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Exhibit 24(b)(9)(a)
ADMINISTRATION AGREEMENT
This AGREEMENT is made as of this 5th day of August, 1996, by and between
THE KENT FUNDS, a Massachusetts business trust (the "Company"), and BISYS FUND
SERVICES LIMITED PARTNERSHIP d/b/a BISYS FUND SERVICES (the "Administrator"),
an Ohio limited partnership.
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 several series of shares 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 series of the Company that are currently in existence and which may
hereafter be created (the "Portfolios") on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises and the covenants herein
set forth, the Company and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Company hereby appoints
the Administrator to act as the administrator of the Portfolios and, subject to
the supervision, direction and control of the Company's Board of Trustees, to
furnish the Portfolios with the management and administrative services set
forth in Article 2 below. The Administrator hereby accepts such appointment
and agrees to perform said services for the compensation provided for in
Article 4 below.
The Administrator 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 the administrative services described
herein 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 the Portfolios' 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 agrees to perform the services described herein in accordance
with the service standards set forth in Schedule A attached hereto and made a
part hereof.
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The Administrator shall provide the Company with regulatory reporting, all
necessary office space, equipment, personnel, 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 Company's Board of Trustees, the
Administrator shall make reports to the Trustees concerning the performance of
its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator shall:
(a) calculate each Portfolio's contractual expenses and control all
disbursements by the Company and the Portfolios, and as appropriate
compute each Portfolio's yields, total return, expense ratios,
portfolio turnover rate and, if required, portfolio average
dollar-weighted maturity;
(b) prepare drafts of prospectuses, statements of additional
information, registration statements and proxy materials with the
advice of Company counsel and assist Company counsel with the
filing of the same;
(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 desirable to
register, or otherwise qualify, 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
annual and semi-annual reports to Shareholders, coordinate the
mailing of prospectuses, statements of additional information,
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, 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;
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(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 and required tax filings;
(i) examine and review the operations and performance of the
various organizations providing services to the Company or any
Portfolio, including, without limitation, the Company's investment
adviser, distributor, custodian, fund accountant, transfer agent,
outside legal counsel and independent public accountants, and at the
request of the Company's Board of Trustees, report to the Board on
the performance of such 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(d)(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
registered 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 investment advisory
agreement, distribution agreement, custodian agreement, transfer
agent agreement and fund accounting agreement;
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(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 report for the
Company on Form N-SAR and, within 60 days after the close of each
fiscal year of the Company, all required notices pursuant to Rule
24f-2;
(s) provide reasonable assistance to the Company in connection with
any examination by the SEC;
(t) prepare and maintain a current compliance manual for the Company;
(u) monitor on at least a monthly basis compliance by each Portfolio
with (i) the investment restrictions and diversification requirements
of the 1940 Act; and (ii) the investment restrictions and policies in
the Portfolio's current prospectus and statement of additional
information; and
(v) prepare drafts of minutes for all meetings of the Company's Board
of Trustees and each committee thereof with the advice of Company
counsel and otherwise prepare and distribute all materials necessary
or desirable for each such meeting.
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 and
semi-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.
In performing its duties as Administrator under this Agreement, the
Administrator will act in conformity with the Company's Declaration of Trust,
By-Laws, prospectuses and statements of additional information as in effect
from time to time and will conform to and comply with the requirements of the
1940 Act and all applicable federal and state laws and regulations.
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 other
organization affiliated with 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.
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(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 the investment
adviser to the Company or any other organization affiliated with the
Administrator or the investment adviser, insurance, interest, brokerage costs,
litigation and other extraordinary or nonrecurring expenses, and all fees and
charges of investment advisers to the Company.
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 during the term of this
Agreement compensation in accordance with, and in the manner set forth in,
Schedule B attached hereto. 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 the
reasonable travel and lodging expenses incurred by officers and employees of
the Administrator in connection with attendance at Board meetings.
(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.
(C) Reimbursement Based Upon State Expense Limitations. If in any fiscal
year the aggregate expenses of a particular Portfolio (as defined under the
securities regulations of any state having jurisdiction over the Company)
exceed the expense limitations of any such state, the Administrator will
reimburse such Portfolio for a portion of such excess expenses equal to such
excess times the ratio of the fees respecting such Portfolio otherwise payable
to the Administrator hereunder to the aggregate fees respecting such Portfolio
otherwise payable to the Administrator hereunder and to Old Kent Bank under the
Investment Advisory Agreement between Old Kent Bank and the Company. The
expense reimbursement obligation of the Administrator is limited to the amount
of its fees hereunder for such fiscal year, provided, however, that
notwithstanding the foregoing, the Administrator shall reimburse a particular
Portfolio for such proportion of such excess expenses regardless of the amount
of fees paid to it during such fiscal year to the extent that the securities
regulations of any state having jurisdiction over the Company so require. Such
expense reimbursement, if any, will be estimated daily and reconciled and paid
on a monthly basis.
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
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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 partners, officers, employees and other agents of
the Administrator as well as the Administrator itself.) Any person, even
though also an officer, director, partner, employee or agent of the
Administrator, who may be or become an officer, Trustee, employee or agent of
the Company, shall be deemed, when rendering services to the Company or to any
Portfolio, or acting on any business of the Company or of any Portfolio (other
than services or business in connection with the Administrator's duties
hereunder) to be rendering such services to or acting solely for the Company or
the Portfolio and not as an officer, director, partner, employee or agent or
one under the control or direction of the Administrator even though paid by the
Administrator.
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
indemnity and defense provisions set forth herein shall survive the termination
of this Agreement for a period of five years.
Except for actions, suits or claims brought or threatened against the
Administrator by (i) the Company, or (ii) one or more Shareholders of the
Company, 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 provision contained herein shall apply, however, it is
understood that if in any case the Company may be asked to indemnify or hold
the Administrator harmless, the Company shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Company promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Company, but failure to do so in good faith shall not affect the
Administrator's indemnification rights hereunder.
The Company 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 Company elects to assume the
defense of any such claim, the defense shall be conducted by counsel chosen by
the Company and satisfactory to the Administrator, whose approval shall not be
unreasonably withheld. In the event that the Company elects to assume the
defense of any suit and retain counsel, the Administrator shall bear the fees
and expenses of any additional counsel retained by it. If the Company does not
elect to assume the defense of a suit, it will reimburse the Administrator for
the reasonable fees and expenses of any counsel retained by the Administrator.
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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 reasonable 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 in good faith upon
any document which it reasonably believes to be genuine and to have been signed
or presented by the proper person or persons.
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. To the extent the Administrator renders services to
another investment company which are similar to the services the Administrator
is obligated to perform under this Agreement, the Administrator will take
reasonable precautions to avoid any conflict of interest between its
obligations to the Company and its obligations to any such other investment
company. 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 partners, officers and employees of
the Administrator and its counsel are or maybe 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 duration of this Agreement
shall be as specified in Schedule B 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, 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. No provision of this Agreement may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party against whom an enforcement of the change, waiver, discharge or
termination is sought.
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
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the Administrator, but shall be the property of the Company and will be made
available to or surrendered promptly to the Company 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. 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 12. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by facsimile or
registered or certified mail, postage prepaid, addressed by the party giving
notice to the other party at the following address: 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000, facsimile number (000) 000-0000, or at such other
address or facsimile number as such party may from time to time specify in
writing to the other party pursuant to this Section. Notice sent by registered
or certified mail shall be deemed to have been given three days after it is
sent. Notice sent by facsimile shall be deemed to have been given immediately.
ARTICLE 13. 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 14. 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.
ARTICLE 15. Confidentiality. The Administrator agrees on behalf of itself
and its employees to treat confidentially and as the proprietary information of
the Company, all records and other information relative to the Company and
prior, present or potential Shareholders, and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except, after prior notification to and approval in writing
by the Company, which approval shall not be unreasonably withheld and may not
be withheld where the Administrator may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the
Company.
ARTICLE 16. Matters Relating to the Company as a Massachusetts Business
Trust. The names "The Kent Funds" and "Trustees of The Kent Funds" refer
respectively to the business trust
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created and the Trustees, as trustees but not individually or personally,
acting from time to time under a Declaration of Trust dated as of May 9, 1986
to which reference is hereby made and a copy of which is on file at the office
of the Secretary of the Commonwealth of Massachusetts and elsewhere as required
by law, and to any and all amendments thereto so filed or hereafter filed. The
obligations of "The Kent Funds" entered into in the name or on behalf thereof
by any of the Trustees, representatives or agents are made not individually,
but in such capacities, and are not binding upon any of the Trustees,
shareholders or representatives of the Company personally, but bind only the
assets of the Company, and all persons dealing with any Portfolio must look
solely to the assets of the Company belonging to such Portfolio for the
enforcement of any claims against the Company.
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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.
THE KENT FUNDS
By: /s/ Xxxxxx X. Xxx Xxxxxxxx
---------------------------
BISYS FUND SERVICES LIMITED
PARTNERSHIP
BY: BISYS FUND SERVICES, INC.,
GENERAL PARTNER
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
BETWEEN THE KENT FUNDS
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
SERVICE STANDARDS
Pursuant to Article 2 of this Agreement, the Administrator has agreed to
perform the services described in this Agreement in accordance with the service
standards set forth in this Schedule A. Such standards are contained on the
pages attached hereto. The parties agree that such service standards may be
revised, from time to time, by mutual agreement.
Each of the service standards will be monitored by a Quality Assurance team.
In the event the Administrator fails to meet a service standard in any
particular month, the Administrator agrees to take appropriate corrective
measures within the following thirty-day period in order to be in compliance
with the appropriate standard at the end of such thirty-day period; provided,
however, that the foregoing requirement shall not apply in those instances in
which the Administrator's failure to meet a service standard was due to
circumstances beyond its control.
In the event the Administrator fails to meet a particular service standard
(except for any failure due to circumstances beyond its control) in two
consecutive months, the fee payable to the Administrator hereunder shall be
reduced by one percent (1%) or such lower amount as the parties shall agree
upon for the second of those two months. If such failure occurs in three
consecutive months, the fee payable to the Administrator hereunder shall be
reduced by one and one-half percent (1.5%) or such lower amount as the parties
shall agree upon for the third of those three months.
In the event the Administrator fails to meet a particular service standard
(except for any failure due to circumstances beyond its control) for any three
months within a six-month period, such failure shall be deemed to be a service
standard deficiency for purposes of the "cause" definition contained in the
Duration and Termination provisions set forth in Schedule C.
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SCHEDULE B
TO THE ADMINISTRATION AGREEMENT
DATED AS OF AUGUST 5, 1996
BETWEEN THE KENT FUNDS
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
Portfolios: This Agreement shall apply to all Portfolios of the Company, either
now or hereafter created (collectively, the "Portfolios"). The
current Portfolios of the Company are set forth below: The Kent
International Growth Fund, The Kent Small Company Growth Fund, The
Kent Index Equity Fund, The Kent Growth and Income Fund, The Kent
Income Fund, The Kent Intermediate Bond Fund, The Xxxx Xxxxx Term
Bond Fund, The Kent Tax-Free Income Fund, The Kent Intermediate
Tax-Free Fund, The Kent Michigan Municipal Bond Fund, The Kent
Limited Term Tax-Free Fund, The Kent Money Market Fund and The Kent
Michigan Municipal Money Market 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 rate of:
Eighteen and one-half one-hundredths of
one percent (.185%) of the Company's
average daily net assets up to $5 billion.
Sixteen and one-half one-hundredths of one
percent (.165%) of the Company's average
daily net assets in excess of $5 billion
up to $7.5 billion.
Thirteen and one-half one-hundredths of
one percent (.135%) of the Company's
average daily net assets in excess of $7.5
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. All Portfolios that are created
after the effective date of this Agreement shall be subject to a per
Portfolio annual minimum fee of $45,000.
Upon any termination of this Agreement before the end of any month,
the fee for
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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 net assets of a particular Portfolio shall be
computed in the manner described in the Company's Declaration of
Trust or in the Prospectus or Statement of Additional Information
respecting that Portfolio 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 the shares of such Portfolio.
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SCHEDULE C
TO THE ADMINISTRATION AGREEMENT
BETWEEN THE KENT FUNDS
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
DURATION AND TERMINATION
Pursuant to Article 7, the term of this Agreement shall commence on August 5,
1996 and shall remain in effect through July 31, 1998 (the "Initial Term").
Thereafter, unless otherwise terminated as provided herein, this Agreement
shall be renewed automatically for successive one-year periods ("Rollover
Periods"). This Agreement may be terminated without penalty (i) by provision of
a notice of nonrenewal in the manner set forth below, (ii) by provision of 60
days advance written notice of termination during any Rollover Period, (iii) by
mutual agreement of the parties or (iv) for "cause," as defined below, upon the
provision of 45 days advance written notice by the party alleging cause.
Written notice of nonrenewal must be provided within 60 days following the
Initial Term or any Rollover Period in order to avoid automatic renewal. In
the event such notice is provided in a timely manner, this Agreement shall
terminate 180 days after such notice, if given following the Initial Term, or
60 days after such notice, if given following a Rollover Period.
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)
multiple negligent acts on the part of the party to be terminated which in the
aggregate constitute a serious failure to perform satisfactorily that party's
obligations hereunder; (c) 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;
(d) 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
under Title 11 of the United States Code, as from time to time is in effect, or
any applicable law, other than said Title 11, of any jurisdiction relating to
the liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors; or (e) a service standard deficiency as
defined in Schedule A.
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. The Administrator shall be entitled to
collect from the Company, in addition to the compensation described in Schedule
B, 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
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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 the Company terminates this Agreement other than as provided in the first
paragraph of this Schedule C, then the Company shall make a one-time cash
payment, as liquidated damages, to the Administrator equal to the balance due
the Administrator for the remainder of the then current term of this Agreement,
assuming for purposes of calculation of the payment that the asset level of the
Company on the date the Agreement is terminated will remain constant for the
balance of the then current contract term.
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