EXHIBIT 6(B)(3)
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
AGREEMENT dated as of August 19, 1998 between First Funds, a Massachusetts
business trust which may issue one or more series of shares of beneficial
interest (the "Trust"), with respect to the separate series of the Trust as
listed in Appendix B (the "Portfolios"), and ALPS Mutual Funds Services, Inc., a
Colorado corporation and a registered broker-dealer under the Securities
Exchange Act of 1934 (the "Administrator").
WHEREAS, the Trust wishes to employ the services of the Administrator; and
WHEREAS, the Administrator wishes to provide such services under the
conditions set forth below; and
WHEREAS, the Trust and Administrator, effective as of November 19, 1997,
amended and restated the Administration Agreement dated as of July 1, 1995 to
extend the term thereof to June 30, 2000; and
WHEREAS, the Trust and Administrator desire to amend the Amended and
Restated Administration Agreement dated as of November 19, 1997 to clarify the
term "net capital" in Section 8.(iv) hereof to mean "total stockholders equity";
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and the Administrator agree as follows:
1. Appointment. The Trust hereby appoints and employs the Administrator
and the Administrator accepts the appointment as agent to perform the services
described herein.
2. Trust Administration. Subject to the direction and control of the
Board of Trustees of the Trust ("Trustees"), the Administrator shall assist in
supervising aspects of the Trust's operation of the Portfolios not otherwise
supervised by the Trust's investment adviser, transfer agent, custodian,
auditors, counsel or other agents.
To the extent not otherwise the responsibility of, or provided by, the
Trust or other agents of the Trust, the Administrator shall provide: (i) office
space, equipment and facilities for maintaining the Trust's organization and for
performing administrative services hereunder; (ii) non-investment related
statistical and research data and such other reports, evaluations, and
information as the Trust may request from time to time; (iii) monthly compliance
testing and reporting based on the Investment Company Act of 1940 (the "1940
Act"), the Internal Revenue Code of 1986, as amended, and the investment
guidelines as outlined in each Portfolio's Prospectus and Statement of
Additional Information (such testing does not include testing for ERISA
compliance in respect of employee benefit plans invested in the Portfolios);
(iv) Code of Ethics reporting for the
Trust's defined Access Persons, such reporting to exclude all employees of the
investment adviser(s) or sub-adviser(s) of the Trust; (v) internal clerical,
accounting and legal services; and (vi) stationery and office supplies. The
Administrator shall (a) prepare and file with the Securities and Exchange
Commission ("SEC") and applicable state securities administrators the
Portfolios' Registration Statement, Prospectuses and Statements of Additional
Information and Annual and Semi-Annual Reports to Shareholders of the
Portfolios, and cause such filings, together with any other filings made with
the SEC which may be relied upon by investors to make an investment decision, to
be reviewed and approved by Administrator's outside counsel, at Administrator's
expense, prior to such filing; and (b) coordinate execution and filing by the
Portfolios of all federal and state tax returns and required tax filings other
than those required to be made by the Trust's transfer agent and custodian, and
required filings with the SEC including timely notices required pursuant to Rule
24f-2 under the 1940 Act, and Semi-Annual Reports on Form N-SAR; and (c) prepare
and file registrations, renewals and other documents related to registration and
qualification of the shares and the Trust with state Blue Sky authorities with
the advice and consultation of the Trustees and the Trust's counsel. The
Administrator shall also: (i) maintain the Trust's existence, and during such
times as the shares of the Portfolios are publicly offered, maintain the
registration and qualification of the Portfolios' shares under federal and state
law; (ii) to the extent not to be maintained by the Trust's Portfolio accounting
agent, keep and maintain the financial accounts and records of the Trust; (iii)
develop and implement procedures for monitoring compliance with SEC, Internal
Revenue Service and Prospectus and Statement of Additional Information
requirements; and (iv) generally assist as requested from time to time by the
Trustees in other aspects of the Trust's operations, as appropriate, including
monitoring performance of the Trust's other agents.
In compliance with the requirements of Rule 31a-3 of the 1940 Act, the
Administrator hereby agrees that all records which it maintains with respect to
each Portfolio for the Trust are the property of the Trust, and further agrees
to surrender promptly to the Trust any of such records upon the Trust's request.
Administrator further agrees to preserve for the periods prescribed by Rule 31a-
2 under the 1940 Act the records subject to Rule 31a-1 under the 1940 Act that
are maintained by the Administrator.
In performing its services as Administrator, Administrator shall comply
with all applicable laws, rules and regulations including without limitation all
rules and regulations made or adopted pursuant to the Securities Act of 1933, as
amended ("1933 Act"), the 1940 Act, the SEC, the National Association of
Securities Dealers, Inc. (the "NASD") or state securities commissions.
In connection with all documents and filings to be prepared by it under
this Section 2, Administrator represents that all such Registration Statements
and Prospectuses filed on behalf of the Trust with the SEC under the 1933 Act
and the 1940 Act, as applicable, with respect to the shares, will be prepared in
conformity with the requirements of said Acts and rules and regulations of the
SEC thereunder. As used in this Agreement, the terms "Registration Statement"
and "Prospectus" shall mean any registration statement and prospectus (together
with the related Statements of Additional
Information) filed with the SEC with respect to any of the shares and any
amendments and supplements thereto which at any time shall have been filed with
the SEC. Administrator further represents that any Registration Statement and
Prospectus, when such Registration Statement becomes effective, will contain all
statements required to be stated therein in conformity with the 1933 and 1940
Acts and the rules and regulations of the SEC; that all statements of fact
contained in any such Registration Statement and Prospectus will be materially
true and correct when such Registration Statement becomes effective; and that
neither any Registration Statement nor any Prospectus when such Registration
Statement becomes effective, will include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading.
Administrator agrees to advise the Trustees promptly in writing:
(a) of any request by the SEC for amendments to the Registration
Statement or Prospectuses then in effect;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or Prospectuses
then in effect or the initiation of any proceeding for that purpose;
(c) of the happening of any event which makes untrue any statement of
a material fact made in the Registration Statement or Prospectuses in order
to make the statements therein not misleading; and
(d) of all the actions of the SEC with respect to any Registration
Statement or Prospectus which may from time to time be filed with the SEC.
3. Fees. As compensation for the services, facilities and personnel which
the Administrator is to provide or cause to be provided pursuant to Paragraph 2,
each Portfolio of the Trust shall pay to the Administrator out of said
Portfolio's net assets, an annual fee, which shall be computed and accrued daily
and paid in arrears on the first business day of every month, at the annual rate
as referenced in Appendix A to this Agreement.
For the purpose of determining fees payable to the Administrator, the value
of the net assets of each Portfolio of the Trust shall be computed in the manner
described in the Portfolios' Prospectuses and Statements of Additional
Information from time to time in effect. The fee for any partial month under
this Agreement shall be calculated on a proportional basis.
The Administrator may, from time to time, employ or associate with itself
such person or persons as it may believe to be particularly fitted to assist it
in the performance of this Agreement. Such person or persons may be officers
and employees who are employed by both the Administrator and the Trust. The
compensation of such person or persons shall be paid by the Administrator.
The services of the Administrator provided hereunder are not to be deemed
exclusive and the Administrator shall be free to render similar services to
others and engage in other activities. The Administrator shall be free to enter
other agreements with the Portfolios or the Trust for providing additional
services to the Portfolio or the Trust which are not covered by this Agreement,
and to receive additional compensation for such services. Such services may
include, but are not limited to, distribution of shares, pricing and bookkeeping
and transfer agent services. The Administrator will make available, at the
Administrator's expense, for consideration by the Trustees, officers or
employees of the Administrator to serve as Treasurer and Secretary of the Trust,
and such assistant officers as the Trustees may deem necessary or appropriate.
4. Seed Capital. Administrator will replace the seed capital (in the
amount of $100,000.00) of Fidelity Management & Research Corp. which had been
initially invested to activate the Portfolios of First Funds.
5. Expenses. The Administrator shall bear all expenses in connection with
its performance of services hereunder, including but not limited to legal fees
and expenses in providing the services and preparing the documents described in
Section 2 of this Agreement. The Portfolios will pay, or contract with persons
not parties to this Agreement to pay for, all its expenses other than those
expressly stated to be payable by the Administrator hereunder, which expenses
payable by each Portfolio shall include, without limitation, (i) interest and
taxes; (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments; (iii) fees and
expenses of the Trustees; (iv) legal expenses (other than legal fees and
expenses, including legal fees related to Blue Sky filings for the Trust, which
the Administrator at its sole discretion, may incur from time to time in
utilizing outside law firms in fulfillment of its duties of Administration
hereunder) and audit expenses; (v) custodian, pricing and bookkeeping, registrar
and transfer agent fees and expenses; (vi) state and jurisdiction registration
fees, sales report fees, fees (if any) for filing of Prospectuses and/or
Statements of Additional Information related to the Blue Sky registration and
qualification of the Trust and the Portfolios' shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing proxy
material to shareholders of each Portfolio; (viii) all other expenses incidental
to holding meetings of the Portfolios' shareholders, including proxy
solicitations therefor; (ix) expenses of typesetting Prospectuses and Statements
of Additional Information and supplements thereto; (x) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; (xi) insurance premiums for fidelity
bonds and other coverage to the extent approved by the Trustees; (xii)
association membership dues authorized by the Trustees; and (xiii) such
nonrecurring or extraordinary expenses as may arise, including those relating to
actions, suits, or proceedings to which the Trust is a party or to which the
Portfolios' assets are subject and the legal obligation which the Trust may have
to indemnify the Trustees and officers with respect thereto.
The Administrator has no obligation to reimburse the Trust or its
Portfolios for (or to have deducted from its fees) any Trust or Portfolio
expense in excess of expense
limitations, if any, imposed by state securities authorities having jurisdiction
over the Trust.
6. Limitation of Liability. The Administrator shall not be liable for any
damages or loss suffered by the Trust in connection with the matters to which
this Agreement relates, except for a loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the performance, or reckless
disregard, of its duties under this Agreement. Any person, even though also an
officer, director, employee, or agent of the Administrator, who may be or become
an officer, Trustee, employee or agent of the Trust, shall be deemed, when
rendering services to or acting on any business of the Trust in any such
capacity (other than services or business in connection with the Administrator's
duties under this Agreement), to be rendering such service to or acting solely
for the Trust, and not as an officer, director, employee, or agent or one under
the control or direction of the Administrator even though paid by it.
7. Proprietary and Confidential Information. Administrator agrees on
behalf of itself and its officers, directors, agents and employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Trust and prior, present or potential shareholders,
and not to use such records and information for any purpose other than
performance of its responsibilities and duties hereunder. If the Administrator
is requested or required by, but not limited to, oral questions,
interrogatories, request for information or documents, subpoena, civil
investigation, demand or other action, proceeding or process or as otherwise
required by law, statute, regulation, writ, decree, or the like to disclose such
information, the Administrator will provide the Trust with prompt written notice
of any such request or requirement so that the Trust may seek an appropriate
protective order or other appropriate remedy and/or waive compliance with this
provision. If such order or other remedy is not sought, or obtained, or waiver
not received, the Administrator may without liability hereunder, disclose to the
person, entity or agency requesting or requiring the information, that portion
of the information that is legally required in the opinion of Administrator's
counsel.
8. Term. This Agreement became effective as of July 1, 1995, and shall
continue until June 30, 2000 (the "Initial Term"). Thereafter, this Agreement
shall continue automatically for successive annual periods ending June 30 of
each year, provided such continuance is specifically approved at least annually
(i) by the Trustees, (ii) by a vote of a majority of the outstanding shares (as
defined in the 1940 Act), and provided further that in either event such
continuance is also approved by the majority of the Trustees who are not parties
to the Agreement or "interested persons" (as defined in the 0000 Xxx) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. During the Initial Term, this Agreement may
only be terminated (i) for "cause" by the Trustees, or (ii) by vote of a
majority (as defined in the 0000 Xxx) of the outstanding shares of each
Portfolio, or (iii) by the Administrator on not less than sixty days' prior
notice. After the Initial Term of this Agreement, this Agreement may be
terminable with respect to a Portfolio, on not less than sixty days' notice by
the Trustees,
the Administrator, or by vote of a majority of the outstanding shares of the
Portfolios (as defined by the 1940 Act).
Termination for "cause" shall mean:
(i) willful misfeasance, bad faith, gross negligence or reckless
disregard on the part of the Administrator with respect to its obligations
and duties hereunder or under the Distribution Agreement of even date
herewith between Administrator and the Trust (the "Distribution
Agreement");
(ii) regulatory, administrative, or judicial proceedings against
Administrator which result in a determination that it has violated any
rule, regulation, order, or law and which in the reasonable judgment of the
Trustees, including a majority of the Trustees who are not interested
persons (as defined in the 0000 Xxx) of any party to this Agreement, which
substantially impairs the performances of Administrator's obligations and
duties hereunder or under the Distribution Agreement;
(iii) financial difficulties on the part of Administrator which are
evidenced by the authorization or commencement of, or involvement by way of
pleading, answer, consent, or acquiescence in, a voluntary or involuntary
case under Title 11 of the United Stated Code, as from time to time in
effect, or any applicable law other than said Title 11, of any jurisdiction
relating to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors;
(iv) failure by the Administrator to maintain total stockholders
equity of at least $250,000 and to provide to the Trustees at least
annually an audited financial statement documenting the existence of such
total stockholders equity;
(v) failure by the Administrator to keep in effect professional
liability insurance satisfactory to the Trustees naming the Administrator
as insured and providing coverage with respect to the Administrator's
activities on behalf of the Trust in the amount of at least $1,000,000, and
to provide to the Trustees at least annually a certificate of insurance
evidencing that such insurance is in full force and effect; or
(vi) any other circumstance which in the reasonable judgment of the
Trustees, including a majority of the Trustees who are not interested
persons (as defined in the 0000 Xxx) of any party to this Agreement,
substantially impairs on an on-going basis the performance of
Administrator's obligations and duties hereunder or under the Distribution
Agreement.
9. Governing Law, Shareholder and Trustee Limitation of Liability. This
Agreement shall be governed by the law of the State of Tennessee. The
Administrator is hereby expressly put on notice of the limitations of
shareholder and Trustee liability as set
forth in the Declaration of Trust of the Trust and agrees that obligations
assumed by the Trust pursuant to this Agreement shall be limited in all cases to
the Trust and its assets. The Administrator agrees that it shall not seek
satisfaction of any such obligation from the shareholders or any individual
shareholder of the Trust, nor from the Trustees or any individual Trustee of the
Trust. The Administrator understands that the rights and obligations of each
series of the Trust under the Trust's Declaration of Trust are separate and
distinct from those of any and all other series.
The captions in 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. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
ALPS MUTUAL FUNDS SERVICES, INC.
By: ________________________________
W. Xxxxxx Xxxxxxxxx
Title: Chairman
FIRST FUNDS
By: ________________________________
Xxxxxxx Xxxxxxx
Title: President
APPENDIX A
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Effective July 1, 1995
ADMINISTRATION FEES
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Money Market Portfolios: 7.5 Basis Points
Variable NAV Portfolios: 15 Basis Points
On new Portfolios of the Trust introduced after July 1, 1995, including the
Tennessee Tax-Free Portfolio, the Administrator will waive its fee for the
initial six months of operation, or until the Portfolio reaches $20 million in
average net assets, whichever occurs first. For the next six months of
operation of a new Portfolio, the Administrator will receive fees based on the
following structure:
1. 50% of the contractual fee up to $20 million in average net assets.
2. 75% of the contractual fee based on average net assets from $20
million to $25 million.
3. 100% of the contractual fee for average net assets above $25 million.
After one year of operation, the Administrator will collect its full contractual
fees.
Average net assets for each Portfolio shall be defined and computed in the
manner described in the Portfolio's Prospectuses and Statements of Additional
Information from time to time in effect.
APPENDIX B
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Effective November 19, 1997
FIRST FUNDS
Cash Reserve Portfolio
Municipal Money Market Portfolio
Tennessee Tax-Free Portfolio
Growth and Income Portfolio
Bond Portfolio
U.S. Government Money Market Portfolio
U.S. Treasury Money Market Portfolio
Capital Appreciation Portfolio
Intermediate Bond Portfolio
