Exhibit g(c)
SUB-ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT dated as of , 1995 between Southwest Small Cap Equity
Fund, Inc. (the "Fund"), a Delaware corporation, XxXxxxx & Company I, L.P.
("XxXxxxx"), a limited partnership, and MGF Service Corp. ("MGF"), an Ohio
corporation.
WHEREAS, the Fund is a diversified, closed-end management investment
company under the Investment Company Act of 1940; and
WHEREAS, XxXxxxx acts as the administrator to the Fund pursuant to the
terms of an Administrative Services Agreement; and
WHEREAS, XxXxxxx wishes to avail itself of the information, advice,
assistance and facilities of MGF to perform on behalf of the Fund the services
as hereinafter described; and
WHEREAS, MGF wishes to provide such services to the Fund under the
conditions set forth below; and
WHEREAS, the Board of Directors of the Fund has authorized XxXxxxx to
retain MGF to provide such services and to execute this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Fund, XxXxxxx and MGF agree as follows:
1. EMPLOYMENT. XxXxxxx, being duly authorized, hereby employs MGF to
perform those services described in this Agreement. MGF shall perform the
obligations thereof upon the terms and conditions hereinafter set forth and
subject to the direction and control of the Fund.
2. FUND ADMINISTRATION. Subject to the direction and control of the
Fund, MGF shall (1) prepare all reports required to be filed by the Fund with
the Securities and Exchange Commission ("SEC") on Form N-SAR, or such other form
as the SEC may substitute for Form N-SAR; (2) provide to the Fund's independent
accountants such information as is necessary for such accountants to prepare and
file the Fund's federal, state and local tax returns, and review such returns
after they are prepared; (3) respond to certain inquiries from the Fund's
stockholders in connection with proxies, rights offerings and other such events;
(4) assist in the preparation and dissemination to stockholders of the Fund
proxy and rights offering materials and oversee the tabulation of proxies by
-1-
the Fund's transfer agent, (5) negotiate contractual arrangements with the
Fund's agents, including custodians, transfer agents, dividend paying agents,
independent accountants and printing companies, monitor the performance of such
agents pursuant to such arrangements, and make such reports and recommendations
to the Fund concerning the provision of such services as the Fund reasonably
requests or as MGF deems appropriate; (6) assist in preparing financial
information relating to the Fund for the Fund's periodic reports to
stockholders, prospectuses, proxy materials and press releases; (7) assist in
monitoring compliance of the Fund's operations with the Investment Company Act
of 1940 and with its investment policies and limitations; (8) assist in the
calculation of the Fund's net asset value in accordance with the Fund's
registration statement under the Investment Company Act of 1940 and the
Securities Act of 1933 and make the Fund's net asset value available for public
dissemination; (9) assist in establishing the accounting policies of the Fund;
(10) assist the Fund in determining the amount of dividends or other
distributions available to be paid by the Fund to its stockholders; (11) arrange
for the printing (at the Fund's expense) of financial reports, prospectuses,
proxy materials and dividend notices to stockholders; (12) provide the Fund's
transfer agent, dividend paying agent and custodian with such information as is
required for such parties to effect the payment of dividends and other
distributions and implementing the Fund's Dividend Reinvestment Plan; and (13)
assist in the preparation and dissemination of press releases regarding such
dividends and other distributions. The Fund shall reimburse MGF for expenses
incurred by MGF personnel in attending Board of Directors' meetings and
shareholders' meetings of the Fund.
3. RECORD KEEPING AND OTHER INFORMATION. MGF shall create and maintain
all necessary records in accordance with all applicable laws, rules and
regulations, including but not limited to records required by Section 31(a) of
the Investment Company Act of 1940 and the rules thereunder, as the same may be
amended from time to time, pertaining to the various functions performed by it
and not otherwise created and maintained by another party pursuant to contract
with the Fund. Where applicable, such records shall be maintained by MGF for the
periods and in the places required by Rule 31a-2 under the Investment Company
Act of 1940.
4. AUDIT, INSPECTION AND VISITATION. MGF shall make available to
XxXxxxx and the Fund during regular business hours all records and other data
created and maintained pursuant to the foregoing provisions of this Agreement
for reasonable audit and inspection by the Fund, XxXxxxx or any regulatory
agency having authority over the Fund or XxXxxxx.
5. COMPENSATION. For the performance of MGF's obligations under this
Agreement, XxXxxxx shall pay MGF, on the first business day following the end of
each month, a fee equal to one-
- 2 -
twelfth (1/12) of the annual rate of .25% of the average value of the Fund's
weekly net assets during such month up to $100,000,000, and .20% of the average
value of such assets in excess of $100,000,000; provided, however, that the
minimum fee shall be $6,000 per month. MGF shall not be required to reimburse
the Fund or the Fund's investment adviser for (or have deducted from its fees)
any expenses in excess of expense limitations imposed by certain state
securities commissions having jurisdiction over the Fund.
6. INDEMNIFICATION OF MGF. MGF may rely on information reasonably
believed by it to be accurate and reliable. Except as may otherwise be required
by the Investment Company Act of 1940 and the rules thereunder, neither MGF nor
its shareholders, officers, directors, employees, agents, control persons or
affiliates of any thereof shall be subject to any liability for, or any damages,
expenses or losses incurred by the Fund or Xxxxxxx in connection with, any error
of judgment, mistake of law, any act or omission connected with or arising out
of any services rendered under or payments made pursuant to this Agreement or
any other matter to which this Agreement relates, except by reason of willful
misfeasance, bad faith or gross negligence on the part of any such persons in
the performance of the duties of MGF under this Agreement or by reason of
reckless disregard by any of such persons of the obligations and duties of MGF
under this Agreement.
Notwithstanding any other provision of this Agreement, XxXxxxx shall
indemnify and hold harmless MGF, its directors, officers, employees,
shareholders, agents, control persons and affiliates, from and against any and
all claims, demands, expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which MGF may sustain or incur or which may
be asserted against MGF by any person, by reason of, or as a result of: (i) any
action taken or omitted to be taken by MGF in good faith in reliance upon any
certificate, instrument, order or stock certificate believed by it to be genuine
and to be signed, countersigned or executed by any duly authorized person, upon
the oral instructions or written instructions of an authorized person of XxXxxxx
or the Fund or upon the opinion of legal counsel for XxXxxxx or the Fund or its
own counsel; or (ii) any action taken or omitted to be taken by MGF in
connection with its appointment in good faith in reliance upon any law, act,
regulation or interpretation of the same even though the same may thereafter
have been altered, changed, amended or repealed. However, indemnification under
this subparagraph shall not apply to actions or omissions of MGF or its
directors, officers, employees, shareholders or agents in cases of its or their
own gross negligence, willful misconduct, bad faith, or reckless disregard of
its or their own duties hereunder.
7. SERVICES FOR OTHERS. Nothing in this Agreement shall prevent MGF or
any affiliated person of MGF from providing
- 3 -
services for any other person, firm or corporation, including other investment
companies; provided, however, that MGF expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations under this Agreement.
8. COMPLIANCE WITH THE INVESTMENT COMPANY ACT OF 1940. The parties
hereto acknowledge and agree that nothing contained herein shall be construed to
require MGF to perform any services which services could cause MGF to be deemed
an "investment adviser" of the Fund within the meaning of Section 2(a)(20) of
the Investment Company Act of 1940 or to supersede or contravene the Prospectus
or Statement of Additional Information of the Fund or any provisions of the
Investment Company Act of 1940 and the rules thereunder.
9. RENEWAL AND TERMINATION. This Agreement shall become effective on
the date first above written and shall remain in force for a period of two (2)
years from such date, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Directors who are not interested persons of the Fund, XxXxxxx or MGF,
cast in person at a meeting called for the purpose of voting on such approval
and by a vote of the Board of Directors or of a majority of the Fund's
outstanding voting securities. This Agreement may be terminated without the
payment of any penalty by any party upon sixty (60) days' written notice to the
other party. This Agreement shall terminate automatically in the event of its
assignment. Upon the termination of this Agreement, XxXxxxx shall pay MGF such
compensation as may be payable for the period prior to the effective date of
such termination.
10. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect.
- 4 -
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
SOUTHWEST SMALL CAP EQUITY FUND, INC.
By: ________________________________
Its: President
XxXXXXX & COMPANY I, L.P.
By: ________________________________
Its: President
MGF SERVICE CORP.
By: ________________________________
Its: President
- 5 -
