EXHIBIT - h(2)
ADMINISTRATION AGREEMENT
AGREEMENT made this 26th day of July, 2000 between Lexington
Natural Resources Trust (the "Trust"), a Massachusetts business trust, and
Pilgrim Group, Inc. (the "Administrator"), a Delaware corporation.
WHEREAS, the Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Trust desires to avail itself of the services of
the Administrator for the provision of administrative services for the Trust;
and
WHEREAS, the Administrator is willing to render such services
to the Trust;
NOW, THEREFORE, in consideration of the premises, the promises
and mutual covenants herein contained, it is agreed between the parties as
follows:
1. Appointment. The Trust hereby appoints the
Administrator, subject to the direction of the Board of Trustees, for the period
and on the terms set forth in this Agreement, to provide administrative
services, as described herein, with respect to the Trust. The Administrator
accepts such appointment and agrees to render the services set forth herein.
2. Services of the Administrator. Subject to the general
supervision of the Board of Trustees of the Trust, the Administrator shall
provide the following administrative services:
(a) Provide all administrative services reasonably
necessary for the operation of the Trust other than the investment advisory
services performed by the investment adviser or sub-adviser, including, but not
limited to, (i) coordinating all matters relating to the operation of the Trust,
including any necessary coordination among the investment adviser, custodian,
transfer agent, dividend disbursing agent, and portfolio accounting agent
(including pricing and valuation of the portfolio), accountants, attorneys, and
other parties performing services or operational functions for the Trust; (ii)
maintaining or supervising the maintenance by third parties engaged by the Trust
of such books and records of the Trust as may be required by applicable federal
or state law; (iii) preparing or supervising the preparation by third parties
selected by the Trust of all federal, state, and local tax returns and reports
required by applicable law; (iv) preparing and filing, with the assistance of
counsel, and arranging for the distribution of proxy materials and periodic
reports to shareholders as required by applicable law; (v) preparing and
arranging for the filing, with the assistance of counsel, of registration
statements and other documents with the Securities and Exchange Commission (the
"SEC") and other federal and state regulatory authorities as may be required by
applicable law; (vi) taking such other action with respect to the Trust as may
be required by applicable law, including without limitation the rules and
regulations of the SEC and other regulatory agencies; (vii) providing the Trust,
at the Administrator's expense, with adequate personnel, office space,
communications facilities, and
other facilities necessary for operation of the Trust as contemplated in this
Agreement; (viii) arranging for meetings of the Trust's Board of Trustees and,
in connection therewith, providing the Board with necessary or appropriate
information for its meetings; (ix) providing non-investment related statistical
and research data and such other reports, evaluations and information as the
Trust may request from time to time; (x) maintaining the Trust's existence, and
during such time as shares of the Trust are publicly offered, maintaining the
registration and qualification of the Trust's shares under federal and state
law; and (xi) responding to inquiries from shareholders or their agents or
representatives relating to the Trust, concerning, among other things, exchanges
among funds, or referring any such inquiries to the Trust's officers or transfer
agent. Nothing in this provision shall be deemed to inhibit the Trust or its
officers from engaging, at the expense of the Trust, other persons to assist in
providing administrative services to the Trust including, but not limited to,
accounting agents, recordkeeping agents, proxy solicitation agents, attorneys,
accountants, consultants and others.
(b) Render to the Board of Trustees of the Trust such
periodic and special reports as the Board may reasonably request;
(c) Make available its officers and employees to the
Board of Trustees and officers of the Trust for consultation and discussions
regarding the administration of the Trust and the services provided to the Trust
under this Agreement; and
(d) Develop and implement, if appropriate, management and
shareholder services designed to enhance the value or convenience of the Trust
as an investment vehicle.
3. Conformity with Applicable Law. The Administrator, in
the performance of its duties and obligations under this Agreement, shall act in
conformity with the Registration Statement of the Trust and with the
instructions and directions of the Board of Trustees of the Trust and will
conform to, and comply with, the requirements of the 1940 Act and all other
applicable federal and state laws and regulations.
4. Exclusivity. The services of the Administrator to the
Trust under this Agreement are not to be deemed exclusive, and the
Administrator, or any affiliate thereof, shall be free to render similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Trust) and to
engage in other activities, so long as its services hereunder are not impaired
thereby.
5. Expenses. During the term of this Agreement, the
Administrator will pay all expenses incurred by it in connection with its
activities under this Agreement, except such expenses as are assumed by the
Trust under this Agreement and such expenses as are assumed by the investment
adviser pursuant to an Investment Management Agreement. The Trust shall be
responsible for all of the other expenses of its operations, including, without
limitation, the administration fee payable hereunder; advisory fees; brokerage
commissions; interest; legal fees and expenses of attorneys; fees of auditors,
transfer agents and dividend disbursing agents, custodians and shareholder
servicing agents; fees of accountants and accounting services; the
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expense of obtaining quotations for calculating the Trust's net asset value;
taxes, if any, and the preparation of the Trust's tax returns; cost of stock
certificates and any other expenses (including clerical expenses) of issue,
sale, repurchase or redemption of shares; expenses of registering and qualifying
shares of the Trust under federal and state laws and regulations; salaries of
personnel involved in placing orders for the execution of the Trust's portfolio
transactions; expenses of printing and distributing reports, notices and proxy
materials to existing shareholders; expenses of printing and filing reports and
other documents filed with governmental agencies; expenses in connection with
shareholder and director meetings; expenses of printing and distributing
prospectuses and statements of additional information to existing shareholders;
fees and expenses of Trustees of the Trust who are not "interested persons" of
the Trust as that term is defined in the Investment Company Act of 1940; trade
association dues; insurance premiums; and extraordinary expenses such as
litigation expenses. To the extent the Administrator incurs any costs or
performs any services which are an obligation of the Trust, as set forth herein,
the Trust shall promptly reimburse the Administrator for such costs and
expenses. To the extent the services for which the Trust is obligated to pay are
performed by the Administrator, the Administrator shall be entitled to recover
from the Trust only to the extent of its costs for such services.
6. Compensation. For the services provided by the
Administrator pursuant to this Agreement, the Trust will pay to the
Administrator the annual fee set forth in Schedule A hereto.
7. Liability of the Administrator. The Administrator may
rely on information reasonably believed by it to be accurate and reliable.
Except as may otherwise be required by the 1940 Act or the rules thereunder,
neither the Administrator nor its stockholders, officers, directors, employees,
or agents shall be subject to any liability for, or any damages, expenses, or
losses incurred in connection with, any act or omission connected with or
arising out of any services rendered under this Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Administrator's duties, or by reason of reckless disregard of the
Administrator's obligations and duties under this Agreement. The liability
incurred by the Administrator pursuant to this paragraph 7 in any year shall be
limited to the revenues of the Administrator derived from the Trust in that
fiscal year of the Trust. The Administrator shall look solely to Trust property
for satisfaction of claims of any nature against the Trust or a director,
officer, employee or agent of the Trust arising in connection with the affairs
of the Trust.
8. Continuation and Termination. This Agreement shall
become effective on the date first written above, subject to the condition that
the Trust's Board of Trustees, including a majority of those Trustees who are
not interested persons (as such term is defined in the 0000 Xxx) of the
Administrator, shall have approved this Agreement. Unless terminated as provided
herein, the Agreement shall continue in full force and effect for two (2) years
from the effective date of this Agreement, and shall continue from year to year
thereafter so long as such continuance is specifically approved at least
annually by the vote of a majority of the Board of Trustees of the Trust,
including a majority of the Board of Trustees of the Trust who are not
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parties to this Agreement or "interested persons" (as defined in the 0000 Xxx)
of the Trust or the Administrator.
This Agreement may be terminated by the Trust at any time,
without the payment of any penalty, by vote of a majority of the Board of
Trustees of the Trust on sixty (60) days' written notice to the Administrator,
or by the Administrator at any time, without the payment of any penalty, on
sixty (60) days' written notice to the Trust.
9. Limitation of Liability of Trustees. Notice is hereby
given that this Agreement is executed by an officer of the Trust on behalf of
the Trustees of the Trust, as Trustees and not individually, and that the
obligations of this Agreement with respect to the Trust shall be binding upon
the assets and the properties of the Trust only and shall not be binding upon
the assets or properties of the Trustees, officers, employees, agents or
shareholders of the Trust individually.
10. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original.
11. Applicable Law.
(a) This Agreement shall be governed by the laws of the
State of Arizona, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any
rules or order of the SEC thereunder.
(b) 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 and, to this extent, the provisions
of this Agreement shall be deemed to be severable.
(c) The captions of this Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
LEXINGTON NATURAL RESOURCES TRUST
By: /s/ [ILLEGIBLE]
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Title CFO
PILGRIM GROUP, INC.
By: /s/ [ILLEGIBLE]
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Title SEVP & COO
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