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FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of January 1, 1998, by and
between Light Index Fund, Inc., a Maryland corporation (hereinafter referred to
as the "Company") and Firstar Trust Company, a corporation organized under the
laws of the State of Wisconsin (hereinafter referred to as "FTC").
WHEREAS, the Company is an open-end management investment company which
is registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FTC is a trust company and, among other things, is in the
business of providing fund administration services for the benefit of its
customers; and
WHEREAS, the Company desires to retain FTC to act as Administrator for
the Light Index Fund (the "Fund") and for each additional series of the Company
listed on Exhibit A attached hereto, as may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and FTC agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Company hereby appoints FTC as Administrator of the Company on the
terms and conditions set forth in this Agreement, and FTC hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FTC
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Coordinate board communication by:
a. Assisting Company counsel in establishing meeting agendas
b. Preparing board reports based on financial and administrative
data
c. Evaluating independent auditor
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d. Securing and monitoring fidelity bond and director and officer
liability coverage, and making the necessary SEC filings
relating thereto
e. Preparing minutes of meetings of the board and shareholders
3. Audits
a. Prepare appropriate schedules and assist independent auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
4. Assist in overall operations of the Fund
5. Pay Fund expenses upon written authorization from the Company
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements, including:
1) Asset diversification tests
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-3
4) Code of Ethics for the disinterested directors of
the Fund
b. Monitor Fund's compliance with the policies and investment
limitations of the Company as set forth in its Prospectus and
Statement of Additional Information
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings relating
to the registration of the securities of the Company so as to
enable the Company to make a continuous offering of its shares
in all states
b. Monitor status and maintain registrations in each state
3. SEC Registration and Reporting
a. Assist Company counsel in updating Prospectus and Statement of
Additional Information and in preparing proxy statements and
Rule 24f-2 notices
b. Prepare annual and semiannual reports
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c. Coordinate the printing of publicly disseminated Prospectuses
and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
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4. IRS Compliance
a. Monitor Company's status as a regulated investment company
under Subchapter M through review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by Fund's Prospectus and Statement
of Additional Information
2. Prepare financial reports for shareholders, the board, the SEC,
and independent auditors
3. Supervise the Company's Custodian and the Company's Accountants in
the maintenance of the Company's general ledger and in the
preparation of the Fund's financial statements, including
oversight of expense accruals and payments, of the determination
of net asset value of the Company's net assets and of the
Company's shares, and of the declaration and payment of dividends
and other distributions to shareholders
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and state
tax returns including Forms 1120/8610 with any necessary schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to directors and other
service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
3. COMPENSATION
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The Company, on behalf of the Fund, agrees to pay FTC for the performance
of the duties listed in this Agreement, the fees and out-of-pocket expenses as
set forth in the attached Exhibit A.
These fees may be changed from time to time, subject to mutual written
Agreement between the Company and FTC.
The Company agrees to pay all fees and reimbursable expenses within ten
(10) business days following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FTC shall exercise reasonable care in the performance of its
duties under this Agreement. FTC shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Company in connection with
matters to which this Agreement relates, including losses resulting from
mechanical breakdowns or the failure of communication or power supplies beyond
FTC's control, except a loss resulting from FTC's refusal or failure to comply
with the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, the Company shall
indemnify and hold harmless FTC from and against any and all claims, demands,
losses, expenses, and liabilities (whether with or without basis in fact or law)
of any and every nature (including reasonable attorneys' fees) which FTC may
sustain or incur or which may be asserted against FTC by any person arising out
of any action taken or omitted to be taken by it in performing the services
hereunder (i) in accordance with the foregoing standards, or (ii) in reliance
upon any written or oral instruction provided to FTC by any duly authorized
officer of the Company, such duly authorized officer to be included in a list of
authorized officers furnished to FTC and as amended from time to time in writing
by resolution of the Board of Directors of the Company.
FTC shall indemnify and hold the Company harmless from and
against any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which the Company may sustain or incur or which may
be asserted against the Company by any person arising out of any action taken or
omitted to be taken by FTC as a result of FTC's refusal or failure to comply
with the terms of this Agreement, its bad faith, negligence, or willful
misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FTC shall take all
reasonable steps to minimize service interruptions for any period that such
interruption continues beyond FTC's control. FTC xxxx
XXXX 6
make every reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FTC. FTC agrees that it
shall, at all times, have reasonable contingency plans with appropriate parties,
making reasonable provision for emergency use of electrical data processing
equipment to the extent appropriate equipment is available. Representatives of
the Company shall be entitled to inspect FTC's premises and operating
capabilities at any time during regular business hours of FTC, upon reasonable
notice to FTC.
Regardless of the above, FTC reserves the right to reprocess
and correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the indemnitor may be
asked to indemnify or hold the indemnitee harmless, the indemnitor shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the indemnitee will use all
reasonable care to notify the indemnitor promptly concerning any situation which
presents or appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the indemnitee
against any claim which may be the subject of this indemnification. In the event
that the indemnitor so elects, it will so notify the indemnitee and thereupon
the indemnitor shall take over complete defense of the claim, and the indemnitee
shall in such situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall in no case
confess any claim or make any compromise in any case in which the indemnitor
will be asked to indemnify the indemnitee except with the indemnitor's prior
written consent.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FTC agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Company all
records and other information relative to the Company and prior, present, or
potential shareholders of the Company (and clients of said shareholders), and
not to use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Company, which approval shall not
be unreasonably withheld and may not be withheld where FTC 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 Company.
6. DATA NECESSARY TO PERFORM SERVICES
The Company or its agent, which may be FTC, shall furnish to FTC the data
necessary to perform the services described herein at times and in such form as
mutually agreed upon.
7. TERM OF AGREEMENT
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This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue automatically in effect for
successive annual periods. The Agreement may be terminated by either party upon
giving ninety (90) days prior written notice to the other party or such shorter
period as is mutually agreed upon by the parties. However, this Agreement may be
amended by mutual written consent of the parties.
8. NOTICES
Notices of any kind to be given by either party to the other party shall
be in writing and shall be duly given if mailed or delivered as follows: Notice
to FTC shall be sent to:
Firstar Trust Company
Attn.: Mutual Fund Services
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
Light Index Investment Company
Attn.: Xxxxx Xxxxxx
704 Court A
Xxxxxx, XX 00000
9. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
FTC's duties or responsibilities hereunder is designated by the Company by
written notice to FTC, FTC will promptly, upon such termination and at the
expense of the Company, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by FTC under this
Agreement in a form reasonably acceptable to the Company (if such form differs
from the form in which FTC has maintained, the Company shall pay any expenses
associated with transferring the data to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from FTC's personnel in the establishment of books, records, and other data by
such successor.
10. GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Wisconsin. However,
nothing herein shall be
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construed in a manner inconsistent with the 1940 Act or any rule or regulation
promulgated by the Securities and Exchange Commission thereunder.
11. RECORDS
FTC shall keep records relating to the services to be performed hereunder,
in the form and manner, and for such period as it may deem advisable and is
agreeable to the Company but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act
and the rules thereunder. FTC agrees that all such records prepared or
maintained by FTC relating to the services to be performed by FTC hereunder are
the property of the Company and will be preserved, maintained, and made
available in accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Company on and in accordance with its request.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
LIGHT INDEX FUND, INC. FIRSTAR TRUST COMPANY
By:______________________________ By: ________________________________
Attest: __________________________ Attest:______________________________
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FUND ADMINISTRATION AND COMPLIANCE
ANNUAL FEE SCHEDULE - DOMESTIC FUNDS
EXHIBIT A
Separate Series of Light Index Fund, Inc.
NAME OF SERIES ADDED AS OF
Light Index Fund January 1, 1998
Annual fee based upon average net assets per fund or class
6 basis points on the first $200 million
5 basis points on the next $500 million
3 basis points on the balance Minimum annual fee:
$30,000 first fund
$20,000 /fund next three funds
$15,000 /fund additional funds
Plus out-of-pocket expense reimbursements, including but not limited to:
Postage
Programming
Stationery
Proxies
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of directors meetings
Auditing and legal expenses
Fees and out-of-pocket expense reimbursements are billed monthly.
