Exhibit (k)(2)
Sub-Fund Accounting And Administration Agreement
This Sub-Fund Accounting And Administration Agreement ("Agreement"),
made and entered into this 14th day of April, 2004, by and between the
Generation Capital Management LLC, a New York limited liability company (the
"Administrator"), and The Nottingham Management Company d/b/a The Nottingham
Company, a North Carolina corporation (the "Sub-Sub-Administrator").
WHEREAS, the Administrator acts as administrator to Generation Hedge
Strategies Fund LLC (the "Fund"), a Delaware limited liability company, pursuant
to that certain Administration Agreement ("Administration Agreement"), dated
______, between the Fund and the Administrator;
WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Administrator, subject to the approval of the Fund's Board
of Directors, wishes to retain the Sub-Administrator to assist Administrator in
rendering certain certain administrative services to the Fund in the manner and
on the terms set forth therein;
WHEREAS, Sub-Administrator is willing to furnish and/or arrange for
such services in the manner and on the terms hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement and intending to be legally bound, the Administrator
and Sub-Administrator agree as follows:
1. Retention of the Sub-Administrator. The Administrator hereby
retains and appoints the Sub-Administrator to act as the
Sub-Administrator to Administrator and to provide or procure
certain administrative and other services with respect to the
Fund for the period and on the terms set forth in this
Agreement. The Sub-Administrator hereby accepts such
appointment and agrees to render the services herein set forth
under the terms and conditions of this Agreement.
2. Duties of Sub-Administrator. Subject to the policies and
direction of the Administrator and the Fund's Board of
Directors ("Directors"), the Sub-Administrator shall provide,
or cause to be furnished by others, the fund accounting and
administrative services for the Fund as set forth in Exhibit
A, attached hereto and made a part hereof. The
Sub-Administrator shall exercise reasonable customary care in
the performance of its duties under this Agreement.
1
3. Allocation of Charges and Expenses.
a. The Sub-Administrator. The Sub-Administrator will
furnish at its own expense the executive, supervisory
and clerical personnel reasonably necessary to perform
its obligations under this Agreement. Except as
otherwise provided hereunder, the Sub-Administrator will
also provide the items which it is obligated to provide
under this Agreement. In addition, the Sub-Administrator
will pay all compensation, if any, of any officers or
Directors of the Fund who are affiliated persons of the
Sub-Administrator or any affiliated corporation of
Sub-Administrator; provided, however, that unless
otherwise specifically provided, the Sub-Administrator
will not be obligated to pay the compensation of any
employee of the Fund retained by the Directors to
perform services on behalf of the Fund.
b. The Administrator and Fund. The Administrator and/or the
Fund assumes and will pay, or cause to be paid, all
other expenses of the Fund not otherwise allocated in
this Agreement, including, without limitation, the
following:
(i) Organizational expenses;
(ii) Taxes;
(iii) Brokerage fees and commissions with regard to
portfolio transactions of the Fund;
(iv) Interest charges, fees and expenses of the
custodian of the Fund's portfolio securities;
(v) Fees and expenses of the Fund's dividend
disbursing and transfer agent(s);
(vi) Administrative expenses (including, without
limitation, any fees, expenses and reimbursements
payable to the Sub-Administrator under this
Agreement);
(vii) Auditing and legal expenses of the Fund;
(viii) Cost of maintenance of the Fund's existence as a
legal entity;
(ix) Fees and expenses of Directors who are not
interested persons of the Fund as that term is
defined by law;
(x) Costs and expenses of Fund meetings;
(xi) Costs and expenses of initial and ongoing
registration of the Fund's shares under Federal
and state securities laws;
(xii) Costs of preparing (including typesetting),
printing and mailing reports, offering documents,
proxy solicitation material and notices to
existing shareholders;
(xiii) Costs of fidelity bonds and directors and
officers/errors and omissions insurance policies;
(xiv) Investment advisory fees payable to each of the
Fund's investment advisors;
(xv) Litigation and other extraordinary or nonrecurring
expenses involving the Fund;
(xvi) Any actual out-of-pocket expenses of the
Sub-Administrator as provided in this Agreement
and as may be agreed upon from time to time; and
(xvii) other expenses relating to the Fund not specified
in this Agreement as being the responsibility of
the Sub-Administrator.
4. Compensation of the Sub-Administrator.
a. Administration Fees. For the services to be rendered and
the expenses assumed by the Sub-Administrator pursuant
to this Agreement, the Administrator will promptly pay
(or cause the Fund to promptly pay) to the
Sub-Administrator compensation as specified in Exhibit B
attached hereto. In addition, the Sub-Administrator
shall be entitled to additional compensation for any
special projects or services requested by the
Administrator or the Fund, such projects and services
and Sub-Administrator's compensation in connection
therewith to be mutually agreed upon in writing by the
parties.
2
b. Reimbursements. The Administrator will promptly
reimburse (or cause the Fund to promptly reimburse) the
Sub-Administrator for its reasonable out-of pocket
expenses in connection with the Fund's activities
including, without limitation:
i. costs of telephone services (but not telephone
equipment owned by the Sub-Administrator)
including, without limitation, long distance
telephone and wire charges,
ii. postage and the printing of special forms and
stationery,
iii. copying charges,
iv. costs of financial publications (if any) or
professional memberships (e.g. ICI membership) in
connection with the Fund's activities,
v. third party storage fees of the Fund's files and
records, etc., and
vi. any travel and lodging expenses incurred by
officers and employees of the Sub-Administrator in
connection with attendance at meetings of the
Fund's Board of Directors.
c. Partial Month Compensation. If this Agreement becomes
effective subsequent to the first day of the month or
terminates before the last day of the month, the
Sub-Administrator's compensation for that part of the
month in which this Agreement is in effect will be
prorated in a manner consistent with the calculation of
the fees as set forth in Subsection 4.a. above.
d. Compensation from Transactions. The Administrator hereby
authorizes (and will cause the Fund to authorize) any
entity or person associated with the Sub-Administrator
which is a member of a national securities exchange to
effect any transaction on the exchange for the account
of the Fund which is permitted by Section 11(a) of the
Securities Exchange Act of 1934, as amended ("1934 Act")
and the Rule 11a2-2(T) thereunder, and the Fund hereby
consents to the retention of compensation for such
transactions in accordance with Rule 11a2-2(T)(a)(2)(iv)
thereunder.
e. Survival of Compensation Rates. All rights of
compensation under this Agreement for services performed
as of the termination date will survive the termination
of this Agreement. In addition, upon a liquidation (as
defined in Section 10 of this Agreement) or upon
termination of this Agreement the Sub-Administrator
shall be entitled to such other compensation as set
forth in Exhibit B.
3
5. Limitation of Liability of the Sub-Administrator. The duties
of the Sub-Administrator will be confined to those expressly
set forth in the Agreement, and no implied duties are assumed
by or may be asserted against the Sub-Administrator under this
Agreement. The Sub-Administrator will not be liable for any
error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in carrying
out its duties under this Agreement, except a loss resulting
from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard
of its obligations and duties under this Agreement, except as
may otherwise be provided under provisions of applicable law
which cannot be waived or modified by this Agreement.
Sub-Administrator will not be responsible for losses beyond
its control. Notwithstanding anything in this Agreement to the
contrary, Sub-Administrator shall not be liable for any
consequential, special, or indirect losses or damages,
regardless of whether the likelihood of such losses or damages
was known by the Sub-Administrator (As used in this Section 5
and in Section 6 below, the term "Sub-Administrator" will
include directors, officers, employees and other agents of the
Sub-Administrator as well as the Sub-Administrator itself).
6. Indemnification of Sub-Administrator. The Administrator and
the Fund (jointly and severally) assume full responsibility
and will indemnify and defend the Sub-Administrator and hold
it harmless from and against any and all actions, suits and
claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable
counsel fees and disbursements, payments, expenses, and
liabilities (including reasonable investigation expenses) of
every nature and character arising or occurring directly or
indirectly out of Sub-Administrator's relationship under this
Agreement or any of Sub-Administrator's action taken or
nonactions with respect to the performance of services under
this Agreement; provided, however, Sub-Administrator shall not
be indemnified against any liability arising out of its own
willful misfeasance, bad faith or gross negligence in the
performance of its duties or its own reckless disregard of its
duties or obligations under this Agreement. The indemnity and
defense provisions set forth herein shall indefinitely survive
the termination of this Agreement.
The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification
hereunder may ultimately be merited. In order that the
indemnification provision contained herein shall apply,
however, it is understood that if in any case the
Administrator or the Fund may be asked to indemnify, defend or
hold the Sub-Administrator harmless, the Administrator and the
Fund shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further
understood that the Sub-Administrator will use all reasonable
care to identify and notify the Administrator and the Fund
promptly concerning any situation which presents or appears
likely to present the probability of such a claim for
indemnification against them , but failure to do so in good
faith will not affect the rights under this Agreement.
The Administrator and the Fund will be entitled to participate
at their own expense or, if they so elect, to assume the
defense of any suit brought to enforce any claims subject to
this indemnity provision. If the Administrator and/or the Fund
elect to assume the defense of any such claim, the defense
will be conducted by counsel chosen by such party or parties
and satisfactory to the Sub-Administrator, whose approval will
not be unreasonably withheld. In the event the Administrator
and/or the Fund elect to assume the defense of any suit and
retain counsel, the Sub-Administrator will bear the fees and
expenses of any additional counsel retained by it, absent a
conflict of interest between the Administrator and/or the Fund
and the Sub-Administrator. In the event of a conflict between
the Administrator and/or the Fund and the Sub-Administrator or
4
if the Administrator and/or the Fund do not elect to assume
the defense of a suit, Administrator and the Fund shall
reimburse the Sub-Administrator for the reasonable fees and
expenses of any counsel retained by Sub-Administrator.
The Sub-Administrator may apply to the Administrator or the
Fund at any time for instructions and may consult with counsel
for the Administrator or the Fund or its own counsel and with
accountants and other experts with respect to any matter
arising in connection with the Sub-Administrator's duties, and
the Sub-Administrator will not be liable or accountable for
any action taken or omitted by it in good faith in accordance
with such instructions or with the opinion of such counsel,
accountants or other experts.
Also, the Sub-Administrator will be protected in acting on any
document which it reasonably believes to be genuine and to
have been signed or presented by the proper person or persons.
Nor will the Sub-Administrator be held to have notice of any
change of authority of any officers, employee or agent of the
Administrator or the Fund until receipt of written notice
thereof from the Administrator or the Fund, as the case may
be.
Should the foregoing indemnification agreement be found
unenforceable or that contribution is required from
Sub-Administrator, then the Sub-Administrator's aggregate
contribution for all losses, claims, damages or liabilities,
including rescission liabilities, shall not exceed the value
of all fees earned by and expenses reimbursed to the
Sub-Administrator pursuant to this Agreement. No person or
entity guilty of fraudulent misrepresentation shall be
entitled to contribution from any person or entity who is not
so guilty.
7. Activities of the Sub-Administrator. The services of the
Sub-Administrator rendered under this Agreement are not to be
deemed to be exclusive. The Sub-Administrator is free to
render such services to others and to have other businesses
and interests. It is understood that Directors, officers,
employees, shareholders of the Fund are or may be or become
interested in the Sub-Administrator, as directors, officers,
employees and shareholders or otherwise and that directors,
officers, employees and shareholders of the Sub-Administrator
and its counsel are or may be or become similarly interested
in the Fund, and that the Sub-Administrator may be or become
interested in the Fund as a shareholder or otherwise.
8. Confidentiality. The Sub-Administrator agrees on behalf of
itself and its employees to treat confidential all records and
other information relative to the Fund and its prior, present
or potential shareholders and not to use such records and
information for any purpose other than performance of its
responsibilities and duties under this Agreement, except after
prior notification to and approval in writing by the
Administrator or the Fund, which approval will not be
unreasonable withheld. Notwithstanding the forgoing, the
Sub-Administrator may divulge such confidential records and
information where the Sub-Administrator may be exposed to
civil or criminal contempt proceedings for failure to comply,
when requested by duly constituted authorities, when so
requested by the Fund's investment adviser, distributor,
custodian, transfer agent, outside legal counsel or
independent public accountants, when so requested by the
Administrator or when so requested by the Fund. For purposes
of this Section 8, the following records and other information
shall not be considered confidential: (a) any record or other
information which is or becomes publicly available through no
fault of Sub-Administrator; (b) any record and other
information which is released by the Fund in a public release;
(c) any record or other information which is lawfully obtained
from third parties who are not under an obligation to keep
such information confidential, or (d) any record or other
information previously known by Sub-Administrator.
5
9. Compliance With Governmental Rules and Regulations. The
Sub-Administrator undertakes to comply with all applicable
requirements of the Securities Act of 1933, the 1934 Act, the
1940 Act and other laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to
be performed by the Sub-Administrator under this Agreement.
10. Duration and Termination Of This Agreement. This Agreement
will become effective as of the date first above written and
shall continue in effect for a period of one (1) year (the
"Initial Term"), unless earlier terminated by either party
hereto as provided hereunder. This Agreement shall be renewed
automatically for successive periods of one year after the end
of the Initial Term (the "Renewal Term"), unless written
notice of non-renewal is provided by either party to the other
party in writing not less than sixty (60) days prior to the
end of the then current term. This Agreement may also be
terminated (a) by mutual written agreement of the parties; (b)
by either party on such date as is specified in written notice
given by the terminating party, in the event of a material
breach of this Agreement by the other party, provided the
terminating party has notified the other party of such breach
at least 45 days prior to the specified date of termination
and the breaching party has not remedied or cured such breach
by the specified date; or (c) effective upon the liquidation
of either the Administrator, the Fund or the
Sub-Administrator. For purposes of this Section 11, the term
"liquidation" will mean a transaction in which the assets of
the Administrator, the Fund or the Sub-Administrator are sold
or otherwise disposed of and proceeds therefrom are
distributed in cash to the shareholders or owners in complete
liquidation of the interest of such shareholders or owners in
the entity.
11. Independent Contractor. The Sub-Administrator will, for
purposes stated in this Agreement, be deemed an independent
contractor and, unless otherwise expressly provided or
authorized, will have no authority to act or represent the
Administrator or the Fund in any way and will not be deemed an
agent of the Administrator or the Fund.
12. Assignment. This Agreement shall not be assignable by either
party without the written consent of the other party, such
consent not to be unreasonably without held or delayed.
Notwithstanding the forgoing, the Sub-Administrator may, at
its expense unless provided otherwise in the Agreement,
subcontract with any entity or person concerning the provision
of the services contemplated hereunder. The Sub-Administrator
shall not, however, be relieved of any of its obligations
under this Agreement by the appointment of such subcontractor.
This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors
and assigns.
13. Amendments. This Agreement or any part hereof may be changed
or waived only by an instrument in writing signed by the party
against which enforcement of such change or waiver is sought.
14. Books and Records.
a. Record Maintenance. The Sub-Administrator shall maintain
customary books and records in connection with its
duties as specified in this Agreement. Any books or
records required to be maintained and preserved pursuant
to Rules 31a-1 and 31a-2 under the 1940 Act which are
prepared and maintained by the Sub-Administrator on
behalf of the Fund shall be the property of the Fund and
will be made available to or surrendered promptly to the
Fund on request. Notwithstanding the forgoing,
Sub-Administrator shall be entitled to keep copies of
any books or records that Sub-Administrator may be
required to retain by law or regulation.
6
Unless otherwise agreed upon by the Sub-Administrator and the
Administrator, Sub-Administrator may subcontract to a
third party the storage and maintenance of the Fund's
books and records and such costs and expenses shall be
the responsibility of Administrator (unless the
Administrator shall cause the Fund to be responsible).
In case of any request or demand for the inspection of such
records by another party, the Sub-Administrator will
notify the Administrator and the Fund and follow the
their instructions as to permitting or refusing such
inspection; provided that the Sub-Administrator may
exhibit such records as provided in Section 8 above and
to any person in any case where it is advised by its
counsel that it may be held liable for failure to do so,
unless (in cases involving potential exposure only to
civil liability) the Administrator or the Fund has
agreed to indemnify the Sub-Administrator against such
liability.
b. Delivery of Documents. The Administrator shall provided,
or cause the Fund to provide, the Sub-Administrator with
the necessary documents, records and other information
in its possession or control to enable the
Sub-Administrator to perform its duties and obligations
under this Agreement, including without limitation, a
copy of the Fund's organizational documents and any
amendments thereto.
c. Converting to Sub-Administrator's System. The
Administrator agrees to cooperate (and cause the Fund to
cooperate) with the Sub-Administrator in converting to
Sub-Administrator's data processing system and software
("Sub-Administrator's System") to the extent necessary
for Sub-Administrator to perform Sub-Administrator's
duties under this Agreement. Notwithstanding anything to
the contrary in this Agreement, the Administrator
acknowledges and agrees that all computer programs and
procedures developed by or for Sub-Administrator to
perform its duties and services under this Agreement,
including without limitation Sub-Administrator's System,
are and shall remain the sole property of the
Sub-Administrator.
15. Definitions of Certain Terms. The terms "interested persons"
and "affiliated person," when used in this Agreement, will
have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions
as granted by the Securities and Exchange Commission.
16. Notice. Any notice required or permitted to be given by either
party to the other party shall be in writing and will be
deemed sufficient if personally delivered or sent by
registered or certified mail, postage prepaid, addressed by
the party giving notice to the other party at following
addresses (or such other address for a party as shall be
specified by like notice):
7
If to Administrator, at:
----------------------------
----------------------------
----------------------------
Attn:
---------
If to Sub-Administrator, at:
The Nottingham Company
000 Xxxxx Xxxxxxxx Xxxxxx
Post Xxxxxx Xxx 00
Xxxxx Xxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxx III
Chairman and CEO
17. Governing Law. This Agreement shall be governed by the laws of
the State of North Carolina without regard to the principles
of conflict of laws, provided that nothing herein shall be
construed in a manner inconsistent with the 1940 Act, the
Investment Advisers Act of 1940, or any applicable rule or
order of the Securities and Exchange Commission.
18. Construction. If any provision of this Agreement, or portion
thereof, shall be determined to be void or unenforceable by
any court of competent jurisdiction, then such determination
shall not affect any other provision of this Agreement, or
portion thereof, all of which other provisions and portions
thereof shall remain in full force and effect. If any
provision of this Agreement, or portion thereof, is capable of
two interpretations, one of which would render the provision,
or portion thereof, void and the other which would render the
provision, or portion thereof, valid, then the provision, or
portion thereof, shall have the meaning which renders it
valid. In addition, the language used herein shall be deemed
to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction shall
be applied against either party.
19. Multiple Originals. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be
deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
20. Entire Agreement. This Agreement, including all exhibits,
schedules and attachments, comprise the entire agreement among
the parties hereto with respect to subject matter hereof and
supersede all other prior agreements, understandings and
letters related to this Agreement. The headings in this
Agreement have been inserted solely for ease of reference and
shall not be considered in the interpretation or construction
of this Agreement.
8
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be duly
signed as of the day and year first above written.
Administrator:
GENERATION CAPITAL MANAGEMENT LLC
By:
---------------------------------------
Name:
---------------------------------------
Title: President
Sub-Administrator:
THE NOTTINGHAM MANAGEMENT COMPANY
D/B/A THE NOTTINGHAM COMPANY
By:
---------------------------------------
Name: C. Xxxxx Xxxxxx III
Title: President
Acknowledged and Agreed to by the Board of Directors of
Generation Hedge Strategies Fund LLC:
By:
-----------------------------------
Its:
-----------------------------------
Dated:
-----------------------------------
9
Exhibit A
To the Sub-Fund Accounting and Administration Agreement
Dated as of April 14, 2004
The Sub-Administrator shall provide, or cause to be provided by others, the
following services:
1. Accounting and Administrative Services. The Sub-Administrator
will assist the Administrator in providing the Fund with
administrative services, fund accounting and related portfolio
accounting services, equipment, personnel and facilities
(including facilities for regular directors' meetings)
necessary for Administrator's handling of the affairs of the
Fund and such other services as the Administrator and the
Directors may, from time to time, reasonably request, and the
Sub-Administrator may, from time to time, reasonably determine
to be necessary to perform its obligations under this
Agreement. In addition, at the request of the Directors, the
Sub-Administrator will make reports to the Directors
concerning the performance of its obligations hereunder.
Without limiting the generality of the forgoing, the
Sub-Administrator will:
a. Calculate contractual Fund expenses and control all
disbursements for the Fund, and, as appropriate, compute
the Fund's yields, total return, expense ratios,
portfolio turnover rate and, if required, portfolio
average dollar-weighed maturity;
b. Assist the Administrator and Fund counsel with the
preparation of offering documents, registration
statements and proxy materials;
c. Assist the Administrator in the preparation of such
reports, applications and documents (including reports
regarding the sale and redemption of shares as may be
required in order to comply with Federal and/or state
securities laws) as may be necessary or desirable to
register the Fund's shares with state securities
authorities, assist in monitoring the sale of the Fund's
shares for compliance with state securities laws, and
assist with the filing with the appropriate state
securities authorities the registration statements and
reports for the Fund and the Fund's shares with state
securities authorities, as appropriate;
d. Assist the Administrator in the development and
preparation of communications to shareholders, including
the semi-annual and annual reports to shareholders (the
"Shareholder Reports"), coordinate mailing notices
(including privacy policy notices), proxy statements,
proxies and other reports (including, without
limitation, semi-annual and annual reports to
shareholders) to the Fund's shareholders, and supervise
and facilitate the solicitations of proxies solicited by
the Fund for all shareholder meetings (including,
without limitation, the tabulation process for
shareholder meetings);
e. If requested, coordinate with the Administrator and Fund
counsel the preparation and negotiation of, and
administer contracts on behalf of the Fund with, among
others, the Fund's investment advisor(s), distributor(s)
and transfer agent(s);
10
f. Maintain the Fund's general ledger and prepare the
financial statements, including expense accruals and
payments, determine the net asset value of the Fund's
assets and of the Fund's shares, and supervise the
Fund's transfer agent(s) with respect to payment of
dividends and other distributions to shareholders;
g. Calculate performance data of the Fund for dissemination
to information services covering the investment company
industry;
h. If requested, assist in the preparation and filing of
the Fund's tax returns;
i. If requested, assist with the examination and review of
the operations and performance of the various
organizations providing services to the Fund, including
the Fund's investment advisor(s), distributor(s),
custodian(s), transfer agent(s), outside legal counsel
and independent public accountants, and at the request
of the Board of Directors, report to the Directors on
the performance of such organizations;
j. If requested, assist with the layout and printing of
disseminated offering documents and assist with and
coordinate layout and printing of the Fund's semi-annual
and annual reports to shareholders;
k. If requested, assist with the design, development, and
operation of the Fund, including class investment
objectives, policies and structure;
l. If requested, assist in identifying individuals
acceptable to the Directors for nomination, appointment,
or elections as officers of the Fund, who will be
responsible for the management of certain of the Fund's
affairs as determined by the Directors;
m. If requested, coordinate and assist the Fund to obtain
and keep in effect a fidelity bond and directors and
officers/errors and omissions insurance policies for the
Fund in accordance with the requirements of Rules 17g-1
and 17d-1(7) under the 1940 Act as such bonds and
policies are approved by the Fund's Board of Directors;
n. If requested, assist in monitoring and advising the Fund
on its registered investment company status under the
Internal Revenue Code of 1986, as amended;
o. Perform such other normal and customary administrative
services and functions for Fund as the Directors may
reasonably request; provided such services are not
provided to the Fund pursuant to the Fund's investment
advisory agreement, distribution agreement, custodian
agreement or transfer agent agreement or similar type of
service provider agreement; and
p. If requested, assist with the preparation of and filing
with the SEC of the necessary reports for the Fund.
2. Custodian Services. If so requested, the Sub-Administrator shall also
procure on behalf of the Fund a custodian or custodians for the Fund to
provide for the safekeeping of the Fund's assets. If Sub-Administrator
is request to procure a custodian or custodians for the Fund,
Administrator shall pay (or cause the Fund to pay) such custody fees as
set forth in Exhibit B of this Agreement under the section entitled
"Domestic Custody Fee Schedule" and the Sub-Administrator shall be
responsible for compensating such custodian or custodians out such
custody fees . Such custodian or custodians shall be subject to the
approval of the Directors. The Fund may be a party to any forgoing
agreement.
3. Other Services. The Sub-Administrator will perform other services for
the Administrator or the Fund as agreed to by the Sub-Administrator and
such party from time to time, including, but not limited to performing
internal audit examinations for the Fund.
11
Exhibit B
To the Sub-Fund Accounting and Administration Agreement
Dated as of April 14, 2004
For the services delineated in the Agreement, the Sub-Administrator shall be
compensated at the rates specified below. Such compensation will be calculated
and accrued daily, and paid to the Sub-Administrator monthly. Where applicable,
the fee shall be calculated based upon the average daily net assets of the Fund.
The following fees shall be paid for the Fund:
FUND ACCOUNTING FEE
Base fee: $2,000 per month per fund
Class Fee: $750 per month for each additional class of shares
Asset base fee: Annual fee of 1 basis point
ADMINISTRATION FEE
Asset based fee:
----------------
Annual
Net Assets Fee
---------- ---
On the first $50 million 0.175%
On the next $50 million 0.150%
On the next $50 million 0.125%
On the next $50 million 0.100%
On all assets over $200 million 0.075%
Minimum asset base fee per month: $1,750.00
OUT OF POCKET
Securities pricing:
-------------------
$0.25 per equity per pricing day priced
$1.00 per foreign security per pricing day
$0.50 per U.S. Treasury
$1.00 per asset backed security per pricing day
$0.50 per corporate bond per pricing day
$2.00 per equity per month for corporate action
$2.00 per foreign security per month for corporate action
Blue Sky administration:
------------------------
$150 per registration per state per year
12
DOMESTIC CUSTODY FEE SCHEDULE
Custody Administration asset based fee:
---------------------------------------
On the first $100 million of assets 2.0 basis points
On all assets over $100 million 0.9 basis points
Transaction Fees:
$4.00 Book Entry DTC Transactions ($7.50 Book Entry DTC Transactions
if Custodian affirms trades)
$10.00 Book Entry Federal Reserve Transactions
$30.00 Physical Securities Transactions
$15.00 Options
$8.00 Futures Contracts
$4.00 Paydowns on Mortgage Backed Securities.
$5.50 Fed Wire Charge on Repo Collateral in / out.
$6.50 Cash Wire Transfers
Minimum Annual Fee: $4,800 per fund ($400 per month)
-------------------
For purposes of determining the fees payable to the Sub-Administrator, the value
of the net assets of a the Fund shall be computed in the manner described in the
Fund's Operating Agreement or offering documents from time to time is in effect
for computation of the value of such net assets in connection with the
determination of the liquidating value of the shares of the Fund. The fees
payable hereunder shall be applied to the Fund as a whole, and not to separate
classes of shares within the Fund.
Upon termination of this Agreement, the Sub-Administrator shall also be entitled
to be paid a termination fee, at termination, equal to the compensation paid (or
payable to) the Sub-Administrator for the two months immediately prior such
termination. Said termination fee is not a penalty but an extra fee to
compensate the Sub-Administrator for its service in assisting in transferring
records and reports and otherwise wrapping up its services under this Agreement
for the Administrator and the Fund. In the event of a liquidation of the Fund,
the Sub-Administrator shall also be entitled to be paid, in lieu of the forgoing
termination fee, a liquidation fee equal to the compensation paid (or payable
to) the Sub-Administrator for the three months immediately prior such
termination. Said liquidation fee is not a penalty but an extra fee to
compensate the Sub-Administrator for its services in assisting in the winding
down and liquidation the Fund. The forgoing compensation shall be in addition to
reimbursing Sub-Administrator for its reasonable out-of-pocket expenses in
connection with the Sub-Administrator's activities in effecting such termination
or liquidation, including without limitation, the cost of delivering to the Fund
or its designee the Fund's records and documents or copies thereof.
Sub-Administrator shall be paid said termination fee promptly upon termination
of this Agreement and said liquidation fee promptly upon the liquidation of the
Fund.
13
