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FORM OF ASSET ALLOCATION ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of [ ] by and between XXXXX BROTHERS XXXXXXXX
& CO., a limited partnership organized under the State of New York (the
"Administrative Agent"), and [ ] (the "Fund") and each subfund thereof (each a
"Subfund").
WHEREAS, the Fund has appointed Xxxxx Brothers Xxxxxxxx & Co. as
its custodian and administrator under Custodian Agreement and an
Administration and Accounting Agreement, respectively,
each dated _________________.
WHEREAS, the Fund's sub-investment advisor (the "Advisor") utilizes an
algorithm for the investment of un-invested cash among certain target investment
funds pre-selected by the Fund as set forth on Exhibit A hereto (the "Target
Funds");
WHEREAS, the Fund desires that the Administrative Agent provide various
limited administrative services to for the purpose of allocating from time to
time un-invested cash deposited in the Fund among the Target Funds (the
"Service"), and the Administrative Agent is willing to provide such Asset
Allocation Service to the Fund.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Employment of Administrative Agent. The Fund hereby employs and
appoints the Administrative Agent to act on the terms set forth in this
Agreement, and the Administrative Agent accepts such appointment.
2. Delivery of Algorithm to the Administrative Agent. The Fund or its Advisor
will deliver the investment allocation percentage among the various Target Fund
as provided in Exhibit B hereto (the "Allocation Formula"). The Administrative
Agent will utilize the Allocation Formula to calculate the amount of un-invested
cash of the Fund in US Dollars (the "Allocation Amount") on any business day for
subsequent investment in each of the Target Funds. The Administrative Agent will
only calculate the Allocation Amount on any business day on which the aggregate
amount of such un-invested cash exceeds the amount set forth on Exhibit C hereto
(the "Cash Threshold Amount"). In the absence of the Administrative Agent's
receipt of such notice from the Fund or the Advisor in respect of any Cash
Threshold Amount, the Allocation Formula or the Target Funds, the Administrative
Agent will adhere to Exhibits A, B and C attached hereto.
3. Description of Services. The Administrative Agent will perform the following
Service on behalf of the Fund:
(a) On any business day in which the un-invested cash on deposit in the
Fund exceeds the Cash Threshold Amount, the Administrative Agent will utilize
the Allocation Formula to calculate the Allocation Amount to be invested in each
Target Fund as each is designated on Exhibit A hereto, and to invest all such
cash in excess of the Cash Threshold Amount in Administrative Agent's custody
from time to time in subject to the terms of Appendix D hereto and to which the
Fund hereby acknowledges and agrees. As the Administrative Agent is not an
investment advisor to the Fund and as such, does not accept responsibility for
the investment risks and decisions associated with such allocations and
investments by the Fund, a person so authorized on behalf of Advisor in
accordance with the Custodian Agreement shall confirm all such Allocation
Amounts and investments in writing (by non-facsimile only) to the Administrative
Agent and in advance of order execution by Administrative Agent in each Target
Fund (each a "Confirmation"). Upon receipt of a Confirmation from the Advisor,
the Administrative Agent may conclusively rely upon such Confirmation and shall,
as instructed herein, execute such orders on behalf of the Fund in accordance
with such Confirmation.
4. Expenses and Compensation. For the Allocation Services to be
rendered and the facilities to be furnished by the Administrative Agent as
provided for in this Agreement, the Fund shall pay the Administrative Agent for
its services rendered pursuant to this Agreement a fee based on such fee
schedule as may from time to time be agreed upon in writing by the Investment
Manager and the Administrative Agent. In addition to such fee, the
Administrative Agent shall xxxx the Investment Manager separately for any
out-of-pocket disbursements of the Administrative Agent. Out-of-pocket
disbursements shall include, but shall not be limited to, postage, including
courier services; telephone; telecommunications; printing, duplicating and
photocopying charges; forms and supplies; filing fees; legal expenses; and
travel expenses. The foregoing fees and disbursements shall be billed to the
Fund by the Administrative Agent and shall be paid promptly by wire transfer or
other appropriate means to the Administrative Agent.
5. Standard of Care. The Administrative Agent shall be held only to the
exercise of reasonable care in the performance of its obligations under Section
3 provided in this Agreement, but shall not be held accountable or liable for
any losses or damages the Fund, any Subfund or any shareholder or former
shareholder thereof, the Advisor or any other person may suffer or incur arising
from or based upon errors or delays in the determination of such Allocations
resulting from any event beyond the reasonable control of the Administrative
Agent unless such error or delay was due to the Administrative Agent's
negligence or reckless or willful misconduct in determination of such Allocation
Amount as provided in Section 3 hereof. (The parties hereto acknowledge,
however, that the Administrative Agent's causing an error or delay in the
determination of any Allocation does not in and of itself, constitute negligence
or reckless or willful misconduct.) In no event shall the Administrative Agent
be liable or responsible to the Fund, any Subfund, any present or former
shareholder thereof, the Advisor or any other person for any error or the
composition of the Allocation Formula itself, or any error or delay which
continued or was undetected after the date of an audit performed by the
certified public accountants employed by the Fund if, in the exercise of
reasonable care in accordance with generally accepted accounting standards, such
accountants should have become aware of such error or delay in the course of
performing such audit. The Administrative Agent's aggregate liability for any
such negligence or reckless or willful misconduct which results in an error in
determination of such valuations and ratios shall be limited exclusively the
total compensation received by the Administrative Agent under this Agreement for
the first twelve months (12) (the "Aggregate Liability"). The Fund and the
Administrative Agent agree that any amount which the Administrative Agent may
agree to pay in response to a claim by the Fund for recovery of losses, costs,
damages or expenses resulting from the Administrative Agent's provision of the
Services herein described (each a "Payment") shall be applied to the calculation
of the Aggregate Liability whether or not the Administrative Agent acknowledges
liability therefore under this Section 5.
Without limiting the foregoing, the Administrative Agent shall not be
held accountable or liable to the Fund, any Subfund, any shareholder or former
shareholder thereof, the Investment Manager or any other person for any delays
or losses, damages or expenses any of them may suffer or incur resulting from
(i) the acts or omissions of any third party including the Advisor, (ii) the
accuracy or completeness of any order executed by the Administrative Agent in
conformity with a Confirmation, (iii) delays in receiving a Confirmation from
the Advisor, or (iv) the non-receipt of such Confirmation from the Advisor. The
Fund further agrees that it shall be responsible for (i) ensuring that all
Confirmations accurately reflect the allocations and investments in the Target
Funds as set forth on Exhibits A and B hereto, (ii) ensuring that Confirmations
are remitted to the Administrative Agent in accordance with time deadlines
provided by it, and (iii) promptly advising the Administrative Agent in the
event that the Allocation Formula, the Cash Threshold Amount or the Target Funds
change at any time.
6. Limitation of Liability.
(a) In no event shall the Administrative Agent be responsible
for providing investment management or advice under this Agreement, nor shall
the Administrative Agent be liable for the investment management and advice
undertaken by the Advisor to the Fund hereunder.
(b) The Fund agrees that the Services provided hereunder are
intended to provide notional investment allocation records only. The Fund and
the Advisor will consider such notional records among other factors in the
Fund's investment strategy and asset allocation. The calculations and records
maintained hereunder by the Administrative Agent for the Fund shall be used by
it in conjunction with the Fund's and its Advisor's own records and research.
The Advisor's own records and research shall be considered as the definitive
records upon which it bases investment and asset allocation in connection with
the Fund or any Subfund thereof.
(c) The Administrative Agent shall incur no liability with
respect to any telecommunications, equipment or power failures, or any failures
to perform or delays in performance by postal or courier services or third-party
information providers. The Administrative Agent shall also incur no liability
under this Agreement if the Administrative Agent or any agent or entity utilized
by the Administrative Agent shall be prevented, forbidden or delayed from
performing, or omits to perform, any act or thing which this Agreement provides
shall be performed or omitted to be performed, by reason of causes or events
beyond its control, including but not limited to (x) any Sovereign Risk, or (y)
any provision of any present or future law, regulation or order of the United
States or any state thereof, or of any foreign country or political subdivision
thereof, or of any securities depository or clearing agency, or (z) any
provision of any order or judgment of any court of competent jurisdiction. A
"Sovereign Risk" shall mean any nationalization; expropriation; devaluation;
revaluation; confiscation; seizure; cancellation; destruction; strike; act of
war, terrorism, insurrection or revolution; or any other act or event beyond the
Administrative Agent's control.
(d) The Administrative Agent shall in no event be required to
take any action which is in contravention of any applicable law, rule or
regulation or any order or judgment of any court of competent jurisdiction. The
Fund hereby agrees to indemnify the Administrative Agent against and hold it
harmless from any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from any act,
omission, error or delay or any claim, demand, action or suit, in connection
with or arising out of performance of its obligations and duties under this
Agreement, not resulting from the willful malfeasance, bad faith or negligence
of the Administrative Agent in the performance of such obligations and duties.
(e) The Administrative Agent shall in no event be liable or
responsible to the Fund, any Subfund, any present or former shareholder of a
Subfund, the Advisor or any other person for any error or delay which continued
or was undetected after the date of an audit performed by the certified public
accountants employed by the Fund if, in the exercise of reasonable care in
accordance with generally accepted accounting standards, such accountants should
have become aware of such error or delay in the course of performing such audit.
(f) Without limiting the generality of any of the foregoing
provisions, in no event shall the Administrative Agent be liable for any taxes,
penalties, costs, charges or fees imposed on the Fund in connection with the
services hereunder.
(g) The Administrative Agent shall have no responsibility or
liability to the Advisor, the Fund, any Subfund or any shareholder thereof to
ensure that the Fund, any Subfund satisfies any regulatory requirements or any
restrictions or limitations in the Fund's prospectus with respect to the
Allocation Services hereunder.
7. Reliance by the Administrative Agent on Proper Instructions and
Opinions of Counsel and Opinions of Certified Public Accountants.
(a) The Administrative Agent shall not be liable for, and
shall be indemnified by the Fund against any and all losses, costs, damages or
expenses arising from or as a result of, any action taken or omitted in reliance
upon instructions or upon any other written notice, request, direction,
instruction, certificate or other instrument believed by it to be genuine and
signed or authorized by the proper party or parties. This clause shall survive
any termination of this Agreement.
(b) Proper Instructions shall include a written request,
direction, instruction or certification signed or initialed on behalf of the
Fund by one or more persons as it shall have from time to time authorized. Those
persons authorized to give instructions may be identified by name, title or
position. Telephonic or other oral instructions or instructions given by telefax
transmission may be given by any one of the above persons and will also be
considered instructions if the Administrative Agent believes them to have been
given by a person authorized to give such instructions with respect to the
transaction involved.
With respect to telefax transmissions, the Fund hereby
acknowledges that (i) receipt of legible instructions cannot be assured, (ii)
the Administrative Agent cannot verify that authorized signatures on telefax
instructions are original, and (iii) the Administrative Agent shall not be
responsible for losses or expenses incurred through actions taken in reliance on
such telefax instructions. The Fund agrees that such telefax instructions shall
be conclusive evidence of the Advisor's instruction to the Administrative Agent
to act or to omit to act.
Instructions given orally will be confirmed by written
instructions in the manner set forth above, including by telefax, but the lack
of such confirmation shall in no way affect any action taken by the
Administrative Agent in reliance upon such oral instructions. The Fund
authorizes the Administrative Agent to tape record any and all telephonic or
other oral instructions given to the Administrative Agent by or on behalf of the
Fund or the Advisor (including any of its officers, Directors, employees or
agents or any person or entity which is authorized to give instructions on
behalf of the Fund or the Advisor to the Administrative Agent.)
(c) The Administrative Agent may consult with its counsel or
the Fund's and/or the Advisor's counsel in any case where so doing appears to
the Administrative Agent to be necessary or desirable. The Administrative Agent
shall not be considered to have engaged in any misconduct or to have acted
negligently and shall be without liability in acting upon the advice of its
counsel or of the Fund's and/or the Advisor's counsel.
(d) The Administrative Agent may consult with a certified
public accountant or the Fund's Treasurer in any case where so doing appears to
the Administrative Agent to be necessary or desirable. The Administrative Agent
shall not be considered to have engaged in any misconduct or to have acted
negligently and shall be without liability in acting upon the advice of such
certified public accountant or of the Fund's Treasurer.
8. Termination of Agreement.
(a) This Agreement shall continue in full force and effect
until terminated by the Administrative Agent or the Fund by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than ninety (90) calendar days after the
date of such delivery or mailing. In the event a termination notice is given by
a party hereto, all expenses associated with the movement of records and
materials and the conversion thereof shall be paid by the Fund for which
services shall cease to be performed hereunder. The Administrative Agent shall
be responsible for completing all actions in progress when such termination
notice is given unless otherwise agreed.
Notwithstanding anything in the foregoing provisions of this
clause, if it appears impracticable in the circumstances to effect an orderly
delivery of the necessary and appropriate records of the Administrative Agent to
a successor within the time specified in the notice of termination as aforesaid,
the Administrative Agent and the Fund agree that this Agreement shall remain in
full force and effect for such reasonable period as may be required to complete
necessary arrangements with a successor.
(b) If a party hereto shall fail to perform its duties and
obligations hereunder (a "Defaulting Party") resulting in material loss to
another party ("the "Non-Defaulting Party"), the Non-Defaulting Party may give
written notice thereof to the Defaulting Party, and if such material breach
shall not have been remedied within thirty (30) calendar days after such written
notice is given, then the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) calendar days' written notice of such termination to the
Defaulting Party. If the Administrative Agent is the Non-Defaulting Party, its
termination of this Agreement shall not constitute a waiver of any other rights
or remedies of the Administrative Agent with respect to payment for services
performed prior to such termination or rights of the Administrative Agent to be
reimbursed for out-of-pocket expenses. In all cases, termination by the
Non-Defaulting Party shall not constitute a waiver by the Non-Defaulting Party
of any other rights it might have under this Agreement or otherwise against the
Defaulting Party.
(c) This Section 8 shall survive any termination of
this Agreement, whether for cause or not for cause.
9. Amendment of this Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof. No provision of this Agreement may be amended or terminated
except by a statement in writing signed by the party against which enforcement
of the amendment or termination is sought.
In connection with the operation of this Agreement, the Fund
and the Administrative Agent may agree in writing from time to time on such
provisions interpretive of or in addition to the provisions of this Agreement as
may in their joint opinion be consistent with the general tenor of this
Agreement. No interpretive or additional provisions made as provided in the
proceeding sentence shall be deemed to be an amendment of this Agreement.
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
The section headings and the use of defined terms in the
singular or plural tenses in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW OF SUCH STATE. THE PARTIES HERETO
IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE FEDERAL COURTS LOCATED IN NEW YORK CITY IN THE BOROUGH OF
MANHATTAN.
11. Notices. Notices and other writings delivered or mailed postage
prepaid to the Fund at [ ] or to such other address as the Fund may have
designated to the Administrative Agent in writing, or to the Administrative
Agent at 000 Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: FX Treasury, or to such
other address as the Administrative Agent may have designated to the Fund in
writing, shall be deemed to have been properly delivered or given hereunder to
the respective addressee.
12. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Investment Manager and the Administrative Agent and their
respective successors and assigns, provided that no party hereto may assign this
Agreement or any of its rights or obligations hereunder without the written
consent of the other party.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and which
collectively shall be deemed to constitute only one instrument. This Agreement
shall become effective when one or more counterparts have been signed and
delivered by each of the parties.
14. Exclusivity. The services furnished by the Administrative Agent
hereunder are not to be deemed exclusive, and the Administrative Agent shall be
free to furnish similar services to others.
15. Authorization. The Fund hereby represents and warrants that the
execution and delivery of this Agreement have been authorized by its
constitutional documents and Board of Directors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
XXXXX BROTHERS XXXXXXXX & CO. ____________________________________
By: __________________________________ By: ________________________________
Name: Name:
Title: Title:
EXHIBIT A
designated Target Funds
EXHIBIT B
ALLOCATION FORMULA
EXHIBIT C
CASH THRESHOLD AMOUNT
EXHIBIT D
TERMS AND CONDITIONS RELATED TO COLLECTIVE
INVESTMENT SCHEME ORDER EXECUTION, SETTLEMENT, AND SAFEKEEPING
