ADMINISTRATION AGREEMENT
Administration Agreement, dated as of _________ __, 1997, by
and between RCM Capital Management, L.L.C., a Delaware limited liability
company ("RCM"), and RCM Equity Funds, Inc. (the "Company"), on behalf of
RCM Kleinwort Xxxxxx Emerging Markets Fund, a series of the Company (the
"Fund").
WHEREAS, the Fund is a diversified series of the Company, a
registered open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Company, on behalf of the Fund, desires to retain
RCM to furnish certain administrative services to the Fund, and RCM is
willing to furnish such services, on the terms and conditions hereinafter set
forth (RCM, in its capacity as administrator to the Fund pursuant to the
terms hereof is hereinafter referred to as the "Administrator").
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Company 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.
2. DELIVERY OF DOCUMENTS
The Company will promptly deliver to the Administrator copies
of each of the following documents and all future amendments and supplements,
if any:
a. The Company's charter document and by-laws;
b. The Company's currently effective registration statement
under the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act and the Prospectus(es) and
Statement(s) of Additional Information relating to the Fund
and all amendments and supplements thereto as in effect from
time to time;
c. Certified copies of the resolutions of the Board of
Directors of the Company (the "Board") authorizing (1) the
Company 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;
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d. A copy of the investment advisory agreement between the
Company, on behalf of 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 Company that:
a. It is a Delaware limited liability company, duly organized,
existing and in good standing under the laws of the State of
Delaware;
b. All requisite proceedings have been taken to authorize it to
enter into and perform this Agreement;
c. 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
d. The execution and performance of 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 COMPANY
The Company represents and warrants to the Administrator that:
a. It is corporation, duly organized and existing and in good
standing under the laws of the State of Maryland;
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 registered under the 1940 Act;
e. 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;
f. No legal or administrative proceedings have been instituted
or threatened which would impair the Company's ability to
perform its duties and obligations under this Agreement;
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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 Company or the Fund or any law or
regulation applicable to them; and
h. As of the close of business on the date of this Agreement,
the Company is authorized to issue up to 50,000,000 shares
of capital stock of the Fund.
5. ADMINISTRATION SERVICES
The Administrator shall provide the following services subject
to the control, supervision and direction of the Company and the review and
comment by the Company's auditors and legal counsel and in accordance with
procedures which may be established from time to time between the Company 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 Company's independent accountants
and filing by the Company's treasurer;
d. Review the calculation, submit for approval by officers of
the Company and arrange for payment of the Fund's expenses;
e. Prepare for review and approval by officers of the Company
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 Company 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 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;
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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 Company's officers, independent
accountants, legal counsel, custodian and Transfer Agent in
establishing the accounting policies of the Fund;
1. Review implementation of any dividend reinvestment programs
authorized by the Board;
m. Respond to, or refer to the Company'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 Subchapter M of the
Internal Revenue Code, qualification 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 a general corporate calendar;
q. Maintain copies of the Company's charter and by-laws;
r. File annual and semi-annual shareholder reports with
appropriate regulatory agencies; review text of
"Presidents' letters" to shareholders and "Management's
Discussion of Fund Performance" (which shall also be
subject to review by the Fund's legal counsel),
s. Subject to review and comment by the Company's legal
counsel, 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 Company's
independent Board members;
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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 with applicable legal requirements;
w. 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;
x. Assist with the filing of amendments to the Fund's
Prospectus and Statement of Additional Information, prepare
and file with the SEC proxy statements and SEC Rule 24f-2
notices.
The Administrator shall provide the office facilities and the personnel
required by it to perform the services contemplated herein.
6. FEES; EXPENSES; EXPENSE REIMBURSEMENT
For the services to be rendered hereunder, the Fund shall pay
the Administrator a monthly fee equal to the annualized rate of the higher of
$75,000.00 and 0.15% of the Fund's average daily net asset value. 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
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;
costs 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); investment advisory fees; costs 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 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
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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 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 costs 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
Company for instructions and may consult with its own legal counsel or
outside counsel for the Company 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
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 Company. 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, attorney's 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
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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 the 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
Company the right to terminate this Agreement.
The Company shall indemnify and hold the Administrator
harmless from loss, cost, damage and expense, including reasonable fees and
expenses for counsel, incurred by the Administrator resulting from any claim,
demand, actions 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 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 shareholder accounts and will
not disclose the same to any person except at the request or with the written
consent of the Company.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Company assumes full responsibility for complying with all
securities, tax, commodities and other laws, rules and regulations applicable
to the Fund.
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 Company, 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.
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11. SERVICES NOT EXCLUSIVE
The services of the Administrator to the Company are not
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 Company from time to time, have no authority to act or
represent the Company in any way or otherwise be deemed an agent of the
Company.
12. TERM, TERMINATION AND AMENDMENT
This Agreement shall continue in effect until the close of
business on _____ __, 1999. This Agreement may thereafter be renewed from
year to year by mutual consent, provided that such renewal shall be
specifically approved at least annually by the Board. Upon termination of
this Agreement, the Fund shall pay to the Administrator such compensation
and 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 such address and/or fax
number as a party may specify by written notice to the other.
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.
15. SUCCESSORS
This Agreement shall be binding on and shall inure to the
benefit of the Company and the Administrator and their respective successors
and permitted assigns.
16. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the
parties 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
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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 State of California,
without regard to principles of conflicts of law.
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.
RCM EQUITY FUNDS, INC.
ON BEHALF OF RCM KLEINWORT
XXXXXX EMERGING MARKETS FUND
By:_______________________
Name: _________________
Title: _________________
RCM CAPITAL MANAGEMENT, L.L.C.
By:_______________________
Name: _________________
Title: _________________
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