Operating Services Agreement
XXXXXX FUNDS, INC.
This Agreement is made and entered into as of the 31st day of March,
1999, by and between Xxxxxx Funds, Inc., a Maryland corporation (the "Fund"),
and Xxxxxx Investment Advisors, LLC, a New Jersey Limited Liability
Company (hereinafter referred to as "Manager").
WHEREAS, the Fund is a diversified, open-end management investment company,
registered under the Investment Company Act of 1940, as amended (the "Act"),
and authorized to issue shares representing interests in The Xxxxxx Value
Fund (the "Portfolio"); and
WHEREAS, Manager is registered as an investment advisor under the Investment
Advisors act of 1940, and engages in the business of asset manaagement and
the provision of certain other administrative recordkeeping in connection
therewith; and
WHEREAS, the Fund wishes to engage Manager, to provide, or arrange for the
provision of, certain operational services which are necessary for the day-
to-day operations of the Portfolio in the manner and on the terms and
conditions hereinafter set forth, and Manager wishes to accept such
engagement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and Manager agree as follows:
Obligations of Manager
(a) Services. The Fund hereby retains Manager to provide, or, upon receipt
of written approval of the Fund arrange for other companies to provide, the
following services to the Portfolio in the manner and to the extent that
such services are reasonably necessary for the operation of the Portfolio
(collectively, the "Services"):
accounting services and functions, including costs and expenses of any
independent public accountants;
non-litigation related legal and compliance services, including the
expenses of maintaining registration and qualification of the Fund and
the Portfolio under federal, state and any other applicable laws and
regulations;
dividend disbursing agent, dividend reinvestment agent, transfer agent,
and registrar services and functions (including answering inquiries
related to shareholder Portfolio accounts);
custodian and depository services and functions;
distribution, marketing, and/or underwriting services;
independent pricing services;
preparation of reports describing the operations of the Portfolio, including
the costs of providing such reports to broker-dealers, financial institutions
and other organizations which render services and assistance in connection
with the distribution of shares of the Portfolio;
sub-accounting and recordkeeping services and functions (other than those
books and records required to be maintained by Manager under the Investment
Advisory Agreement between the Fund and Manager dated August 15, 1998),
including maintenance of shareholder records and shareholder information
concerning the status of their Portfolio accounts by investment advisors,
broker-dealers, financial institutions, and other organizations on behalf
of Manager;
shareholder and board of directors communication services, including the
costs of preparing, printing and distributing notices of shareholders'
meetings, proxy statements, prospectuses, statements of additional
information, Portfolio reports, and other communications to the Fund's
Portfolio shareholders, as well as all expenses of shareholders' and
board of directors' meetings, including the compensation and reimbursable
expenses of the directors of the Fund;
other day-to-day administrative services, including the costs of designing,
printing, and issuing certificates representing shares of the Portfolio, and
premiums for the fidelity bond maintained by the Fund pursuant to
Section 17(g) of the Act and rules promulgated thereunder (except for such
premiums as may be allocated to third parties, as insureds thereunder).
(b)Exclusions from Service. Notwithstanding the provisions of Paragraph 1(a)
above, the Services shall not include and Manager will not be responsible
for any of the following:
all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Fund or the Portfolio in connection with securities
transactions to which the Fund or the Portfolio is a party or in
connection with securities owned by the Fund or the Portfolio;
the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Fund or the Portfolio
to federal, state, county, city, or other governmental agents;
the expenses, including fees and disbursements of counsel, in connection
with litigation by or against the Fund or the Portfolio; and
any other extraordinary expense of the Fund or Portfolio.
(c)Books and Records. All books and records prepared and maintained by
Manager for the Fund under this Agreement shall be the property of the
Fund and, upon request therefor, Manager shall surrender to the Fund
such of the books and records so requested.
(d)Staff and Facilities. Manager assumes and shall pay for maintaining
the staff, personnel, space, equipment and facilities necessary to
perform its obligations under this Agreement.
Obligations of the Fund
fee. The Fund will pay to Manager on the last day of each month a fee at
an annual rate equal to 0.50% of average net asset of the Portfolio, such
fee to be computed daily based upon the net asset value of the Portfolio
as determined by a valuation made in accordance with the Fund's procedure
for calculating Portfolio net asset value as described in the Fund's
Prospectus and/or Statement of Additional Information. During any period
when the determination of a Portfolio's net asset value is suspended by
the directors of the Fund, the net asset value of a share of that Portfolio
as of the last business day prior to such suspension shall, for the purpose
of this Paragraph 2(a), be deemed to be the net asset value at the close
of each succeeding business day until it is again determined.
Information. The Fund will, from time to time, furnish or otherwise make
available to Manager such information relating to the business and affairs
of the Portfolio as Manager may reasonably require in order to discharge
its duties and obligations hereunder.
3.Term. This Agreement shall remain in effect until no later than March
31, 2001, and from year to year thereafter provided such continuance is
approved at least annually by (1) the vote of a majority of the Board of
Directors of the Fund or (2) a vote of a "majority" (as that term is
defined in the Investment Company Act of 1940) of the Fund's outstanding
securities, provided that in either event the continuance is also approved
by the vote of a majority of the directors of the Fund who are not parties
to this Agreement or "interested persons" (as defined in the Act) of any
such party, which vote must be cast in person at a meeting called for
the purpose of voting on such approval; provided, however, that;
(a)the Fund, at any time and without the payment of any penalty may
terminate this Agreement upon 120 days written notice to Manager;
(b)the Agreement shall immediately terminate in the event of its assignment
(within the meaning of the Act and the Rules thereunder); and
(c)Manager may terminate this Agreement without payment of penalty on
120 days written notice to the Fund.
4. Notices. Except as otherwise provided in this Agreement, any notice
or other communication required by or permitted to be given in connection
with this Agreement will be in writing and will be delivered in person
or sent by first class mail, postage prepaid or by prepaid overnight
delivery service to the respective parties as follows:
If to the Fund: If to the Manager:
Xxxxxx Funds, Inc. Xxxxxx Investment Advisors, LLC
000 Xxx Xxxx 000 Xxx Xxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx Attention: Xxxxxxx X. Xxxxxx
President President
5. Miscellaneous
Performance Review. Manager will permit representatives of the Fund,
including the Fund's independent auditors, to have reasonable access to
the personnel and records of Manager in order to enable such representatives
to monitor the quality of services being provided and the level of fees
due Manager pursuant to this Agreement. In addition, Manager shall promptly
deliver to the board of directors of the Fund such information as may
reasonably be requested from time to time to permit the board of directors
to make an informed determination regarding continuation of this Agreement
and the payments contemplated to be made hereunder.
(b)Choice of Law. This Agreement shall be construed in accordance with
the laws of the State of Maryland and the applicable provisions of the
Act. To the extent the applicable law of the State of Maryland or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
Xxxxxx Funds, Inc. Xxxxxx Investment Advisors, LLC
By: Xxxxxxx X. Xxxxxx By: Xxxxxxx X. Xxxxxx
President President
