ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of October, 1996, by and
between REPUBLIC PORTFOLIOS, (the "Company"), a New York business trust, and
BISYS FUND SERVICES (IRELAND), LIMITED (the "Administrator"), a limited
liability company incorporated under the Ireland Companies Acts.
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 Limited
Partnership; provided, however, that the parties agree that any such services
performed by BISYS Fund Services Limited Partnership shall be subject to and in
compliance with the provisions set forth in Article 2, subparagraph (p) below.
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.
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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 outside of Ireland 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 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;
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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;
(i) examine and review the operations and performance of the
various organizations providing services to the Company or any
Portfolio of the Company, including, 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) subject to subparagraph (r) herein, assist with the design,
development, and operation of the Portfolios, including new
classes, investment objectives, policies and structure;
(l) subject to subparagraph (r) herein, provide individuals,
reasonably acceptable to the Company's Board of Trustees, to
serve as officers of the Company;
(m) upon request, 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) conduct its affairs in a manner that will enable the Company
to satisfy the requirements of Section 864 (b) (2) of the
Internal Revenue Code of 1986, as amended, and Treasury
regulations thereunder, for treatment of the Company as a
corporation that is not engaged in the conduct of a trade or
business in the United States;
(q) to the extent permitted by the Company's Declaration of Trust
and the 1940 Act, take appropriate steps to cause the Company
and each of its Portfolios to qualify as a partnership, and
not as a "publicly traded partnership", for federal tax
purposes;
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(r) limit its activities so as not to be engaged in the management
or control of the Company;
(s) 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;
(t) 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;
(u) 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; and
(v) 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
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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. 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 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
partners, 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
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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 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 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
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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 partners, 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 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 materially 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, cast in person at a Board of Trustees
meeting called for the purpose of voting on such approval.
For special cases, the parties hereto may materially 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
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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 (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 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇; and if to the Administrator at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇.
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. Declaration of Trust. A copy of the Declaration of Trust
for the Company is on file and has been executed on behalf of the Company by a
Trustee of the Company in his or her capacity as Trustee of the Company and not
individually. The obligations of this Agreement shall be binding upon the assets
and property of the Company and shall not be binding upon any Trustee, officer,
or shareholder of the Company individually.
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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 PORTFOLIOS
By:
Title:
BISYS FUND SERVICES (IRELAND), LIMITED
By:
Title:
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF OCTOBER 1, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PORTFOLIOS
AND
BISYS FUND SERVICES (IRELAND), LIMITED
Portfolios: This Agreement shall apply to all Portfolios of the Company,
either now or hereafter created. The current Portfolios of
the Company are the Republic Fixed Income Fund, the Republic
International Equity Fund and the Republic Small
Capitalization Equity 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:
Five one-hundredths of one percent (.05%) of the
Company's average daily net assets up to $1 billion.
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.
The fee payable by the Company hereunder shall be allocated to
each Portfolio based upon its prorated 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.
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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 October 1, 1996, and shall remain in effect
through March 31, 1999 (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, or (iv) 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 of 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
for 45 days following receipt of written notice of such breach
from the nonbreaching party.
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 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,
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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, the Company terminates this
Agreement other than as provided in the first paragraph of
this Section, 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 such
Initial Term, 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 such Initial Term.
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