EXHIBIT (9)(b)
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of May 31,
1996, by and between FIRST DATA INVESTOR SERVICES GROUP,
INC., a Massachusetts corporation ("FDISG"), and WILSHIRE
TARGET FUNDS, INC. (the "Company").
In consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as
follows:
1. Appointment. The Company hereby appoints FDISG
to act as Administrator on the terms set forth in this
Agreement. FDISG accepts such appointment and agrees to
render the services herein set forth for the compensation
herein provided. In the event that the Company decides to
retain FDISG to act as Administrator hereunder with respect
to one or more portfolios other than the Funds, the Company
shall notify FDISG in writing. If FDISG is willing to
render such services, it shall notify the Company in writing
whereupon such portfolio shall become a Fund hereunder.
2. Delivery of Documents. The Company has
furnished FDISG with copies properly certified or
authenticated of each of the following:
(a) The Company's Articles of Incorporation
(the "Articles") filed with the state of Maryland and all
amendments thereto;
(b) The Company's Registration Statement on
Form N-1A (the "Registration Statement") under the
Securities Act of 1933 and under the 1940 Act, as filed with
the Securities and Exchange Commission (the "SEC") on April
2, 1996, relating to shares of the Company's Common Stock,
$0.001 par value per share, and all amendments thereto; and
(c) Each Fund's most recent prospectus and
statement of additional information, and all amendments and
supplements thereto (collectively, the "Prospectuses").
The Company will furnish FDISG from time to time with
copies, properly certified or authenticated, of all
amendments of or supplements to the foregoing. Furthermore,
the Company will provide FDISG with any other documents that
FDISG may reasonably request and will notify FDISG as soon
as possible of any matter materially affecting the
performance by FDISG of its services under this Agreement.
3. Duties as Administrator. FDISG, as
Administrator, will assist in supervising all aspects of the
Company's administrative operations and undertakes to
perform all services and to furnish all personnel and
facilities ordinarily incident to the administration of a
mutual fund, including but not limited to the following
specific services:
(a) Maintaining office facilities (which may
be in the offices of FDISG or a corporate affiliate) and
furnishing corporate officers for the Company at its
request;
(b) Furnishing data processing services,
clerical services, and internal legal, executive and
administrative services and stationery and office supplies
in connection with the foregoing;
(c) Accounting and bookkeeping services
(including maintenance of such accounts, books and records
of the Company as may be required by Section 31(a) of the
1940 Act and the rules thereunder);
(d) Internal auditing;
(e) Performing all functions ordinarily
performed by the office of a corporate treasurer, and
furnishing the services and facilities ordinarily incident
thereto, including calculating the net asset value of the
shares of each Fund at the close of trading on the New York
Stock Exchange (the "NYSE") on each day on which the NYSE is
open for trading and at such other times as the Board of
Directors may reasonably request;
(f) Preparing reports to the Company's
shareholders of record and the SEC including, but not
necessarily limited to, Annual Reports and Semi-Annual
Reports on Form N-SAR;
(g) Preparing and filing various applications,
registration statements, reports or other documents required
by federal, and state laws and regulations, other than those
filed or required to be filed by the Adviser or Transfer
Agent;
(h) Preparing and filing the Company's tax
returns;
(i) At the Adviser's request, monitoring and
developing compliance procedures for the Company which will
include, among other matters, monitoring compliance with
each Fund's investment objective, policies, restrictions,
tax matters and applicable laws and regulations;
(j) Performing all functions ordinarily
performed by the office of a corporate secretary, and
furnishing the services and facilities incident thereto,
including all functions pertaining to matters organic to the
organization, existence and maintenance of the corporate
franchise of the Company, including preparation for, conduct
of, and recording directors' meeting and shareholder
meetings. Directors' meetings in excess of five in any
calendar year and shareholder meetings in excess of one in
any two year period shall be for an additional reasonable
charge as may be agreed upon by the Administrator and FDISG;
(k) Performing "Blue Sky" compliance
functions, including maintaining registrations or "Blue
Chip" exemptions (if available) in all U.S. jurisdictions
requested by the Company, monitoring sales of shares in all
such jurisdictions and applying for such additional or
amended registrations as may be reasonably anticipated to be
necessary to permit continuous sales of the shares of the
Funds in all such jurisdictions, filing sales literature and
advertising materials to the extent required, with such Blue
Sky authorities, and making and filing all other
applications, reports, notices, documents and exhibits in
connection with the foregoing; and
(l) Furnishing all other services identified
on Schedule D annexed hereto and incorporated herein which
are not otherwise specifically set forth above.
In performing all services under this Agreement,
FDISG: (a) shall act in conformity with the Articles, the
Prospectuses and the instructions and directions of the
Administrator, and will conform to and comply with the
requirements of the 1940 Act and all other applicable
federal or state laws and regulations; and (b) will consult
with legal counsel to the Fund, as necessary or appropriate.
Furthermore, FDISG shall not have or be required to have any
authority to supervise the investment or reinvestment of the
securities or other properties which comprise the assets of
the Company or any of its Funds and shall not provide any
investment advisory services to the Company or any of its
Funds.
4. Compensation and Allocation of Expenses. FDISG
shall bear all expenses in connection with the performance
of its services under this Agreement, except as indicated
below.
(a) FDISG may from time to time employ or
associate with itself such person or persons as FDISG may
believe to be particularly suited to assist it in performing
services under this Agreement. Such person or persons may
be officers or employees of FDISG. The compensation of such
person or persons shall be paid by FDISG and no obligation
shall be incurred on behalf of the Company in such respect.
(b) FDISG shall not be required to pay any of
the following expenses which may be incurred by the Company:
membership dues in the Investment Company Institute or any
similar organization; investment advisory expenses; costs of
printing and mailing stock certificates, prospectuses,
reports and notices; interest on borrowed money; brokerage
commissions; stock exchange listing fees; taxes and fees
payable to Federal, state and other governmental agencies;
salaries or fees of Officers or Directors of the Company who
are not affiliated with FDISG; outside auditing expenses;
outside legal expenses; or other expenses not specified in
this Section 4 which may be properly payable by the Company.
(c) For the services to be rendered, the
facilities to be furnished and the payments to be made by
FDISG, as provided for in this Agreement, the Company will
pay FDISG on the first business day of each month a fee for
the previous month as set forth on Schedule B annexed hereto
and incorporated herein. Upon any termination of this
Agreement before the end of any month, the fee for such part
of a month shall be prorated according to the proportion
which such period bears to the full monthly period and shall
be payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to FDISG, the
value of each Fund's net assets shall be computed at the
times and in the manner specified in the Registration
Statement.
(d) The Company shall compensate FDISG for its
services rendered pursuant to this Agreement in accordance
with the fees set forth on Schedule B. Such fees do not
include out-of-pocket disbursements of FDISG for which FDISG
shall be entitled to xxxx separately. Out-of-pocket
disbursements shall include the items specified on Schedule
C annexed hereto and incorporated herein and such other
items upon which the Administrator and FDISG may agree from
time to time.
(e) FDISG will xxxx the Company as soon as
practicable after the end of each calendar month, and such
xxxxxxxx will be detailed in accordance with the out-of-
pocket schedule. The Company will pay to FDISG the amount
of such billing within thirty (30) days of receipt.
(f) As to each Fund, if in any fiscal year the
aggregate annual expenses of the Fund (including fees
pursuant to this Agreement and the Company's Investment
Advisory Agreement, but excluding interest, taxes,
brokerage, Rule 12b-1 plan expenses and extraordinary
expenses) exceed the expense limitation of any state in
which shares of the Fund are qualified for offer and sale,
the Company may deduct from the portion of the fees to be
paid hereunder (for such fiscal year) which are chargeable
to such Fund (hereinafter, the "Fund's share of FDISG's
fee"), or FDISG will bear, to the extent required by state
law, that portion of such excess expense which bears the
same relation to such excess expense as the Fund's share of
FDISG's fee bears to the total of (i) the Fund's share of
FDISG's fee, plus (ii) the Fund's share of the advisory fee
payable for such fiscal year (before giving effect to any
similar state expenses reimbursement provision) pursuant to
the Company's Investment Advisory Agreement. Such deduction
or payment, if any, will be estimated daily, and reconciled
and deducted or paid, as the case may be, on a monthly
basis.
5. Limitation of Liability.
(a) FDISG shall at all times act in good faith
and agrees to use its best efforts within commercially
reasonable limits to ensure the accuracy of all services
performed under this Agreement, but assumes no
responsibility for loss or damage to the Company unless said
errors are caused by FDISG's own negligence, bad faith or
willful misconduct or that of its employees.
(b) Notwithstanding any provision in this
Agreement to the contrary, FDISG's cumulative liability (to
the Fund) for all losses, claims, suits, controversies,
breaches, or damages ("Claims") for any cause whatsoever
arising out of or related to this Agreement and regardless
of the form of action or legal theory, shall not exceed one
million ($1,000,000) dollars, plus any and all amounts
available to FDISG or to the Company in respect of such
Claims under FDISG's liability insurance, which FDISG agrees
continuously to maintain in principal coverage amounts of at
least Five Million Dollars ($5,000,000) at all times during
the term of this Agreement and for at least one (1) year
thereafter. FDISG agrees to furnish initial certification
of such insurance coverage and immediate notification of any
modification or termination of such coverage thereafter.
The Company understands the limitation on FDISG's damages to
be a reasonable allocation of risk and the Company expressly
consents with respect to such allocation of risk. In
allocating risk under the Agreement, the parties agree that
the damage limitation set forth above shall apply to any
alternative remedy ordered by a court in the event such
court determines that sole and exclusive remedy provided for
in the Agreement fails of its essential purpose.
(c) Each party shall have the duty to mitigate
damages for which the other party may become responsible.
(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT
TO THE CONTRARY, IN NO EVENT SHALL EITHER PARTY, THEIR
AFFILIATES OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS OR SUBCONTRACTORS BE LIABLE TO THE OTHER PARTY FOR
EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT OR CONSEQUENTIAL
DAMAGES.
6. Indemnification.
(a) The Company shall indemnify and hold FDISG
harmless from and against any and all claims, costs,
expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or
kind which may be asserted against FDISG or for which FDISG
may be held to be liable in connection with this Agreement
or FDISG's performance hereunder (a "Claim"), unless such
Claim arose by reason of FDISG's willful misfeasance, bad
faith or negligence in the performance of its duties
hereunder. FDISG shall indemnify and hold the Company
harmless from and against any and all claims, costs,
expenses (including reasonable attorney's fees), losses,
damages, charges, payments and liabilities of any sort or
kind which may be asserted against the Company or for which
the Company may be liable in connection with this Agreement
or FDISG's performance hereunder (also, a "Claim"), if such
Claim arises by reason of FDISG's willful misfeasance, bad
faith, or negligence in the performance of its duties
hereunder.
(b) In any case in which one party hereto may
be asked to indemnify or hold the other harmless pursuant to
the provision of Section 6(a) hereof, the party seeking
indemnification will notify the other promptly after
identifying any situation which it believes presents or
appears likely to present a claim for indemnification
hereunder, although the failure to do so shall not prevent
recovery by the party seeking indemnification except to the
extent that such failure prejudices the other party in its
defense of any such claim, and shall keep the other advised
with respect to all developments concerning such situation.
The party from which indemnification is sought shall have
the option to defend the other against any Claim which may
be the subject of this indemnification, and, in the event
that the party from which indemnification is sought so
elects, such defense shall be conducted by counsel chosen by
the party from which indemnification is sought and
satisfactory to the other, and thereupon the party from
which indemnification is sought shall take over complete
defense of the Claim and the other shall sustain no further
legal or other expenses in respect of such Claim. The party
seeking indemnification will not confess any Claim or make
any compromise in any case in which the other will be asked
to provide indemnification, except with the party's from
which indemnification is sought prior written consent. The
obligations of the parties hereto under this Section 6 shall
survive the termination of this Agreement.
7. EXCLUSION OF WARRANTIES. THIS IS A SERVICE
AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
FDISG DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, MADE TO THE ADMINISTRATOR 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. FDISG DISCLAIMS ANY
WARRANTY OF TITLE OR NON-INFRINGEMENT EXCEPT AS OTHERWISE
SET FORTH IN THIS AGREEMENT.
8. Term and Termination of Agreement.
(a) This Agreement shall be effective on the
date first written above and shall continue for a period of
two (2) years (the "Initial Term"), unless earlier
terminated pursuant to the terms of this Agreement. In
addition, the term of this Agreement shall automatically be
extended for a third year unless the Company notifies FDISG
to the contrary in writing at least six (6) months prior to
the second anniversary of the effective date. Thereafter,
the term of this Agreement shall continue for successive
annual periods, provided such continuance is specifically
approved at least annually by (i) the Company's Board of
Directors or (ii) a vote of a "majority" (as defined in the
0000 Xxx) of the Company's outstanding voting securities,
provided that in either event the continuance is also
approved by a majority of the Board of Directors who are not
"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.
(b) Upon termination, for whatever reason, the
Company and FDISG shall cooperate fully with each other and
with any new administrator in the transfer of the
administration of the Company's business and affairs to such
new administrator, and shall act promptly and expeditiously
in all matters relating thereto, including the transfer of
all records, data and information reasonably necessary or
appropriate to the conversion and/or the continuation of the
administration of the Company thereafter, with a view toward
achieving an orderly, efficient and cost-effective
transition on any reasonable schedule which may be
established therefor by the Company. The parties agree that
any transition schedule allowing for a period of sixty (60)
days or more to complete the transition shall be deemed a
"reasonable schedule" for purposes of this Section 8(b). In
the event that such termination occurs prior to the third
anniversary of the effective date of this Agreement, the
Company agrees to reimburse FDISG for its reasonable
itemized costs and expenses incurred in connection with the
transfer of administration, not to exceed in any event
$15,000. In the event of termination on or after the third
anniversary of the effective date of this Agreement, each
party hereto shall bear its own costs and expenses in
connection with the transfer of administration.
(c) If a party hereto is guilty of a material
failure to perform its duties and obligations hereunder (a
"Defaulting Party") resulting in a material loss to the
other party, such other party (the "Non-Defaulting Party")
may give written notice thereof to the Defaulting Party, and
if such material breach shall not have been remedied within
thirty (30) days after such written notice is given, then
the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) days written notice of such termination
to the Defaulting Party. The termination of this Agreement
by a Non-Defaulting Party under this Section 8(c) shall not
constitute a waiver of any other rights or remedies of such
Party with respect to services performed prior to such
termination or rights of FDISG to be reimbursed for out-of-
pocket expenses hereunder. In all cases, termination by the
Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under
this Agreement or otherwise against the Defaulting Party.
(d) A party hereto may terminate this
Agreement by giving thirty (30) days written notice of such
termination to the other party in the event that the other
party has become insolvent or made a general assignment for
the benefit of creditors, or a petition under the Bankruptcy
Code is filed by or against the other party and the other
party has not discharged said petition within thirty (30)
days after such filing.
9. Modifications and Waivers. No change,
termination, modification, or waiver of any term or
condition of the Agreement shall be valid unless in writing
signed by each party. No such writing shall be effective as
against FDISG unless said writing is executed by a Senior
Vice President, Executive Vice President or President of
FDISG. A party's waiver of a breach of any term or
condition in the Agreement shall not be deemed a waiver of
any subsequent breach of the same or another term or
condition.
10. No Presumption Against Drafter. FDISG and the
Company have jointly participated in the negotiation and
drafting of this Agreement. The Agreement shall be
construed as if drafted jointly by the Company and FDISG,
and no presumptions arise favoring any party by virtue of
the authorship of any provision of this Agreement.
11. Publicity. Neither FDISG nor the Company shall
release or publish news releases, public announcements,
advertising or other publicity relating to this Agreement or
to the transactions contemplated by it without prior review
and written approval of the other party; provided, however,
that either party may make such disclosures as are required
by legal, accounting or regulatory requirements after making
reasonable efforts in the circumstances to consult in
advance with the other party.
12. Severability. The parties intend every
provision of this Agreement to be severable. If a court of
competent jurisdiction determines that any term or provision
is illegal or invalid for any reason, the illegality or
invalidity shall not affect the validity of the remainder of
this Agreement. In such case, the parties shall in good
faith modify or substitute such provision consistent with
the original intent of the parties. Without limiting the
generality of this paragraph, if a court determines that any
remedy stated in this Agreement has failed of its essential
purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of
warranties, shall remain fully effective.
13. Miscellaneous.
(a) Any notice or other instrument authorized
or required by this Agreement to be given in writing to the
Company or FDISG shall be sufficiently given if addressed to
the party and received by it at its office set forth below
or at such other place as it may from time to time designate
in writing.
To the Company:
c/o Wilshire Associates, Incorporated
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Vice President and General Counsel
To FDISG:
First Data Investor Services Group, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
(b) This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and permitted assigns and is not intended to
confer upon any other person any rights or remedies
hereunder. This Agreement may not be assigned or otherwise
transferred by either party hereto, without the prior
written consent of the other party, which consent shall not
be unreasonably withheld; provided, however, that FDISG
may, in its sole discretion, assign all its right, title and
interest in this Agreement to an affiliate, parent or
subsidiary, provided that (i) the financial capacity of such
assignee is not materially less than FDISG's, (ii) the
nature and quality of the services to be provided hereunder
are not materially and adversely affected by such
assignment, and (iii) the quality and capabilities of the
personnel and facilities of the assignee are not materially
less than FDISG's. FDISG may, in it sole discretion, engage
subcontractors to perform any of the obligations contained
in this Agreement to be performed by FDISG, provided,
however, that FDISG shall at all times remain fully
responsible for the acts or omissions of such sub-
contractors as if it were providing such services directly.
(c) The laws of the Commonwealth of
Massachusetts, excluding the laws on conflicts of laws,
shall govern the interpretation, validity, and enforcement
of this Agreement. All actions arising from or related to
this Agreement shall be brought in the state and federal
courts sitting in the City of Boston, and FDISG and the
Company hereby submit themselves to the exclusive
jurisdiction of those courts.
(d) This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be
an original and which collectively shall be deemed to
constitute only one instrument.
(e) The captions of this Agreement are
included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
14. Confidentiality.
(a) The parties agree that the Proprietary
Information (defined below) (collectively "Confidential
Information") is confidential information of the parties and
their respective licensers. The Company and FDISG shall
exercise reasonable care to safeguard the confidentiality of
the Confidential Information of the other. The Company and
FDISG may each use the Confidential Information only to
exercise its rights or perform its duties under this
Agreement. The Company and FDISG shall not duplicate, sell
or disclose to others the Confidential Information of the
other, in whole or in part, without the prior written
permission of the other party. The Company and FDISG may,
however, disclose Confidential Information to its employees
who have a need to know the Confidential Information to
perform work for the other, provided that each shall use
reasonable efforts to ensure that the Confidential
Information is not duplicated or disclosed by its employees
in breach of this Agreement. The Company and FDISG may also
disclose the Confidential Information to independent
contractors, auditors and professional advisors, provided
they first agree in writing to be bound by the
confidentiality obligations substantially similar to this
Section 14. Notwithstanding the previous sentence, in no
event shall either the Company or FDISG disclose the
Confidential Information to any competitor of the other
without specific, prior written consent.
(b) Proprietary Information means:
(i) any data or information that is
completely sensitive material, and not generally known to
the public, including, but not limited to, information about
product plans, marketing strategies, finance, operations,
customer relationships, customer profiles, sales estimates,
business plans, and internal performance results relating to
the past, present or future business activities of the
Company or FDISG, their respective subsidiaries and
affiliated companies and the customers, clients and
suppliers of any of them;
(ii) any scientific or technical
information, design, process, procedure, formula, or
improvement that is commercially valuable and secret in the
sense that its confidentiality affords the Company, or FDISG
a competitive advantage over its competitors; and
(iii) all confidential or proprietary
concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts,
databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.
(c) Confidential Information includes, without
limitation, all documents, inventions, substances,
engineering and laboratory notebooks, drawings, diagrams,
specifications, bills of material, equipment, prototypes and
models, and any other tangible manifestation of the
foregoing of either party hereto which now exist or come
into the control or possession of the other party hereto.
(d) The Company acknowledges that breach of
the restrictions on use, dissemination or disclosure of any
Confidential Information would result in immediate and
irreparable harm, and money damages would be inadequate to
compensate FDISG for that harm. FDISG shall be entitled to
equitable relief, in addition to all other available
remedies, to redress any such breach.
15. Force Majeure. No party shall be liable for any
default or delay in the performance of its obligations under
this Agreement if and to the extent such default or delay is
caused, directly or indirectly, by (i) fire, flood, elements
of nature or other acts of God; (ii) any outbreak or
escalation of hostilities, war, riots or civil disorders in
any country, (iii) any act or omission of any governmental
authority; (iv) any labor disputes (whether or not the
employees' demands are reasonable or within the party's
power to satisfy); or (v) nonperformance by a third party or
any similar cause beyond the reasonable control of such
party, including without limitation, failures or
fluctuations in telecommunications or other equipment. In
any such event, the non-performing party shall be excused
from any further performance and observance of the
obligations so affected only for so long as such
circumstances prevail and such party continues to use
commercially reasonable efforts to recommence performance or
observance as soon as practicable.
16. Entire Agreement. This Agreement, including all
Schedules hereto, constitutes the entire agreement between
the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous proposals,
agreements, contracts, representations, and understandings,
whether written or oral, between the parties with respect to
the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be duly executed and delivered by their
duly authorized officers as of the date first written above.
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title:Vice President
WILSHIRE TARGET FUNDS, INC.
By: /s/Xxxxxx X. Xxxxxxx
Name: Thomans X. Xxxxxxx
Title: Senior Vice President - WA
President - WTF
SCHEDULE A
NAMES OF FUNDS
Large Company Growth Portfolio
Large Company Value Portfolio
Small Company Growth Portfolio
Small Company Value Portfoli
SCHEDULE B
FEES (ON AN ANNUAL BASIS)
First $1 billion in aggregate assets .15% of monthly
average net assets
Next $4 billion in aggregate assets .10% of monthly average
net assets
Excess .08% of monthly average net assets
Minimum of $100,000 per year for four Funds
Plus: Flat fee of $25,000 per Fund per annum
Additional charge of $2,000 per annum per additional class
FDISG reserves the right to renegotiate the fees set forth
on this Schedule B and in Section 4 of the Agreement should
the actual services required vary materially from the
assumptions provided. It is specifically understood by the
parties that fees for those services provided by FDISG which
are not described in Section 3 of the Agreement or included
on Schedule D under "Routine Projects", will be charged
separately by FDISG and are not included in the fees
referenced above.
SCHEDULE C
OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to, the
following:
- Postage of Board meeting materials and other materials
to the Company's
Board members and service providers (including
overnight or other courier
services)
- Telecommunications charges (including FAX) with
respect to
communications with the Company's directors, officers
and service
providers
- Duplicating charges with respect to filings with
federal and state authorities
and Board meeting materials
- Pricing services
- Forms and supplies for the preparation of Board
meetings and other
materials for the Company
- Vendor set-up charges for Blue Sky services
- Such other expenses as are agreed to by FDISG and the
Administrator
SCHEDULE D
Fund Accounting and Administrative Services
Routine Projects
o Daily, Weekly, and Monthly Reporting
o Portfolio and General Ledger Accounting
o Daily Pricing of all Securities
o Daily Valuation and NAV Calculation
o Comparison of NAV to market movement
o Review of price tolerance/fluctuation report
o Research items appearing on the price exception report
o Weekly cost monitoring along with market-to-market
valuations in accordance with Rule 2a7
o Preparation of monthly ex-dividend monitor
o Daily cash reconciliation with the custodian bank
o Daily updating of price and rate information to the
Transfer Agent/Insurance Agent
o Daily support and report delivery to Portfolio
Management
o Daily calculation of fund advisor fees and waivers
o Daily calculation of distribution rates
o Daily maintenance of each fund's general ledger
including expense accruals
o Daily price notification to other vendors as required
o Calculation of 30-day adjusted SEC yields
o Preparation of month-end reconciliation package
o Monthly reconciliation of fund expense records
o Preparation of monthly pay down gain/loss summaries
o Preparation of all annual and semi-annual audit work
papers
o Preparation and Printing of Financial Statements
o Providing Shareholder Tax Information to Transfer
Agent
o Producing Drafts of IRS and State Tax Returns
o Treasury Services including:
Provide Officer for the fund
Expense Accrual Monitoring
Determination of Dividends
Prepare materials for review by the board, e.g.,
2a-7,10f-3, 17a-7, 17e-1
Tax and Financial Counsel
o Monthly Compliance Testing including section 817H
D-1
Distribution and Legal, Regulatory and Board of Directors
Support
Routine Projects
o Provide 1940 Act Attorney to assist in organization
o Prepare agenda and background materials for legal
approval at Board Meetings; make
presentations where appropriate; prepare minutes;
follow up on issues
o Review and filing of Form N-SAR
o Review and filing of Annual and Semi-Annual Financial
Reports
o Assistance in Preparation of Fund Registration
Statements
o Review of all Sales Material and Advertising
o Coordinate all aspects of the printing and mailing
process with outside printers for all
shareholder publications
o Support for all quarterly board meetings
o Preparation of proxy materials for one meeting per
year
o Annual update Post-Effective Amendment (PEA)
o Prospectus supplements as needed
o Consultations regarding legal issues as needed
o SEC audit report
o Arrange insurance coverage
o Support for one special board meeting per year and
consent votes where needed
o One additional PEA (other than annual update)
o One exemptive order application
o Assist with marketing strategy and product development
Special Projects*
o Proxy material preparation for additional meetings
beyond one per year
o N-14 preparation (merger document)
o Additional PEAs beyond two per year
o Prospectus simplification
o Additional exemptive order applications beyond one per
year
o Extraordinary non-recurring projects - e.g., arranging
CDSC financing programs
o Basic sales, mutual funds, and product training to
branch and sales representatives
*Charged on a project-by-project basis.
D-2
