EXHIBIT h(2)
ADMINISTRATION AGREEMENT
AGREEMENT dated as of November l, 1999 by and between SAMCO FUNDS, INC.,
a Maryland corporation (the "Fund"), and INVESTORS BANK & TRUST COMPANY, a
Massachusetts trust company ("Investors Bank").
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of the separate portfolios listed on APPENDIX A hereto;
WHEREAS, the Fund offers shares of common stock, par value $.001 per
share, which have been registered under the Securities Act of 1933, as amended;
WHEREAS, the Fund desires to retain Investors Bank to render certain
administrative services, including supervision of certain third party vendors to
the Fund and Investors Bank is willing to render such services.
NOW, THEREFORE, in consideration of the above premises and of other good
and valuable consideration the parties hereto, intending to be legally bound
hereby, agree as follows:
1. APPOINTMENT OF ADMINISTRATOR. The Fund hereby appoints Investors Bank to
act as administrator to the Fund for the period and on the terms set forth in
this Agreement. Investors Bank accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
2. DUTIES OF ADMINISTRATOR. Subject to the supervision and direction of the
Board of Directors of the Fund, Investors Bank, as Administrator, will assist in
conducting various aspects of the Fund's administrative operations and
undertakes to perform the services described in APPENDIX B hereto. Investors
Bank may, from time to time, perform additional duties and functions which shall
be set forth in an amendment to such APPENDIX B executed by both parties. At
such time, the fee schedule included in APPENDIX C hereto shall be appropriately
amended.
In performing all services under this Agreement, Investors Bank shall act
in conformity with the Fund's Articles and By-Laws and the 1940 Act, as the same
may be amended from time to time, and the investment objectives, investment
policies and other practices and policies set forth in the Fund's Registration
Statement, as the same may be amended from time to time. Notwithstanding any
item discussed herein, Investors Bank has no discretion over the Fund's assets
or choice of investments and cannot be held liable for any problem relating to
such investments. Investors Bank will perform all of its obligations under this
Agreement in accordance with applicable law, including without limitation laws
against discrimination.
3. DUTIES OF THE FUND
A. The Fund is solely responsible (through its transfer agent or
otherwise) for (i) providing timely and accurate reports ("Daily Sales Reports")
which will enable Investors Bank as Administrator to monitor the total number of
shares sold in each state on a daily basis and (ii) identifying any exempt
transactions ("Exempt Transactions") which are to be excluded from the Daily
Sales Reports.
B. The Fund will deliver to Investors Bank copies of each of the
following documents and will deliver to Investors Bank all future amendments and
supplements, if any:
(1) A certified copy of the Articles of Incorporation of the Fund as
amended and currently in effect;
(2) A copy of the Fund's By-Laws as amended and currently in effect,
certified by the Secretary of the Fund;
(3) A copy of the resolution of the Fund's Board of Directors
authorizing this Agreement, certified by the Secretary of the Fund;
(4) The Fund's registration statement on Form N-1A as filed with, and
declared effective by, the U.S. Securities and Exchange Commission
("SEC"), and all amendments thereto;
(5) Each resolution of the Board of Directors of the Fund authorizing
the original issue of its shares, certified by the Secretary of the Fund;
(6) Copies of the resolutions of the Fund's Board of Directors
authorizing: (i) certain officers and employees of Investors Bank to give
instructions to the Fund's custodian and transfer agent as required by
agreements with such parties, and (ii) certain officers and employees of
Investors Bank to sign checks and pay expenses on behalf of the Fund,
certified by the Secretary of the Fund;
(7) A copy of the current Investment Advisory Agreement between the
Fund and Seix Investment Advisors, Inc.;
(8) A copy of the Custodian Agreement and Transfer Agency Agreement
relating to the Fund; and
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(9) Such other certificates, documents or opinions which Investors
Bank may, in its reasonable discretion, deem necessary or appropriate in
the proper performance of its duties.
C. The Fund will cooperate in providing Investors Bank with all
information reasonably necessary to permit Investors Bank to perform its duties
hereunder.
D. The Fund certifies to Investors Bank that, as of the close of
business on the date of this Agreement, it has authorized capitalization of
2,500,000,000 shares of its common stock, $.001 par value (the "Shares"), and
agrees that Investors Bank will be promptly notified from time to time when the
Fund takes corporate action to increase the number of authorized shares,
including restoring redeemed shares held in its treasury to the status of
authorized and unissued shares.
4. SERVICES TO BE OBTAINED INDEPENDENTLY BY THE FUND
The Fund shall, at its own expense, provide for any of its own:
A. Organizational expenses;
B. Services of an independent accountant;
C. Services of outside legal counsel (including such counsel's review
of the Fund's registration statement, proxy materials and other reports and
materials prepared by Investors Bank under this Agreement);
D. Services contracted for by the Fund directly from parties other
than Investors Bank acting as administrator (or subcontracted for by Investors
Bank on behalf of the Fund, subject to review and approval by the Fund's
executive officers or Board of Directors);
E. Trading operations and brokerage fees, commissions and transfer
taxes in connection with the purchase and sale of securities for its investment
portfolio;
F. Investment advisory services;
G. Taxes, insurance premiums and other fees and expenses applicable
to its operation;
H. Costs incidental to any meeting of shareholders including, but not
limited to, legal and accounting fees, proxy filing fees and costs incidental to
the preparation, printing and mailing of any proxy materials;
I. Cost incidental to Directors' meetings, including fees and
expenses of Directors;
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J. The salary and expenses of any officer or employee of the Fund who
is not also an officer or employee of Investors Bank;
K. Custodian and depository banks, and all services related thereto;
L. Costs incidental to the preparation, printing and distribution of
its registration statement and any amendments thereto, and shareholder reports,
including printing setup, printing and mailing costs;
M. All registration fees and filing fees required under the
securities laws of the United States and state regulatory authorities;
N. Fidelity bond and director's and officers' liability insurance;
O. Record retention costs of third parties;
P. Distribution fees pursuant to any distribution plan, if and when
adopted pursuant to Rule 12b-1 under the 1940 Act; and
Q. Litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business.
5. PRICE AND CHARGES
(a) For the services to be rendered and the facilities to be
furnished by Investors Bank, as provided for in this Agreement, the Fund will
compensate Investors Bank in accordance with the fee schedule attached as
APPENDIX C hereto. Such fees do not include out-of-pocket disbursements (as
delineated on the fee schedule or other expenses with the prior approval of the
Fund's management) of Investors Bank for which Investors Bank shall be entitled
to xxxx the Fund separately and for which the Fund shall reimburse Investors
Bank.
(b) Investors Bank shall not be required to pay any expenses
incurred by the Fund.
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6. LIMITATION OF LIABILITY AND INDEMNIFICATION
A. Investors Bank shall provide its services in a professional manner
customarily provided by leading mutual fund administration companies. Investors
Bank shall be responsible for the performance of only such duties as are set
forth or contemplated herein or contained in instructions given to it by the
Fund which are not contrary to this Agreement. Investors Bank shall have no
liability for any loss or damage resulting from the performance or
non-performance of its duties hereunder unless caused by or resulting from the
gross negligence, bad faith or willful misconduct of Investors Bank, its
officers or employees or the violation by any of such persons of this Agreement.
In no event, however, shall Investors Bank be liable for any consequential
damages including, without limitation, any taxes, penalties, litigation expenses
or other loss or damage resulting from the failure by other persons providing
services to the Fund to conform to applicable legal or regulatory requirements,
or to the Fund's investment policies and restrictions as set forth in its
registration statement, notwithstanding that Investors Bank, in the course of
carrying out its monitoring duties hereunder, failed to discover such failure.
B. The Fund shall indemnify and hold Investors Bank harmless from all
loss, cost, damage and expense, including reasonable expenses for counsel,
incurred by it resulting from any claim, demand, action or suit in connection
with any action or omission by it in the performance of its duties hereunder, or
as a result of acting upon any instructions reasonably believed by it to have
been executed by a duly authorized officer of the Fund, provided that this
indemnification shall not apply to actions or omissions of Investors Bank, its
officers or employees in cases of its or their own gross negligence or
misconduct or the violation by any of such persons of this Agreement.
C. The Fund will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any liability subject to the indemnification provided above, and if the
Fund elects to assume the defense, such defense shall be conducted by counsel
chosen by the Fund. In the event the Fund elects to assume the defense of any
such suit and retain such counsel, Investors Bank or any of its affiliated
persons, named as defendant or defendants in the suit, may retain additional
counsel at its or their own expense, except that, if the Fund shall have
specifically authorized the retaining of such counsel, then the reasonable
expenses for such counsel shall be reimbursed by the Fund.
D. At any time Investors Bank may apply to any executive officer of
the Fund or executive officer of the Fund's investment adviser for instructions,
and may consult with legal counsel for the Fund, if consented to by an executive
officer of the Fund at the expense of the Fund, with respect to any matter
arising in connection with the services to be performed by Investors Bank under
this Agreement and Investors Bank shall not be liable and shall be indemnified
by the Fund for any action taken or omitted by it in good faith in reliance upon
such instructions or upon the opinion of such counsel. Investors Bank shall be
protected and indemnified in acting upon any
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paper or document of the Fund reasonably believed by it to be genuine and to
have been signed by the proper person or persons and shall not be held to have
notice of any change of authority of any representative of the Fund, until
receipt of written notice thereof from the Fund, unless an officer of Investors
Bank shall have actual knowledge of such change. Investors Bank shall also be
protected and indemnified, except where a stop order is in effect, in
recognizing transfer documents which Investors Bank reasonably believes to bear
the proper manual or facsimile signature of the officers of the Fund, and the
proper counter-signatures of any present or former transfer agent.
7. CONFIDENTIALITY
Investors Bank agrees on behalf of itself and its directors, officers and
employees to treat confidentially and as proprietary information of the Fund all
records and other information relative to the Fund and its prior, present or
potential shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities hereunder, except (i)
after prior notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld, when requested to divulge such information
by duly constituted authorities and may not be withheld where Investors Bank may
be exposed to civil or criminal contempt proceedings for failure to comply, and
Investors Bank shall disclose all such records and information to the investment
adviser to the Fund when so requested by the adviser or the Fund.
8. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS
The Fund assumes full responsibility for complying with all applicable
requirements of the Securities Act of 1933, the 1940 Act and the Securities
Exchange Act of 1934, all as amended, and any laws, rules and regulations of
governmental authorities having jurisdiction, except to the extent that
Investors Bank specifically assumes any such obligations under the terms of this
Agreement.
Investors Bank shall maintain and preserve for the period prescribed,
such records relating to the services to be performed by Investors Bank under
this Agreement as are required pursuant to the 1940 Act and the Securities
Exchange Act of 1934, all as amended, and the rules and regulations thereunder.
All such records shall at all times remain the respective properties of the
Fund, shall be readily accessible during normal business hours and shall be
promptly surrendered upon the termination of this Agreement or otherwise on
written request. Records shall be surrendered in usable machine readable form.
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9. STATUS OF INVESTORS BANK
Investors Bank shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided herein or authorized by the Fund from time
to time, have no authority to act or represent the Fund in any way or otherwise
be deemed an agent of the Fund.
Nothing herein shall be deemed to limit or restrict Investors Bank's
right or that of any of its affiliates or employees, to engage in any other
business or to devote time and attention to the administration or other related
aspects of any other registered investment company or to render services of any
kind to any other corporation, firm, individual or association.
10. PRINTED MATTER CONCERNING THE FUND OR INVESTORS BANK
Neither the Fund nor Investors Bank shall publish and circulate any
printed matter which contains any reference to the other party without its prior
written approval, excepting such printed matter as refers in accurate terms to
Investors Bank's appointment under this Agreement and/or any other agreement
between the Fund and Investors Bank, and excepting as may be required by
applicable laws or regulations.
11. TERM, AMENDMENT AND TERMINATION
This Agreement may be modified or amended, from time to time, by mutual
agreement between the parties hereto. This Agreement shall remain in effect from
the date hereof, and shall expire on November 3, 2002. After the expiration
date, this Agreement shall automatically be renewed annually thereafter, and may
be terminated thereafter, by either party on 120 days' prior written notice.
Upon termination of the Agreement, the Fund shall pay to Investors Bank such
compensation as may be due under the terms hereof on the date of such
termination.
12. DEFAULT
Should either party materially breach, materially neglect or materially
fail, in whole or in part, to perform its duties and/or observe its obligations
hereunder (a "Default"), that party shall be in Default hereunder (the
"Defaulting Party"). The other party hereto may give written notice to the
Defaulting Party, and if such Default fails to be remedied within sixty (60)
days after receipt of such written notice, then the party giving such notice may
terminate this Agreement by thirty (30) days' written notice of such termination
to the Defaulting Party. Such termination shall not affect any rights or
obligations of either party arising from, or relating to, such Default under the
terms hereof.
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The provisions of this Section 12 shall not limit either party's
termination rights under Section 11 of this Agreement. The provisions of Section
11 and this Section 12 shall govern the method of termination of this Agreement,
but shall not limit any other rights or remedies of either party in the event of
any breach of this Agreement by the other party.
13. NOTICES
Any notice or other communication authorized or required hereunder shall
be in writing or by confirming telegram, cable, telex or facsimile sending
device. Notice shall be addressed to the Fund at 000 Xxxx Xxxxxxxxx, Xxxxxxxxx
Xxxx, Xxx Xxxxxx 00000 Attention: Xxxxx Xxxxxx; and to Investors Bank & Trust
Company, 000 Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxx Xxxx, Senior
Director, Client Management, with a copy to Investors Capital Services, Inc.,
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
Xxxxxxxxx. Either party may designate a different address by notice to the other
party. Any such notice or other communication shall be deemed given when
actually received.
14. NON-ASSIGNABILITY
This Agreement shall not be assigned by either of the parties hereto
without the prior consent in writing of the other party. Any purported
assignment in violation of this Agreement shall be void and of no effect.
15. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of the
Fund and Investors Bank, and their respective successors and permitted assigns.
16. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
SAMCO FUNDS, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Assistant Secretary
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
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