Exhibit 5
ADMINISTRATION AGREEMENT
Agreement dated as of _______, 1999 by and between American Data Services,
Inc., a New York company (the "Administrator"), and Orbitex Group of Funds (the
"Fund").
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Fund desires to retain the Administrator to furnish certain
administrative services to the Fund, and the Administrator is willing to furnish
such services, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Fund hereby appoints the Administrator to act as administrator with
respect to the Fund for purposes of providing certain administrative services
for the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees to render the services stated herein.
This Agreement will apply to Orbitex Focus 30 Fund (the "Investment Fund").
In the event that the Fund establishes one or more additional investment funds
with respect to which it wishes to retain the Administrator to act as
administrator hereunder, the Fund shall notify the Administrator in writing.
Upon written acceptance by the Administrator, such investment fund shall become
subject to the provisions of this Agreement to the same extent as the Investment
Fund, except to the extent that such provisions (including those relating to the
compensation and expenses payable by the Fund and the Investment Fund) may be
modified with respect to each additional investment fund in writing by the Fund
and the Administrator at the time of the addition of the investment fund.
2. DELIVERY OF DOCUMENTS
To the extent not prepared by the Administrator for the Fund, the Fund will
promptly deliver to the Administrator copies of each of the following documents
and all future amendments and supplements, if any:
a. The Fund's charter document and by-laws;
b. The Fund's currently effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and the 1940 Act
and the Fund's Prospectus and Statement of Additional Information
relating to the Investment Fund and all amendments and supplements
thereto as in effect from time to time;
c. Certified copies of the resolutions of the Board of Trustees of the
Fund (the "Board") authorizing (1) the Fund to enter into this
Agreement and (2) certain individuals on behalf of the Fund to (a)
give instructions to the Administrator pursuant to this Agreement and
(b) sign checks and pay expenses;
d. A copy of the investment advisory agreement between the Fund and its
investment adviser; and
e. Such other certificates, documents or opinions which the Administrator
may, in its reasonable discretion, deem necessary or appropriate in
the proper performance of its duties;
3. REPRESENTATIONS AND WARRANTIES OF THE ADMINISTRATOR
The Administrator represents and warrants to the Fund that:
a. It is a Massachusetts trust company, duly organized, existing and in
good standing under the laws of The Commonwealth of Massachusetts;
b. It has the corporate power and authority to carry on its business in
The Commonwealth of Massachusetts;
c. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Administrator's ability to perform
its duties and obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a material breach or
be in material conflict with any other agreement or obligation of the
Administrator or any law or regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Administrator that:
a. It is a business trust, duly organized and existing and in good
standing under the laws of Delaware;
b. It has the corporate power and authority under applicable laws and by
its charter and by-laws to enter into and perform this Agreement;
c. All requisite proceedings have been taken to authorize it to enter
into and perform this Agreement;
d. It is an investment company properly registered under the 1940 Act;
e. Subject to Administrator performing under Section 5 (x), a
registration statement under the 1933 Act and the 1940 Act has been
filed and will be effective and remain effective during the term of
this Agreement. The Fund also warrants to the Administrator that as of
the effective date of this Agreement, all necessary filings under the
securities laws of the states in which the Fund offers or sells its
shares have been made;
f. No legal or administrative proceedings have been instituted or
threatened which would impair the Fund's ability to perform its duties
and obligations under this Agreement;
g. Its entrance into this Agreement shall not cause a material breach or
be in material conflict with any other agreement or obligation of the
Fund or any law or regulation applicable to it; and
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h. As of the close of business on the date of this Agreement, the Fund is
authorized to issue an unlimited amount of shares of beneficial
interest.
5. ADMINISTRATION SERVICES
The Administrator shall provide the following services, in each case,
subject to the control, supervision and direction of the Fund and the review and
comment by the Fund's auditors and legal counsel and in accordance with
procedures which may be established from time to time between the Fund and the
Administrator:
a. Oversee the determination and publication of the Fund's net asset
value in accordance with the Fund's policy as adopted from time to
time by the Board;
b. Oversee the maintenance by the Fund's custodian of certain books and
records of the Fund as required under Rule 31a-1(b) of the 1940 Act;
c. Prepare the Fund's federal, state and local income tax returns for
review by the Fund's independent accountants and filing by the Fund's
treasurer;
d. Review calculation, submit for approval by officers of the Fund and
arrange for payment of the Fund's expenses;
e. Prepare for review and approval by officers of the Fund financial
information for the Fund's semi-annual and annual reports, proxy
statements and other communications required or otherwise to be sent
to Fund shareholders, and arrange for the printing and dissemination
of such reports and communications to shareholders;
f. Prepare for review by an officer of and legal counsel for the Fund the
Fund's periodic financial reports required to be filed with the
Securities and Exchange Commission ("SEC") on Form N-SAR and financial
information required by Form [N-1A/N-2] and such other reports, forms
or filings as may be mutually agreed upon;
g. Prepare reports relating to the business and affairs of the Fund as
may be mutually agreed upon and not otherwise prepared by the Fund's
investment adviser, custodian, legal counsel or independent
accountants;
h. Make such reports and recommendations to the Board concerning the
performance of the independent accountants as the Board may reasonably
request;
i. Make such reports and recommendations to the Board concerning the
performance and fees of the Fund's custodian and transfer and dividend
disbursing agent ("Transfer Agent") as the Board may reasonably
request or deems appropriate;
j. Oversee and review calculations of fees paid to the Fund's investment
adviser, custodian and Transfer Agent;
k. Consult with the Fund's officers, independent accountants, legal
counsel, custodian and Transfer Agent in establishing the accounting
policies of the Fund;
l. Review implementation of any dividend reinvestment programs authorized
by the Board;
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m. Respond to, or refer to the Fund's officers or Transfer Agent,
shareholder inquiries relating to the Fund;
n. Provide periodic testing of portfolios to assist the Fund's investment
adviser in complying with Internal Revenue Code mandatory
qualification requirements, the requirements of the 1940 Act and Fund
prospectus limitations as may be mutually agreed upon;
o. Review and provide assistance on shareholder communications;
p. Maintain general corporate calendar;
q. Maintain copies of the Fund's charter and by-laws;
r. File annual and semi-annual shareholder reports with the appropriate
regulatory agencies; review text of "President's letters" to
shareholders and "Management's Discussion of Fund Performance" (which
shall also be subject to review by the Fund's legal counsel);
s. Organize, attend and prepare minutes of shareholder meetings;
t. Provide consultation on regulatory matters relating to portfolio
management, Fund operations and any potential changes in the Fund's
investment policies, operations or structure; act as liaison to legal
counsel to the Fund and, where applicable, to legal counsel to the
Fund's independent Board members;
u. Maintain continuing awareness of significant emerging regulatory and
legislative developments which may affect the Fund, update the Board
and the investment adviser on those developments and provide related
planning assistance where requested or appropriate;
v. Develop or assist in developing guidelines and procedures to improve
overall compliance by the Fund and its various agents;
w. Counsel and assist the Fund in the handling of routine regulatory
examinations and work closely with the Fund's legal counsel in
response to any non-routine regulatory matters;
Subject to review and comment by the Fund's legal counsel:
x. Prepare and file with the SEC and Fund's registration statement and
amendments thereto, including updating the Prospectus and Statement of
Additional Information, where applicable;
y. Prepare and file with the SEC proxy statements; provide consultation
on proxy solicitation matters;
z. Prepare agenda and background materials for Board meetings, make
presentations where appropriate, prepare minutes and follow-up on
matters raised at Board meetings;
aa. Prepare and file with the SEC Rule 24f-2 notices; and
bb. Prepare and file necessary documentation to allow the Fund to offer
and sell its shares in various states pursuant to the specific
instructions of the Fund and as detailed in Schedule B to this
Agreement.
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The Administrator shall provide the office facilities and the personnel
required by it to perform the services contemplated herein.
6. FEES; EXPENSES; EXPENSE REIMBURSEMENT
The Administrator shall receive from the Fund such compensation for the
Administrator's services provided pursuant to this Agreement as may be agreed to
from time to time in a written fee schedule approved by the parties and
initially set forth in Schedule A to this Agreement. The fees are accrued daily
and billed monthly and shall be due and payable upon receipt of the invoice.
Upon the termination of this Agreement before the end of any month, the fee for
the part of the month before such termination shall be prorated according to the
proportion which such part bears to the full monthly period and shall be payable
upon the date of termination of this Agreement. In addition, the Fund shall
reimburse the Administrator for its reasonable out-of-pocket costs incurred in
connection with this Agreement.
The Fund agrees promptly to reimburse the Administrator for any equipment
and supplies specially ordered by or for the Fund through the Administrator and
for any other expenses not contemplated by this Agreement that the Administrator
may incur on the Fund's behalf at the Fund's request or with the Fund's consent.
The fund will bear all expenses that are incurred in its operation and not
specifically assumed by the Administrator. Expenses to be borne by the Fund,
include, but are not limited to: organizational expenses; cost of services of
independent accountants and outside legal and tax counsel (including such
counsel's review of the Fund's registration statement, proxy materials, federal
and state tax qualification as a regulated investment company and other reports
and materials prepared by the Administrator under this Agreement); cost of any
services contracted for by the Fund directly from parties other than the
Administrator; cost of trading operations and brokerage fees, commissions and
transfer taxes in connection with the purchase and sale of securities for the
Fund; investment advisory fees; taxes, insurance premiums and other fees and
expenses applicable to its operation; costs incidental to any meetings of
shareholders including, but not limited to, legal and accounting fees, proxy
filing fees and the costs of preparation, printing and mailing of any proxy
materials; costs incidental to Board meetings, including fees and expenses of
Board members; the salary and expenses of any officer, director\trustee or
employee of the Fund; costs incidental to the preparation, printing and
distribution of the Fund's registration statements and any amendments thereto
and shareholder reports; costs of typesetting and printing of prospectuses; cost
of preparation and filing of the Fund's tax returns, Form N-1A or N-2 and Form
N-SAR, and all notices, registrations and amendments associated with applicable
federal and state tax and securities laws; all applicable registration fees and
filing fees required under federal and state securities laws; fidelity bond and
directors' and officers' liability insurance; and cost of independent pricing
services used in computing the Fund's net asset value.
The Administrator is authorized to and may employ or associate with such
person or persons as the Administrator may deem desirable to assist it in
performing its duties under this Agreement; provided, however, that the
compensation of such person or persons shall be paid by the Administrator and
that the Administrator shall be as fully responsible to the Fund for the acts
and omissions of any such person or persons as it is for its own acts and
omissions.
7. INSTRUCTIONS AND ADVICE
At any time, the Administrator may apply to any officer of the Fund for
instructions and may consult with its own legal counsel or outside counsel for
the Fund or the independent accountants for the Fund at the expense of the Fund,
with respect to any matter arising in connection with the services to be
performed by the Administrator under this Agreement. The Administrator 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 any such
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instructions or advice or upon any paper or document believed by it to be
genuine and to have been signed by the proper person or persons. The
Administrator shall not be held to have notice of any change of authority of any
person until receipt of written notice thereof from the Fund. Nothing in this
paragraph shall be construed as imposing upon the Administrator any obligation
to seek such instructions or advice, or to act in accordance with such advice
when received.
8. LIMITATION OF LIABILITY AND INDEMNIFICATION
The Administrator shall be responsible for the performance of only such
duties as are set forth in this Agreement and, except as otherwise provided
under Section 6, shall have no responsibility for the actions or activities of
any other party, including other service providers. The Administrator shall have
no liability for any error of judgment or mistake of law or for any loss or
damage resulting from the performance or nonperformance of its duties hereunder
unless solely caused by or resulting from the gross negligence or willful
misconduct of the Administrator, its officers or employees. The Administrator
shall not be liable for any special, indirect, incidental, or consequential
damages of any kind whatsoever (including, without limitation, attorneys' fees)
under any provision of this Agreement or for any such damages arising out of any
act or failure to act hereunder. In any event, the Administrator's liability
under this Agreement shall be limited to its total annual compensation earned
and fees paid hereunder during the preceding twelve months for any liability or
loss suffered by the Fund including, but not limited to, any liability relating
to qualification of the Fund as a regulated investment company or any liability
relating to the Fund's compliance with any federal or state tax or securities
statute, regulation or ruling.
The Administrator shall not be responsible or liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its control, including
without limitation, work stoppage, power or other mechanical failure, computer
virus, natural disaster, governmental action or communication disruption, nor
shall any such failure or delay give the Fund the right to terminate this
Agreement.
The Fund shall indemnify and hold the Administrator harmless from all loss,
cost, damage and expense, including reasonable fees and expenses for counsel,
incurred by the Administrator resulting from any claim, demand, action or suit
in connection with the Administrator's acceptance of this Agreement, 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 duly
authorized by the Fund, provided that this indemnification shall not apply to
actions or omissions of the Administrator, its officers or employees in cases of
its or their own gross negligence or willful misconduct.
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. In the event the Fund
elects to assume the defense of any such suit and retain counsel, the
Administrator or any of its affiliated persons, named as defendant or defendants
in the suit, may retain additional counsel but shall bear the fees and expenses
of such counsel unless (i) the Fund shall have specifically authorized the
retaining of such counsel or (ii) the Administrator shall have determined in
good faith that the retention of such counsel is required as a result of a
conflict of interest.
The indemnification contained herein shall survive the termination of this
Agreement.
9. CONFIDENTIALITY
The Administrator agrees that, except as otherwise required by law or in
connection with any required disclosure to a banking or other regulatory
authority, it will keep confidential all records and information in its
possession relating to the Fund or its shareholders or shareholders accounts and
will not disclose the same to any person except at the request or with the
written consent of the Fund.
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10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
Without derogating from obligations of the Administrator hereunder, the
Fund assumes full responsibility for complying with all securities, tax,
commodities and other laws, rules and regulations applicable to it.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Administrator agrees that all records which it maintains for the Fund shall at
all times remain the property of the Fund, shall be readily accessible during
normal business hours, and shall be promptly surrendered upon the termination of
the Agreement or otherwise on written request. The Administrator further agrees
that all records which it maintains for the Fund pursuant to Rule 31a-1 under
the 1940 Act will be preserved for the periods prescribed by Rule 31a-2 under
the 1940 Act unless any such records are earlier surrendered as provided above.
Records shall be surrendered in usable machine-readable form.
11. SERVICES NOT EXCLUSIVE
The services of the Administrator to the Fund are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others. The Administrator shall be deemed to be an independent contractor and
shall, unless otherwise expressly provided herein or authorized by the Fund form
time to time, have no authority to act or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
12. TERM, TERMINATION AND AMENDMENT
This Agreement shall be effective as of the date first written above and
shall remain in effect until terminated in writing by either party on sixty (60)
days' prior written notice given by either party to the other party; provided,
however, that without limitation of any other remedy available at law or in
equity, upon termination of this Agreement by the Fund prior to three years from
the effective date of this Agreement, the Fund shall pay to the Administrator an
amount equal to fees waived by the Administrator under this Agreement.
Termination of this Agreement with respect to the Investment Fund shall in no
way affect the continued validity of this Agreement with respect to any other
investment fund established pursuant to Section 1. Upon termination of this
Agreement, the Fund shall pay to the Administrator such compensation and any
reimbursable expenses as may be due under the terms hereof as of the date of
such termination, including reasonable out-of-pocket expenses associated with
such termination. This Agreement may be modified or amended from time to time by
mutual written agreement of the parties hereto.
13. NOTICES
Any notice or other communication authorized or required by this Agreement
to be given to either party shall be in writing and deemed to have been given
when delivered in person or by confirmed facsimile, or posted by certified mail,
return receipt requested, to the following address (or such other address as a
party may specify by written notice to the other): if to the Fund:
___________________, Attn: ________________ fax: __________________ if to the
Administrator: American Data Services, Inc., The Hauppauge Corporate Center, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ______________, fax: _________.
14. NON-ASSIGNABILITY
This Agreement shall not be assigned by either party hereto without the
prior consent in writing of the other party, except that the Administrator may
assign this agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by or under common control with
the Administrator.
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15. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of the
Fund and the Administrator and their respective successors and permitted
assigns.
16. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parities
hereto with respect to the subject matter hereof and supersedes all previous
representations, warranties or commitments regarding the services to be
performed hereunder whether oral or in writing.
17. WAIVER
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver nor shall it deprive
such party of the right thereafter to insist upon strict adherence to that term
or any term of this Agreement. Any waiver must be in writing signed by the
waiving party.
18. SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, the balance
of the Agreement shall remain in effect, and if any provision is inapplicable to
any person or circumstance it shall nevertheless remain applicable to all other
persons and circumstances.
19. GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
20. REPRODUCTION OF DOCUMENTS
This Contract and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process. The parties hereto all/each
agree that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
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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 date first written above.
ORBITEX GROUP OF FUNDS
By:
-------------------------------------
Name:
Title:
AMERICAN DATA SERVICES, INC.
By: /s/
-------------------------------------
Name:
Title:
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SCHEDULE A
FEES AND EXPENSES
B-1
SCHEDULE B
NOTICE FILING WITH
STATE SECURITIES ADMINISTRATORS
AT THE SPECIFIC DIRECTION OF THE FUND, THE ADMINISTRATOR WILL PREPARE REQUIRED
DOCUMENTATION AND MAKE NOTICE FILINGS IN ACCORDANCE WITH THE SECURITIES LAWS OF
EACH JURISDICTION IN WHICH FUND SHARES ARE TO BE OFFERED OR SOLD PURSUANT TO
INSTRUCTIONS GIVEN TO THE ADMINISTRATOR BY THE FUND.
THE FUND SHALL BE SOLELY RESPONSIBLE FOR THE DETERMINATION (i) OF THOSE
JURISDICTIONS IN WHICH NOTICE FILINGS ARE TO BE SUBMITTED AND (ii) THE NUMBER OF
FUND SHARES TO BE PERMITTED TO BE SOLD IN EACH SUCH JURISDICTION. IN THE EVENT
THAT THE ADMINISTRATOR BECOMES AWARE OF (a) THE SALE OF FUND SHARES IN A
JURISDICTION IN WHICH NO NOTICE FILING HAS BEEN MADE OR (b) THE SALE OF FUND
SHARES IN EXCESS OF THE NUMBER OF FUND SHARES PERMITTED TO BE SOLD IN SUCH
JURISDICTION, THE ADMINISTRATOR SHALL REPORT SUCH INFORMATION TO THE FUND, AND
IT SHALL BE THE FUND'S RESPONSIBILITY TO DETERMINE APPROPRIATE CORRECTIVE ACTION
AND INSTRUCT THE ADMINISTRATOR WITH RESPECT THERETO.
The Blue Sky services shall consist of the following:
1. Filing of Fund's Initial Notice Filings, as directed by the Fund;
2. Filing of Fund's renewals and amendments as required;
3. Filing of amendments to the Fund's registration statement where
required;
4. Filing Fund sales reports where required;
5. Payment at the expense of the Fund of all Fund Notice Filing fees;
6. Filing the Prospectuses and Statements of Additional Information and
any amendments or supplements thereto where required;
7. Filing of annual reports and proxy statements where required; and
8. The performance of such additional services as the Administrator and
the Fund may agree in writing.
Unless otherwise specified in writing by the Administrator, Blue Sky services by
the Administrator shall not include determining the availability of exemptions
under a jurisdiction's blue sky law. Any such determination shall be made by the
Fund or its legal counsel. In connection with the services described herein, the
Fund shall issue in favor of the Administrator a power of attorney to submit
Notice Filings on behalf of the Fund, which power of attorney shall be
substantially in the form of Exhibit I attached hereto.
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EXHIBIT I
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of ________, 1999 that the undersigned
Orbitex Group of Funds with principal offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ (the "Fund") makes, constitutes, and appoints AMERICAN DATA SERVICES, INC.
(the "Administrator") with principal offices at The Hauppauge Corporate Center,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, its lawful attorney-in-fact for it
to do as if it were itself acting, the following:
1. REGISTRATION OF FUND SHARES. The power to register shares of the Fund in
each jurisdiction in which Fund shares are offered or sold and in
connection therewith the power to prepare, execute, and deliver and file
any and all Fund applications, including without limitation, applications
to register shares, consents, including consents to service of process,
reports, including without limitation, all periodic reports, claims for
exemption, or other documents and instruments now or hereafter required or
appropriate in the judgment of the Administrator in connection with the
registration of Fund shares.
2. AUTHORIZED SIGNERS. Pursuant to this Limited Power of Attorney, individuals
holding the titles of Officer, Blue Sky Manager, or Senior Blue Sky
Administrator at the Administrator shall have authority to act on behalf of
the Fund with respect to item 1 above.
The execution of this limited power of attorney shall be deemed coupled with an
interest and shall be revocable only upon receipt by the Administrator of such
termination of authority. Nothing herein shall be construed to constitute the
appointment of the Administrator as or otherwise authorize the Administrator to
act as an officer, director or employee of the Fund.
IN WITNESS WHEREOF, the Fund has caused this Agreement to be executed in its
name and on its behalf by and through its duly authorized officer, as of the
date first written above.
ORBITEX GROUP OF FUNDS
By:
----------------------------------
Name:
Title:
I-1