Exhibit (h)(1)
ADMINISTRATION AGREEMENT
Agreement dated as of December 21, 2004 by and between State
Street Bank and Trust Company, a Massachusetts trust company (the
"Administrator"), and Drake Funds Trust (the "Trust").
WHEREAS, the Trust is registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust desires to retain the Administrator to
furnish certain administrative services to the Trust, 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 Trust hereby appoints the Administrator to act as
administrator with respect to the Trust 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.
The Trust will initially consist of the portfolio(s) and/or
class(es) of shares (each an "Investment Fund") listed in Schedule A to this
Agreement. In the event that the Trust establishes one or more additional
Investment Funds with respect to which it wishes to retain the Administrator to
act as administrator hereunder, the Trust 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 existing Investment Funds, except to the extent that such provisions
(including those relating to the compensation and expenses payable by the Trust
and its Investment Funds) may be modified with respect to each additional
Investment Fund in writing by the Trust and the Administrator at the time of the
addition of the Investment Fund.
2. DELIVERY OF DOCUMENTS
The Trust will promptly deliver to the Administrator copies of
each of the following documents and all future amendments and supplements, if
any:
a. The Trust's Declaration and by-laws;
b. The Trust's currently effective registration
statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act and the
Trust's Prospectus(es) and Statement(s) of Additional
Information relating to all Investment Funds 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 Trust (the "Board") authorizing (1)
the Trust to enter into this Agreement and (2)
certain individuals on behalf of the Trust 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 Trust 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 Trust that:
a. It is a Massachusetts trust company, duly organized
and existing 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 TRUST
The Trust represents and warrants to the Administrator that:
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a. It is a statutory trust, duly organized, existing and
in good standing under the laws of State 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. 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.
Subject to the Administrator's performance per
Schedule B to this Agreement, the Trust 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 Trust
offers or sells its shares have been made;
f. No legal or administrative proceedings have been
instituted or threatened which would impair the
Trust's ability to perform its duties and obligations
under this Agreement;
g. Its entrance into this Agreement will not cause a
material breach or be in material conflict with any
other agreement or obligation of the Trust or any law
or regulation applicable to it; and
h. As of the close of business on the date of this
Agreement, the Trust is authorized to issue shares of
beneficial interest, and it will initially offer
shares, in the authorized amounts as set forth in
Schedule A to this Agreement.
5. ADMINISTRATION SERVICES
The Administrator shall provide the following services, in
each case, subject to the control, supervision and direction of the Trust and
the review and comment by the Trust's auditors and legal counsel and in
accordance with procedures which may be established from time to time between
the Trust and the Administrator:
a. Prepare the Trust's federal, state and local income
tax returns for review by the Trust's independent
accountants and filing by the Trust's treasurer;
b. Review calculation, submit for approval by officers
of the Trust and arrange for payment of the Trust's
expenses;
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c. Prepare for review and approval by officers of the
Trust financial information for the Trust's
semi-annual and annual reports, proxy statements and
other communications required or otherwise to be sent
to Trust shareholders, and arrange for the printing
and dissemination of such reports, excluding proxy
statements and certain other communications to
shareholders as may be mutually agreed upon;
d. Prepare for review by an officer of and legal counsel
for the Trust the Trust's periodic financial reports
required to be filed with the Securities and Exchange
Commission ("SEC") on Form N-SAR, N-CSR and N-Q and
financial information required by Form N-1A and such
other reports, forms or filings as may be mutually
agreed upon;
e. Prepare reports relating to the business and affairs
of the Trust as may be mutually agreed upon and not
otherwise prepared by the Trust's investment adviser,
custodian, legal counsel or independent accountants;
f. Make such reports and recommendations to the Board
concerning the performance of the independent
accountants as the Board may reasonably request;
g. Make such reports and recommendations to the Board
concerning the performance and fees of the Trust's
custodian and transfer and dividend disbursing agent
("Transfer Agent") as the Board may reasonably
request or deems appropriate;
h. Oversee and review calculations of fees paid to the
Trust's investment adviser, custodian and Transfer
Agent;
i. Consult with the Trust's officers, independent
accountants, legal counsel, custodian and Transfer
Agent in establishing the accounting policies of the
Trust;
j. Refer to the Trust's officers or Transfer Agent,
shareholder inquiries relating to the Trust;
k. Provide periodic testing of portfolios to assist the
Trust's investment adviser in complying with Internal
Revenue Code mandatory qualification requirements,
the requirements of the 1940 Act and Trust prospectus
limitations as may be mutually agreed upon;
l. Prepare and file with the SEC Rule 24f-2 notices;
m. Perform Blue Sky services pursuant to the specific
instructions of the Trust and as detailed in Schedule
B to this Agreement; and
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n. Prepare summaries of the Administrator's internal
controls and procedures and provide to the Trust's
Board of Trustees and Chief Compliance Officer on an
annual basis and upon reasonable request.
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 Trust 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 the Fee Schedule 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 Trust shall reimburse the Administrator for its
out-of-pocket costs incurred in connection with this Agreement.
The Trust agrees promptly to reimburse the Administrator for
any equipment and supplies specially ordered by or for the Trust through the
Administrator and for any other expenses not contemplated by this Agreement that
the Administrator may incur on the Trust's behalf at the Trust's request or with
the Trust's consent.
The Trust will bear all expenses that are incurred in its
operation and not specifically assumed by the Administrator. Expenses to be
borne by the Trust, 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 Trust'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 Trust 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 Trust; 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 Trust; costs incidental to the preparation,
printing and distribution of the Trust's registration statements and any
amendments thereto and shareholder reports; cost of typesetting and printing of
prospectuses; cost of preparation and filing of the Trust'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 Trust's net asset
value.
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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 Trust 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
Trust for instructions and may consult with its own legal counsel or outside
counsel for the Trust or the independent accountants for the Trust at the
expense of the Trust, 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 Trust, 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 Trust. 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 in respect of any loss, damage or expense
suffered by the Trust insofar as such loss, damage or expense arises from the
performance of the Administrator's duties hereunder in reliance upon records
that were maintained for the Trust by entities other than the Administrator
prior to the Administrator's appointment as administrator for the Trust. 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 cumulative liability for each calendar year (a "Liability
Period") with respect to the Trust under this Agreement regardless of the form
of action or legal theory shall be limited to its total annual compensation
earned with respect to the Trust and fees payable hereunder during the preceding
Compensation Period, as defined herein, for any liability or loss suffered by
the Trust including, but not limited to, any liability relating to qualification
of the Trust as a regulated investment company or any liability relating to the
Trust's compliance with any federal or state tax or securities statute,
regulation or ruling during such Liability Period. "Compensation Period" shall
mean the calendar year ending immediately prior to each Liability Period in
which the event(s) giving rise to the Administrator's liability for that period
have occurred. Notwithstanding the foregoing, the Compensation Period for
purposes of
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calculating the annual cumulative liability of the Administrator for the
Liability Period commencing on the date of this Agreement and terminating on
December 31, 2004 shall be the date of this Agreement through December 31, 2005,
and the Compensation Period for the Liability Period commencing January 1, 2005
and terminating on December 31, 2005 shall be January 1, 2005 through December
31, 2005.
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.
The Trust 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 Trust, 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 Trust or its shareholders or shareholder accounts
and will not disclose the same to any person except at the request or with the
written consent of the Trust and pursuant to the disclosure policies established
by the Trust and communicated to the Administrator.
10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Trust 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
Trust shall at all times remain the property of the Trust, 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 Trust
pursuant to Rule 31a-1 under the 1940 Act will be preserved for the periods
prescribed by Rule 31a-2 under the 1940 Act
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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 Trust 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 Trust
from time to time, have no authority to act or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
12. TERM, TERMINATION AND AMENDMENT
(a) This Agreement shall become effective on the date of
its execution and shall remain in full force and
effect for a period of one year from the effective
date and shall automatically continue in full force
and effect after such initial term unless either
party terminates this Agreement by written notice to
the other party at least sixty (60) days prior to the
expiration of the initial term.
(b) Either party may terminate this Agreement at any time
after the initial term upon at least sixty (60) days'
prior written notice to the other party. Termination
of this Agreement with respect to any given
Investment Fund shall in no way affect the continued
validity of this Agreement with respect to any other
Investment Fund.
(c) Upon termination of this Agreement, the Trust 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.
(d) 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
Trust: Drake Capital Management LLC, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 Attn: Xxx Xxxxxxxxx, fax: 000-000-0000; if to the Administrator:
State Street Bank and Trust Company, X.X. Xxx 0000, Xxxxxx, XX 00000-0000, Attn:
Fund Administration Legal Department, fax: 000-000-0000.
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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 Trust 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 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 Agreement and all schedules, exhibits, attachments and
amendments hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, 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.
DRAKE FUNDS TRUST
By: /s/ XXXXXX XXXXXXXX
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Name: Xxxxxx Xxxxxxxx
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Title: President
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STATE STREET BANK AND TRUST COMPANY
By: /s/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Title: Senior Vice President
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ADMINISTRATION AGREEMENT
SCHEDULE A
LISTING OF INVESTMENT FUNDS AND AUTHORIZED SHARES
Investment Fund Authorized Shares
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Drake Low Duration Fund Unlimited
Drake Total Return Fund Unlimited
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ADMINISTRATION AGREEMENT
SCHEDULE B
NOTICE FILING WITH
STATE SECURITIES ADMINISTRATORS
AT THE SPECIFIC DIRECTION OF THE TRUST, THE ADMINISTRATOR WILL PREPARE REQUIRED
DOCUMENTATION AND MAKE NOTICE FILINGS IN ACCORDANCE WITH THE SECURITIES LAWS OF
EACH JURISDICTION IN WHICH TRUST SHARES ARE TO BE OFFERED OR SOLD PURSUANT TO
INSTRUCTIONS GIVEN TO THE ADMINISTRATOR BY THE TRUST.
THE TRUST SHALL BE SOLELY RESPONSIBLE FOR THE DETERMINATION (i) OF THOSE
JURISDICTIONS IN WHICH NOTICE FILINGS ARE TO BE SUBMITTED AND (ii) THE NUMBER OF
TRUST SHARES TO BE PERMITTED TO BE SOLD IN EACH SUCH JURISDICTION. IN THE EVENT
THAT THE ADMINISTRATOR BECOMES AWARE OF (a) THE SALE OF TRUST SHARES IN A
JURISDICTION IN WHICH NO NOTICE FILING HAS BEEN MADE OR (b) THE SALE OF TRUST
SHARES IN EXCESS OF THE NUMBER OF TRUST SHARES PERMITTED TO BE SOLD IN SUCH
JURISDICTION, THE ADMINISTRATOR SHALL REPORT SUCH INFORMATION TO THE TRUST, AND
IT SHALL BE THE TRUST'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 Trust's Initial Notice Filings, as directed by the
Trust;
2. Filing of Trust's renewals and amendments as required;
3. Filing of amendments to the Trust's registration statement
where required;
4. Filing Trust sales reports where required;
5. Payment at the expense of the Trust of all Trust 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 Trust may agree upon 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
Trust or its legal counsel. In connection with the services described herein,
the Trust shall issue in favor of the Administrator a power of attorney to
submit Notice Filings on behalf of the Trust, which power of attorney shall be
substantially in the form of Exhibit I attached hereto.
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EXHIBIT 1
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of December ___, 2004 that
DRAKE FUNDS TRUST
(the "Funds") with principal offices at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, makes, constitutes, and appoints STATE STREET BANK AND
TRUST COMPANY (the "Administrator") with principal offices at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx its lawful attorney-in-fact for it to do as if it
were itself acting, the following:
1. NOTICE FILINGS FOR FUND SHARES. The Power to submit notice filings for the
Funds in each jurisdiction in which the Funds' shares are offered or sold and in
connection therewith the power to prepare, execute, and deliver and file any and
all of the Funds' applications including without limitation, applications to
provide notice for the Funds' shares, consents, including consents to service of
process, reports, including without limitation, all periodic reports, or other
documents and instruments now or hereafter required or appropriate in the
judgment of the Administrator in connection with the notice filings of the
Funds' shares.
2. CHECKS. The power to draw, endorse, and deposit checks in the name of the
Funds in connection with the notice filings of the Funds' shares with state
securities administrators.
3. 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 Funds with
respect to items 1 and 2 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 Funds.
IN WITNESS WHEREOF, the Funds have 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.
DRAKE FUNDS TRUST
By:
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Name:
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Title:
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Subscribed and sworn to before me
this day of December 2004
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Notary Public
State of
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In and for the County of
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My Commission expires
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