ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made by and between AETNA VARIABLE ENCORE FUND, a
Massachusetts business trust (the "Fund"), and AELTUS INVESTMENT MANAGEMENT,
INC., a Connecticut corporation (the "Administrator"), with respect to the
following recital of facts:
R E C I T A L
WHEREAS, the Fund is registered as an open-end diversified management
investment company under the Investment Company Act of 1940 (the "1940 Act");
and
WHEREAS, the Administrator is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as an
investment adviser and an administrator of investment companies; and
WHEREAS, the Fund and the Administrator desire to enter into an agreement
to provide for administrative services for the Fund on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable considerations, the receipt of which is hereby
acknowledged, the parties agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE ADMINISTRATOR
The Administrator is hereby appointed to serve as the Administrator to the
Fund, to provide the administrative services described herein and assume the
obligations set forth in Section II, subject to the terms of this Agreement and
the control of the Fund's Board of Trustees (the "Board"). The Administrator
shall, for all purposes herein, be deemed an independent contractor and shall
have, unless otherwise expressly provided or authorized, no authority to act for
or represent the Fund in any way or otherwise be deemed an agent of the Fund.
II. DUTIES OF THE ADMINISTRATOR
In carrying out the terms of this Agreement, the Administrator shall:
A. provide office space, equipment and facilities (which may be the
Administrator's or its affiliates') for maintaining the Fund's organization, for
meetings of the Fund's Board and shareholders, and for performing administrative
services hereunder;
B. supervise and manage all aspects of the Fund's operations (other than
investment advisory activities), supervise relations with, and monitor the
performance of, custodians, depositories,
transfer and pricing agents, accountants, attorneys, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be necessary and
desirable by the Board;
C. provide internal clerical and legal services, and stationery and office
supplies;
D. provide accounting services, including:
1. determining and arranging for the publication of the net asset
value of the Fund;
2. preparing financial information for presentation to the Fund's
Board and management;
3. preparing and monitoring the Fund's annual expense budget, and
establishing daily accruals;
4. coordinating payment of fund expenses;
5. calculating periodic dividend rates to be declared in accordance
with management guidelines;
6. calculating total return information as defined in the current
prospectus and statement of additional information;
7. coordinating audit packages for use by independent public
accountants;
8. responding to regulatory audits;
E. provide non-investment related statistical and research data and such
other reports, evaluations and information as the Fund may request from time to
time;
F. monitor the Fund's compliance with the current prospectus and statement
of additional information, the 1940 Act, the Internal Revenue Code and other
applicable laws and regulations;
G. prepare, to the extent requested by the Fund, registration statements,
proxy statements and annual and semi-annual reports to shareholders;
H. arrange for the printing and mailing (at the Fund's expense) of proxy
statements and other reports or other materials provided to the Fund's
shareholders;
I. support outside auditors in preparing and filing all the Fund's federal
and state tax returns and required tax filings other than those required to be
made by the Fund's custodian and transfer agent;
J. prepare periodic reports to and filings with the Securities and Exchange
Commission (the "SEC") and state Blue Sky authorities with the advice of the
Fund's counsel;
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K. maintain the Fund's existence, and during such times as the shares of
the Fund are publicly offered, maintain the registration and qualification of
the Fund's shares under federal and state law;
L. keep and maintain the financial accounts and records of the Fund;
M. provide the Board on a regular basis with reports and analyses of the
Fund's operations and the operations of comparable investment companies; and
N. take any other actions which appear to the Administrator and the Board
necessary to carry into effect the purposes of this Agreement.
III. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE ADMINISTRATOR
The Administrator hereby represents and warrants to the Fund as
follows:
1. Due Incorporation and Organization. The Administrator is duly
organized and is in good standing under the laws of the State of
Connecticut and is fully authorized to enter into this Agreement
and carry out its duties and obligations hereunder.
2. Best Efforts. The Administrator at all times shall provide its
best judgment and effort to the Fund in carrying out its
obligations hereunder.
B. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund hereby represents and warrants to the Administrator as
follows:
1. Due Incorporation and Organization. The Fund has been duly
incorporated under the laws of the Commonwealth of Massachusetts
and it is authorized to enter into this Agreement and carry out
its terms.
2. Registration. The Fund is registered as an investment company
with the SEC under the 1940 Act and shares of the Fund are
registered or qualified for offer and sale to the public under
the Securities Act of 1933 (the "1933 Act"), and all applicable
state securities laws. Such registrations or qualifications will
be kept in effect during the term of this Agreement.
IV. CONTROL BY THE BOARD OF TRUSTEES
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Any activities undertaken by the Administrator pursuant to this Agreement
on behalf of the Fund shall at all times be subject to any directives of the
Board.
V. COMPLIANCE WITH APPLICABLE REQUIREMENTS
In carrying out its obligations under this Agreement, the Administrator
shall at all times conform to:
A. all applicable provisions of the 1940 Act;
B. the provisions of the registration statement of the Fund under the
1933 Act and the 1940 Act;
C. the provisions of the Fund's Articles of Incorporation, as amended;
D. the provisions of the By-Laws of the Fund, as amended; and
E. any other applicable provisions of state and federal law.
VI. DELEGATION OF RESPONSIBILITIES
All services to be provided by the Administrator under this Agreement may
be furnished by any directors, officers or employees of the Administrator or by
any affiliates of the Administrator under the Administrator's supervision.
VII. COMPENSATION
For the services to be rendered, the facilities furnished and the expenses
assumed by the Administrator, the Fund shall pay to the Administrator an annual
fee, payable monthly (in arrears), based upon the following average daily net
assets of the Fund:
Rate Net Assets
---- ----------
.075% on the 1st $5 billion
.05% over $5 billion
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily at the rate of 1/365 of the annual administration
fee applied to the daily net assets of the Fund. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of the
fees as set forth above.
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VIII. NON-EXCLUSIVITY
The services of the Administrator to the Fund are not to be deemed to be
exclusive, and the Administrator shall be free to render administrative or other
services to others (including other investment companies) and to engage in other
activities, so long as its services under this Agreement are not impaired
thereby. It is understood and agreed that officers and directors of the
Administrator may serve as officers or trustees of the Fund, and that officers
or trustees of the Fund may serve as officers or directors of the Administrator
to the extent permitted by law; and that the officers and directors of the
Administrator are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment companies.
IX. TERM
This Agreement shall become effective on May 1, 1998, and shall continue
through December 31, 1998. Thereafter it shall continue for successive annual
periods, provided such continuance is specifically approved at least annually:
1. a. by the Board, or
b. by the vote of a majority of the Fund's outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act), and
2. by the affirmative vote of a majority of the trustees who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a trustee of the Fund), by votes cast in
person at a meeting specifically called for such purpose.
X. TERMINATION
This Agreement may be terminated at any time, without the payment of any
penalty, by vote of the Fund's trustees or by vote of a majority of the Fund's
outstanding voting securities, as defined in Section 2(a)(42) of the 1940 Act,
or by the Administrator, on sixty (60) days' written notice to the other party.
XI. LIABILITY OF ADMINISTRATOR AND INDEMNIFICATION
A. LIABILITY
The Administrator shall be liable to the Fund and shall indemnify the Fund
for any losses incurred by the Fund, whether in the purchase, holding or sale of
any security or otherwise, to the extent that such losses resulted from an act
or omission on the part of the Administrator or its officers, directors or
employees, that is found to involve willful misfeasance, bad faith or
negligence,
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or reckless disregard by the Administrator of its duties under this Agreement,
in connection with the services rendered by the Administrator hereunder.
B. INDEMNIFICATION
In the absence of willful misfeasance, bad faith, negligence or reckless
disregard of obligations or duties hereunder on the part of the Administrator or
any officer, director or employee of the Administrator, to the extent permitted
by applicable law, the Fund hereby agrees to indemnify and hold the
Administrator harmless from and against all claims, actions, suits and
proceedings at law or in equity, whether brought or asserted by a private party
or a governmental agency, instrumentality or entity of any kind, relating to the
sale, purchase, pledge of, advertisement of, or solicitation of sales or
purchases of any security by the Fund, its officers, trustees, employees or
agents in alleged violation of applicable federal, state or foreign laws, rules
or regulations.
XII. NOTICES
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Administrator for this
purpose shall be 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000-0000, and the
address of the Fund for this purpose shall be 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000.
XIII. QUESTIONS OF INTERPRETATIONS
This Agreement shall be governed by the laws of the State of Connecticut.
Any question of interpretation of any term or provision of this Agreement having
a counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States courts or, in the absence
of any controlling decision of any such court, by rules or orders of the SEC
issued pursuant to the 1940 Act, or contained in no-action and interpretive
positions taken by the SEC staff. In addition, where the effect of a requirement
of the 1940 Act reflected in the provisions of this Agreement is revised by rule
or order of the SEC, such provisions shall be deemed to incorporate the effect
of such rule or order.
XIV. SERVICE XXXX
The service xxxx of the Fund and the name "Aetna" have been adopted by the
Fund with the permission of Aetna Services, Inc. (formerly known as Aetna Life
and Casualty Company) and their continued use is subject to the right of Aetna
Services, Inc. to withdraw this permission in the event
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the Administrator or another subsidiary or affiliated corporation of Aetna
Services, Inc. should not be the Administrator of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the 25th day of March,
1998.
AELTUS INVESTMENT
MANAGEMENT, INC.
Attest : /s/Xxxxx Xxxxxxxxxx By: /s/Xxxx X. Xxx
------------------------- ----------------------
Name: Xxxxx Xxxxxxxxxx Name: Xxxx X. Xxx
---------------------------- --------------------
Title: Assistant Secretary Title: President
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AETNA VARIABLE ENCORE FUND
Attest: /s/XxXxx X. Xxxxxxxxx By: /s/J. Xxxxx Xxx
-------------------------- ----------------------
Name: XxXxx X. Xxxxxxxxx Name: J. Xxxxx Xxx
---------------------------- --------------------
Title: Assistant Secretary Title: President
--------------------------- -------------------
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