Exhibit (h)(3)
FORM OF ADMINISTRATION AGREEMENT
AGREEMENT made this 26th day of July, 2000 between Lexington Natural Resources
Trust (the "Trust"), a Massachusetts business trust, and Pilgrim Group, Inc.
(the "Administrator"), a Delaware corporation.
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust desires to avail itself of the services of the
Administrator for the provision of administrative services for the Trust; and
WHEREAS, the Administrator is willing to render such services to the Trust;
NOW, THEREFORE, in consideration of the premises, the promises and mutual
covenants herein contained, it is agreed between the parties as follows:
1. Appointment. The Trust hereby appoints the Administrator, subject to the
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direction of the Board of Trustees, for the period and on the terms set forth in
this Agreement, to provide administrative services, as described herein, with
respect to the Trust. The Administrator accepts such appointment and agrees to
render the services set forth herein.
2. Services of the Administrator. Subject to the general supervision of the
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Board of Trustees of the Trust, the Administrator shall provide the following
administrative services:
(a) Provide all administrative services reasonably necessary for the
operation of the Trust other than the investment advisory services performed by
the investment adviser or sub-adviser, including, but not limited to, (i)
coordinating all matters relating to the operation of the Trust, including any
necessary coordination among the investment adviser, custodian, transfer agent,
dividend disbursing agent, and portfolio accounting agent (including pricing and
valuation of the portfolio), accountants, attorneys, and other parties
performing services or operational functions for the Trust; (ii) maintaining or
supervising the maintenance by third parties engaged by the Trust of such books
and records of the Trust as may be required by applicable federal or state law;
(iii) preparing or supervising the preparation by third parties selected by the
Trust of all federal, state, and local tax returns and reports required by
applicable law; (iv) preparing and filing, with the assistance of counsel, and
arranging for the distribution of proxy materials and periodic reports to
shareholders as required by applicable law; (v) preparing and arranging for the
filing, with the assistance of counsel, of registration statements and other
documents with the Securities and Exchange Commission (the "SEC") and other
federal and state regulatory authorities as may be required by applicable law;
(vi) taking such other action with respect to the Trust as may be required by
applicable law, including without limitation the rules and regulations of the
SEC and other regulatory agencies; (vii) providing the Trust, at the
Administrator's expense, with adequate personnel, office space, communications
facilities, and
other facilities necessary for operation of the Trust as contemplated in this
Agreement; (viii) arranging for meetings of the Trust's Board of Trustees and,
in connection therewith, providing the Board with necessary or appropriate
information for its meetings; (ix) providing non-investment related statistical
and research data and such other reports, evaluations and information as the
Trust may request from time to time; (x) maintaining the Trust's existence, and
during such time as shares of the Trust are publicly offered, maintaining the
registration and qualification of the Trust's shares under federal and state
law; and (xi) responding to inquiries from shareholders or their agents or
representatives relating to the Trust, concerning, among other things, exchanges
among funds, or referring any such inquiries to the Trust's officers or transfer
agent. Nothing in this provision shall be deemed to inhibit the Trust or its
officers from engaging, at the expense of the Trust, other persons to assist in
providing administrative services to the Trust including, but not limited to,
accounting agents, recordkeeping agents, proxy solicitation agents, attorneys,
accountants, consultants and others.
(b) Render to the Board of Trustees of the Trust such periodic and special
reports as the Board may reasonably request;
(c) Make available its officers and employees to the Board of Trustees and
officers of the Trust for consultation and discussions regarding the
administration of the Trust and the services provided to the Trust under
this Agreement; and
(d) Develop and implement, if appropriate, management and shareholder
services designed to enhance the value or convenience of the Trust as an
investment vehicle.
3. Conformity with Applicable Law. The Administrator, in the performance of
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its duties and obligations under this Agreement, shall act in conformity with
the Registration Statement of the Trust and with the instructions and directions
of the Board of Trustees of the Trust and will conform to, and comply with, the
requirements of the 1940 Act and all other applicable federal and state laws and
regulations.
4. Exclusivity. The services of the Administrator to the Trust under this
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Agreement are not to be deemed exclusive, and the Administrator, or any
affiliate thereof, shall be free to render similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of the Trust) and to engage in other activities,
so long as its services hereunder are not impaired thereby.
5. Expenses. During the term of this Agreement, the Administrator will pay
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all expenses incurred by it in connection with its activities under this
Agreement, except such expenses as are assumed by the Trust under this Agreement
and such expenses as are assumed by the investment adviser pursuant to an
Investment Management Agreement. The Trust shall be responsible for all of the
other expenses of its operations, including, without limitation, the
administration fee payable hereunder; advisory fees; brokerage commissions;
interest; legal fees and expenses of attorneys; fees of auditors, transfer
agents and dividend disbursing agents, custodians and shareholder servicing
agents; fees of accountants and accounting services; the
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expense of obtaining quotations for calculating the Trust's net asset value;
taxes, if any, and the preparation of the Trust's tax returns; cost of stock
certificates and any other expenses (including clerical expenses) of issue,
sale, repurchase or redemption of shares; expenses of registering and qualifying
shares of the Trust under federal and state laws and regulations; salaries of
personnel involved in placing orders for the execution of the Trust's portfolio
transactions; expenses of printing and distributing reports, notices and proxy
materials to existing shareholders; expenses of printing and filing reports and
other documents filed with governmental agencies; expenses in connection with
shareholder and director meetings; expenses of printing and distributing
prospectuses and statements of additional information to existing shareholders;
fees and expenses of Trustees of the Trust who are not "interested persons" of
the Trust as that term is defined in the Investment Company Act of 1940; trade
association dues; insurance premiums; and extraordinary expenses such as
litigation expenses. To the extent the Administrator incurs any costs or
performs any services which are an obligation of the Trust, as set forth herein,
the Trust shall promptly reimburse the Administrator for such costs and
expenses. To the extent the services for which the Trust is obligated to pay are
performed by the Administrator, the Administrator shall be entitled to recover
from the Trust only to the extent of its costs for such services.
6. Compensation. For the services provided by the Administrator pursuant to
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this Agreement, the Trust will pay to the Administrator the annual fee set forth
in Schedule A hereto.
7. Liability of the Administrator. The Administrator may rely on information
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reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the 1940 Act or the rules thereunder, neither the Administrator
nor its stockholders, officers, directors, employees, or agents shall be subject
to any liability for, or any damages, expenses, or losses incurred in connection
with, any act or omission connected with or arising out of any services rendered
under this Agreement, except by reason of willful misfeasance, bad faith, or
gross negligence in the performance of the Administrator's duties, or by reason
of reckless disregard of the Administrator's obligations and duties under this
Agreement. The liability incurred by the Administrator pursuant to this
paragraph 7 in any year shall be limited to the revenues of the Administrator
derived from the Trust in that fiscal year of the Trust. The Administrator
shall look solely to Trust property for satisfaction of claims of any nature
against the Trust or a director, officer, employee or agent of the Trust arising
in connection with the affairs of the Trust.
8. Continuation and Termination. This Agreement shall become
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effective on the date first written above, subject to the condition that the
Trust's Board of Trustees, including a majority of those Trustees who are not
interested persons (as such term is defined in the 0000 Xxx) of the
Administrator, shall have approved this Agreement. Unless terminated as
provided herein, the Agreement shall continue in full force and effect for two
(2) years from the effective date of this Agreement, and shall continue from
year to year thereafter so long as such continuance is specifically approved at
least annually by the vote of a majority of the Board of Trustees of the Trust,
including a majority of the Board of Trustees of the Trust who are not
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parties to this Agreement or "interested persons" (as defined in the 0000 Xxx)
of the Trust or the Administrator.
This Agreement may be terminated by the Trust at any time, without the payment
of any penalty, by vote of a majority of the Board of Trustees of the Trust on
sixty (60) days' written notice to the Administrator, or by the Administrator at
any time, without the payment of any penalty, on sixty (60) days' written notice
to the Trust.
9. Limitation of Liability of Trustees. Notice is hereby given that this
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Agreement is executed by an officer of the Trust on behalf of the Trustees of
the Trust, as Trustees and not individually, and that the obligations of this
Agreement with respect to the Trust shall be binding upon the assets and the
properties of the Trust only and shall not be binding upon the assets or
properties of the Trustees, officers, employees, agents or shareholders of the
Trust individually.
10. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original.
11. Applicable Law.
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(a) This Agreement shall be governed by the laws of the State of Arizona,
provided that nothing herein shall be construed in a manner inconsistent
with the 1940 Act, the Investment Advisers Act of 1940, or any rules or
order of the SEC thereunder.
(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(c) The captions of this Agreement are included for convenience only and in no
way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
LEXINGTON NATURAL RESOURCES TRUST
By:
______________________________
Title
PILGRIM GROUP, INC.
By:
______________________________
Title
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SCHEDULE A
Administrative Fee
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0.10% of the Trust's average daily net assets
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