Execution Copy
EXHIBIT (h)(3)
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of the 1st day of October, 2003, by and between CDC
IXIS Asset Management Services, Inc., a Massachusetts corporation ("CIS"), and
CDC Nvest Funds Trust I, CDC Nvest Funds Trust II, CDC Nvest Funds Trust III,
CDC Nvest Cash Management Trust, CDC Nvest Tax Exempt Money Market Trust, CDC
Nvest Companies Trust I, Xxxxxx Xxxxxx Funds I and Xxxxxx Xxxxxx Funds II
(collectively, the "Trusts").
WITNESSETH:
WHEREAS, each Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trusts currently employ CIS to provide certain
administrative services to the Trusts and the Trusts and CIS wish to replace
their existing arrangements with this Agreement;
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter contained, the parties hereby agree as follows:
1. APPOINTMENT AND ACCEPTANCE. The Trusts hereby employ CIS to act as
Administrator of the Trusts on the terms set forth in this agreement. CIS hereby
accepts such employment and agrees to furnish the services and to assume the
obligations herein set forth for the compensation herein provided. The Trusts
will initially consist of the series and/or classes of shares (each a "Fund" and
collectively, the "Funds") listed on Schedule A to this Agreement. In the event
that any of the Trusts establish one or more additional Funds with respect to
which such Trust wishes to employ CIS to act as Administrator hereunder, the
Trust shall notify CIS in writing. Upon written acceptance by CIS, such Fund
shall become subject to the provisions of this Agreement to the same extent as
the existing Funds, except to the extent that such provisions (including those
relating to the compensation and expenses payable by the Trusts and its Funds)
may be modified with respect to each additional Fund in writing by the Trust and
CIS at the time of the addition of the Fund.
2. SERVICES PROVIDED BY CIS.
(a) CIS shall perform or arrange for the performance of the various
administrative and clerical services listed in Schedule B hereto. The
administrative services provided hereunder shall be subject to the
control, supervision and direction of the Trusts and the review and
comment by the Trusts' auditors and legal counsel and shall be
performed in accordance with procedures, which may be established from
time to time between the Trusts and CIS. CIS shall provide the office
space, facilities, equipment and the personnel required by it to
perform the services contemplated herein.
(b) In providing any or all of the services listed in Schedule B hereto,
and in satisfaction of its obligations to provide such services, CIS
may, at its expense, enter into agreements with one or more other third
parties to provide such services to the Trusts; provided, however, that
CIS shall
be as fully responsible to the Trusts for the acts and omissions of any
such third party service providers as it would be for its own acts or
omissions hereunder.
3. COMPENSATION AND EXPENSES.
(a) For the services provided hereunder, the Trusts shall pay CIS the
greater of the following:
(1) an annual minimum fee of $5,000,000 payable in monthly
installments; or
(2) a monthly fee (accrued daily) based on the Trusts' average
daily net assets during the calendar month, such fee being
calculated at the annualized rates set forth below:
ANNUALIZED FEE RATE
AVERAGE DAILY NET ASSETS AS A % OF AVERAGE DAILY NET ASSETS
$0 - $ 5 billion 0.0675%
Next $ 5 billion 0.0625%
Over $ 10 billion 0.0500%
(3) In addition, each new fund that becomes effective after
January 1, 2004 is subject to an annual administration fee
consisting of a new fund base fee of $50,000 plus $12,500 per
class (if multiple classes) and an additional $50,000 fee for
each multi-manager fund. The parties understand and agree that
the annual minimum set forth in paragraph (3)(a)(1) above will
be reviewed annually and the parties will agree to an
appropriate adjustment taking into consideration new funds
added and funds liquidated or merged out of existence during
the year.
(b) In addition, the Trusts shall reimburse CIS for its reasonable
out-of-pocket expenses as well as any other advances incurred by CIS
with the consent of the Trusts with respect to its provision of
services hereunder. It is agreed that the expenses for Blue Sky
administrative services performed and vendor costs incurred will be
paid directly by the Trusts.
(c) For any period less than a full calendar month, any fees payable to CIS
for such period shall be pro-rated for such lesser period. All of the
foregoing fees and expenses will be billed monthly in arrears by CIS.
The Trusts shall pay such fees and reimburse such expenses promptly
upon receipt of an invoice therefor and, in no event, later than five
(5) business days after receipt of the invoice.
(d) The Trusts agree promptly to reimburse CIS for any equipment and
supplies specially ordered by or for the Trusts through CIS at the
request or with the consent of the Trusts, and for any other expenses
not contemplated by this Agreement that CIS may incur on behalf of, at
the request of, or with the consent of the Trusts.
(e) The Trusts will bear all expenses that are incurred in its operation
and not specifically assumed by CIS. Expenses to be borne by the
Trusts, include, but are not limited to: organizational expenses; cost
of services of independent accountants and outside legal and tax
counsel (including such counsel's review of each Trust's registration
statement, proxy materials, federal and state tax qualification as a
regulated investment company and other reports and materials prepared
by CIS under this Agreement); cost of any services contracted for by
the Trusts directly
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from parties other than CIS; cost of trading operations and brokerage
fees, commissions and transfer taxes in connection with the purchase
and sale of securities for the Funds; investment advisory fees; taxes,
insurance premiums and other fees and expenses applicable to its
operation; costs incidental to any meetings of shareholders including,
but not limited to, legal and accounting fees, proxy filing fees and
the costs of preparation, printing and mailing of any proxy materials;
costs incidental to Board meetings, including fees and expenses of
Board members; the salary and expenses of any non-affiliated officer or
director/trustee or any employee of the Trusts; costs incidental to the
preparation, printing and distribution of the Trusts' registration
statements and any amendments thereto and shareholder reports; cost of
typesetting and printing of prospectuses; cost of preparation and
filing of each of the Fund's tax returns, Form N-1A, Form N-CSR and
Form N-SAR, and all notices, registrations and amendments associated
with applicable federal and state tax and securities laws; all
applicable registration fees and filing fees required under federal and
state securities laws; fidelity bond and directors' and officers'
liability insurance; and cost of independent pricing services used in
computing each Fund's net asset value.
4. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) CIS shall not be liable to the Trusts for any error of judgment or
mistake of law or for any loss arising out of any act or omission by
CIS, or any persons engaged pursuant to Section 2(b) hereof, including
officers, agents, and employees of CIS and its affiliates, in the
performance of its duties hereunder; provided, however, that nothing
contained herein shall be construed to protect CIS against any
liability to the Trusts, the Funds, or the shareholders to which CIS
shall otherwise be subject by reason of its willful misfeasance, bad
faith, or negligence in the performance of its duties or the reckless
disregard of its obligations and duties hereunder.
(b) CIS will indemnify and hold harmless the Trusts, their officers,
employees, and agents and any persons who control the Trusts
(collectively, the "Trusts Indemnified Parties") and hold each of them
harmless from any losses, claims, damages, liabilities, or actions in
respect thereof to which the Trusts Indemnified Parties may become
subject, including amounts paid in settlement with the prior written
consent of CIS, insofar as such losses, claims, damages, liabilities,
or actions in respect thereof arise out of or result from the failure
of CIS to comply with the terms of this Agreement.
CIS will reimburse the Trusts for reasonable legal or other expenses
reasonably incurred by the Trusts in connection with investigating or
defending against any such loss, claim, damage, liability, or action.
CIS shall not be liable to the Trusts for any action taken or omitted
by the Trusts in bad faith or with willful misfeasance or negligence or
with reckless disregard by the Trusts of their respective obligations
and duties hereunder. The indemnities herein shall, upon the same terms
and conditions, extend to and inure to the benefit of each of the
officers of the Trusts and any person controlling the Trusts.
(c) The obligations set forth in this Section 4 shall survive the
termination of this Agreement.
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5. ACTIVITIES OF CIS NOT EXCLUSIVE; DUAL INTERESTS.
(a) The services of CIS under this Agreement are not to be deemed
exclusive, and CIS and any person controlled by or under common control
with CIS shall be free to render similar services to others.
(b) It is understood that any of the officers, employees, and agents of the
Trusts or the Manager may be a shareholder, director, officer,
employee, or agent of, or be otherwise interested in, CIS, any
affiliated person of CIS, any organization in which CIS may have an
interest, or any organization that may have an interest in the Trusts.
Except as otherwise provided by specific provisions of applicable law,
the existence of any such dual interest shall not affect the validity
of this Agreement or any of the transactions hereunder.
6. REPRESENTATIONS AND WARRANTIES.
(a) The Trusts each represents and warrants to CIS that this Agreement has
been duly authorized by each of them and, when executed and delivered,
will constitute a legal, valid, and binding obligation of the Trusts,
enforceable against the Trusts in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting the rights and remedies of creditors and
secured parties.
(b) CIS represents and warrants to the Trusts that this Agreement has been
duly authorized by CIS and, when executed and delivered by CIS, will
constitute a legal, valid, and binding obligation of CIS, enforceable
against CIS in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium, and other laws of general
application affecting the rights and remedies of creditors and secured
parties.
7. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) This Agreement shall become effective as of the date first above
written and, unless otherwise terminated, shall continue indefinitely;
provided, however, that this Agreement may be terminated at any time
without the payment of any penalty by either party on not less than
sixty (60) days' written notice to the other party.
(b) This Agreement shall automatically terminate for any Fund in the
attached Schedule A upon the termination of that Fund's Advisory
Agreement.
(c) Unless otherwise terminated, this Agreement shall continue in effect
for one year from the date of execution, and from year to year
thereafter so long as such continuance is specifically approved at
least annually by the Board of Trustees of the Trusts.
(d) CIS hereby agrees that any books and records prepared hereunder with
respect to the Trusts are the property of the Trusts and shall be
readily accessible to the Trusts and their respective trustees,
officers and agents during normal business hours. CIS further agrees
that, upon the termination of this Agreement or otherwise upon request,
CIS will surrender promptly to the Trusts copies of all such books and
records.
8. AMENDMENTS AND WAIVERS. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved by the Trusts' Board of
Trustees, and such amendment is set forth in
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a written instrument executed by each of the parties hereto. At any time, any of
the provisions hereof may be waived by the written mutual consent of the parties
hereto.
9. NOTICES. All notices or other communications hereunder to either party
shall be in writing and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid. Notices shall be sent to the addresses set
forth below or to such other address as either party may designate by written
notice to the other.
If to CIS:
CDC IXIS Asset Management Services, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
With a copy to: General Counsel
If to the Trusts:
CDC Nvest Funds Trust I, CDC Nvest Funds Trust II, CDC Nvest
Funds Trust III, CDC Nvest Cash Management Trust, CDC Nvest
Tax Exempt Money Market Trust, CDC Nvest Companies Trust I,
Xxxxxx Xxxxxx Funds I or Xxxxxx Xxxxxx Funds II
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
With a copy to: Secretary
Notice shall also be deemed sufficient if given electronically or by telex,
telecopier, telegram, or other similar means of same day delivery (with a
confirming copy by mail as provided herein).
10. ADDITIONAL PROVISIONS
(a) Separate Portfolios. This Agreement shall be construed to be made by
the Trusts as a separate agreement with respect to each Fund, and under
no circumstances shall the rights, obligations, or remedies with
respect to a particular Fund be deemed to constitute a right,
obligation, or remedy applicable to any other Fund.
(b) Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes
any prior arrangements, agreements, or understandings.
(c) Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance is held to be invalid
or unenforceable to any extent, the remainder of this Agreement or the
application of such provision to other persons or circumstances shall
not be affected thereby and shall be enforced to the fullest extent
permitted by law.
(d) Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of The Commonwealth of
Massachusetts as then in effect.
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(e) Counterparts. This Agreement may be executed by the parties hereto in
one or more counterparts, and, if so executed, the separate instruments
shall constitute one agreement.
(f) Headings. Headings used in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
CDC IXIS ASSET MANAGEMENT SERVICES, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: President & Chief Executive Officer
CDC NVEST FUNDS TRUST I
CDC NVEST FUNDS TRUST II
CDC NVEST FUNDS TRUST III
CDC NVEST CASH MANAGEMENT TRUST
CDC NVEST TAX EXEMPT MONEY MARKET TRUST
CDC NVEST COMPANIES TRUST
XXXXXX XXXXXX FUNDS II
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: President & Chief Executive Officer
XXXXXX XXXXXX FUNDS I
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
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SCHEDULE A
Trust Portfolios
As of: October 1, 2003
CDC Nvest FUNDS TRUST I
CDC Nvest International Equity Fund
CDC Nvest Large Cap Growth Fund
CDC Nvest Star Advisers Fund
CDC Nvest Star Growth Fund
CDC Nvest Star Small Cap Fund
CDC Nvest Star Value Fund
CDC Nvest Star International Fund
CGM Advisor Targeted Equity Fund
Xxxxxx Xxxxxx Core Plus Bond Fund
Xxxxxx Xxxxxx Government Securities Fund
Westpeak Capital Growth Fund
CDC Nvest FUNDS TRUST II
Xxxxxx Associates Growth and Income Fund
Xxxxxx Xxxxxx Massachusetts Tax Free Income Fund
CDC Nvest FUNDS TRUST III
Xxxxxx Associates Focused Value Fund
CDC Nvest CASH MANAGEMENT TRUST
CDC Nvest Cash Management Trust - Money Market Series
CDC Nvest TAX EXEMPT MONEY MARKET TRUST
CDC Nvest COMPANIES TRUST I
AEW Real Estate Fund
XXXXXX XXXXXX FUNDS I
Xxxxxx Xxxxxx Benchmark Core Fund
Xxxxxx Xxxxxx Bond Fund
Xxxxxx Xxxxxx Core Plus Fixed Income Fund
Xxxxxx Xxxxxx Fixed Income Fund
Xxxxxx Xxxxxx Global Bond Fund
Xxxxxx Xxxxxx Institutional High Income Fund
Xxxxxx Xxxxxx Intermediate Duration Fixed Income Fund
Xxxxxx Xxxxxx Investment Grade Fixed Income Fund
Xxxxxx Xxxxxx Mid Cap Growth Fund
Xxxxxx Xxxxxx Small Cap Value Fund
Xxxxxx Xxxxxx Small Company Growth Fund
Xxxxxx Xxxxxx US Government Securities Fund
XXXXXX XXXXXX FUNDS II
Xxxxxx Xxxxxx Aggressive Growth Fund
Xxxxxx Xxxxxx Growth Fund
Xxxxxx Xxxxxx High Income Fund
Xxxxxx Xxxxxx International Equity Fund
Xxxxxx Xxxxxx Investment Grade Bond Fund
Xxxxxx Xxxxxx Limited Term US Government Fund
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Xxxxxx Xxxxxx Managed Bond Fund
Xxxxxx Xxxxxx Municipal Income Fund
Xxxxxx Xxxxxx Research Fund
Xxxxxx Xxxxxx Small Cap Growth Fund
Xxxxxx Xxxxxx Strategic Income Fund
Xxxxxx Xxxxxx Tax-Managed Equity Fund
Xxxxxx Xxxxxx Value Fund
Xxxxxx Xxxxxx Worldwide Fund
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Schedule B
DESCRIPTION OF SERVICES PROVIDED
DATED: OCTOBER 1, 2003
CIS shall perform or arrange for the performance of the following administration
and clerical service:
CORPORATE SECRETARIAL SERVICES
1. provide Secretary and Assistant Secretaries for the Trusts and
other officers as requested;
2. maintain general corporate calendar, tracking all legal and
regulatory compliance through annual cycles;
3. prepare Board materials for quarterly Board meetings and Board
committee meetings, including agenda and background materials for
annual review of advisory and distribution fees, presentation of
issues to the Board, prepare minutes and follow-up on matters
raised at meetings;
4. maintain charter documents for the Trusts;
5. prepare organizational Board meeting materials for new Funds;
6. draft contracts, assisting in negotiation and planning, as
appropriate, for example advisory, distribution and selling
agreements, transfer agency and custodian agreements, 12b-1 and
shareholder servicing plans and related agreements and various
other agreements and amendments;
7. prepare and file proxy solicitation materials, oversee
solicitation and tabulation efforts, conduct shareholder meetings
and provide legal presence at meetings;
REGISTRATION AND DISCLOSURE ASSISTANCE SERVICES
8. prepare and file amendments to the Funds' registration statement,
including updating prospectuses and SAIs;
9. prepare and file prospectus and SAI supplements, as needed;
10. prepare and file other regulatory documents, including Form
N-CSR, Form N-SARs, Rule 24f-2 Notices, Form N-PX;
11. establish and maintain a disclosure controls and procedures
program to assist in the funds' officers certification under the
Xxxxxxxx-Xxxxx Act of 2002;
12. obtain and file fidelity bonds and monitor compliance with Rule
17g-1 and Rule 17d-1(7) under the 1940 Act;
13. obtain and monitor directors' and officers' errors and omissions
policies;
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14. prepare and file shareholder meeting materials and assist with
all shareholder communications;
15. coordinate and monitor state Blue Sky qualification through an
experienced vendor partner;
LEGAL CONSULTING AND PLANNING SERVICES
16. provide general legal advice on matters relating to portfolio
management, Fund operations, mutual fund sales, development of
advertising materials, changing or improving prospectus
disclosure, and any potential changes in each Fund's investment
policies, operations, or structure;
17. communicate significant emerging regulatory and legislative
developments to the Adviser, the Trusts and the Board and provide
related planning assistance;
18. develop or assist in developing guidelines and procedures to
improve overall compliance by the Trusts and Funds;
19. provide advice with regard to litigation matters, routine fund
examinations and investigations by regulatory agencies;
20. provide advice regarding long-term planning for the Funds,
including creation of new funds or portfolios, corporate
structural changes, mergers, acquisitions, and other asset
gathering plans including new distribution methods;
21. maintain effective communications with fund counsel and counsel
to the independent Trustees, if any;
22. create and implement timing and responsibility system for outside
legal counsel when necessary to implement major projects and the
legal management of such projects;
23. monitor activities and billing practices of counsel performing
services for the Funds or in connection with related fund
activities;
24. provide consultation and advice for resolving compliance
questions along with the Adviser, its counsel, the Trusts and
fund counsel;
25. provide active involvement with the management of SEC and other
regulatory examinations;
26. maintain the Trusts' Code of Ethics and monitor compliance of
personnel;
27. maintain the Trusts' Xxxxxxxx-Xxxxx Code of Ethics and monitor
compliance of personnel;
28. maintain procedures to assist the Trusts' in complying with
attorney conduct rules of Xxxxxxxx-Xxxxx Act of 2002
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TRANSFER AGENT MONITORING SERVICES
29. ensure that the content of confirmations, statements, annual and
semi-annual reports, disclosure statements and shareholder
administrative communications conform to regulatory requirements
and are distributed within the mandated time frames;
30. monitor and review transfer agent activity in order to evaluate
the status of regulatory compliance, protect the integrity of the
funds and shareholders, search for systemic weaknesses, and
examine for potential liability and fraud;
31. establish and maintain an anti-money laundering program to assist
in the Funds' compliance with the requirements of the USA PATRIOT
Act;
32. investigate and research customer and other complaints to
determine liability, facilitate resolution and promote equitable
treatment of all parties;
33. consult with transfer agent and other staff regarding prospectus
and SAI provisions and requirements, distribution issues
including payment programs, sub-transfer agent arrangements and
other regulatory issues;
TREASURY FINANCIAL SERVICES
34. provide Treasurer and Assistant Treasurers for the Trusts and
other officers as requested;
35. generate portfolio schedules utilizing the Funds' custodian
system;
36. create financial statements and financial highlight tables;
37. maintain and update the notes to the financials;
38. supply the Funds' custodian with a listing of audit reports and
schedules;
39. coordinate with external auditors for annual audit;
40. review financial statements for completeness accuracy and full
disclosure;
41. coordinate ROCSOP adjustments with auditors;
42. determine and monitor expense accrual for each fund;
43. verify management and 12b-1 fees calculated by the Funds'
custodian;
44. review fund waivers and deferrals;
45. calculate total returns for each fund and respective classes
using the Fundstation system;
46. oversee and review custodial bank services including maintenance
of books and records;
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47. provide service bureaus with funds statistical information;
48. oversee the determination and publication of the Funds' net asset
values;
49. review the calculation, submit for approval by an officer of the
Funds', and arrange for the payment of the Funds' expenses;
50. oversee and review the calculation of fees paid to the Funds'
service providers, including, as applicable, the Funds'
investment advisers and sub-advisers, custodian, transfer agent
and distributor and submit to an officer for Funds' approval;
TREASURY REGULATORY SERVICES
51. prepare and file annual and semi-annual N-CSR and N-SAR forms
with the SEC;
52. provide Trustees with condensed portfolio information;
53. review securities lending activity;
54. review pricing errors;
55. review fair value pricing;
56. review stale pricing;
57. review collateral segregation;
58. provide bi-monthly summaries of pricing overrides to management;
59. provide a review of expense caps and management fee waivers to
management;
60. review short sales;
61. review derivatives positions;
62. review brokerage commissions;
63. review dividends and capital gain distributions;
TREASURY TAX SERVICES
64. provide annual tax information (Form 1099) for each fund or class
of shares to shareholders and transfer agents;
65. calculate distribution of capital gains, income and spill back
requirements;
66. provide estimates of capital gains;
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67. provide 1099 information to vendors;
68. provide service bureaus, brokers and various parties with tax
information notices;
69. prepare excise tax returns;
70. prepare income tax returns;
71. prepare tax identification number filings;
72. perform IRS sub-Chapter M testing for 25% diversification
(monthly), 50% diversification (monthly), 90% gross income
(monthly), 90% income distribution requirement (annually), and
98% excise distribution requirement (annually);
TREASURY COMPLIANCE SERVICES
73. perform oversight review to ensure investment manager compliance
with investment policies and limitations;
74. obtain and review investment manager certification on adhering to
all investment policies, restrictions and guidelines;
75. monitor SEC diversification with 75% diversification test and
Section 12 diversification test;
76. periodically review designated collateral on all fund derivative
and delayed delivery positions;
TREASURY SPECIAL SERVICES
77. administer daily review of securities lending with lending
agent(s);
78. ensure periodic review of Funds for opportunities with lending
and review of current income levels;
79. establish opportunities with investment manager and brokers for
directed commission programs;
80. monitor line of credit arrangement and payment of commitment
fees;
81. maintain Trustee payments and monitor deferred compensation
arrangements;
82. provide Trustees and vendors with Form 1099 information;
83. generate expense proformas for new products;
84. negotiate with vendors to ensure new products are brought in at
the lowest costs;
85. ensure all aspects of new products are operationally ready.
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