PUGET SOUND ALTERNATIVE INVESTMENT SERIES TRUST
ADMINISTRATION AGREEMENT
AGREEMENT made this first day of July, 1999 by and between PUGET SOUND
ALTERNATIVE INVESTMENT SERIES TRUST (the "Trust"), a business trust organized
under the laws of the State of Massachusetts, and INVESTMENT COMPANY
ADMINISTRATION, L.L.C. (the "Administrator"), an Arizona limited liability
company.
WITNESSETH:
In consideration of the mutual promises and agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:
l. In General.
The Trust hereby appoints Investment Company Administration L.L.C. as
Administrator, subject to the overall supervision of the Board of Trustees of
the Trust, for the period and on the terms set forth in this Agreement. The
Administrator hereby accepts such appointment and agrees during such period to
render the services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Duties and Obligations of the Administrator.
(a) The Administrator shall be responsible, at its expense, for
providing all administrative services required for the operation of the
Trust and each of its series, including but not limited to corporate
secretarial, treasury, blue sky services and fund accounting services
(except for services that another provider is obligated by written contract
with the Trust to provide to the Trust). Without limiting the generality of
the foregoing, the Administrator shall be responsible for all of the
services listed on Exhibit A.
All services to be furnished by the Administrator under this Agreement
may be furnished through the medium of any such directors, officers or
employees of the Administrator. The Administrator shall perform such other
services for the Trust that are mutually agreed upon by the parties from
time to time. In performing its duties hereunder, the Administrator shall
be obligated to exercise reasonable care and diligence, act in good faith,
use its best efforts and comply with all relevant provisions of the 1940
Act, applicable rules and regulations thereunder, and other applicable law,
the Trust's Declaration of Trust and Bylaws, prospectuses and statements of
additional information and the instructions of the Board of Trustees of the
Trust.
(b) In the absence of willful misfeasance, bad faith, negligence or
reckless disregard of obligations or duties ("disabling conduct") hereunder
on the part of the Administrator (and its officers, directors, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with the Administrator) the Administrator shall not be subject
to liability to the Trust or to any shareholder of the Trust for any act or
omission in the course of, or connected with, rendering services hereunder,
including, without limitation, any error of judgment or mistake of law or
for any loss suffered by any of them in connection with the matters to
which this Agreement relates, except to the extent specified in Section
36(b) of the Investment Company Act of 1940 (the "Act") concerning loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services. Except for such disabling conduct, the Trust
shall indemnify the Administrator (and its officers, directors, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with the Administrator) from any liability arising from the
Administrator's conduct under this Agreement to the extent permitted by the
Trust's Declaration of Trust and applicable law.
In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Trust may be asked
to indemnify or hold the Administrator harmless, the Trust shall be fully
and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the Administrator will use all
reasonable care to identify and notify the Trust promptly concerning any
situation which presents or appears likely to present the probability of
such a claim for indemnification against the Trust, but failure to do so in
good faith shall not affect the rights hereunder. The Trust shall be
entitled to participate at its own expense or, if it so elects, to assume
the defense of any suit brought to enforce any claims subject to this
indemnity provision. If the Trust elects to assume the defense of any such
claim, the defense shall be conducted by counsel chosen by the Trust and
satisfactory to the Administrator, whose approval shall not be unreasonably
withheld. In the event that the Trust elects to assume the defense of any
suit and retain counsel, the Administrator shall bear the fees and expenses
of any additional counsel retained by it. If the Trust does not elect to
assume the defense of a suit, it will reimburse the Administrator for the
reasonable fees and expenses of any counsel retained by the Administrator.
The Administrator agrees to indemnify and hold harmless the Trust and
each of its Trustees, officers, employees and shareholders from all claims
and liabilities (including without limitation, liabilities under the
Securities Act of 1933, the Securities Exchange Act of 1934, and the 1940
Act, and any state and foreign securities laws, all as amended from time to
time) and expenses, including (without limitation) reasonable attorneys
fees and disbursements, arising directly or indirectly from any action or
thing which the Administrator takes or does or omits to take or do which is
in violation of this Agreement or not in accordance with instructions
properly given to the Administrator, or arising out of the Administrator's
own willful misfeasance, bad faith, negligence or reckless disregard of its
duties and obligations under this Agreement.
(c) It is agreed that the Administrator shall have no responsibility
or liability for the accuracy or completeness of the Trust's Registration
Statement under the Act except for information supplied by the
Administrator or negligently omitted by the Administrator for inclusion
therein.
(d) The Administrator shall, for all purposes herein, be deemed to be
an independent contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for or represent the Trust in
any way and shall not be deemed an agent of the Trust.
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3. Allocation of Expenses.
The Administrator agrees that it will furnish the Trust, at the
Administrator's expense, with suitable office space and all necessary facilities
(including facilities for meetings of shareholders and trustees of the Trust),
and equipment and bookkeeping and clerical personnel necessary for carrying out
its duties under this Agreement and for the efficient conduct of the affairs of
the Trust. The Administrator will also pay all compensation and expenses of all
Trustees, officers and employees of the Trust who are affiliated persons of the
Administrator or of any affiliated person of the Administrator. All costs and
expenses of the Trust not expressly assumed by the Administrator under this
Agreement shall be paid by the Trust, including, but not limited to (i) interest
and taxes; (ii) brokerage fees and commissions; (iii) insurance premiums; (iv)
compensation and expenses of the Trust's Trustees and officers other than those
affiliated with the Administrator; (v) legal and auditing fees and expenses;
(vi) fees and expenses of the Trust's custodian, transfer agent and accounting
services agent; (vii) expenses incident to the issuance of the Trust's shares,
including issuance on the payment of, or reinvestment of, dividends; (viii) fees
and expenses incident to the registration under Federal or state securities laws
of the Trust or its shares; (ix) expenses of preparing, printing and mailing
reports and notices and proxy material to shareholders of the Trust; (x) all
other expenses incidental to holding meetings of the Trust's shareholders; (xi)
dues or assessments of or contributions to the Investment Company Institute or
any successor; (xii) such non-recurring expenses as may arise, including
litigation affecting the Trust and the legal obligations which the Trust may
have to indemnify its officers and Trustees with respect thereto; and (xiii)
organization costs of the Trust.
4. Compensation of the Administrator.
The Trust agrees to pay the Administrator and the Administrator agrees to
accept as full compensation for all services rendered, facilities furnished and
expenses assumed by the Administrator as such, an annual fee, payable monthly,
computed on the value of the net assets of the Trust as of the close of business
each business day as per the attached fee schedule. If this Agreement becomes
effective subsequent to the first day of a month or terminates before the last
day of a month, the Administrator's compensation for that part of the month in
which this Agreement is in effect shall be prorated in a manner consistent with
the calculation of fees as set forth above.
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5. Duration and Termination.
(a) This Agreement shall become effective on the date set forth above
and shall remain in force until terminated pursuant to the provisions of
paragraph (b) hereof.
(b) This Agreement may be terminated by the Administrator at any time
without penalty upon giving the Trust not less than sixty (60) days'
written notice (which notice may be waived by the Trust) and may be
terminated by the Trust at any time without penalty upon giving the
Administrator not less than sixty (60) days' written notice (which notice
may be waived by the Administrator), provided that such termination by the
Trust shall be directed or approved by the vote of a majority of all of its
Trustees in office at the time or by the vote of the holders of a majority
(as defined in the Act) of the voting securities of the Trust.
6. Assignment and Amendment.
(a) This Agreement shall not be assignable by either party without the
prior written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
(b) This Agreement may be amended by the parties hereto only if such
amendment is specifically approved (i) by the vote of a majority of the
Trustees of the Trust.
7. Confidentiality.
The Administrator agrees on behalf of itself and its directors, officers,
employees, agents and representatives to treat confidentially and as proprietary
information of the Trust all records and other information relative to the Trust
and all prior, present or potential shareholders of the Trust, and not to use
such records and information for any purpose other than performance of its
responsibilities and duties hereunder, except, after prior notification to and
approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where the Administrator may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Trust. All records required to be maintained and preserved by the
Administrator under this Agreement are property of the Trust and will be
surrendered to the Trust promptly upon request.
8. Governing Law.
This Agreement constitutes the entire agreement and understanding between
the parties hereto, and it shall be governed and construed in accordance with
the laws of the State of Delaware (without regard to conflicts of law).
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9. Definitions of Certain Items.
The terms "interested person" and "affiliated person," when used in this
Agreement, shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
10. Notices.
All notices and other communications required or permitted hereunder shall
be in writing and shall be sent by registered or certified mail, postage
prepaid, return receipt requested, or delivered by hand, messenger or overnight
courier, or communicated by telegram, telex or facsimile transmission (with hard
copy sent via regular mail), and shall be deemed given when received at the
addresses set forth below, or at such other address as either party may specify
by written notice to the other.
If to the Administrator, to: Investment Company Administration, L.L.C.
0000 X. Xxxxxxxxx Xxx, Xxx. 000
Xxxxxxxx, Xxxxxxxxxx 00000
If to the Trust, to: Puget Sound Alternative Investment
Series Trust
Xxx Xxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Either party may change its address set forth above by giving the other
notice of such change in accordance with the provisions of this Section.
11. Computer Hardware and Software.
Based on a review of the operations of the Administrator and its affiliates
as they relate to the processing, storage and retrieval of data, the
Administrator does not believe that a material adverse change in the ability of
the Administrator to perform its obligations under this Agreement will occur as
a result of computer software and hardware that does not function with respect
to periods commencing January 1, 2000 at lest as effectively as with respect to
periods ending prior to December 31, 1999.
12. Matters relating to the Trust as a Massachusetts Business Trust.
A copy of the Agreement and Declaration of Trust establishing the Trust is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed on behalf of the Trust by an
officer of the Trust as an officer and not individually and the obligations of
or arising out of this Agreement are not binding upon any of the trustees,
officers or shareholders of the Trust individually but are binding only upon the
assets and property belonging to the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by duly authorized persons and their seals to be hereunto
affixed, all as of the day and year first above written.
PUGET SOUND ALTERNATIVE
INVESTMENT SERIES TRUST
By:
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ATTEST:
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INVESTMENT COMPANY ADMINISTRATION, L.L.C.
By:
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ATTEST:
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ADMINISTRATION FEE SCHEDULE
FOR
PUGET SOUND ALTERNATIVE INVESTMENT
SERIES TRUST
ADMINISTRATION SERVICES FEES(1):
Basis Points Average Net Assets for the Complex
------------ ----------------------------------
.05% First $500 million
.03% Assets in Excess of $500 million
Per Fund Annual Minimums(2)
---------------------------
$30,000 Per Fund
$ 5,000 For each additional share class
----------
(1) FOR THE FIRST 18 MONTHS, THEN .10% BASIS POINTS FIRST $200 MILLION, .05%
BASIS POINTS NEXT $300 MILLION AND .03% BASIS POINTS THEREAFTER.
(2) FOR THE FIRST 12 MONTHS, THEN $40,000 PER FUND ANNUAL MINIMUM, $15,000 FOR
EACH ADDITIONAL CLASS.
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EXHIBIT A
INVESTMENT COMPANY ADMINISTRATION, L.L.C.
ADMINISTRATIVE SERVICES
FOR
PUGET SOUND ALTERNATIVE INVESTMENT SERIES TRUST
RESPONSIBILITY FOR BOARD MEETINGS.
* Coordinating the preparation of the agenda.
* Preparing and distributing materials prior to the meeting.
* Preparing minutes of each meeting and maintaining the minute book.
* Advise the Trust and the Board of Trustees on administrative matters as
described in the following list
RESPONSIBILITY FOR SHAREHOLDER MEETINGS.
* Determining when meetings are needed as well as those matters to be voted
on.
* Drafting proxy material.
* Coordinating printing and mailing of proxy material.
* Coordinating proxy solicitation including tabulations of shareholder votes.
* Preparing minutes of the meeting.
COORDINATING THE MAINTENANCE OF THE REGISTRATION STATEMENT.
* Drafting annual revisions and circulating drafts among counsel, the Trust's
advisers, etc.
* Preparing and filing registration statement amendments, supplements
("stickers") and other required documents with the SEC.
* Receiving comments from SEC staff.
* Coordinating printing and mailing of final prospectuses and statements of
additional information.
* Preparing and filing registration fee payments pursuant to Rule 24f-2 and
other applicable rules.
* Filing semi-annual reports on Form N-SAR.
PREPARING SHAREHOLDER REPORTS.
* Drafting reports and circulating drafts.
* Coordinating comments.
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* Coordinating printing and distribution.
* Filing with SEC.
MAINTAINING STATE NOTICE FILINGS.
* Monitoring status of filings in each state.
* Increasing amounts filed as needed.
* Filing renewals as needed.
* Filing sales reports and monitor sales.
* Filing copies of registration statement amendments, supplements and other
required documents.
MONITORING COMPLIANCE.
* Monitor the Trust's compliance with respect to the 1940 Act, the Internal
Revenue Code, Board of Trustees and prospectus guidelines, restrictions and
policies.
* Reviewing 1940 Act, IRS, and voluntary investment restrictions with
portfolio managers.
* Preparing checklists for use by portfolio managers.
* Reviewing reports from the accounting services agent.
* Preparing compliance reports for management and the Board.
* Monitoring the adequacy of the fidelity bond and D&O insurance, negotiating
and arranging with insurance carriers of agreements for fidelity bond and
D&O insurance, and making all required filings with government and
regulatory agencies relating to fidelity bond and insurance matters.
* Monitor and advise the Trust regarding its registered investment company
status under the Internal Revenue Code of 1986, as amended.
PREPARING BUDGETS AND CONTROLLING EXPENSES.
* Establishing budgets each year for the accounting services agent.
* Comparing budgeted expenses to actual during the year and revising budgets
as needed.
* Reviewing bills as received and approving for payment by the custodian.
* Calculate expenses and compute total return, expense ratio and portfolio
turnover rate.
* Coordinate with the Trust's fund accountants the computation of the Fund's
SEC yield, including tax equivalent yields and , if required, portfolio
average dollar weighted maturity.
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HANDLING SEC INSPECTIONS.
* Meeting SEC staff and gathering data as requested.
* Responding to SEC correspondence resulting from inspections.
OVERSEEING OTHER SERVICE PROVIDERS.
* Acting as management's day-to-day representative with the custodian,
transfer agent (including but not limited to supervising the transfer agent
with respect to the payment of dividends and other distributions to
shareholders), fund accounting agent, auditors, legal counsel, broker
dealers, underwriters, insurers and other service providers.
* Coordinate and supervise the preparation and filing of the Trust's tax
returns by its auditors.
* Monitoring the quality of performance of service providers.
* Provide performance data and act as liaison with industry associations and
reporting services (E.G. Lipper, Morningstar, CDA, etc.).
* Oversee the maintenance by the Trust's custodian and fund accountant of the
books and records maintained by each of them pertaining to the Trust and
maintain such other books and records (other than those required to be
maintained by the Trust's adviser and sub-adviser(s)), at the expense of
the Administrator, as may be required by law to be maintained by the Trust
or may be required for the proper operation of the Trust (which other books
and records shall be the property of the Trust, shall be surrendered
promptly to the Trust upon its request, shall not be permitted to be
inspected by any person without the consent of the Trust and shall be
preserved for the periods required by the 1940 Act).
* Monitor the net asset value per share of each series of the Trust on each
business day, and review and adjust as necessary the Trust's daily expense
accruals.
GENERAL
* Provide the Trust with regulatory reporting, reports regarding investment
performance and other reports reasonably requested by the Trust.
* Provide all other administrative services and functions of the Trust and
each of its series, (except for services that another service provider is
obligated by written contract with the Trust to provide to the Trust).
* Maintaining the Trust's books and records (other than financial or
accounting books and records maintained by any custodian, transfer agent or
accounting services agent)
* Responding to all inquiries or other communications of shareholders, if
any, which are directed to the Administrator, or if any such inquiry or
communication is more properly to be responded to by the Trust's custodian,
transfer agent or accounting services agent, overseeing their response
thereto.
* Authorizing and directing any of the Administrator's directors, officers
and employees who may be elected as Trustees or officers of the Trust to
serve in the capacities in which they are elected.
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