Exhibit 99.h(xiii)
SUB-ADMINISTRATION
AND ACCOUNTING SERVICES AGREEMENT
THIS
SUB-ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT is made as of
_________________, 2006 by and among RS Investment Management Co. LLC, a
Delaware limited liability company (“RS”), and Guardian Investor Services LLC,
a Delaware limited liability company (“GIS” and together with RS, the “Parties”
and each, a “Party”), and, solely with respect to Section 12 hereof, RS
Investment Trust (the “RS Trust”), a Massachusetts business trust and RS
Variable Products Trust (the “VC Trust” and together with the RS Trust, the
“Trusts”), a Massachusetts business trust.
W I T N E S S E T H:
WHEREAS,
pursuant to the Investment Advisory Agreement dated __________, 2006 (the
“Investment Advisory Agreement”) between RS and RS Trust, on behalf of each of
its series (each, a “Retail Portfolio”), RS has agreed to provide investment
management and administrative and accounting related services to each Retail
Portfolio; and
WHEREAS,
it is anticipated that RS will also provide investment management,
administrative and accounting services to each series (each, an “Variable
Contract Portfolio”) of the VC Trust; and
WHEREAS,
RS desires to retain GIS to serve, and GIS desires to serve, as the
sub-administrator for certain Retail Portfolios and Variable Contract
Portfolios (each, a “Portfolio” and together, the “Portfolios”) specified
herein to which GIS does not serve as sub-adviser and to provide administrative
and accounting services to such Portfolios, subject to the terms and conditions
hereof;
NOW
THEREFORE, in consideration of the mutual covenants, agreements and promises
contained in this Agreement, the Parties agree as follows:
1
Section
1. Definitions.
(a)
“1940 Act” means the Investment Company Act of 1940, as amended from
time to time, and the rules and regulations promulgated under that Act by the
SEC.
(b)
“Authorized Person” means any officer of RS and any other person duly
authorized by the RS Trust’s or VC Trust’s Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Covered Portfolios.
(c)
“Covered Portfolio” has the meaning set out in Section 2(a).
(d)
“Custodian” is the custodian of the Covered Portfolios.
(e)
“GIS” has the meaning set out in the preamble.
(f)
“Oral Instructions” mean oral instructions received by GIS from an
Authorized Person or from a person reasonably believed by GIS to be an
Authorized Person.
(g)
“Party” has the meaning set out in the preamble.
(h)
“Portfolio” has the meaning set out in the recitals.
(i)
“Retail Portfolio” has the meaning set out in the recitals.
(j)
“RS” has the meaning set out in the preamble.
(k)
“RS Trust” has the meaning set out in the preamble.
(l)
“SEC” means the Securities and Exchange Commission.
(m)
“Shares” means the shares of beneficial interest of any class of a
Covered Portfolio.
2
(n)
“Trust” means RS Trust and/or the VC Trust, as the context requires.
(o)
“VC Trust” has the meaning set out in the preamble.
(p)
“Variable Contract Portfolio” has the meaning set out in the
recitals.
(q)
“Written Instructions” mean written instructions signed by an Authorized
Person and received by GIS. The
instructions may be delivered by hand, mail, tested telegram, cable, telex or
facsimile sending device.
Section
2. Appointment.
(a)
RS hereby retains GIS to provide the sub-administration and accounting
services described in this Agreement to each of the Portfolios listed on Annex
A, as such Annex is amended from time to time by mutual agreement of the
Parties (each, a “Covered Portfolio”).
GIS accepts such appointment and agrees to furnish such services.
(b)
GIS’s provision of services hereunder is subject to the oversight of RS,
and to the general oversight of the Board of Trustees of the respective
Trust.
Section
3. Description of
Administrative Services.
Subject
to Section 10 below, the Parties acknowledge that the Custodian has primary
responsibility for maintaining certain books and records of the Covered
Portfolios. GIS will perform the
following administrative services with respect to each Covered Portfolio based,
where applicable, on information and data supplied to GIS by the Custodian:
(a) preparing
quarterly broker security transactions summaries;
(b) preparing
monthly security transaction listings;
3
(c) supplying
various normal and customary Portfolio and Trust statistical data as reasonably
requested on an ongoing basis;
(d) assisting
in the preparation, execution and filing of each Covered Portfolio’s Federal
and state tax returns;
(e) reviewing
and serving as liaison with any transfer agent, custodian, independent
registered public accounting firm and other vendors that provide services to
the Covered Portfolios;
(f) providing
support to monitor a Covered Portfolio for compliance (daily, bi-weekly or
monthly, as appropriate) with the 1940 Act, the applicable prospectus and
statement of additional information for a Covered Portfolio, and declaration of
trust on industry concentration and diversification (if applicable to a Covered
Portfolio) and security holdings of other registered investment companies under
the 1940 Act;
(g)
monitoring each Covered Portfolio’s status as a regulated investment company
under Sub-Chapter M of the Internal Revenue Code of 1986, as amended;
(h) monitoring
the Covered Portfolios’ compliance with the amounts and conditions of each
state qualification;
(i) preparing
and coordinating with counsel of the Trust and filing with the SEC
Post-Effective Amendments to the Trust’s Registration Statement, preparing
reports to the Trust’s shareholders of records and the SEC including the
preparation and filing of quarterly reports on Form N-Q, semi-annual reports on
Form N-CSR and Form N-SAR and notices pursuant to Rule 24f-2 and assisting in
preparation of notices of Annual or Special Meetings of Shareholders and proxy
materials relating to such meetings;
(j) providing
services for proxy solicitation, including selection and giving support to
tabulator and solicitor; coordinating printing and distribution of proxy materials;
monitoring votes and determining any additional follow-up solicitation;
4
(k)
providing individuals reasonably acceptable to the Trust’s Board of Trustees to
serve as “non-policy making” officers of the Trust, who will be responsible for
the administration of certain of the Trust’s affairs as determined by the
Trust’s Board of Trustees;
(l) assisting
in obtaining and maintaining fidelity bonds and directors and officers/errors
and omissions insurance policies for the Trust in accordance with the
requirements of Rules 17g-1 and 17d-1(d)(7) under the 1940 Act as such bonds
and policies are approved by the Trust’s Board of Trustees; and
(m) performing
such other administrative duties as the Parties may agree upon from time to
time.
In
connection with its provision of the foregoing services, GIS will comply in all
material respects, insofar as applicable to GIS and the services hereunder,
with the policies and procedures of the Covered Portfolios maintained pursuant
to Rule 38a-1 under the 1940 Act or otherwise; provided, that GIS shall
not be required to comply with any amended or new policies and procedures until
GIS shall have received written notice thereof.
Notwithstanding
any provision of this Agreement, RS may at any time determine not to require
the provision of any of the foregoing services; provided that the fee payable
by RS hereunder shall not as a result be reduced.
Section
4. Accounting Services.
The
Parties acknowledge that the Custodian (or, in the future, another third party
accounting services provider, for purposes of this Section 4, the “Custodian”)
has primary responsibility for fund accounting for the Covered Portfolios. GIS will review and provide oversight for the
performance of the following accounting services, to the extent provided by the
Custodian, with respect to each Covered Portfolio:
(a) journalization
of investment, capital share and income
and expense activities;
5
(b) verification
of investment buy/sell trade tickets when received from RS;
(c) maintenance
of individual ledgers for investment securities;
(d) maintenance
of historical tax lots for each security;
(e) reconciliation
of cash and investment balances of the Covered Portfolio with the Custodian,
and ensuring that RS is provided with the beginning cash balance available for
investment purposes;
(f) updates
of the cash availability of the Covered Portfolio throughout the day, as
required by RS;
(g) preparation
of the Statement of Assets and Liabilities and the Statement of Operations;
(h) calculation
of various contractual expenses (e.g., advisory and custody fees);
(i) monitoring
of the expense accruals and notifying an officer of the Trust of any proposed
adjustments;
(j) management
of disbursements and authorization of such disbursements upon Written Instructions;
(k) calculation
of capital gains and losses;
(l) determination
of net income;
(m) calculation
of the market value of each investment in the Covered Portfolios that exceeds
preset tolerance levels;
(n) computation
of net asset value when preset tolerance levels are exceeded;
(o) computation,
if appropriate, of yields, total return, expense ratios, portfolio turnover
rate, and, if required, portfolio average dollar-weighted maturity; and
6
(p) preparation
of a monthly financial statement, which will include the following items: (i)
Schedule of Investments, (ii) Statement of Assets and Liabilities, (iii)
Statement of Operations, (iv) Statement of Changes in Net Assets, (v) Cash
Statement and (vi) Schedule of Capital Gains and Losses.
In
connection with its provision of the foregoing services, GIS will comply in all
material respects, insofar as applicable to GIS and the services hereunder,
with the policies and procedures of the Covered Portfolios maintained pursuant
to Rule 38a-1 under the 1940 Act or otherwise; provided, that GIS shall
not be required to comply with any amended or new policies and procedures until
GIS shall have received written notice thereof.
Notwithstanding
any provision of this Agreement, RS may at any time determine not to require the
provision of any of the foregoing services; provided that the fee payable by RS
hereunder shall not as a result be reduced.
Section
5. Delivery of Portfolio
Documents.
RS has
provided or, where applicable, will provide GIS with the following, upon GIS’s
reasonable request:
(a)
certified or authenticated copies of the resolutions of the Board of
Trustees of the Trust, approving the appointment of GIS or its affiliates to
provide services to the Covered Portfolios and approving this Agreement;
(b)
a copy of the most recent effective registration statement for the
Covered Portfolios;
(c)
a copy of the advisory agreement relating to each Covered Portfolio;
(d)
a copy of the distribution agreement with respect to each class of
Shares representing an interest in a Covered Portfolio;
7
(e)
a copy of any additional administration agreement with respect to a
Covered Portfolio;
(f)
a copy of any shareholder servicing agreement made in respect of a
Covered Portfolio, as amended from time to time;
(g)
a copy of all policies and procedures of the Covered Portfolios
maintained pursuant to Rule 38a-1 of the 1940 Act or otherwise; and
(h)
copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
Section 6. Instructions.
(a)
Unless otherwise provided in this Agreement, GIS shall act only upon
Oral Instructions and Written Instructions.
(b)
GIS shall be entitled to rely upon any Oral Instruction and Written
Instruction it receives from an Authorized Person (or from a person reasonably
believed by GIS to be an Authorized Person) pursuant to this Agreement. GIS may assume that any Oral Instruction or
Written Instruction received hereunder is not in any way inconsistent with the
provisions of organizational documents or this Agreement or of any vote,
resolution or proceeding of the Trust’s Board of Trustees or of the Covered
Portfolio’s shareholders, unless and until GIS receives Written Instructions to
the contrary.
(c)
RS agrees to forward to GIS any Written Instruction confirming any Oral
Instruction so that GIS receives the Written Instruction by the close of
business on the same day that such Oral Instruction is received. The fact that such confirming Written Instruction
is not received by GIS shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instruction, or
result in any liability on the part of RS to GIS. Where Oral Instruction or Written Instruction
reasonably appears to have been received
8
from an Authorized Person, GIS shall incur no
liability to RS in acting upon such Oral Instruction or Written Instruction
provided that GIS’s actions comply with the other provisions of this Agreement.
Section
7. Right to Inquiry.
(a)
If GIS is in doubt as to any action it should or should not take, GIS
may request directions or advice, including Oral Instructions or Written
Instructions, from RS.
(b)
In the event of a conflict between Oral Instructions and Written
Instructions GIS receives from RS, unless resolved by RS, GIS shall rely upon
and follow the Written Instructions for the Covered Portfolio in question.
(c)
GIS shall be protected in any action it takes or does not take in
reliance upon directions, advice or Oral Instructions or Written Instructions
it receives from RS and which GIS believes, in good faith, to be consistent
with those directions, advice and Oral Instructions or Written
Instructions. Nothing in this section
shall be construed so as to impose an obligation upon GIS to seek such
directions, advice or Oral Instructions or Written Instructions.
Section
8. Confidentiality.
GIS
agrees to keep confidential all records of the Covered Portfolios and
information relating to the Portfolio and its shareholders, unless the release
of such records or information is otherwise consented to, in writing, by
RS. RS agrees that such consent shall
not be unreasonably withheld and may not be withheld where GIS may be exposed
to civil or criminal contempt proceedings or when required to divulge such
information or records to duly constituted authorities.
9
Section
9. Accountant Liaison.
GIS
shall, at the request of RS, act as liaison with the Covered Portfolios’
independent registered public accountants and shall provide account analyses,
fiscal year summaries, and other audit-related schedules with respect to each
Covered Portfolio, as reasonably requested.
GIS shall take all reasonable action in the performance of its duties
under this Agreement to assure that the necessary information is made available
to such accountants for the expression of their opinion, as required by the
Covered Portfolio.
Section
10. Books and Records
GIS
shall keep all books and records that GIS is required to maintain pursuant to
Rule 31a-1 under the 1940 Act or otherwise to the extent the requirement to
maintain such records is applicable in connection with the services provided
hereunder. Any books and records of a
Covered Portfolio which are maintained by GIS or which are in the possession or
under the control of GIS shall be the property of the Covered Portfolio. Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable laws, rules, and
regulations. The Covered Portfolio, RS,
and Authorized Persons, as applicable, will have access to such books and
records at all times during GIS’s normal business hours. Upon the reasonable request of the Covered
Portfolio or RS, copies of any such books and records shall be provided by GIS
to the Covered Portfolio, RS, or an Authorized Person, as applicable.
Section 11. Compensation.
(a) In consideration
of the services provided by GIS under this Agreement, RS will pay GIS monthly
fees for each Covered Portfolio at the annual rates set forth on Annex A,
calculated in the same manner as fees are calculated under the Investment
Advisory Agreement; provided that the monthly fee due hereunder to GIS in
respect of a Covered Portfolio shall be reduced by the amount of any fee
waivers to which RS and GIS have agreed and that are in effect for that Covered
Portfolio. Monthly fees shall be due
within ten (10) days after the end of the month to which the payment relates,
or, if later, within five (5) days after the receipt of payment by
10
RS of the
corresponding fees from the Covered Portfolio in question. RS shall not be required to make any payment
hereunder in respect of services rendered by GIS relating to any Covered
Portfolio for any period unless and until RS has received payment under the Investment
Advisory Agreement in respect of such Covered Portfolio for such period.
(b) From and after the
third anniversary of the effective date of this Agreement, RS will pay to GIS
such other fee or fees as may be agreed to in writing between RS and GIS.
Section 12. Indemnification.
The Trusts, on behalf of each of their respective Covered
Portfolios, separately agree to indemnify and hold harmless GIS and its
affiliates from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, liabilities arising under any state
or foreign securities and blue sky laws, and amendments thereto), and
reasonable expenses, including (without limitation) reasonable attorneys’ fees
and disbursements, arising directly or indirectly from any action or omission
to act which GIS takes in respect of that Covered Portfolio (i) at the request
or on the direction of or in reliance on the advice of the Trusts or RS, acting
as agent for the Trusts, or (ii) upon Oral Instructions or Written
Instructions. Neither GIS, nor any of
its affiliates, shall be indemnified against any liability (or any expenses
incident to such liability) arising out of GIS’s or its affiliates’ own willful
misfeasance, bad faith, negligence or reckless disregard of its duties and
obligations under this Agreement.
Section 13. Duration and Termination.
(a) This
Agreement shall remain in effect for a period of two (2) years, unless sooner
terminated in accordance with paragraph (b), and shall continue in effect from
year to year thereafter in respect of each Covered Portfolio so long as such
continuation is approved at least annually by the Board of Trustees of the
11
Trust and the vote of a majority of the Trustees of the Trust
who are not parties to this Agreement or interested persons of any such party,
cast in person at a meeting for the purpose of voting on such approval.
(b) This Agreement may
be terminated in respect of a Covered Portfolio at any time, without payment of
any penalty, by the Board of Trustees of the Trust or by a vote of a majority
of voting securities of such Covered Portfolio, upon sixty (60) days written
notice to GIS, and by GIS upon sixty (60) days written notice to the
Trust. This Agreement shall also
terminate in the event of any assignment hereof, as defined in the 1940 Act,
and with respect to a Covered Portfolio, upon the termination of the Advisory
Agreement with respect to that Portfolio.
(c) Termination under
this section shall not affect the right of GIS to receive payments on any
unpaid balance of the compensation described in Section 11 earned prior to such
termination.
Section 14. Notices.
All
notices and other communications, including Written Instructions, shall be in
writing or by confirming telegram, cable, telex or facsimile sending device.
Notice shall be effective upon receipt.
Notices
shall be addressed
(a) if to GIS,
7 Hanover Square
New York, New York 10004
Attention: Bruce
C. Long
Title: President
(b) if to RS,
388 Market Street
Suite 1700
San Francisco, California 94111
12
Attention: Terry R. Otton, Chief Executive
Officer
(c) if to the RS Trust,
388 Market Street
Suite 1700
San Francisco, California 94111
Attention: Terry R. Otton,
President
(d) if to the VC Trust,
388 Market Street
Suite 1700
San Francisco, California 94111
Attention: Terry R. Otton,
President
Section 15. Standard of Care and Liability.
(a) GIS shall be under
no duty to take any action except as specifically set forth herein or as may be
specifically agreed to by GIS in writing.
GIS shall be obligated to exercise care and diligence in the performance
of its duties hereunder, to act in good faith and to use its reasonable
efforts, in performing services provided for under this Agreement. GIS shall be liable for any damages arising
out of GIS’s failure to perform its duties under this Agreement to the extent
such damages arise out of GIS’s willful misfeasance, bad faith, gross
negligence or reckless disregard of such duties.
(b) Without limiting
the generality of the foregoing or of any other provision of this Agreement,
(i) GIS shall not be liable for losses beyond its control, provided that GIS
has acted in accordance with the standard of care set forth above; and (ii) GIS
shall not be liable for (A) the validity or invalidity or authority or lack
thereof
13
of any Oral
Instruction or Written Instruction, notice or other instrument which conforms
to the applicable requirements of this Agreement, and which GIS reasonably
believes to be genuine; or (B) delays or errors or loss of data occurring by
reason of circumstances beyond GIS ‘s control, including acts of civil or
military authority, national emergencies, labor difficulties, fire, flood,
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
(c) Notwithstanding
anything in this Agreement to the contrary, neither GIS nor its affiliates
shall be liable to RS, to either a Trust or to any Portfolio for any
consequential, special or indirect losses or damages which RS or any Portfolio
may incur or suffer by or as a consequence of GIS’s or any affiliates’
performance of the services provided hereunder, whether or not the likelihood
of such losses or damages was known by GIS or its affiliates.
Section 16. Amendments.
No amendment to this Agreement
will be effective unless it is in writing and signed by each Party. Any amendment shall require the approval of
the Board of Trustees of the Trust. Any
failure of a Party to comply with any obligation, covenant, agreement or
condition contained in this Agreement may be waived by the Party entitled to
the benefits of the provision only by a written instrument duly executed and
delivered by the Party granting the waiver, but the waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
will not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure of compliance.
Section 17. Delegation and Assignment.
GIS may
assign its rights and delegate its duties hereunder to any majority-owned
direct or indirect subsidiary of GIS or The Guardian Life Insurance Company of
America, provided that (i) GIS gives RS thirty (30) days prior written notice
of such assignment or delegation, (ii) the assignee or delegate agrees to
comply with the
14
relevant
provisions of this Agreement, (iii) GIS and such assignee or delegate promptly
provide such information as RS may reasonably request, and respond to such
questions as RS may reasonably ask, relative to the assignment or delegation
(including, without limitation, the capabilities of the assignee or delegate),
and (iv) RS and the Trustees consent to such assignment and/or delegation (the
consent by RS not to be unreasonably withheld).
Section 18. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
Section 19. Further Actions.
Each
party agrees to perform such further acts and execute such further documents as
are necessary to effectuate the purposes hereof.
Section 20. Miscellaneous.
(a) This Agreement
embodies the entire agreement and understanding between the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof, provided that the parties may embody in one or more separate
documents their agreement, if any, with respect to delegated duties and Oral
Instructions. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. Notwithstanding any provision
hereof, the services of GIS are not, nor shall they be, construed as
constituting legal advice or the provision of legal services for or on behalf
of RS or any other person.
(b) This Agreement
shall be deemed to be a contract made in New York and governed by New York law,
without regard to principles of conflicts of law.
15
(c) If any provision
of this Agreement shall be held or made invalid by a court decision, statute,
rule, requirement of applicable law or otherwise, the remainder of this
Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
(d) Each Covered
Portfolio and its Trustees are hereby expressly made third-party beneficiaries
under this Agreement, and each of them shall be entitled to enforce this
Agreement against GIS, and to bring an action against GIS in respect of any
failure to perform its obligations under this Agreement, in each case as it or
they relate to such Covered Portfolio, as if such Covered Portfolio and its
Trustees were parties hereto, and GIS expressly consents to the foregoing. Except as provided in the preceding sentence,
neither Party intends for this Agreement to benefit any third-party not
expressly named in this Agreement.
(e) Copies of the RS
Trust's Amended and Restated Agreement and Declaration of Trust dated March 13,
1997, as amended, and the VC Trust’s [Declaration of Trust dated ________,
2006] are on file at the office of the Secretary of The Commonwealth of
Massachusetts. This Agreement was
executed or made by or on behalf of GIS and the Trusts by the Trustees or
officers of the Trusts as Trustees or officers and not individually and the
obligations of this Agreement are not binding upon any of them or the
shareholders of the Covered Portfolios individually but are binding only upon
the assets and property of the Trusts or upon the assets belonging to the
Covered Portfolios for the benefit of which the Trustees have caused this
Agreement to be made.
(f) This Agreement is,
and shall be construed as, a separate agreement between GIS and the Trusts,
separately, on behalf of each of the Covered Portfolios separately. Without limiting the generality of the
foregoing, no Covered Portfolio shall have any liability or obligation for, or
in respect of, any obligation of any other Covered Portfolio for any services
provided by GIS to, or actions taken by GIS in respect of, any other Covered
Portfolio.
16