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shared\tlegal\contract\isg\admin\bt98\admin3.doc
Exhibit h(2)
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of December 10th, 1998 (the
"Effective Date"), by and between FIRST DATA INVESTOR SERVICES GROUP, INC., a
Massachusetts corporation ("Investor Services Group"), and BT INSURANCE FUNDS
TRUST, a Massachusetts business trust (the "Trust").
WITNESSETH:
WHEREAS, the Trust desires to retain Investor Services Group to render
certain administrative services to each portfolio of the Trust listed on
Schedule A annexed hereto and incorporated herein, as the same may be amended
from time to time (collectively, the "Funds"); and
WHEREAS, Investor Services Group is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints Investor Services Group to act as
Administrator on the terms set forth in this Agreement. Investor Services Group
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided. In the event that the Trust decides to retain
Investor Services Group to act as Administrator hereunder with respect to one or
more portfolios other than the Funds, the Trust shall notify Investor Services
Group in writing. If Investor Services Group is willing to render such services,
it shall notify the Trust in writing whereupon such portfolio shall become a
Fund hereunder.
2. Delivery of Documents. The Trust has furnished Investor Services Group
with copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust (the "Declaration of Trust")
filed with the Commonwealth of Massachusetts and all amendments thereto;
(b) The Trust's Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and under the 1940
Act, as filed with the Securities and Exchange Commission ("SEC") on January 26,
1996, relating to shares of beneficial interest of the Trust, $.001 par value
per share, and all amendments thereto; and
(c) Each Fund's most recent prospectus and statement of additional
information, and all amendments and supplements thereto (collectively, the
"Prospectuses").
The Trust will furnish Investor Services Group from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to the foregoing. Furthermore, the Trust will provide Investor Services Group
with any other documents that Investor Services Group may reasonably request and
will notify Investor Services Group as soon as possible of any matter materially
affecting the performance by Investor Services Group of its services under this
Agreement.
3. Duties as Administrator. Subject to the supervision and direction of the
Trust, Investor Services Group, as Administrator, will assist in supervising
various aspects of the Trust's administrative operations and undertakes to
perform the following specific services:
(a) Maintaining office facilities (which may be in the offices of Investor
Services Group or a corporate affiliate);
(b) Furnishing statistical and research data, data processing
services, clerical services, and internal legal, executive and administrative
services and stationery and office supplies in connection with the foregoing;
(c) Furnishing corporate secretarial services including
preparation and distribution of materials for Board of Trustees meetings (Board
meetings in excess of five in any calendar year and shareholder meetings shall
involve an additional reasonable charge as may be agreed upon by the parties
hereto);
(d) Accounting and bookkeeping services (including maintenance of
such accounts, books and records of the Trust as may be required by Section
31(a) of the 1940 Act and the rules thereunder);
(e) Internal auditing;
(f) Valuing the assets of each Fund and calculating the net asset
value of the shares of each Fund at the close of trading on the New York Stock
Exchange (the "NYSE") on each day on which the NYSE is open for trading, or such
other business day as described in the Prospectus, and at such other times as
the Board of Trustees may reasonably request;
(g) Calculating the net income and realized capital gains or losses of each
Fund;
(h) Accumulating information for and, subject to approval by the
Trust's Treasurer, preparing reports to the Trust's shareholders of record and
the SEC including, but not necessarily limited to, Annual Reports and
Semi-Annual Reports on Form N-SAR;
(i) Preparing and filing various reports or other documents
required by federal, state and other applicable laws and regulations, other than
those filed or required to be filed by the Trust's investment adviser (the
"Adviser") or transfer agent;
(j) Preparing and filing the Trust's tax returns;
(k) Assisting the Adviser in monitoring and developing compliance
procedures for the Trust which will include, among other matters, procedures to
assist the Adviser in monitoring compliance with each Fund's investment
objective, policies, restrictions, tax matters and applicable laws and
regulations; and
(l) Preparing and furnishing the Trust (at the Trust's request)
with performance information (including yield and total return information)
calculated in accordance with applicable U.S. securities laws and reporting to
external databases such information as may reasonably be requested; and
(m) Performing the "Routine Projects" and "Special Projects" on
Schedule B annexed hereto and incorporated herein.
In performing all services under this Agreement, Investor Services Group:
(a) shall act in conformity with the Declaration of Trust, the Prospectuses, the
Registration Statements and the instructions and directions of the Trust or the
Adviser, and will conform to and comply with the requirements of the Investment
Company Act of 1940 ("1940 Act") and all other applicable federal or state laws
and regulations; and (b) will consult with legal counsel to the Trust, as
necessary or appropriate. Furthermore, Investor Services Group shall not have or
be required to have any authority to supervise the investment or reinvestment of
the securities or other properties which comprise the assets of the Trust or any
of the Funds and shall not provide any investment advisory services to the Trust
or any of the Funds.
Investor Services Group agrees to provide the services described herein in
accordance with the Performance Standards annexed hereto as Exhibit 1 to
Schedule B and incorporated herein (the "Performance Standards"). Such
Performance Standards may be amended from time to time upon written agreement by
the parties.
4. Compensation and Allocation of Expenses. Investor Services Group shall
bear all expenses in connection with the performance of its services under this
Agreement, except as indicated below.
(a) Investor Services Group may from time to time employ such
person or persons as Investor Services Group may believe to be particularly
suited to assist it in performing services under this Agreement. Such person or
persons may be officers or employees of Investor Services Group. The
compensation of such person or persons shall be paid by Investor Services Group
and no obligation shall be incurred on behalf of the Trust in such respect.
(b) Investor Services Group shall not be required to pay any of
the following expenses which may be incurred by the Trust: membership dues in
the Investment Company Institute or any similar organization; investment
advisory expenses; costs of printing and mailing stock certificates,
prospectuses, reports and notices; interest on borrowed money; brokerage
commissions; stock exchange listing fees; taxes and fees payable to Federal,
state and other governmental agencies; fees of Trustees of the Trust who are not
affiliated with Investor Services Group; outside auditing expenses; outside
legal expenses; or other expenses not specified in this Section 4 which may be
properly payable by the Trust.
(c) For the services to be rendered, the facilities to be
furnished and the payments to be made by Investor Services Group, as provided
for in this Agreement, the Funds will pay Investor Services Group within 30 days
after the end of each month a fee for the previous month as set forth on
Schedule C annexed hereto and incorporated herein. The fee for the period from
the date the Registration Statement is declared effective by the SEC to the end
of the month during which the Registration Statement is declared effective shall
be prorated according to the proportion that such period bears to the full
monthly period. Upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to Investor Services Group, the value of each Fund's
net assets shall be computed at the times and in the manner specified in the
Registration Statement.
(d) The Trust shall compensate Investor Services Group for its
services rendered pursuant to this Agreement in accordance with the fees set
forth above. Such fees do not include out-of-pocket disbursements of Investor
Services Group for which Investor Services Group shall be entitled to xxxx
separately. Out-of-pocket disbursements shall include, but shall not be limited
to, the items specified in Schedule D annexed hereto and incorporated herein.
Schedule D may be modified by Investor Services Group upon not less than thirty
(30) days' prior written notice to the Trust with the Trust's consent.
(e) Investor Services Group will xxxx the Trust for out-of-pocket
expenses as soon as practicable after the end of each calendar month, and such
xxxxxxxx will be detailed in accordance with the out-of-pocket schedule. The
Trust will pay to Investor Services Group the amount of such billing within
thirty (30) days of receipt.
(f) The Trust acknowledges that the fees that Investor Services
Group charges the Trust under this Agreement reflect the allocation of risk
between the parties hereto, including the disclaimer of warranties in Section 7
and the limitations on liability in Section 5. Modifying the allocation of risk
from what is stated here would affect the fees that Investor Services Group
charges, and in consideration of those fees, the Trust agrees to the stated
allocation of risk.
5. Limitation of Liability.
(a) Investor Services Group, its directors, officers, employees,
shareholders and agents shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the performance
of its obligations and duties under this Agreement, except a loss resulting from
Investor Services Group's willful misfeasance, bad faith or negligence in the
performance of such obligations and duties, or by reason of its reckless
disregard thereof.
(b) Notwithstanding any provision in this Agreement to the
contrary, Investor Services Group's cumulative liability to the Trust for all
losses, claims, suits, controversies, breaches, or damages ("Liability Claims")
for any cause whatsoever arising out of or related to this Agreement and
regardless of the form of action or legal theory, shall not exceed Five Million
Dollars ($5,000,000).
(c) Each party shall have the duty to mitigate damages for which
the other party may become responsible.
(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN
NO EVENT SHALL EITHER PARTY HERETO, ITS AFFILIATES OR ANY OF ITS OR THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE UNDER ANY
THEORY OF TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY
FOR LOST PROFITS, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE
PARTIES REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER
PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
6. Indemnification.
(a) The Trust shall indemnify and hold Investor Services Group
harmless from and against any and all claims, costs, expenses (including
reasonable attorneys' fees), losses, damages, charges, payments and liabilities
of any sort or kind which may be asserted against Investor Services Group or for
which Investor Services Group may be held to be liable in connection with this
Agreement or Investor Services Group's performance hereunder (a "Claim"), unless
such Claim resulted from a negligent act or omission to act, willful misconduct
or bad faith by Investor Services Group in the performance of its duties
hereunder. Investor Services Group shall indemnify and hold the Trust harmless
from and against any and all claims, costs, expenses (including reasonable
attorneys' fees), losses, damages, charges, payments and liabilities of any sort
or kind which may be asserted against the Trust or for which the Trust may be
held to be liable in connection with this Agreement or the Trust's performance
hereunder (a "Claim"), unless such Claim resulted from a negligent act or
omission to act, willful misconduct or bad faith by the Trust in the performance
of its duties hereunder
(b) In any case in which the either party (the "Indemnifying
Party") may be asked to indemnify or hold the other party (the "Indemnified
Party") harmless, the Indemnified Party will notify the Indemnifying Party in
writing promptly after identifying any situation which it believes presents or
appears likely to present a claim for indemnification against the Indemnifying
Party although the failure to do so shall not prevent recovery by the
Indemnified Party unless the Indemnifying Party is prejudiced by such failure to
notify and shall keep the Indemnifying Party advised with respect to all
developments concerning such situation. The Indemnifying Party shall have the
option to defend the Indemnified Party against any Claim which may be the
subject of this indemnification, and, in the event that the Indemnifying Party
so elects, such defense shall be conducted by counsel chosen by the Indemnifying
Party and satisfactory to the Indemnified Party, and thereupon the Indemnifying
Party shall take over complete defense of the Claim and the Indemnified Party
shall sustain no further legal or other expenses in respect of such Claim. the
Indemnified Party will not confess any Claim or make any compromise in any case
in which the Indemnifying Party will be asked to provide indemnification, except
with the Indemnifying Party's prior written consent. The obligations of the
parties hereto under this Section 6 shall survive the termination of this
Agreement.
7. EXCLUSION OF WARRANTIES. THIS IS A SERVICE AGREEMENT. EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, INVESTOR SERVICES GROUP DISCLAIMS ALL
OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, MADE TO THE TRUST OR
ANY OTHER PERSON, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING
QUALITY, SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE) OF
ANY SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO SERVICES PROVIDED UNDER THIS
AGREEMENT. Investor Services Group DISCLAIMS ANY WARRANTY OF TITLE OR
NON-INFRINGEMENT EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT.
8. Term and Termination of Agreement.
(a) This Agreement shall be effective on the date first written above
and shall continue for a period of five (5) years (the "Initial Term").
(b) Upon expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal Terms") each,
unless the Trust or Investor Services Group provides written notice to the other
of its intent not to renew. Such notice must be received not less than ninety
(90) days and not more than one hundred eighty (180) days prior to the
expiration of the Initial Term or the current renewal term. In the event the
Trust shall provide Investor Services Group with notice to terminate this
Agreement, it shall be deemed that the Trust has given similar notice to
terminate the Transfer Agency and Services Agreement between the Trust and
Investor Services Group and the Distribution Agreement between the Trust and
First Data Distributors, Inc., and such other agreements shall terminate on the
same date as this Agreement; provided, however, that Investor Services Group, in
its sole discretion, shall have the right to waive this cross termination
provision with respect to either or both agreements.
(c) In the event a termination notice is given by the Trust, all
expenses associated with the movement of records and materials and conversion
thereof will be borne by the Trust.
(d) If a party hereto is guilty of a material failure to perform
its duties and obligations hereunder (a "Defaulting Party") resulting in a
material loss to the other party, such other party (the "Non-Defaulting Party")
may give written notice thereof to the Defaulting Party, and if such material
breach shall not have been remedied within thirty (30) days after such written
notice is given, then the Non-Defaulting Party may immediately terminate this
Agreement by giving written notice of such termination to the Defaulting Party.
If Investor Services Group is the Non-Defaulting Party, its termination of this
Agreement shall not constitute a waiver of any other rights or remedies of
Investor Services Group with respect to services performed prior to such
termination or rights of Investor Services Group to be reimbursed for
out-of-pocket expenses. In all cases, termination by the Non-Defaulting Party
shall not constitute a waiver by the Non-Defaulting Party of any other rights it
might have under this Agreement or otherwise against the Defaulting Party.
(e) In the event that Investor Services Group has failed to meet a
specific Performance Standard, as set forth in Exhibit 1 to Schedule B, in any
two consecutive calendar quarters, the Trust may terminate this Agreement upon
ninety (90) days written notice to Investor Services Group. The Trust must
provide such notice within thirty (30) days following the end of second calendar
quarter if it intends to exercise its option under this Section 8(e).
Notwithstanding the foregoing, the Trust's right under this Section 8(e) shall
not become effective until ninety (90) days following the effective date of this
Agreement.
9. Modifications and Waivers. No change, termination, modification, or
waiver of any term or condition of the Agreement shall be valid unless in
writing signed by each party. No such writing shall be effective as against
Investor Services Group unless said writing is executed by an Executive Vice
President or the President of Investor Services Group. A party's waiver of a
breach of any term or condition in the Agreement shall not be deemed a waiver of
any subsequent breach of the same or another term or condition.
10. No Presumption Against Drafter. Investor Services Group and the Trust
have jointly participated in the negotiation and drafting of this Agreement. The
Agreement shall be construed as if drafted jointly by the Trust and Investor
Services Group, and no presumptions arise favoring any party by virtue of the
authorship of any provision of this Agreement.
11. Publicity. Neither Investor Services Group nor the Trust shall release
or publish news releases, public announcements, advertising or other publicity
relating to this Agreement or to the transactions contemplated by it without
prior review and written approval of the other party; provided, however, that
either party may make such disclosures as are required by legal, accounting or
regulatory requirements after making reasonable efforts in the circumstances to
consult in advance with the other party.
12. Severability. The parties intend every provision of this Agreement to
be severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement has
failed of its essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall remain
fully effective.
13. Miscellaneous.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Trust or Investor Services Group shall
be sufficiently given if addressed to the party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Trust:
c/o BT Xxxx Xxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
With a copy to:
Xxxxxx Xxxxxxx, Esq.
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Investor Services Group:
First Data Investor Services Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to Investor Services Group's General Counsel
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns and
is not intended to confer upon any other person any rights or remedies
hereunder. This Agreement may not be assigned or otherwise transferred by either
party hereto, without the prior written consent of the other party, which
consent shall not be unreasonably withheld; provided, however, that Investor
Services Group may, in its sole discretion, assign all its right, title and
interest in this Agreement to an affiliate, parent or subsidiary. Investor
Services Group may engage subcontractors to perform any of the obligations
contained in this Agreement to be performed by Investor Services Group with the
prior written consent of the Trust, which consent shall not be unreasonably
withheld, provided however, that Investor Services Group shall be as fully
responsible to the Trust for the acts and omissions of any subcontractor as it
is for its own acts and omissions.
(c) The laws of the State of New York, excluding the laws on
conflicts of laws, shall govern the interpretation, validity, and enforcement of
this Agreement.
(d) This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
14. Confidentiality.
(a) The parties agree that the Proprietary Information (defined
below) and the contents of this Agreement (collectively "Confidential
Information") are confidential information of the parties and their respective
licensers. The Trust and Investor Services Group shall exercise reasonable care
to safeguard the confidentiality of the Confidential Information of the other.
The Trust and Investor Services Group may each use the Confidential Information
only to exercise its rights or perform its duties under this Agreement. Except
as required by law, the Trust and Investor Services Group shall not duplicate,
sell or disclose to others the Confidential Information of the other, in whole
or in part, without the prior written permission of the other party. The Trust
and Investor Services Group may, however, disclose Confidential Information to
its employees, auditors, counsel, regulatory authorities and others agreed to by
Investor Services Group and the Trust who have a need to know the Confidential
Information to perform work for the other, provided that each shall use
reasonable efforts to ensure that the Confidential Information is not duplicated
or disclosed by its employees in breach of this Agreement. The Trust and
Investor Services Group may also disclose the Confidential Information to
independent contractors, provided they first agree in writing to be bound by the
confidentiality obligations substantially similar to this Section 14.
Notwithstanding the previous sentence, in no event shall either the Trust or
Investor Services Group disclose the Confidential Information to any competitor
of the other without specific, prior written consent.
(b) Proprietary Information means:
(i) any data or information that is completely sensitive material, and not
generally known to the public, including, but not limited to, information
about product plans, marketing strategies, finance, operations, customer
relationships, customer profiles, sales estimates, business plans, and
internal performance results relating to the past, present or future
business activities of the Trust or Investor Services Group, their
respective subsidiaries and affiliated companies and the customers, clients
and suppliers of any of them;
(ii) any scientific or technical information, design, process, procedure,
formula, or
improvement that is commercially valuable and secret in the sense that its
confidentiality affords the Trust or Investor Services Group a competitive
advantage over its competitors; and
(iii) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow
charts, databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
(c) Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment, prototypes and
models, and any other tangible manifestation of the foregoing of either party
hereto which now exist or come into the control or possession of the other party
hereto.
(d) The Trust acknowledges that breach of the restrictions on use,
dissemination or disclosure of any Confidential Information would result in
immediate and irreparable harm, and money damages would be inadequate to
compensate Investor Services Group for that harm. Investor Services Group shall
be entitled to equitable relief, in addition to all other available remedies, to
redress any such breach.
15. Force Majeure. No party shall be liable for any default or delay in the
performance of its obligations under this Agreement if and to the extent such
default or delay is caused, directly or indirectly, by (i) fire, flood, elements
of nature or other acts of God; (ii) any outbreak or escalation of hostilities,
war, riots or civil disorders in any country, (iii) any act or omission of the
other party or any governmental authority; or (iv) nonperformance by a third
party or any similar cause beyond the reasonable control of such party,
including without limitation, failures or fluctuations in telecommunications or
other equipment. In any such event, the non-performing party shall be excused
from any further performance and observance of the obligations so affected only
for so long as such circumstances prevail and such party continues to use
commercially reasonable efforts to recommence performance or observance as soon
as practicable.
16. Limitation of Trustee/Shareholder Liability. A copy of the Declaration
of Trust of the Trust dated January 19, 1996 is on file with the Secretary of
the Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as Trustees and
not individually and that the obligations of this instrument are not binding
upon any of the Trustees or the Trust's shareholders individually but are
binding only upon the assets and property of the Trust.
17. Entire Agreement. This Agreement, including all Schedules hereto,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings, whether written or
oral, between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
General Counsel
BT INSURANCE FUNDS TRUST
By: /s/Xxxxxxx X. Small
Name: Xxxxxxx X. Small
Title: President
SCHEDULE A
Names of Funds
Managed Assets Fund
Small Cap Fund
International Equity Fund
Small Cap Index Fund
EAFE Equity Index Fund
Equity 500 Index Fund
US Bond Index Fund
SCHEDULE B
Fund Accounting and Administrative Services
Routine Projects
o Daily, Weekly, and Monthly Reporting o Portfolio and General Ledger Accounting
o Daily Pricing of all Securities o Daily Valuation and NAV Calculation o
Comparison of NAV to market movement o Review of price tolerance/fluctuation
report
o Research items appearing on the price exception report
o Weekly cost monitoring along with market-to-market valuations in
accordance with Rule 2a7
o Preparation of monthly ex-dividend monitor
o Daily cash reconciliation with the custodian bank
o Daily updating of price and rate information to the Transfer Agent/Insurance
Agent
o Daily support and report delivery to Portfolio Management
o Daily calculation of fund advisor fees and waivers
o Daily calculation of distribution rates
o Daily maintenance of each fund's general ledger including expense accruals
o Daily price notification to other vendors as required
o Calculation of 30-day adjusted SEC yields
o Preparation of month-end reconciliation package
o Monthly reconciliation of fund expense records
o Preparation of monthly pay down gain/loss summaries
o Preparation of all annual and semi-annual audit work papers
o Preparation and Printing of Financial Statements
o Providing Shareholder Tax Information to Transfer Agent
o Producing Drafts of IRS and State Tax Returns
o Treasury Services including:
Provide Officer for the fund
Expense Accrual Monitoring
Determination of Dividends
Prepare materials for review by the board, e.g., 2a-7,10f-3, 17a-7,
17e-1
Tax and Financial Counsel
o Monthly Compliance Testing including section 817H o Provide 1940 Act attorney
to assist in organization
o Prepare agenda and background materials for legal approval at Board
Meetings; make presentations where appropriate; prepare minutes; follow up
on issues
o Review and filing of Form N-SAR
o Review and filing of Annual and Semi-Annual Financial Reports
o Assistance in Preparation of Fund Registration Statements
o Review of all Sales Material and Advertising
o Coordinate all aspects of the printing and mailing process with outside
printers for all
shareholder publications
SCHEDULE B (CONTINUED)
o Support for all quarterly board meetings o Preparation of proxy materials for
one meeting per year o Annual update Post-Effective Amendment (PEA) o Prospectus
supplements as needed o Consultations regarding legal issues as needed o SEC
audit report o Arrange insurance coverage
o Support for one special board meeting per year and consent votes where needed
o One additional PEA (other than annual update) o One exemptive order
application o Assist with marketing strategy and product development o
Preparation of surveys
Special Projects*
o Proxy material preparation for additional meetings beyond one per year o N-14
preparation (merger document) o Additional PEAs beyond two per year o Prospectus
simplification o Additional exemptive order applications beyond one per year o
Extraordinary non-recurring projects - e.g., arranging CDSC financing programs o
Basic sales, mutual funds, and product training to branch and sales
representatives
*Charged on a project-by-project basis.
Exhibit 1 to
SCHEDULE B
PERFORMANCE STANDARDS
Daily NAV calculations - 98.5% or better accuracy rate on an
annualized basis, provided that all information received from
external vendors or fund managers is correct and received
within appropriate time frame.
Daily communication of NAV's - 98.5% accuracy in delivering
the NAV to the Transfer Agent and participating insurance
companies on an annualized basis.
Correct any material weaknesses (as determined by the Trust's
auditors) in the Trust's system of internal accounting
control, related to the services provided under this
Agreement, within 30 days.
Complete the following regulatory filings within the
prescribed deadlines, including all applicable extensions,
provided that all requested information is received from fund
managers in accordance with an agreed upon schedule: federal
and state tax returns; annual and semi-annual reports; annual
update to the Registration Statement; and annual 24f-2
notices.
SCHEDULE C
1. Fees (On an Annual Basis)
$70,000 per Fund per annum, plus
2.0 basis points on first $2 billion in aggregate
assets 1.0 basis point on next $3 billion in
aggregate assets 0.75 basis point on excess
$3,000 per Fund per annum for each additional share
class, not including
the initial share class
2. Start-Up Fees
$20,000 per Fund start-up fee with respect to the
Small Cap Fund and International Equity Fund (total
of $40,000), payable upon effectiveness of the
Registration Statement relating to such Portfolios
$10,000 per Fund start-up fee with respect to the
Managed Assets Fund, Small Cap Index Fund, EAFE
Equity Index Fund, Equity 500 Index Fund and the U.S.
Bond Index Fund (total of $50,000), payable upon
effectiveness of the Registration Statement relating
to such Portfolios
3. Fee Waivers
Investor Services Group agrees to waive its annual fees with respect to the
Small Cap Index Fund, EAFE Equity Index Fund, Equity 500 Index Fund (the "Waiver
Portfolios") as follows: Investor Services Group will waive $1 of its annual
fees with respect to the Waiver Portfolios for each $2 of investment advisory
fee waived by the Adviser with respect to the Waiver Portfolios; provided,
however, that such fee waivers by Investor Services Group shall not exceed
$30,000 per Waiver Portfolio for the period ending one (1) year after the
Effective Date; $25,000 per Waiver Portfolio for the period ending two (2) years
after the Effective Date; and $10,000 per Waiver Portfolio for the period ending
three (3) years after the Effective Date. In the event that at any time this
Agreement is effective an affiliate of the Fund would provide administration
services to any of the Waiver Portfolios, the Fund shall pay to Investor
Services Group the amount of any fees waived prior to the termination of
services.
4. General
Investor Services Group reserves the right to renegotiate the fees set
forth on this Schedule C and in Section 4 of the Agreement should the actual
services required vary materially from the assumptions provided. It is
specifically understood by the parties that fees for those services provided by
Investor Services Group which are not described in Section 3 of the Agreement or
which are not included on Schedule B under "Routine Projects" will be charged
separately by Investor Services Group and are not included in the fees
referenced above.
SCHEDULE D
Out-of-Pocket Expenses
Out-of-pocket expenses include, but are not limited to, the following:
- Overnight delivery and courier service
- Telephone and telecommunications charges (including fax)
- Terminals, transmitting lines and any expenses incurred in
connection with such lines
- Travel expenses associated with Board of Trustees meetings
- Pro rata portion of the cost for SAS 70 Report
- Customized programming requests
- Any other unusual expenses in association with the services
rendered under this Agreement
- Pricing services
- Vendor set-up charges for Blue Sky services
Investor Services Group reserves the right to renegotiate the fees set forth on
this Schedule D and in Section 4 of the Agreement should the actual services
required vary materially from the assumptions provided.
