis points (.03%)
OR
MINIMUM FEE:
$40,000 per Fund per year
The Cash Reserves Fund shall pay a fee equal to two (2) basis points (.002%)
based upon prior month average net assets.
On each annual anniversary date of this Agreement, the fees enumerated above may
be increased by the change in the Consumer Price Index for the Northeast region
(CPI) for the twelve-month period ending with the month preceding such annual
anniversary date.
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Any CPI increases not charged in any given year may be
included in prospective CPI fee increases in future years.
STATE REGISTRATION (BLUE SKY) FEES
The fees enumerated above include the initial state registration, renewal and
maintenance of registrations (as detailed in Paragraph 1(l) DUTIES OF THE
ADMINISTRATOR) for three (3) states. Each additional state registration
requested will be subject to the following fees:
Initial registration ........... $295.00
Registration renewal ........... $150.00
Sales reports (if required) .... $ 25.00
OUT OF POCKET EXPENSES
The Trust shall reimburse the Administrator for any out-of-pocket
expenses, exclusive of salaries, advanced by the Administrator in connection
with but not limited to the printing or filing of documents for the Trust,
travel, telephone, quotation services, facsimile transmissions, stationery and
supplies, record storage, postage, telex, and courier charges, incurred in
connection with the performance of its duties hereunder. The Administrator shall
provide the Trust with a monthly invoice of such expenses and the Trust shall
reimburse the Administrator within fifteen (15) days after receipt thereof.
SPECIAL REPORTS
All reports and /or analyses requested by the Trust, its auditors,
legal counsel, portfolio manager, or any regulatory agency having jurisdiction
over the Trust, that are not in the normal course of fund administrative
activities as specified in Section 1 of this Agreement shall be subject to an
additional charge, agreed upon in advance, based upon the following rates:
Labor:
Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $45.00/hr.
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