ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this ____ day of _________________, 1999, by
and between THE COVENTRY GROUP, a Massachusetts business trust (the "Company")
having its principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
00000, and BISYS FUND SERVICES OHIO, INC. (the "Administrator"), an Ohio
corporation having its principal place of business at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000.
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 for
each currently existing Kensington series of the Company advised by Kensington
Investment Group as set forth in Schedule A hereto, and such additional
Kensington series advised by Kensington Investment Group that are hereafter
created and identified in such Schedule A (individually referred to herein as a
"Portfolio" and collectively as the "Portfolios").
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 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 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.
The Administrator shall provide the Company with regulatory reporting, all
necessary office space, equipment, personnel, compensation 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 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 Portfolio expenses and control all
disbursements for the Company, and as appropriate compute the
Portfolios' yields, total return, expense ratios, Portfolio turnover
rate and, if required, Portfolio average dollar-weighted maturity;
(b) maintain the Company's regulatory compliance calendar and ensure
that all necessary actions on that calendar are taken in a timely
manner by the persons responsible therefor;
(c) assist Company counsel with the preparation and filing of
prospectuses, statements of additional information, registration
statements and proxy materials;
(d) 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 satisfy state notice filing requirements
related to the offer and sale of the Portfolios' Shares, monitor the
sale of Portfolio 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
Portfolios' Shares as may be necessary or convenient to comply with
applicable requirements of state securities authorities to enable
the Company to make a continuous offering of the Portfolios' Shares;
(e) develop and prepare, with the assistance of the Portfolios'
investment adviser, communications to Shareholders, including the
annual report to Shareholders, coordinate the mailing of
prospectuses, notices, proxy statements, proxies and other reports
to Shareholders, and supervise and facilitate the proxy solicitation
process for all shareholder meetings, including the tabulation of
shareholder votes;
(f) administer contracts on behalf of the Company with, among others,
the Company's investment adviser, distributor, custodian, transfer
agent and fund accountant;
(g) supervise the Company's transfer agent with respect to the payment
of dividends and other distributions to the Portfolios'
Shareholders;
(h) calculate performance data of the Portfolios for dissemination to
information services covering the investment company industry;
(i) coordinate and supervise the preparation and filing of the Company's
and/or Portfolios' tax returns;
(j) examine and review the operations and performance of the various
organizations providing services to 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 Board
of Trustees, report to the Board on the performance of
organizations;
(k) 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;
(l) assist with the design, development, and operation of the
Portfolios, including new classes, investment objectives, policies
and structure;
(m) 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 Company affairs as
determined by the Company's Board of Trustees;
(n) advise the Company and its Board of Trustees on matters concerning
the Company and its affairs;
(o) 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;
(p) monitor and advise the Company and the Portfolios on their
registered investment company status under the Internal Revenue Code
of 1986, as amended;
(q) 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 Portfolios' investment advisory agreement,
distribution agreement, custodian agreement, transfer agent
agreement and fund accounting agreement;
(r) 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; and
(s) prepare and file with the SEC the semi-annual report for the Company
on Form N-SAR and all required notices pursuant to Rule 24f-2.
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 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 securities laws,
the cost of notice filings and any other filings that are necessary under 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 affiliated corporation of 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 compensation at an annual
rate specified in the Omnibus Fee Agreement between the Company and the
Administrator dated as of ___________________, 1999 (the "Fee Agreement").
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
directors, 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 the performance of services hereunder. 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 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 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.
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 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, 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 ensure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
ARTICLE 9. Amendments. This Agreement may be 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 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 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 registered or certified
mail, postage prepaid, 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_________________________________, Attention:
____________________; and if to the Administrator at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000, Attention: Xxxxxxx X. Xxxxx.
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. Limitation of Liability of the Trustees and Shareholders. It
is expressly agreed that the obligations of the Company hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Company personally, but shall bind only the trust property of
the Company. The execution and delivery of this Agreement have been authorized
by the Trustees, and this Agreement has been signed and delivered by an
authorized officer of the Company, acting as such, and neither such
authorization by the Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Company as provided in the Company's Agreement and Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE COVENTRY GROUP
By_______________________________
Title:_____________________________
BISYS FUND SERVICES OHIO, INC.
By:_______________________________
Title:______________________________
SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF _________________________
BETWEEN THE COVENTRY GROUP
AND
BISYS FUND SERVICES OHIO, INC.
Portfolios: This Agreement shall apply to all Portfolios of the Company that are
advised by Kensington Investment Group either currently existing or
hereafter created. The current Portfolios of the Company that are
advised by Kensington Investment Group are set forth below:
Kensington _____________________ Fund
Term: Pursuant to Article 7, the term of this Agreement shall commence on
_____________, 1999 and shall remain in effect through ___________,
2002 ("Initial Term"). Thereafter, unless otherwise terminated as
provided herein, this Agreement shall be renewed automatically for
successive two-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 mutual agreement
of the parties or (iii) for "cause," as defined below, upon the
provision of 60 days advance written notice by the party alleging
cause. Written notice of nonrenewal must be provided within 60 days
of the end of the Initial Term or any Rollover Period, as the case
may be.
For purposes of this Agreement, "cause" shall mean (a) a material
breach of this Agreement that has not been cured within thirty (30)
days following written notice of such breach from the non-breaching
party; (b) a series of negligent acts or omissions or breaches of
this Agreement which, in the aggregate, constitute, in the
reasonable judgment of the Company's Trustees, a serious failure to
perform satisfactorily the Administrator's obligations hereunder;
(c) 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; (e) any
failure on the part of the Company to collect from the investment
adviser any payment or reimbursement that is due and payable by the
investment adviser to the Company (including an amount due the
Company that directly or indirectly represents amounts payable to
the Administrator in its capacity as fund administrator to the
Company) within 60 days following the due date; or (f) any failure
on the part of its affiliates under any other agreement to which the
Company is a party within 60 days following the due date. For
purposes of this definition of "cause," a material breach shall
include, but not be limited to, any failure on the part of the
Company to pay fees due and payable to the Administrator pursuant to
Article 4 hereunder within 60 days following the due date.
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 this Schedule A, the amount of all of the
Administrator's 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, instruments and
documents, or any copies thereof. Subsequent to such termination,
for a reasonable fee, the Administrator will provide the Company
with reasonable access to any Company documents or records remaining
in its possession.
If, for any reason other than the nonrenewal, mutual agreement of
the parties or "cause", as defined above, the Administrator is
replaced as the service provider under this Agreement, the Fund
Accounting Agreement between the parties dated as of
__________________________, 1999 or the Transfer Agency Agreement
between the parties dated as of ____________________, 1999, or if a
third party is added to perform all or a part of the services
provided by the Administrator under any of such agreements then the
Company shall make a one-time cash payment, as liquidated damages,
to the Administrator equal to the balance due the Administrator
under the Fee Agreement for the lesser of (A) the next twelve (12)
months or (B) the remainder of the then-current term of this
Agreement, assuming for purposes of calculation of the payment that
such balance shall be based upon the average amount of Fund assets
and the average number of Fund shareholder accounts for the twelve
months prior to the date the Administrator is replaced or a third
party is added.
In the event the Portfolios are merged into another legal entity in
part or in whole pursuant to any form of business reorganization or
are liquidated in part or in whole prior to the expiration of the
then-current term of this Agreement, the parties acknowledge and
agree that the liquidated damages provision set forth above shall be
applicable in those instances in which the Administrator is not
retained to provide administration services consistent with this
Agreement. The one-time cash payment referenced above shall be due
and payable on the day prior to the first day during which assets
are transferred pursuant to the plan of reorganization or
liquidation.
The parties further acknowledge and agree that, in the event the
Administrator ceases to be retained, as set forth above, (i) a
determination of actual damages incurred by the Administrator would
be extremely difficult, and (ii) the liquidated damages provision
contained herein is intended to adequately compensate the
Administrator for damages incurred and is not intended to constitute
any form of penalty.
