Form of agreement subject to completion
SUB-ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of ______, ______ by and among PFPC Inc., a
Massachusetts corporation ("PFPC"), E*TRADE Asset Management, Inc., a Delaware
corporation (the "Administrator") and E*TRADE FUNDS, a Delaware statutory
business trust (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Administrator and the Fund wish to retain PFPC to provide
administration and accounting services to its investment portfolios listed on
Exhibit A attached hereto and made a part hereof, as such Exhibit A may be
amended from time to time (each a "Portfolio"), and PFPC wishes to furnish such
services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound hereby the parties hereto
agree as follows:
1. Definitions. As used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Administrator or the
Fund and any other person duly authorized by the Fund's Board of
Trustees to give Oral Instructions and Written Instructions on
behalf of the Fund. An Authorized Person's scope of authority may
be limited by setting forth such limitation in a written document
signed by both parties hereto.
(d) "Change of Control" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).
(e) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to
be an Authorized Person. PFPC may, consider and rely upon
instructions it receives from an Authorized Person via electronic
mail as Oral Instructions.
(f) "SEC" means the Securities and Exchange Commission.
(g) "Securities Laws" means the 1933 Act, the 1934 Act and the 1940 Act.
(h) "Shares" means the shares of beneficial interest of any series or
class of the Fund.
(i) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PFPC or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic
transaction reporting system access to which requires use of a
password or other authorized identifier. The instructions may be
delivered electronically or by hand, mail, tested telegram, cable,
telex or facsimile sending device; provided, however, that if
delivered by electronic mail, it must be sent to at least two
(2) of the parties listed in the Authorized E-mail Recipient List,
which PFPC will make available to the Administrator, the Fund and
Authorized Persons.
2. Appointment. The Administrator and the Fund hereby appoint PFPC to
provide administration and accounting services to each of the Portfolios,
in accordance with the terms set forth in this Agreement. PFPC accepts
such appointment and agrees to furnish such services.
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3. Compliance with Rules and Regulations.
PFPC undertakes to comply with all applicable requirements of the
Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be
performed by PFPC hereunder. Except as specifically set forth herein,
PFPC assumes no responsibility for such compliance by the Administrator
or the Fund or other entity.
4. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC shall act only
upon Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives from an Authorized Person (or from a person
reasonably believed in good faith by PFPC to be an Authorized
Person) pursuant to this Agreement. PFPC may assume that any Oral
Instruction or Written Instruction received hereunder is not in any
way inconsistent with the provisions of organizational documents or
this Agreement or of any vote, resolution or proceeding of the
Fund's Board of Trustees or of the Fund's shareholders, unless and
until PFPC receives Written Instructions to the contrary or unless
PFPC has actual knowledge to the contrary.
(c) The Administrator agrees to forward to PFPC Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC or its affiliates) so that PFPC receives the
Written Instructions as promptly as practicable and in any event by
the close of business on the day after such Oral Instructions are
received. The fact that such confirming Written Instructions are
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not received by PFPC or differ from the Oral Instructions shall in no way
invalidate the transactions or enforceability of the transactions
authorized by the Oral Instructions or PFPC's ability to rely upon such
Oral Instructions so long as it acts in good faith, unless PFPC has
actual knowledge to the contrary.
5. Right to Receive Advice.
(a) Advice of the Administrator and/or the Fund. If PFPC is in doubt as
to any action it should or should not take, PFPC may request
directions or advice, including Oral Instructions or Written
Instructions, from any Authorized Person.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question of
law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from counsel of its own choosing
(who may be counsel for the Administrator, the Fund or PFPC, at the
option of PFPC); provided, however, that such counsel and any
related expense must be approved in advance by the Administrator or
the Fund.
(c) Conflicting Advice. In the event of a conflict between directions
or advice or Oral Instructions or Written Instructions PFPC
receives from any Authorized Person and the advice PFPC receives
from counsel, if it involves an issue of compliance with law or
legal requirements, PFPC may rely upon and follow the advice of
counsel only after it has discussed the matter with the
Administrator, the Fund and the Fund's counsel and the conflict is
not resolved. In the event PFPC so relies on the advice of counsel,
PFPC remains liable for any action or omission on the part of PFPC
which constitutes willful misfeasance, bad faith, gross negligence
or reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.
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(d) Protection of PFPC. PFPC shall be indemnified by the Administrator
and the Fund and without liability for any action PFPC takes or
does not take in good faith and reliance upon directions or advice
or Oral Instructions or Written Instructions PFPC receives from or
on behalf of the Fund or from counsel and which PFPC reasonably
believes, in good faith, to be consistent with those directions or
advice and Oral Instructions or Written Instructions. Nothing in
this section shall be construed so as to impose an obligation upon
PFPC (i) to seek such directions or advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written Instructions.
6. Records; Visits.
(a) The books and records pertaining to the Fund and the Portfolios which are
in the possession or under the control of PFPC shall be the property of
the Fund. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable Securities Laws, rules and
regulations. The Administrator, the Fund, Authorized Persons and the
staff of any regulatory agency having authority over the Fund shall have
access to such books and records at all times during PFPC's normal
business hours. Upon the reasonable request of the Administrator, copies
of any such books and records shall be provided by PFPC to the
Administrator, the Fund or to an Authorized Person, at the
Administrator's expense. Upon reasonable notice by the Fund, PFPC shall
make available during regular business hours its facilities and premises
employed in connection with its performance of this Agreement for
reasonable visits by the Fund, any agent or person designated by the Fund
or any regulatory agency having authority over the Fund.
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(b) PFPC shall keep the following records:
(i) all books and records with respect to each Portfolio's books
of account;
(ii) records of each Portfolio's securities transactions;
(iii) investor documentation and records with respect to the Fund;
and
(iv) all other books and records as PFPC is required to maintain
pursuant to Rule 31a-1 of the 1940 Act in connection with the
services provided hereunder.
Subject to applicable provisions of the 1940 Act and the Advisers Act,
regarding the location of Fund records (and/or the appropriate disclosure
thereof), PFPC may house these records in a third-party storage facility and
notwithstanding the use of such facility, shall remain responsible for all such
records as provided in this Agreement. In addition, to the extent required by,
and in the manner prescribed by and in accordance with, the 1940 Act, the books
and records of PFPC pertaining to its actions under the Agreement and reports
by PFPC or its independent accountants concerning its accounting system,
procedures for safeguarding securities, and internal accounting controls will
be open to inspection and audit at reasonable times by officers, employees or
agents of the Administrator, the Fund or auditors employed by the Administrator
or the Fund and will be preserved by PFPC.
7. Confidentiality.
(a) Each party shall keep confidential any information relating to the
other party's business ("Confidential Information"). Confidential
Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product
plans, marketing strategies, finances, operations, customer
relationships, customer profiles, customer lists, sales estimates,
business plans, and internal performance results relating to the
past, present or future business activities of the Administrator,
the Fund, or PFPC, their respective subsidiaries and affiliated
companies and the customers, clients and suppliers of any of them;
(b) any
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scientific or technical information, design, process, procedure, formula,
or improvement that is commercially valuable and secret in the sense that
its confidentiality affords the Fund or PFPC a competitive advantage over
its competitors; (c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source
code, object code, flow charts, databases, inventions, know-how, and
trade secrets, whether or not patentable or copyrightable; and
(d) anything designated as confidential. Notwithstanding the foregoing,
information shall not be Confidential Information and shall not be
subject to such confidentiality obligations if it: (a) is already known
to the receiving party at the time it is obtained; (b) is or becomes
publicly known or available through no wrongful act of the receiving
party; (c) is rightfully received from a third party who, to the best of
the receiving party's knowledge, is not under a duty of confidentiality;
(d) is released by the protected party to a third party without
restriction; (e) is required to be disclosed by the receiving party
pursuant to a court order, subpoena, governmental or regulatory agency
request or law (provided the receiving party will provide the other party
written notice of the same, to the extent such notice is permitted);
(f) is relevant to the defense of any claim or cause of action asserted
against the receiving party; or (g) has been or is independently
developed or obtained by the receiving party. The provisions of this
Section 7 shall survive termination of this Agreement for a period of
three (3) years after such termination.
(b) PFPC agrees to keep confidential all records of the Fund or the
Administrator and information relating to any of the Administrator, the
Fund or its shareholders,
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unless the release of such records or information is otherwise consented
to, in writing, by the Administrator or the Fund. The Administrator
agrees that such consent shall not be unreasonably withheld and may not
be withheld when PFPC may be exposed to civil or criminal contempt
proceedings or when required to divulge such information or records to
duly constituted authorities.
Notwithstanding any provision herein to the contrary, each party agrees
that any Nonpublic Personal Information as defined under Section 248.3(t)
of Regulation S-P ("Regulation S-P"), promulgated under the Xxxxx-Xxxxx
Xxxxxx Act (the "Act"), disclosed or otherwise made accessible by a party
hereunder is for the specific purpose of permitting the other party to
perform its duties as set forth in this Agreement. Each party agrees
that, with respect to such information, it will comply with Regulation
S-P and the Act and that it will not disclose any Nonpublic Personal
Information received in connection with this Agreement to any other
party, except to the extent necessary to carry out the services set forth
in this Agreement or as otherwise permitted by Regulation S-P or the Act.
8. Property of the Fund. Information or material including client data owned
by the Fund shall remain the property of the Fund. In the event of
termination of this Agreement, information belonging to the Fund,
including client data owned by the Fund shall be returned by PFPC, as
directed by the Administrator or the Fund. This information shall be in a
form that can reasonably be accessed by the Fund; however, nothing herein
shall require PFPC to disclose any of its intellectual property to the
Administrator or the Fund or to any other service provider or third party.
9. Liaison with Accountants. PFPC shall act as liaison with the Fund's
independent public
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accountants and shall provide account analyses, fiscal year summaries,
other audit-related schedules with respect to each Portfolio and any
other reports or information required by such accountants with respect to
the Fund. PFPC shall take all reasonable action in the performance of its
duties under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their opinion,
as required by the Fund or the Administrator.
9. PFPC System. PFPC shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable
or copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights developed by and utilized by PFPC
in connection with the services provided by PFPC to the Fund. PFPC shall
have no right, title or interest in any of the foregoing (including,
without limitation, any databases) or in any information developed, owned
or used by the Fund, the Administrator or its affiliates or furnished to
PFPC by the Fund, the Administrator or its affiliates and all such
rights, property and information shall remain vested in the Fund, the
Administrator and its affiliates. No rights or licenses to any of the
foregoing rights, property or information are implied or granted under
this Agreement.
10. Disaster Recovery. PFPC shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to
the extent appropriate equipment is available. The Administrator and the
Fund shall have the right to review any such agreement or arrangement. In
the event of equipment failures, PFPC shall, at no additional expense to
the Fund or the Administrator, make reasonable best efforts to minimize
service
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interruptions. PFPC shall have no liability with respect to the loss of
data or service interruptions caused by equipment failure, provided such
loss or interruption is not caused by PFPC's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
11. Compensation. As compensation for services rendered by PFPC during the
term of this Agreement, the Fund, on behalf of each Portfolio of the
Fund, will pay to PFPC a fee or fees as may be agreed to in writing by
the Fund and PFPC.
12. Indemnification.
(a) Subject to subsection (b) of this Section 12, the Administrator and
the Fund, on behalf of each Portfolio, agree to indemnify, defend and
hold harmless PFPC and its affiliates, including their respective
officers, directors, agents and employees, from all taxes, charges,
expenses, assessments, claims and liabilities (including, without
limitation, attorneys' fees and disbursements and liabilities arising
under the Securities Laws and any state and foreign securities and blue
sky laws) arising directly or indirectly from any action or omission to
act which PFPC takes in connection with the provision of services to the
Fund. Neither PFPC, nor any of its affiliates, shall be indemnified
against any liability (or any expenses incident to such liability)
arising out of PFPC's or its affiliates' own willful misfeasance, bad
faith, gross negligence or reckless disregard in the performance of
PFPC's activities under this Agreement.
(b) PFPC agrees to indemnify and hold harmless the Administrator and the
Fund from all taxes, charges, assessments, claims and liabilities arising
from PFPC's obligations pursuant to this Agreement (including, without
limitation, liabilities arising under the Securities Laws, and any state
and foreign securities and blue sky laws, and amendments
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thereto) and expenses, including (without limitation) reasonable
attorneys' fees and disbursements arising directly or indirectly out of
PFPC's or its nominees' own willful misfeasance, bad faith, negligence or
reckless disregard of its duties and obligations under this Agreement.
(c) The Trustees and shareholders of the Fund, or any Portfolio thereof,
shall not be liable for any obligations of the Fund, or any such
Portfolio, under this Agreement, and PFPC agrees that in asserting any
rights or claims under this Agreement, it shall look only to the assets
and property of the particular Portfolio in settlement of such rights or
claims and not to such members of the Board or shareholders. PFPC further
agrees that it will look only to the assets and property of a particular
Portfolio of the Fund, should the Fund have established separate series,
in asserting any rights or claims under this Agreement with respect to
services rendered with respect to that Portfolio and will not seek to
obtain settlement of such rights or claims from assets of any other
Portfolio of the Fund. Notwithstanding the foregoing, in asserting any
rights or claims under this Agreement, PFPC shall not be prevented from
looking to the assets and property of the Fund sponsor or any other
appropriate party(ies) in settlement of such rights or claims.
(d) In order that the indemnification provisions contained in this
Section shall apply, upon the assertion of a claim for which any party
may be required to indemnify any other party, the party seeking
indemnification shall promptly notify the other party of such assertion,
and shall keep the other party advised with respect to all developments
concerning such claim. The party who may be required to indemnify shall
have the option to participate with the party seeking indemnification in
the defense of such claim. The party seeking indemnification shall in no
case confess any claim or make any compromise in any case
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in which the other party may be required to indemnify it except with the
other party's prior written consent.
(e) The provisions of this Section 12 shall survive termination of this
Agreement.
13. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action hereunder on behalf
of the Administrator, the Fund or any Portfolio except as
specifically set forth herein or as may be specifically agreed to
by PFPC, the Administrator and the Fund in a written amendment
hereto. PFPC shall be obligated to exercise care and diligence in
the performance of its duties hereunder and to act in good faith
and use its best efforts in performing services provided for under
this Agreement. PFPC shall be liable for any damages arising out of
PFPC's failure to perform its duties under this Agreement to the
extent such damages arise out of PFPC's willful misfeasance,
willful misconduct, bad faith, negligence or reckless disregard of
such duties.
(b) Notwithstanding anything in this Agreement to the contrary,
(i) PFPC shall not be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by
reason of circumstances beyond its reasonable control, including
without limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire;
flood; sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities, transportation,
computer or communications capabilities; insurrection; elements of
nature; or non-performance by a third party caused by any of the
foregoing; provided that PFPC has acted in accordance with the
standard of care set forth
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above and has used reasonable efforts to minimize the impact of any
of the foregoing on its ability to fully perform its obligations
hereunder; and (ii) PFPC shall not be under any duty or obligation
to inquire into and shall not be liable for the validity or
invalidity, authority or lack thereof, or truthfulness or accuracy
or lack thereof, of any instruction, direction, notice, instrument
or other information which PFPC reasonably believes in good faith
to be genuine.
(c) No party may assert a cause of action against PFPC or any of its
affiliates that allegedly occurred more than twelve (12) months
immediately prior to the filing of the suit (or, if applicable,
commencement of arbitration proceedings) alleging such cause of
action.
(e) Each party shall have a duty to mitigate damages for which the
other parties may become responsible.
(f) The provisions of this Section 13 shall survive termination of this
Agreement.
14. Description of Accounting Services on a Continuous Basis.
Subject to the oversight of the Administrator, PFPC will perform the
following accounting services with respect to each Portfolio:
(i) Journalize investment, capital share and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received from the
Administrator and transmit trades to the Fund's custodian (the
"Custodian") for proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Fund with the
Custodian, and provide the Administrator with the beginning cash
balance available for investment purposes;
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(vi) Update the cash availability throughout the day as required by the
Administrator;
(vii) Post to and prepare the Statement of Assets and Liabilities and the
Statement of Operations;
(viii)Calculate various contractual expenses (e.g., advisory and custody
fees);
(ix) Monitor the expense accruals and notify the Administrator and an
officer of the Fund of any proposed adjustments;
(x) Control all disbursements and authorize such disbursements upon
Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii)Obtain security market quotes from independent pricing services
approved by the Administrator, or if such quotes are unavailable,
then obtain such prices from the Administrator, and in either case
calculate the market value of each Portfolio's Investments in
accordance with valuation policies and procedures applicable to the
Portfolio;
(xiv) Transmit or mail a copy of the daily portfolio valuation to the
Administrator;
(xv) Compute net asset value in accordance with the Fund's valuation
procedures;
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity;
(xvii)Determine any foreign exchange gains and losses; and
(xvii)Furnish such additional information as may be requested by the Fund
or the Administrator; however, the Fund or the Administrator may
have to bear such additional costs related thereto.
15. Description of Sub-Administration Services on a Continuous Basis.
Subject to the oversight of the Administrator, PFPC will perform the
following administration services with respect to each Portfolio:
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
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(iii) Supply various normal and customary Portfolio and Fund statistical
data as requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal and state tax
returns;
(v) Monitor each Portfolio's status as a regulated investment company
under Sub-chapter M of the Internal Revenue Code of 1986, as
amended;
(vi) Prepare the Fund's annual and semi-annual shareholder reports, and
prepare and coordinate the filing of Forms N-CSR, N-Q and N-PX
(with the Fund providing the voting records in the format required
by PFPC);
(vii) Prepare and coordinate the filing of annual Post-Effective
Amendments to the Fund's Registration Statement; prepare and file
(or coordinate the filing of) (i) semi-annual reports on Form N-SAR
and (ii) Notices pursuant to Rule 24f-2;
(viii)Administratively assist in obtaining the fidelity bond and
directors' and officers'/errors and omissions insurance policies
for the Fund in accordance with the requirements of Rule 17g-1 and
17d-1(d)(7) under the 1940 Act as such bond and policies are
approved by the Fund's Board of Trustees and filing the Fund's
fidelity bond with the SEC in accordance with the requirements of
Rule 17g-1 under the 1940 Act;
(ix) Monitor the Fund's assets to ensure that adequate fidelity bond
coverage is maintained;
(x) Draft agendas and resolutions for quarterly board meetings;
(xi) Coordinate the preparation, assembly and mailing of board materials
for quarterly board meetings;
(xii) Attend quarterly board meetings and draft minutes thereof;
(xiii)Assist in the preparation of proxy materials relating to
shareholder meetings;
(xiv) Assist the Fund in the handling of SEC examinations;
(xv) Maintain the Fund's files;
(xvi) Maintain a regulatory calendar for the Fund listing various SEC
filing and board approval deadlines;
(xvii)Assist in preparing SEC filings and other documentation required
for tender offers;
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(xviii)Provide performance measurement and analysis, including furnishing
performance data, statistical data and research data to the Fund;
(xix) Assist in the preparation and printing of all documents, private
placement memoranda, reports and other materials sent to
shareholders;
(xx) Assist in the Fund's financial reporting and assist the Fund's
auditors in the preparation of financial statements;
(xxi) At the request of the Fund, assist in the development and
monitoring of compliance procedures for the Fund concerning, among
other matters, adherence of the Fund to its investment objectives,
policies, restrictions, tax matters and applicable laws and
regulations;
(xxii)Prepare and file Form D notices with the SEC and monitoring the
Fund's compliance with the amounts and conditions of each state
qualification ; and
(xxiii)Perform such additional administrative duties relating to the
administration of the Fund as may subsequently be agreed upon in
writing among the Administrator, the Fund and PFPC.
All regulatory services are subject to the review and approval of Fund
counsel.
16. Description of Investor Services on a Continuous Basis.
Subject to the oversight of the Administrator, PFPC will provide the
following investors services with respect to each Portfolio:
(i) Maintain the register of shareholders, enter on such register all
issues, transfer and repurchases of Shares, and generally perform
any other actions related to the issuance, repurchase and transfer
of Shares as may be requested by the Administrator;
(ii) Review and accept subscriptions for Shares (and payment therefore);
(iii) Arrange for the calculation of the issuance and repurchase prices
of Shares in accordance with the Fund's Declaration of Trust and
private placement memorandum;
(iv) Generally perform any other actions related to the issuance,
repurchase and transfer of Shares as may be requested by the
Administrator or the Fund;
(v) Prepare and mail annually to each shareholder a Form 1099-DIV in
accordance
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with applicable tax regulations; and
(iv) Mail Fund offering materials to prospective investors in accordance
with instructions from an Authorized Person.
17. Duration and Termination.
(a) This Agreement shall be effective on the date first written above
and shall continue for a period of three (3) years (the "Initial
Term"); provided, however, that the Fund may terminate the
Agreement prior to the conclusion of the Initial Term by providing
PFPC not less than ninety (90) days' written notice of such
termination.
(b) Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal
Terms") each, unless the Administrator, the Fund or PFPC provides
written notice to the other of its intent not to renew. Such notice
must be received not less than ninety (90) days' prior to the
expiration of the Initial Term or the then current Renewal Term.
(c) In the event the Fund gives notice of termination, all expenses
associated with movement of records and materials and conversion
thereof to a successor service provider will be borne by the Fund
and paid to PFPC prior to any such conversion.
(d) In the event PFPC gives notice of termination, the Administrator
and the Fund will be reimbursed for reasonable out of pocket costs
and expenses related directly to the Fund's conversion to another
service provider.
(e) If for the thirty (30) days preceding the written notice referenced
below in this sentence a party hereto is guilty of a material
failure to perform its duties and
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obligations hereunder (a "Defaulting Party") the other parties (the
"Non-Defaulting Parties") may give written notice thereof to the
Defaulting Party, and if such material failure shall not have been
remedied within sixty (60) days after such written notice is given,
then the Non-Defaulting Parties may terminate this Agreement by
giving a written termination notice to the Defaulting Party. In all
cases, termination by the Non-Defaulting Parties shall not
constitute a waiver by the Non-Defaulting Parties of any other
rights it might have under this Agreement or otherwise against the
Defaulting Party.
(f) Notwithstanding anything contained in this Agreement to the
contrary, if a merger, consolidation, adoption, acquisition, change
in control, re-structuring, re-organization or any other similar
action involving the Fund or any affiliate (as defined under the
0000 Xxx) of the Fund results in the Fund's giving notice to PFPC
terminating it as the provider of any of the services hereunder or
otherwise terminating this Agreement before the expiration of the
then-current Initial or Renewal Term ("Early Termination"), PFPC
shall, if requested by the Fund, make a good faith effort to
facilitate a conversion to the Fund's successor service provider,
provided that PFPC makes no guarantee that it will be able to
effect a conversion on the dates requested by the Fund.
18. Notices. Notices shall be addressed (a) if to PFPC, at 0000 Xxxxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: President (or such
other address as PFPC may inform the Administrator or the Fund in
writing); (b) if to the Administrator, at 0000 Xxxxxxxx Xxxxx, Xxxxx
Xxxx, Xxxxxxxxxx 00000, Attention: President (or such other address as
the Administrator may inform PFPC or the Fund in writing); (c) if to the
Fund,
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at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, Attention:
President (or such other address as the Fund may inform the Administrator
or PFPC in writing) or (d) if to none of the foregoing, at such other
address as shall have been given by like notice to the sender of any such
notice or other communication by the other party. If notice is sent by
confirming telegram, cable, telex or facsimile sending device, it shall
be deemed to have been given immediately. If notice is sent by
first-class mail, it shall be deemed to have been given three (3) days
after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered.
19. Amendments. This Agreement, or any term thereof, may be changed or waived
only by written amendment, which has been consented to by the parties
hereto.
20. Assignment. Except as provided below, this Agreement may not be assigned
by any party without the written consent of the other party. PFPC may
assign, at its own expense, this Agreement to any affiliate (as defined
in the 0000 Xxx) of PFPC or of The PNC Financial Services Group, Inc.,
provided that (i) PFPC gives the Fund sixty (60) days prior written
notice of such assignment, (ii) the assignee agrees to comply with the
relevant provisions of the 1940 Act, and (iii) PFPC and such assignee
promptly provide such information as the Administrator or the Fund may
reasonably request, and respond to such questions as the Administrator or
the Fund may reasonably ask, relative to the assignment (including,
without limitation, the capabilities of the assignee).
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
22. Further Actions. Each party agrees to perform such further acts and
execute such further
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documents as are necessary to effectuate the purposes hereof.
23. Miscellaneous.
(a) Notwithstanding anything in this Agreement to the contrary, the
Fund agrees not to make any modifications to its registration
statement or adopt any policies which would affect materially the
obligations or responsibilities of PFPC hereunder without the prior
written approval of PFPC, which approval shall not be unreasonably
withheld or delayed.
(b) Except as expressly provided in this Agreement, PFPC hereby
disclaims all representations and warranties, express or implied,
made to the Administrator, the Fund 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. PFPC disclaims any warranty of title
or non-infringement except as otherwise set forth in this Agreement.
(c) This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that
the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties. 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. Notwithstanding any
provision hereof, the services of PFPC are not, nor shall they be,
construed as constituting legal advice or the
20
provision of legal services for or on behalf of the Fund or any
other person.
(d) The Administrator will provide such information and documentation
as PFPC may reasonably request in connection with services provided
by PFPC to the Administrator and the Fund.
(e) This Agreement shall be deemed to be a contract made in Delaware
and governed by Delaware law, without regard to principles of
conflicts of law; provided that nothing herein shall be construed
to preempt, or be inconsistent, with any federal laws, rules or
regulations, including the 1940 Act and the Investment Advisers Act
of 1940, as amended, and any rules and regulations promulgated
thereunder.
(f) If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(g) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such party.
(h) To help the U.S. government fight the funding of terrorism and
money laundering activities, U.S. Federal law requires each
financial institution to obtain, verify, and record certain
information that identifies each person who initially opens an
account with that financial institution on or after October 1,
2003. Certain of PFPC's affiliates are financial institutions, and
PFPC may, as a matter of policy, request (or may have already
requested) the Fund's name, address and taxpayer identification
number or other government-issued identification number, and, if
such party is a natural person, that party's date of birth. PFPC
may also ask (and
21
may have already asked) for additional identifying information, and
PFPC may take steps (and may have already taken steps) to verify
the authenticity and accuracy of these data elements.
(i) Compliance Program Representations, Warranties and Obligations:
PFPC represents and warrants that:
(i) with respect to those activities that it performs for or on
behalf of the Fund, it has adopted policies and procedures
reasonably designed to prevent the Fund from violating the
"Federal Securities Laws," as such term is defined in Rule
38a-1 under the 1940 Act;
(ii) no less frequently than annually, it shall review, and
provide all reasonable and necessary reports and assistance
requested by the Administrator and the Fund; regarding:
(1) the adequacy of its policies and procedures; and
(2) the effectiveness of their implementation;
(iii) it shall promptly notify the Administrator and the Fund
regarding:
(1) any material changes made to its policies and
procedures since the date of the last report delivered
pursuant to paragraph (i)(ii) of this Section 23;
(2) any material changes to the policies and procedures
recommended as a result of the annual review conducted
pursuant to paragraph (i)(ii) of this Section 23; and
(3) each "Material Compliance Matter," as such term is
defined in Rule 38a-1 under the 1940 Act.
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24. Limitations of Liability of the Trustees and Shareholders. A copy of the
Certificate of Trust of the Fund is on file with the Secretary of State
of the State of Delaware, 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 shareholders individually but are binding
only upon the assets and property of the Fund.
25. Insurance. PFPC shall maintain insurance of the types and in the amounts
deemed by it to be appropriate. To the extent that policies of insurance
may provide for coverage of claims for liability or indemnity by the
parties set forth in this Agreement, the contracts of insurance shall
take precedence, and no provisions of this Agreement shall be construed
to relieve an insurer of any obligation to pay claims to PFPC or other
insured party which would otherwise be a covered claim in the absence of
any provision of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:
-----------------------------
Title:
-----------------------------
E*TRADE ASSET MANAGEMENT, INC.
By:
-----------------------------
Title:
-----------------------------
E*TRADE FUNDS
By:
-----------------------------
Title:
-----------------------------
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EXHIBIT A
THIS EXHIBIT A, dated as of __________, 2006 is Exhibit A to that certain
Administration and Accounting Services Agreement dated as of __________, 2006
among PFPC Inc., E*Trade Asset Management, Inc. and E*Trade Funds.
PORTFOLIOS
E*TRADE S&P 500 Index Fund
E*TRADE Technology Index Fund
E*TRADE Xxxxxxx 2000 Index Fund
E*TRADE International Index Fund
E*TRADE Kobren Growth Fund
E*TRADE Delphi Value Fund
25
