ADMINISTRATIVE SERVICES AGREEMENT
This is an ADMINISTRATIVE SERVICES AGREEMENT this ("Agreement") made as of
the 7 day of November, 1997, by and between ARM FINANCIAL GROUP, INC., a
Delaware corporation ("Provider"), and ARM CAPITAL ADVISORS, LLC, a Delaware
limited liability company ("Company"), which is registered as an investment
adviser under the Investment Advisers Act of 1940 (the "Act").
RECITALS
WHEREAS, Provider has experience in providing certain administrative
services support to investment advisors; and
WHEREAS, Company desires Provider to perform certain administrative
services ("services") for Company; and
WHEREAS, Provider and Company contemplate that the availability of services
and facilities will achieve certain operating efficiencies and improve services
provided by Company to its clients; and
WHEREAS, Provider and Company wish to identify the services to be rendered
to Company by Provider and the facilities to be used by Company and to provide
for the fees to be paid by Company to Provider;
NOW, THEREFORE, in consideration of the premises and of the mutual promises
set forth herein, and intending to be legally bound hereby, Provider and Company
agree as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject to the terms,
conditions and limitations of this Agreement, Provider agrees to provide the
following services to Company:
(i) investment accounting support for the investment portfolio
of third parties (i.e., other than Provider) at an annualized cost of one basis
point (.0001) multiplied times the market value of the Company's monthly average
assets under management during the course of the year;
(ii) investment accounting support for Provider's investment
portfolio under management by Company during the course of the year at an
annualized cost of (A) seven-tenths of one basis point (.0007) times the first
two billion dollars of monthly average market value of assets under management,
(B) six-tenths of one basis point (.00006) times the monthly average market
value of assets under management in excess of two billion dollars and up to
three billion
dollars, and (C) five-tenths of one basis point (.00005) times the monthly
average market value of assets under management in excess of three billion
dollars;
(iii) if requested by Company, programming and other systems
support at mutually agreed prices, plus out-of-pocket expenses subject to
Company's prior written approval.
(iv) such other services at such prices as are mutually agreed
upon by Provider and Company and set forth in an addendum to this Agreement
signed by both parties hereto.
Subject to the terms, conditions and limitations of this Agreement,
Provider agrees to make available to Company such of its facilities or the
facilities of its subsidiaries as Provider in its discretion deems to be
reasonably necessary in the conduct of Company's investment advisory operations.
(a) CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever
Provider utilizes its personnel to perform services for Company
pursuant to this Agreement, such personnel shall at all times
remain employees of Provider, and Provider shall alone retain
full liability for their compensation, employee benefits, payroll
deductions and legally required employer contributions and
withholding tax obligations. No facility of Provider or its
affiliates used in performing services for (or subject to use by)
Company pursuant to this Agreement shall be deemed to be transferred,
assigned, conveyed or leased by performance or use.
(b) EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing any
services hereunder which require the exercise of judgment by Provider,
Provider shall use its best efforts to perform such services in
accordance with all applicable standards and guidelines to ensure that
any such services comply with the requirements of the Act and other
applicable law.
2
(c) CONTROL. The performance of services by Provider for Company
pursuant to this Agreement shall in no way impair the absolute control of
the business and operations of Company by its Board of Directors and
shareholders. Provider shall act hereunder so as to assure the separate
operating and corporate identity of Company.
2. BILLING AND PAYMENT PROCEDURES. Provider shall periodically submit to
Company a written statement of the amount owed by Company for services provided
hereunder (including applicable out-of-pocket expenses) and Company shall pay to
Provider within thirty (30) days of such written statement the amount set forth
in such statement.
3. ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be responsible for
maintaining full and accurate accounts and records of all services rendered and
facilities used pursuant to this Agreement and such additional information as
Company may reasonably request for purposes of its internal bookkeeping and
accounting operations. Provider shall also maintain such accounts and records
insofar as they pertain to the computation of charges hereunder available at its
principal offices for audit, inspection and copying by Company and persons
authorized by it or any governmental agency having jurisdiction over Company
during reasonable business hours.
4. OTHER RECORDS AND DOCUMENTS. All other books, records, and files
established and maintained by Provider by reason of its performance of its
obligations under this Agreement which, absent this Agreement, would have been
held by Company, shall be deemed the property of Company, and shall be subject
to examination during reasonable business hours by Company and persons
authorized by it or any governmental agency having jurisdiction over Company.
5. RIGHT TO CONTRACT WITH THIRD PARTIES. Except as agreed otherwise by the
parties hereto, Company hereby grants Provider a non-exclusive right to perform
the services (or use of the facilities) called for hereunder. Nothing herein
shall be deemed to prohibit Provider from providing any or all of the services
to be provided to Company hereunder to other persons, whether or not affiliated
with Provider. Further, Provider has right to subcontract with any third party,
3
affiliated or unaffiliated, for services (or facilities) Provider is
obligated to provide to Company pursuant to this Agreement.
6. CONFIDENTIALITY. In rendering its services hereunder Provider may be
furnished with information concerning the Company's business and affairs
including, without limitation, customer lists (the "Confidential Information").
Provider agrees that (a) except as otherwise required by law, to keep all
Confidential Information confidential and not to disclose or reveal any
confidential information (b) not to sell or distribute any customer lists and
(c) not to use Confidential Information for any other purpose other than
rendering services hereunder.
7. CONTACT PERSON(S). Company and Provider each shall appoint one or more
individuals who shall serve as contact person(s) for the purpose of carrying out
this Agreement. Such contact person(s) shall be authorized to act on behalf of
their respective parties as to the matters pertaining to this Agreement.
Effective upon execution of this Agreement, the initial contact person(s) shall
be those set forth in Section 14 of this Agreement. Each party shall notify the
other, in writing, as to the name, address and telephone number of any
replacement for any such designated contact person or additional contact
persons.
8. TERMINATION AND MODIFICATION. This Agreement shall remain in effect
until terminated by either Provider or Company upon giving 180 days' or more
advance written notice. Upon termination, Provider shall promptly deliver to
Company all books and records that are, or are deemed by this Agreement to be,
the property of Company.
9. SETTLEMENT ON TERMINATION. No later than 30 days after the effective
date of the termination of this Agreement, Provider shall deliver to Company a
detailed written statement for all charges incurred and not included in any
previous statement to the effective date of termination. The amount owed or to
be refunded hereunder shall be due and payable within thirty (30) days of
receipt of such statement.
4
10. INDEPENDENT CONTRACTOR. In rendering its services hereunder, Provider
shall act as an independent contractor, and any duties of Provider arising
hereunder shall be owed exclusively to Company.
11. FORCE MAJEURE. If any cause or condition shall occur beyond the
control of Provider which wholly or partially prevents the performance by
Provider of its obligations hereunder, including, without limitation, any act of
God or the public enemy, fire, explosion, flood, earthquake, war, riot, adverse
weather conditions, breakdowns in equipment or facilities, strike, slowdown,
work stoppage or other labor trouble or delays in receiving or failures to
receive any permits, licenses or approvals from any governmental authority, then
Provider shall be excused to the extent made necessary by such cause or
condition and during the continuance thereof, and Provider shall incur no
liability by reason of its failure to perform the obligations so excused. Such
cause or condition shall not, however, relieve Company of the obligation to pay
to Provider fees and charges due to Provider for services rendered and expenses
incurred hereunder prior to such stoppage.
12. ASSIGNMENT. This Agreement and any rights pursuant hereto shall not
be assignable by either party hereto, except by operation of law. Except as and
to the extent specifically provided in this Agreement, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto, or their respective legal successors, any rights, remedies,
obligations or liabilities, or to relieve any person other than the parties
hereto, or their respective legal successors, from any obligations or
liabilities that would otherwise be applicable. The representations, warranties,
covenants and agreements contained in this Agreement shall be binding upon,
extend to and inure to the benefit of the parties hereto, their, and each of
their, successors and assigns respectively.
13. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the applicable to contracts
made and to be performed entirely within the State of New York.
5
14. HOLD HARMLESS. The Company will indemnify and hold Provider harmless
from any and all damages, claims, suits, actions, courses of action,
proceedings, investigations, loses, liabilities and expenses (including, without
limitation, reasonable legal accounting and other professional expenses)
("Liabilities") asserted against or incurred or sustained by Provider,
associated with or arising out of the services hereunder, except to the extent
such Liabilities resulted from the gross negligence, bad faith or willful
misconduct of Provider.
Provider will indemnify and hold Company harmless from all Liabilities
asserted against or incurred or sustained by Company associated with or arising
out of the services hereunder, except to the extent such liabilities resulted
from the gross negligence, bad faith or willful misconduct of Company.
15. NOTICE. All notices, statements or requests provided for hereunder
shall be deemed to have been duly given when delivered by hand to an officer of
the other party, or when deposited with the U.S. Postal Service, as first class
certified or registered mail, postage prepaid, overnight courier services, telex
or telecopier, addressed:
(a) If to Provider to:
ARM Financial Group, Inc.
000 Xxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
(b) If to Company to:
ARM Capital Advisors, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxx
or to such other persons or places as each party may from time to time designate
by written notice sent as aforesaid.
16. ENTIRE AGREEMENT. This Agreement, together with such amendments as
may from time to time be executed in writing by the parties, constitutes the
entire agreement and
6
understanding between the parties in respect to the transactions contemplated
hereby and supersedes all prior agreements, arrangements and understandings
relating to the subject matter hereof.
17. INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any present or future law, and if
the rights or obligations of Provider or Company under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable; (b) this Agreement will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part
hereof; (c) the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid, or
unenforceable provision or by its severance herefrom; and (d) in lieu of such
illegal, invalid, or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid, and enforceable
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible.
18. SECTION HEADINGS. Section headings contained herein are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
19. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate by their respective officers duly authorized so to do as of the
date and year first above written.
ARM FINANCIAL GROUP, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Co-Chief Executive Officer
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
Title: Co-Chief Executive Officer
ARM CAPITAL ADVISORS, LLC
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: President
8
