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Exhibit (h)(4)
ADMINISTRATION AGREEMENT
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THIS AGREEMENT is made as of November 1, 1998, by and between the
REPUBLIC FUNDS, a Massachusetts business trust (the "Company"), and BISYS FUND
SERVICES OHIO, INC. (the "Administrator"), an Ohio corporation.
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of separate series ("Portfolios") each of which issues units
of beneficial interest ("Shares"); and
WHEREAS, the Company desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such Portfolios as the Company and the Administrator may agree on and as listed
on Schedule A attached hereto and made a part of this Agreement, on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and the Administrator hereby agree as
follows:
ARTICLE 1. Retention of the Administrator. The Company hereby retains
the Administrator to act as the administrator of the Portfolios and to furnish
the Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below. The Company consents to the performance of certain
services hereunder by the Administrator's affiliate, BISYS Fund Services
(Ireland) Limited.
The Administrator and its affiliates shall, for all purposes herein, be
deemed to be an independent contractor and, unless otherwise expressly provided
or authorized, shall have no authority to act for or represent the Company in
any way and shall not be deemed an agent of the Company.
ARTICLE 2. Administrative Services. The Administrator shall perform or
supervise the performance by others of other administrative services in
connection with the operations of the Portfolios, and, on behalf of the Company,
will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Trustees of the Company with such reports
regarding investment performance as they may reasonably request but shall have
no responsibility for supervising the performance by any investment adviser or
sub-adviser of its responsibilities.
The Administrator shall provide the Company with, or procure for the
Company, regulatory reporting, all necessary office space, equipment, personnel,
compensation and facilities (including facilities for Shareholders' and
Trustees' meetings) for handling the affairs of the Portfolios and such other
services as the Administrator shall, from time to time, determine to be
necessary to perform its obligations under this Agreement. In addition, at the
request of the
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Board of Trustees, the Administrator shall make reports to the Company's
Trustees concerning the performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Company expenses and control all
disbursements for the Company, and as appropriate compute the
Company's yields, tax-equivalent yields, total return, expense
ratios, portfolio turnover rate and, if required, portfolio
average dollar-weighted maturity;
(b) assist Company counsel with the preparation of prospectuses,
statements of additional information, registration statements
and proxy materials;
(c) prepare such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with Federal and state securities
law) as may be necessary or desirable to register the Company's
Shares with state securities authorities, monitor the sale of
Company Shares for compliance with state securities laws, and
file with the appropriate state securities authorities the
registration statements and reports for the Company and the
Company's Shares and all amendments thereto, as may be necessary
or convenient to register and keep effective the Company and the
Company's Shares with state securities authorities to enable the
Company to make a continuous offering of its Shares;
(d) develop and prepare, with the assistance of the Company's
investment adviser, communications to Shareholders, including
the annual report to Shareholders, coordinate the mailing of
prospectuses, notices, proxy statements, proxies and other
reports to Company Shareholders, and supervise and facilitate
the proxy solicitation process for all shareholder meetings,
including the tabulation of shareholder votes;
(e) administer contracts on behalf of the Company with, among
others, the Company's investment adviser, distributor or
placement agent, custodian, transfer agent and fund accountant;
(f) supervise the Company's transfer agent with respect to the
payment of dividends and other distributions to Shareholders;
(g) calculate performance data of the Portfolios for dissemination
to information services covering the investment company
industry;
(h) coordinate and supervise the preparation and filing of the
Company's tax returns;
(i) examine and review the operations and performance of the various
organizations providing services to the Company or any Portfolio
of the Company, including,
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without limitation, the Company's investment adviser,
distributor or placement agent, custodian, fund accountant,
transfer agent, outside legal counsel and independent public
accountants, and at the request of the Board of Trustees, report
to the Board on the performance of organizations;
(j) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and printing
of the Company's semi-annual and annual reports to Shareholders;
(k) assist with the design, development, and operation of the
Portfolios, including new classes, investment objectives,
policies and structure;
(l) provide individuals reasonably acceptable to the Company's Board
of Trustees to serve as officers of the Company, who will be
responsible for the management of certain of the Company's
affairs as determined by the Company's Board of Trustees;
(m) advise the Company and its Board of Trustees on matters
concerning the Company and its affairs;
(n) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Company
in accordance with the requirements of Rules 17g-1 and 17d-1(7)
under the 1940 Act as such bonds and policies are approved by
the Company's Board of Trustees;
(o) monitor and advise the Company and its Portfolios on their
regulated investment company status under the Internal Revenue
Code of 1986, as amended;
(p) perform all administrative services and functions of the Company
and each Portfolio to the extent administrative services and
functions are not provided to the Company or such Portfolio
pursuant to the Company's or such Portfolio's distribution
agreement, transfer agent agreement and fund accounting
agreement;
(q) furnish advice and recommendations with respect to other aspects
of the business and affairs of the Portfolios as the Company and
the Administrator shall determine desirable;
(r) prepare and file with the SEC the semi-annual reports for the
Company on Form N-SAR and all required notices pursuant to Rule
24f-2;
(s) design, implement and maintain a portfolio compliance program
which will reasonably be expected to monitor compliance with the
1940 Act, the Internal Revenue Code of 1986, as amended, and any
other relevant regulations, such as those issued by the NASD;
and
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(t) make available an individual whose qualifications are acceptable
to the Company and whose time and activities will be dedicated
solely to the provision of such services on behalf of the
Portfolios that the parties may, from time to time, agree upon
(a "Qualified Dedicated Employee") and make available the
services of a second Qualified Dedicated Employee at such time
that Company assets, together with other mutual fund assets
under management by Republic National Bank of New York, equal or
exceed $700 million.
The Administrator shall perform such other services for the Company that
are mutually agreed upon by the parties from time to time. Such services may
include performing internal audit examinations; mailing the annual reports of
the Portfolios; preparing an annual list of Shareholders; and mailing notices of
Shareholders' meetings, proxies and proxy statements, for all of which the
Company will pay the Administrator's out-of-pocket expenses.
ARTICLE 3. Allocation of Charges and Expenses.
(A) The Administrator. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Company as well as all Trustees of the
Company who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Company retained by the Trustees of the
Company to perform services on behalf of the Company.
(B) The Company. The Company assumes and shall pay or cause to be paid
all other expenses of the Company not otherwise allocated herein, including,
without limitation, organization costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
Federal and state securities laws, fees and out-of-pocket expenses of Trustees
who are not affiliated persons of the Administrator or any affiliated
corporation of the Administrator, interest, brokerage costs, litigation and
other extraordinary or nonrecurring expenses.
ARTICLE 4. Compensation of the Administrator.
(A) Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Company shall pay to the Administrator compensation at an annual
rate specified in Schedule A attached hereto.
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Such compensation shall be calculated and accrued daily, and paid to the
Administrator monthly. The Company shall also reimburse the Administrator for
its reasonable out-of-pocket expenses, including but not limited to the travel
and lodging expenses incurred by officers and employees of the Administrator in
connection with attendance at Board meetings.
If this Agreement becomes effective subsequent to the first day
of a month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
(B) Survival of Compensation Rights. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. Limitation of Liability of the Administrator. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby. (As used in this Article 5, the term "Administrator" shall include
directors, affiliates, officers, employees and other agents of the Administrator
as well as the Administrator itself.)
So long as the Administrator acts in good faith and with due diligence
and without negligence, the Company assumes full responsibility and shall
indemnify the Administrator and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of the
Administrator's actions taken or nonactions with respect to the performance of
services hereunder. The Administrator agrees to indemnify and hold harmless the
Company, its employees, agents, Trustees, officers and nominees from and against
any and all actions, suits and claims, whether groundless or otherwise, and from
and against any and all judgments, liabilities, losses, damages, costs, charges,
reasonable counsel fees and other expenses of every nature and character arising
out of or in any way relating to the Administrator's bad faith willful
misfeasance, negligence or from reckless disregard by it of its obligations and
duties, with respect to the performance of services under this Agreement. The
indemnity and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provisions contained
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herein shall apply, however, it is understood that if in any case the
indemnifying party may be asked to indemnify or hold the other party harmless,
the indemnifying party shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further understood that
the indemnified party will use all reasonable care to identify and notify the
indemnifying party promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the indemnifying party, but failure to do so in good faith shall not affect the
rights hereunder.
The indemnifying party shall be entitled to participate at its own
expense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the indemnifying party and satisfactory to the
other party, whose approval shall not be unreasonably withheld. In the event
that the indemnifying party elects to assume the defense of any suit and retain
counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by it. If the indemnifying party does not elect to
assume the defense of a suit, it will reimburse the other party for the
reasonable fees and expenses of any counsel retained by the other party.
The Administrator may apply to the Company at any time for instructions
and may consult counsel for the Company or its own counsel and with accountants
and other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. The Administrator will not be held to have
notice of any change of authority of any officers, employees or agents of the
Company until receipt of written notice thereof from the Company.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Company are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that directors, officers, employees
and Shareholders of the Company are or may be or become interested in the
Administrator, as officers, employees or otherwise and that directors, officers
and employees of the Administrator and its counsel are or may be or become
similarly interested in the Company, and that the Administrator may be or become
interested in the Company as a Shareholder or otherwise.
ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
be as specified in Schedule A hereto.
ARTICLE 8. Assignment. This Agreement shall not be assignable by either
party without the written consent of the other party; provided, however, that
the Administrator may, at its expense, and, upon the prior written approval of
the Company, which approval shall not be
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unreasonably withheld, subcontract with any entity or person concerning the
provision of the services contemplated hereunder. The Administrator shall not,
however, be relieved of any of its obligations under this Agreement by the
appointment of such subcontractor and provided further, that the Administrator
shall be responsible, to the extent provided in Article 5 hereof, for all acts
of such subcontractor as if such acts were its own. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
ARTICLE 9. Amendments. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Company, and (ii) by the vote of a majority of
the Trustees of the Company who are not parties to this Agreement or interested
persons of any such party.
For special cases, the parties hereto may amend such procedures set
forth herein as may be appropriate or practical under the circumstances, and the
Administrator may conclusively assume that any special procedure which has been
approved by the Company does not conflict with or violate any requirements of
its Declaration of Trust or then current prospectuses, or any rule, regulation
or requirement of any regulatory body.
ARTICLE 10. Certain Records. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Company shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Company and will be made
available to or surrendered promptly to the Company or its designee on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Company and follow the
Company's instructions as to permitting or refusing such inspection; provided
that the Administrator may exhibit such records to any person in any case where
it is advised by its counsel that it may be held liable for failure to do so,
unless (in cases involving potential exposure only to civil liability) the
Company has agreed to indemnify the Administrator against such liability.
ARTICLE 11. Maintenance of Systems and Equipment. The Administrator
agrees to perform comprehensive date testing on the systems it utilizes to
provide the services hereunder to simulate the actual turning of the century and
leap year. These tests shall be intended to identify any operational issues
regarding the accurate processing of date/time data from, into and between the
Twentieth and Twenty-First Century, including leap year calculations. The
Administrator agrees to use all commercially reasonable efforts to implement all
necessary updates and changes for its mission critical systems, if any, to
accommodate the turn of the century and leap year and shall have substantially
tested such upgrades and changes by March 31, 1999. The Administrator agrees to
provide the Company quarterly updates on the status of its Year 2000 readiness
project and to make its personnel reasonably available to address any questions
or concerns.
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ARTICLE 12. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 13. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by (i) registered
or certified mail, postage prepaid, (ii) facsimile, or (iii) Federal Express or
similar delivery service, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Company, at 0000 Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxx, Xxxx
00000; and if to the Administrator at 0000 Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxx,
Xxxx 00000.
ARTICLE 14. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of Ohio, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
ARTICLE 15. Multiple Originals. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
REPUBLIC FUNDS
By:
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Title:
--------------------------
BISYS FUND SERVICES OHIO, INC.
By:
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Title:
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF _______________, 1998
BETWEEN THE REPUBLIC FUNDS
AND
BISYS FUND SERVICES OHIO, INC.
Portfolios: This Agreement shall apply to all Portfolios of the Company,
either now or hereafter created. The current Portfolios of the
Company are:
Republic Equity Fund
Republic New York Tax Free Bond Fund
Republic New York Tax Free Money Market Fund
Republic U.S. Government Money Market Fund
Republic Bond Fund
Republic Overseas Equity Fund
Republic Opportunity Fund
Fees: Pursuant to Article 4, in consideration of services rendered and
expenses assumed pursuant to this Agreement, the Company will pay
the Administrator on the first business day of each month, or at
such time(s) as the Administrator shall request and the parties
hereto shall agree, a fee computed daily at the annual rates set
forth below:
A. Fees Payable From Effective Date Through March 31, 1999
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1. For the Equity Fund, New York Tax Free Bond Fund, New
York Tax Free Money Market Fund and U.S. Government Money
Market Fund:
Ten one-hundredths of one percent (.10%) of the
Company's average daily net assets up to $1
billion.
Eight one-hundredths of one percent (.08%) of the
Company's average daily net assets in excess of $1
billion up to $2 billion.
Seven one-hundredths of one percent (.07%) of the
Company's average daily net assets in excess of $2
billion.
2. For the Bond Fund, Overseas Equity Fund and
Opportunity Fund:
Five one-hundredths of one percent (.05%) of the
Company's average daily net assets up to $1
billion.
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Four one-hundredths of one percent (.04%) of the
Company's average daily net assets in excess of $1
billion up to $2 billion.
Three and one-half one-hundredths of one percent
(.035%) of the Company's average daily net assets
in excess of $2 billion.
3. For the Money Market Fund:
The fee schedule set forth below in Section B.
shall be applicable following the commencement of
operations of such Fund.
B. Fees Payable After March 31, 1999
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1. For the Equity Fund, New York Tax Free Bond Fund, New
York Tax Free Money Market Fund, U.S. Government Money
Market Fund and Money Market Fund:
Ten one-hundredths of one percent (.10%) of the
Company's average daily net assets when the
average daily net assets of all investment
companies that are advised by Republic National
Bank for which the Administrator or any of its
affiliates serves as fund administrator
("Republic-advised Investment Companies") are
equal to or less than $1 billion;
Eight one-hundredths of one percent (.08%) of the
Company's average daily net assets when the
average daily net assets of all Republic-advised
Investment Companies are in excess of $1 billion
but do not exceed $2 billion;
Seven one-hundredths of one percent (.07%) of the
Company's average daily net assets when the
average daily net assets of all Republic-advised
Investment Companies exceeds $2 billion.
2. For the Bond Fund, Overseas Equity Fund and
Opportunity Fund:
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Five one-hundredths of one percent (.05%) of the
Company's average daily net assets when the
average daily net assets of all Republic-advised
Investment Companies are equal to or less than $1
billion;
Four one-hundredths of one percent (.04%) of the
Company's average daily net assets when the
average daily net assets of all Republic-advised
Investment Companies are in excess of $1 billion
but do not exceed $2 billion;
Three and one-half one-hundredths of one percent
(.035%) of the Company's average daily net assets
when the average daily net assets of all
Republic-advised Investment Companies exceeds $2
billion.
The fee payable by the Company hereunder shall be allocated to each
Portfolio based upon its pro rata share of the total fee payable
hereunder. Such fee as is attributable to each Portfolio shall be a
separate (and not joint or joint and several) obligation of each such
Portfolio. The Administrator may agree, from time to time, to waive any
fees payable under this Agreement. Such waiver shall be at
Administrator's sole discretion. The fees payable hereunder shall be
subject to a minimum fee as agreed to from time to time by the parties.
Upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be prorated
according to the proportion which such period bears to the full
monthly period and shall be payable upon the date of termination
of this Agreement.
For purposes of determining the fees payable to the
Administrator, the value of the Company's net assets shall be
computed in the manner described in the Company's Declaration of
Trust or in the Prospectus or Statement of Additional Information
as from time to time is in effect for the computation of the
value of such net assets in connection with the purchase and
redemption of Shares.
Term: Pursuant to Article 7, the term of this Agreement shall commence
on November 1, 1998, and shall remain in effect through March 31,
2003 (the "Initial Term"). Thereafter, unless otherwise
terminated as provided herein, this Agreement shall continue in
effect unless and until it is terminated as set forth in this
paragraph. This Agreement may be terminated without penalty (i)
by provision of advance written notice of nonrenewal to the other
party at least 60 days prior to the end of the Initial Term, (ii)
by mutual agreement of the parties, (iii) for "cause," as defined
below, upon the provision of 60 days advance written notice by
the party alleging cause, (iv) in accordance with the interim
evaluation procedures set forth
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below or (v) by provision of 60 days advance written notice to
the other party following the Initial Term.
For purposes of this Agreement, "cause" shall mean (a) willful
misfeasance, bad faith, gross negligence or reckless disregard on
the part of the party to be terminated with respect to its
obligations and duties set forth herein; (b) a final,
unappealable judicial, regulatory or administrative ruling or
order in which the party to be terminated has been found guilty
of criminal or unethical behavior in the conduct of its business;
(c) financial difficulties on the part of the party to be
terminated which are evidenced by the authorization or
commencement of, or involvement by way of pleading, answer,
consent or acquiescence in, a voluntary or involuntary case,
except for purposes for reconstruction or amalgamation, under any
applicable law of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of
the rights of creditors; or (d) a material breach of this
Agreement that has not been remedied within forty-five (45) days
following receipt of written notice of such breach from the
nonbreaching party.
Following July 1, 2001, the Company may conduct an interim
evaluation of (i) the Administrator's performance under this
Agreement (the "Performance Evaluation") and (ii) the market
conditions for the services provided under this Agreement (the
"Market Evaluation").
(a) If the Company's Performance Evaluation indicates
that the quality of service provided by the Administrator is
significantly less than that contemplated by this Agreement (but
otherwise not constituting a material breach), the Company shall,
on or before October 1, 2001, provide written notice to the
Administrator specifying the areas in which the quality of
service has been less than that contemplated by this Agreement.
The Administrator shall have a period of 90 days in which to
restore, to the reasonable satisfaction of the Company, the
quality of service to that contemplated by this Agreement. If, at
the end of such 90-day period, the Administrator has not restored
the quality of service to that contemplated by this Agreement,
the Company may by written notice to the Administrator terminate
this Agreement without penalty effective upon the later (i) of
April 1, 2002 or (ii) 90 days after such termination notice is
provided to the Administrator.
(b) If the Company's Market Evaluation indicates that the
market for the services provided pursuant to this Agreement by
established service providers, at comparable levels of service,
has changed since the date of this Agreement such that mutual
fund families of a comparable size have secured and are then able
to secure significantly better terms for such services under
agreements having the same initial term as this Agreement, the
Company may, on or before
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October 1, 2001, provide written notice to the Administrator of
such evaluation. At the Company's request, the Administrator and
the Company shall negotiate in good faith an amendment to bring
this Agreement into conformity with then-current market terms
effective not sooner than April 1, 2002, which amendment shall
also extend the Initial Term of the Agreement until March 31,
2005.
Notwithstanding the foregoing, after such termination for so long
as the Administrator, with the written consent of the Company, in
fact continues to perform any one or more of the services
contemplated by this Agreement or any schedule or exhibit hereto,
the provisions of this Agreement, including without limitation
the provisions dealing with indemnification, shall continue in
full force and effect. Compensation due the Administrator and
unpaid by the Company upon such termination shall be immediately
due and payable upon and notwithstanding such termination. Upon
termination the Administrator shall deliver to the Company or its
designee, the Company's property, records, instruments and
documents. The Administrator shall be entitled to collect from
the Company, in addition to the compensation described above, the
amount of all of the Administrator's reasonable cash
disbursements for services in connection with the Administrator's
activities in effecting such termination, including without
limitation, the delivery to the Company and/or its designees of
the Company's property, records, instruments and documents, or
any copies thereof. Subsequent to such termination, the
Administrator shall remain obligated to provide the Company with
reasonable access to any Company documents or records remaining
in its possession. If requested by the Company, the Administrator
shall deliver such documents or records, or copies thereof, to
the Company or its designee for a reasonable fee.
If, during the Initial Term, for any reason other than as
provided in the first paragraph of this Section, the
Administrator is replaced as administrator, or if a third party
is added to perform all or a part of the services provided by the
Administrator under this Agreement (excluding any
sub-administrator appointed by the Administrator as provided in
Article 8 hereof), then the Company shall make a one-time cash
payment, in consideration of the fee structure and services to be
provided under this Agreement, and not as a penalty, to the
Administrator equal to the amount due the Administrator for the
remainder of the Initial Term of this Agreement, assuming for
purposes of calculation of the payment that the amount due the
Administrator for the remainder of the Initial Term shall be
based upon the average amount of the Company's assets for the
twelve months prior to the date the Administrator is replaced or
a third party is added.
In the event the Company is merged into another legal entity in
part or in whole pursuant to any form of business reorganization
or is liquidated in part or in whole prior to the expiration of
the Initial Term of this Agreement, the parties
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acknowledge and agree that the liquidated damages provision set
forth above shall be applicable in those instances in which the
Administrator is not retained to provide administration services
consistent with this Agreement, including the level of assets
administered. The one-time cash payment referenced above shall be
due and payable on the day prior to the first day in which the
Administrator is replaced or a third party is added.
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