THE BENCHMARK FUNDS
ADMINISTRATION AGREEMENT
AGREEMENT made this 31st day of March, 1998, between THE BENCHMARK FUNDS, a
Delaware business trust (the "Trust"), and XXXXXXX, XXXXX & CO., a New York
limited partnership (the "Administrator").
WITNESSETH:
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WHEREAS, the Trust is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
("Shares") in separate series with each such series representing the interests
in a separate portfolio of securities and other assets; and
WHEREAS, the Trust currently intends to offer shares of beneficial interest
in seventeen portfolios, known as the Diversified Assets Portfolio, Government
Portfolio, Government Selected Portfolio, Tax-Exempt Portfolio, U.S. Treasury
Index Portfolio, Short-Intermediate Bond Portfolio, Bond Portfolio, Intermediate
Bond Portfolio, Equity Index Portfolio, Small Company Index Portfolio,
Diversified Growth Portfolio, U.S. Government Securities Portfolio, Focused
Growth Portfolio, Balanced Portfolio, International Growth Portfolio,
International Bond Portfolio and International Equity Index Portfolio; such
Portfolios (the "Current Portfolios") together with all other portfolios
subsequently established by the Trust and made subject to this Agreement being
herein collectively referred to as the "Portfolios"; and
WHEREAS, the Trust desires to retain the Administrator to act as
administrator of the Trust and the Administrator is willing to so act;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Administrator. The Trust hereby appoints the
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Administrator to act as administrator of the Trust for the periods and on the
terms herein set forth. The Administrator accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. Delivery of Documents. The Trust has delivered (or
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will deliver as soon as is possible) to the Administrator copies of each of the
following documents:
(a) Agreement and Declaration of Trust of the Trust dated as of July
1, 1997, together with all Amendments thereto (such Agreement and
Declaration of Trust, as currently in effect and as amended from
time to time, is herein called the "Trust Agreement"), copies of
which are also on file with the Trust;
(b) By-Laws of the Trust (such By-Laws, as currently in effect and as
amended from time to time, are herein called the "By-Laws");
(c) Advisory Agreement between the Trust and The Northern Trust
Company ("Northern") (such Agreement, as currently in effect and
as amended and/or superseded from time to time, is herein called
the "Advisory Agreement");
(d) Custodian Agreement between the Trust and Northern;
(e) Transfer Agency Agreement between the Trust and Northern;
(f) Prospectus and Statement of Additional Information of the Trust
(such Prospectus and Statement of Additional Information, as
presently in effect and as amended, supplemented and/or
superseded from time to time, is herein called the "Prospectus"
and "Statement of Additional Information," respectively);
(g) Post-Effective Amendment No. 38 to the Trust's Registration
Statement on Form N-1A (No. 2-80543) under the Securities Act of
1933 (the "1933 Act") and Amendment No. 39 to the Trust's
Registration Statement on such form (No. 811-3605) under the 1940
Act filed as a single document with the Securities and Exchange
Commission (the "Commission") (such Registration Statement, as
presently in effect and as amended from time to time, is herein
called the "Registration Statement");
The Trust agrees to promptly furnish the Administrator from time to time
with copies of all amendments of or supplements to or otherwise current versions
of any of the foregoing documents not heretofore furnished.
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3. Duties of Administrator.
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(a) Subject to the general supervision of the Trustees of the Trust,
the Administrator:
(i) shall provide supervision of all aspects of the Trust's
operations (other than those referred to in paragraph 3(a)
of the Advisory Agreement) (the parties giving due
recognition to the fact that certain of such operations to
be supervised are performed by Northern pursuant to the
Trust's agreements with Northern referred to in paragraph 2
hereof);
(ii) shall, to the extent not provided pursuant to the Trust's
agreements with Northern referred to in paragraph 2 hereof,
provide the Trust with such personnel as are reasonably
necessary for the conduct of the Trust's affairs;
(iii) shall, to the extent not provided pursuant to the Trust's
agreements with Northern referred to in paragraph 2 hereof,
arrange for (A) the preparation for the Trust of all
required tax returns, (B) the preparation and submission of
reports to existing Shareholders, and (C) the periodic
updating of the Prospectus and the preparation of reports
filed with the Commission and other regulatory authorities
(including qualification under state securities or Blue Sky
laws of the Trust's Shares);
(iv) shall, to the extent not provided pursuant to the Trust's
agreements with Northern referred to in paragraph 2 hereof,
provide the Trust with adequate office space and all
necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and
similar items, in Chicago, Illinois;
(v) and shall prepare the Trust's expense budgets and arrange
for the payment of the Trust's bills.
(b) The Administrator, in the performance of its duties hereunder,
shall act in conformity with the Trust Agreement, By-Laws,
Registration Statement and Prospectus and Statement of Additional
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Information and with the instructions and directions of the
Trustees of the Trust, and will use its best efforts to conform
to the requirements of the 1940 Act and all other applicable
federal and state laws, regulations and rulings.
(c) The Administrator shall render to the Trustees of the Trust such
periodic and special reports as the Trustees may reasonably
request.
(d) The services of the Administrator hereunder are not deemed
exclusive and the Administrator shall be free to render similar
services to others so long as its services under this Agreement
are not impaired thereby.
(e) Provide officers to the Trust.
4. Expenses.
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(a) During the term of this Agreement, the Administrator will pay all
expenses incurred by it in connection with the performance of its
duties under paragraph 3 hereof, other than the out-of-pocket
cost of the preparations, submissions, updatings and filings
referred to in paragraph 3(a)(iii).
(b) If, in any fiscal year, the sum of a Portfolio's expenses
(including the fee payable pursuant to paragraph 5 hereof, but
excluding the investment advisory fee and transfer agency fee
payable to Northern pursuant to its agreements with the Trust
referred to in paragraph 2 hereof and servicing fees, and
extraordinary expenses such as taxes, interest, and
indemnification expenses) exceeds on an annualized basis .10% of
a Portfolio's average net assets (0.25% for each International
Portfolio, including the International Growth Portfolio,
International Bond Portfolio and International Equity Index
Portfolio) for such fiscal year, the Administrator will reimburse
each Portfolio for the amount of such excess in accordance with
the following timetable. Expenses reimbursements, if any, will
be calculated and paid monthly. The amount of the reimbursement
paid by the Administrator to each Portfolio will be computed as
of the end of each month by (1) determining the difference
between the Portfolio's accrued annualized expense ration and the
above percentage limitation; (2) multiplying this
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percentage by the Portfolio's year to date average net asset
value for such month to obtain the cumulative dollar amount of
such excess; and (3) subtracting from the cumulative dollar
amount of such excess the cumulative amount of reimbursements
made to such Portfolio by the Administrator since the beginning
of the fiscal year. A positive remainder represents the amount to
be paid by the Administrator to the Portfolio; a negative
remainder represents the amount to be paid by the Portfolio to
the Administrator.
(c) In the event that the reimbursements described in paragraph (b)
to the Portfolios cause the aggregate net administration fees
actually earned by Xxxxxxx Sachs on behalf of all the Fund's
Portfolios during any fiscal year pursuant to the Administration
Agreement to be less than the sum of (a) $1 million for the first
12 Portfolios that were actively engaged in operations during any
part of such fiscal year plus (b) $50,000 for each additional
Portfolio that was actively engaged in operations during any part
of such fiscal year (the "Minimum Fee"), Northern agrees to pay
to Xxxxxxx Xxxxx, promptly following the close of each fiscal
year of the Fund, and amount equal to the difference between such
earned net administration fees and the Minimum Fee.
5. Compensation.
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(a) For the services provided and the expenses assumed by the
Administrator for each non-international portfolio (which include
supervision with respect to the Trust's non-investment advisory
operations) pursuant to the Agreement, the Trust will pay to the
Administrator as full compensation therefor a fee at an annual
rate of .10% of each Portfolio's average daily net assets.
For the services provided and the expenses assumed by the
Administrator for an International Portfolio, including the
International Growth Portfolio, International Bond Portfolio and
International Equity Index Portfolio (which include supervision
with respect to the Trust's non-investment advisory operations)
pursuant to the Agreement, the Trust will pay to the
Administrator as full compensation therefor a fee at an annual
rate of .15% of each Portfolio's average daily net assets.
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(b) The fee will be computed based on net assets on each day and will
be paid to the Administrator monthly.
6. Books and Records. The Administrator agrees to maintain such records
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with respect to its activities hereunder as may be required or as are
appropriate. The Administrator further agrees that all records which it
maintains for the Trust are the property of the Trust and it will surrender
promptly to the Trust any of such records upon the Trust's request.
7. Indemnification.
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(a) The Trust hereby agrees to indemnify and hold harmless the
Administrator, its officers, partners and employees and each
person, if any, who controls the Administrator (collectively the
"Indemnified Parties") against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of
them may become subject under the 1933 Act, the Securities
Exchange Act of 1934, the 1940 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission to state a
material fact required to be stated or necessary to make the
statements made not misleading in the Registration
Statement, the Prospectus or the Statement of Additional
information, or any application or other document filed in
connection with the qualification of the Trust or Shares of
any Portfolio under the Blue Sky or securities laws of any
jurisdiction ("Application"), except insofar as such losses,
claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or
omission either pertaining to a breach of the
Administrator's duties in connection with this Agreement or
the Distribution Agreement of even date herewith between the
Administrator and the Trust, made in reliance upon and in
conformity with information furnished by or on behalf of the
Administrator for use in connection with the Registration
Statement,
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the Prospectus and Statement of Additional Information or
any Application, or
(ii) subject to clause (i) above, the Administrator acting
hereunder or under the Distribution Agreement dated March
31, 1998 between the Administrator and the Trust;
and the Trust will reimburse each Indemnified Party for any legal or other
expenses incurred by such Indemnified Party in connection with investigating or
defending any such loss, claim, damage, liability or action.
(b) If the Indemnification provided for in paragraph 7(a) is due in
accordance with the terms of such paragraph but is for any reason
held by a court to be unavailable from the Trust, then the Trust
shall contribute to the aggregate amount paid or payable by the
Trust and the Indemnified Parties as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect (i) the relative
benefits received by the Trust and such Indemnified Parties in
connection with the operations of the Trust, (ii) the relative
fault of the Trust and such Indemnified Parties, and (iii) any
other relevant equitable considerations. The Trust and the
Administrator agree that it would not be just and equitable if
contribution pursuant to this subparagraph (b) were determined by
pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to
above in this subparagraph (b). The amount paid or payable as a
result of the losses, claims, damages or liabilities (or actions
in respect thereof) referred to above in this subparagraph (b)
shall be deemed to include any legal or other expense incurred by
the Trust and the Indemnified Parties in connection with
investigating or defending any such loss, claim, damage,
liability or action. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(c) It is understood, however, that nothing in this paragraph 7 shall
protect any Indemnified Party against, or entitle any Indemnified
Party to indemnification against, or contribution with respect
to, any liability to the Trust or its
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Shareholders to which such Indemnified Party is subject, by
reason of its willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of any reckless
disregard of its obligations and duties, under this Agreement or
the Distribution Agreement, or otherwise to an extent or in a
manner inconsistent with Section 17 of the 1940 Act.
8. Duration and Termination. Insofar as the holders of Shares
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representing the interests in the Current Portfolios are affected by this
Agreement, it shall continue, unless sooner terminated as provided herein, until
April 30, 1999, and, insofar as the holders of Shares representing the interests
in each of the other Portfolios are affected by this Agreement, it shall
continue until April 30 of the year following the year in which the Portfolio
becomes a Portfolio hereunder, and thereafter shall continue automatically for
periods of one year so long as each such latter continuance is approved at least
annually (a) by the vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or interested persons (as defined by the 0000 Xxx) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Trustees of the Trust or by vote of a majority of
the outstanding Shares (as defined with respect to voting securities in the 1940
Act) representing the interests in such Portfolio. This Agreement may be
terminated by the Trust as to any Portfolio at any time, without the payment of
any penalty, by vote of a majority of the Trustees of the Trust or by vote of a
majority of the outstanding Shares (as so defined) representing the interests in
the Portfolio affected thereby on 60 days' written notice to the Administrator,
or by the Administrator at any time, without the payment of any penalty, on 60
days' written notice to the Trust. This Agreement will automatically and
immediately terminate in the event of its assignment (as defined by the 1940
Act).
9. Status of Administrator as Independent Contractor. The Administrator
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shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided herein or authorized by the Trustees
of the Trust from time to time, have no authority to act for or represent the
Trust in any way or otherwise be deemed an agent of the Trust. The
Administrator represents and warrants to the Trust that it is duly organized as
a New York limited partnership and is and at all times will remain duly
authorized and licensed to carry out its services as contemplated herein.
10. Amendment of Agreement. This Agreement may be amended by mutual
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consent provided that such amendment is approved by vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or interested
persons (as defined in
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the 0000 Xxx) of any such party, cast in person at a meeting called for the
purpose of voting on such amendment.
11. Shareholder Liability. This Agreement is executed by or on behalf of
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the Trust with respect to each of its Portfolios and the obligations hereunder
are not binding upon any of the Trustees, officers or Shareholders of the Trust
individually but are binding only upon the Portfolio to which such obligations
pertain and the assets and property of such Portfolio. All obligations of the
Trust under this Agreement shall apply only on a Portfolio-by-Portfolio basis,
and the assets of one Portfolio shall not be liable for the obligations of
another Portfolio.
12. Miscellaneous. The captions in this Agreement are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. This Agreement shall be construed in accordance with
applicable federal law and (except as to paragraph 11 hereof which shall be
construed in accordance with the laws of the State of Delaware) the laws of the
State of Illinois and shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors (subject to the last sentence
of paragraph 8) and, to the extent provided in paragraph 7 hereof, each
Indemnified Party. Anything herein to the contrary notwithstanding, this
Agreement shall not be construed to require, or to impose any duty upon, either
of the parties to do anything in violation of any applicable laws or
regulations.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
THE BENCHMARK FUNDS
Attest: By: /s/ Xxxxx X. Xxxxxx
_______________________________
Name: Xxxxx X. Xxxxxx
_____________________________
Title: Vice President
____________________________
Attest: XXXXXXX, XXXXX & CO.
By: /s/ Xxxxx X. Xxxxxx
________________________________
Name: Xxxxx X. Xxxxxx
______________________________
Title: Vice President
_____________________________
Attest: THE NORTHERN TRUST COMPANY
FOR PURPOSES OF PARAGRAPH 4(C) ONLY
By: /s/ Xxxxxx X. Xxxxxxx
________________________________
Name: Xxxxxx X. Xxxxxxx
______________________________
Title: Sr. Vice President
_____________________________
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