ADMINSTRATION AGREEMENT
AGREEMENT made this day of May, 1999 between Pilgrim Mutual Funds (the
"Trust"), a Delaware business trust, and Pilgrim Investments, Inc. (the
"Administrator"), a Delaware corporation.
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to issue shares of beneficial interest
in separate series with each such series representing interests in a separate
portfolio of securities and other assets;
WHEREAS, the Trust may offer shares of additional series in the future,
and currently intends to offer shares of additional series in the future;
WHEREAS, the Trust desires to avail itself of the services of the
Administrator for the provision of administrative services for the Trust; and
WHEREAS, the Administrator is willing to render such services to the
Trust;
NOW, THEREFORE, in consideration of the premises, the promises and
mutual covenants herein contained, it is agreed between the parties as follows:
1. APPOINTMENT. The Trust hereby appoints the Administrator, subject to
the direction of the Board of Trustees, for the period and on the terms set
forth in this Agreement, to provide administrative services, as described
herein, with respect to each series of the Trust (individually and collectively
referred to herein as "Series"). The Administrator accepts such appointment and
agrees to render the services herein set forth herein.
In the event the Trust establishes and designates additional series
with respect to which it desires to retain the Administrator to render
administrative services hereunder, it shall notify the Administrator in writing.
If the Administrator is willing to render such services, it shall notify the
Trust in writing, whereupon such additional series shall become a Series
hereunder.
2. SERVICES OF THE ADMINISTRATOR. Subject to the general supervision of
the Board of Trustees of the Trust, the Administrator shall provide the
following administrative services with respect to the Series:
(a) Provide all administrative services reasonably necessary for the
operation of the Trust and the Series other than the investment advisory
services performed by the adviser or sub-adviser to the Series, including, but
not limited to, (i) coordinating all matters relating to the operation of the
Series, including any necessary coordination among the Investment Manager,
custodian, transfer agent, dividend disbursing agent, and portfolio accounting
agent (including pricing and valuation of the Series' portfolios), accountants,
attorneys, and other parties performing services or operational functions for
the Trust; (ii) maintaining or supervising the maintenance by third parties
selected by the Trust of such books and records of the Trust and the Series as
may be required by applicable federal or state law; (iii) preparing or
supervising the preparation by third parties selected by the Trust of all
federal, state, and local tax returns and reports relating to the Series
required by applicable law; (iv) preparing and filing, with the assistance of
counsel, and arranging for the distribution of proxy materials and periodic
reports to shareholders of the Series as required by applicable law; (v)
preparing and arranging for the filing, with the assistance of counsel, of
registration statements and other documents with the Securities and Exchange
Commission (the "SEC") and other federal and state regulatory authorities as may
be required by applicable law; (vi) taking such other action with respect to the
Trust as may be required by applicable law in connection with the Series,
including without limitation the rules and regulations of the SEC and other
regulatory agencies; (vii) providing the Trust, at the Administrator's expense,
with adequate personnel, office space, communications facilities, and other
facilities necessary for operation of the Series as contemplated in this
Agreement; and (viii) arranging for meetings of the Trust's Board of Trustees
and, in connection therewith, providing the Board with necessary or appropriate
information for its meetings. Nothing in this provision shall be deemed to
inhibit the Trust or its officers from engaging, at the expense of the Trust,
other persons to assist in providing administrative services to the Trust and
the Series including, but not limited to, accounting agents, recordkeeping
agents, proxy solicitation agents, attorneys, accountants, consultants and
others.
(b) Render to the Board of Trustees of the Trust such periodic and
special reports as the Board may reasonably request; and
(c) Make available its officers and employees to the Board of Trustees
and officers of the Trust for consultation and discussions regarding the
administration of the Trust and its Series and the services provided to the
Trust under this Agreement.
3. CONFORMITY WITH APPLICABLE LAW. The Administrator, in the
performance of its duties and obligations under this Agreement, shall act in
conformity with the Registration Statement of the Trust and with the
instructions and directions of the Board of Trustees of the Trust and will
conform to, and comply with, the requirements of the 1940 Act and all other
applicable federal and state laws and regulations.
4. EXCLUSIVITY. The services of the Administrator to the Trust under
this Agreement are not to be deemed exclusive, and the Administrator, or any
affiliate thereof, shall be free to render similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of any of the Series) and to engage in other
activities, so long as its services hereunder are not impaired thereby.
5. EXPENSES. During the term of this Agreement, the Administrator will
pay all expenses incurred by it in connection with its activities under this
Agreement, except such expenses as are assumed by the Trust under this Agreement
-2-
and such expenses as are assumed by a Series' investment adviser pursuant to an
Investment Management Agreement or by a Series' sub-adviser pursuant to a
Portfolio Management Agreement. The Trust shall be responsible for all of the
other expenses of its operations, including, without limitation, the
administration fee payable hereunder; advisory fees; brokerage commissions;
interest; legal fees and expenses of attorneys; fees of auditors, transfer
agents and dividend disbursing agents, custodians and shareholder servicing
agents; fees of accountants and accounting services; the expense of obtaining
quotations for calculating each Trust's net asset value; taxes, if any, and the
preparation of the Trust's tax returns; cost of stock certificates and any other
expenses (including clerical expenses) of issue, sale, repurchase or redemption
of shares; expenses of registering and qualifying shares of the Trust under
federal and state laws and regulations (including the salary of employees of the
Administrator engaged in the registering and qualifying of shares of the Trust
under federal and state laws and regulations or a pro-rata portion of the salary
of employees to the extent so engaged); salaries of personnel involved in
placing orders for the execution of the Trust's portfolio transactions; expenses
of printing and distributing reports, notices and proxy materials to existing
shareholders; expenses of printing and filing reports and other documents filed
with governmental agencies; expenses in connection with shareholder and trustee
meetings; expenses of printing and distributing prospectuses and statements of
additional information to existing shareholders; fees and expenses of Trustees
of the Trust; trade association dues; insurance premiums; extraordinary expenses
such as litigation expenses. To the extent the Administrator incurs any costs or
performs any services which are an obligation of the Trust, as set forth herein,
the Trust shall promptly reimburse the Administrator for such costs and
expenses. To the extent the services for which the Trust is obligated to pay are
performed by the Administrator, the Administrator shall be entitled to recover
from the Trust only to the extent of its costs for such services.
6. COMPENSATION. For the services provided by the Administrator to each
Series pursuant to this Agreement, each Series will pay to the Administrator the
annual fee for such Series set forth in Schedule A hereto.
7. LIABILITY OF THE ADMINISTRATOR. The Administrator may rely on
information reasonably believed by it to be accurate and reliable. Except as may
otherwise be required by the 1940 Act or the rules thereunder, neither the
Administrator nor its stockholders, officers, directors, employees, or agents
shall be subject to any liability for, or any damages, expenses, or losses
incurred in connection with, any act or omission connected with or arising out
of any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance of the
Administrator's duties, or by reason of reckless disregard of the
Administrator's obligations and duties under this Agreement. The liability
incurred by the Administrator pursuant to this paragraph 8 in any year shall be
limited to the revenues of the Administrator derived from the Trust in that
fiscal year of the Trust. The Administrator shall look solely to Trust property
for satisfaction of claims of any nature against the Trust or a trustee,
officer, employee or agent of the Trust arising in connection with the affairs
of the Trust. Moreover, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a Series shall be
-3-
enforceable against the assets and property of that Series only, and not against
the assets or property of any other series of the Trust.
8. CONTINUATION AND TERMINATION. This Agreement shall become effective
on the date first written above, subject to the condition that the Trust's Board
of Trustees, including a majority of those Trustees who are not interested
persons (as such term is defined in the 0000 Xxx) of the Administrator, and the
shareholders of each Series, shall have approved this Agreement. Unless
terminated as provided herein, the Agreement shall continue in full force and
effect for two (2) years from the effective date of this Agreement, and shall
continue from year to year thereafter with respect to each Series so long as
such continuance is specifically approved at least annually by the vote of a
majority of the Board of Trustees of the Trust, including a majority of the
Board of Trustees of the Trust who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of the Trust or the
Administrator.
This Agreement may be terminated by the Trust at any time, without the payment
of any penalty, by vote of a majority of the Board of Trustees of the Trust or
by a vote of a majority of the outstanding voting shares of the Trust, or with
respect to a Series, by vote of a majority of the outstanding voting shares of
such Series, on sixty (60) days' written notice to the Administrator, or by the
Administrator at any time, without the payment of any penalty, on sixty (60)
days' written notice to the Trust.
9. LIMITATION OF LIABILITY OF TRUSTEES. Notice is hereby given that
this Agreement is executed by an officer of the Trust on behalf of the trustees
of the Trust, as trustees and not individually, and that the obligations of this
Agreement with respect to the Trust shall be binding upon the assets and the
properties of the Trust only and shall not be binding upon the assets or
properties of the trustees, officers, employees, agents or shareholders of the
Trust individually.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
11. APPLICABLE LAW.
(a) This Agreement shall be governed by the laws of the State of
Arizona, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any
rules or order of the SEC thereunder.
(b) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(c) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
-4-
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PILGRIM MUTUAL FUNDS
BY:
-------------------------------
TITLE:
----------------------------
PILGRIM INVESTMENTS, INC.
BY:
-------------------------------
TITLE:
----------------------------
-5-
SCHEDULE A
ADMINISTRATIVE FEE
Pilgrim Money Market Fund 0.25% of the average daily net assets of the Fund.
Each other Series $1.00
-6-
