Exhibit 99.(h)(6)
FINAL
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into on this 5th day of January,
2005, by and between Xxxxx and Power Balanced Fund, Inc., a corporation
organized under the laws of the State of Minnesota (the "Fund"), and Xxxxx and
Power, Inc. (the "Administrator").
WHEREAS, the Fund is an open-ended management investment company
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act"); and
WHEREAS, the Fund and the Administrator desire to enter into this
Agreement to set forth the terms and conditions under which the Administrator
provides fund administration services for the benefit of the Fund.
NOW, THEREFORE, the Fund and the Administrator do mutually promise and
agree as follows:
I. APPOINTMENT OF ADMINISTRATOR
The Fund hereby appoints the Administrator as administrator of the Fund
on the terms and conditions set forth in this Agreement, and the Administrator
hereby accepts such appointment and agrees to perform the duties and
responsibilities set forth in this Agreement in consideration of the
compensation provided for herein.
II. DUTIES AND RESPONSIBILITIES OF THE ADMINISTRATOR
The Administrator shall perform the following duties and
responsibilities on behalf of the Fund:
A. GENERAL FUND MANAGEMENT
1. Act as liaison among all Fund service providers.
2. Provide appropriate personnel, office facilities,
information technology, record keeping and other
resources as necessary for the Administrator to perform
its duties and responsibilities under this Agreement.
3. Coordinate board activities by:
a. Assisting in establishing meeting agendas.
b. Preparing board reports based on financial and
administrative data.
c. Securing and monitoring director and officers
liability coverage.
4. Coordinate shareholder meetings by:
a. Assisting in the preparation and mailing of
shareholder communications, including proxy
materials.
b. Assisting with the scheduling and conduct of
shareholder meetings.
5. Assist in the overall operations of the Fund.
B. COMPLIANCE
1. Investment Company Act Compliance
a. Assist in updating and monitoring compliance
with the Fund's policies and procedures adopted
pursuant to Rule 38a-l of the Investment Company
Act (the "Fund's Policies and Procedures").
b. Employ the services of a person to act in the
capacity of Chief Compliance Officer of the
Fund, who shall be responsible for administering
the Fund's Policies and Procedures.
c. Periodically monitor compliance with Investment
Company Act requirements, including:
(1) Asset diversification tests
(2) Total return and yield calculations
(3) Maintenance of books and records under
Rule 3la-3
(4) Code of ethics
d. Periodically monitor Fund's compliance with the
policies and investment limitations of the Fund
as set forth in its prospectus and statement of
additional information.
2. SEC Registration and Reporting
a. Assist in updating the prospectus and statement
of additional information.
b. Assist in preparing annual, semiannual and
quarterly reports to shareholders.
c. Assist in preparing and filing all forms
required to be filed by the Fund with the SEC,
including:
(1) Form N-lA
(2) Form N-SAR
(3) Form N-CSR
(4) Form 24f-2
(5) Form N-Q
(6) Form N-PX
(7) Schedule 13G
3. IRS Compliance
a. Periodically monitor the Fund's status as a
registered investment company under Subchapter
M:
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(1) Asset diversification requirements
(2) Qualifying income requirements
(3) Distribution requirements
b. Calculate required distributions to
shareholders.
C. FINANCIAL REPORTING AND AUDITS
1. Supervise the Fund's custodian and accountants in the
maintenance of the Fund's general ledger and in the
preparation of the Fund's financial statements,
including oversight of expense accruals and payments,
the determination of the Fund's net asset value, and the
declaration and payment of dividends and other
distributions to shareholders.
2. Provide financial data required for the Fund's
prospectus and statement of additional information and
quarterly and semi-annual reports to shareholders.
3. Provide information to the Fund's independent auditors
to facilitate the audit process.
4. Prepare financial and statistical reports, as requested
by the board.
D. TAX REPORTING
1. Assist with the preparation and filing of appropriate
federal and state tax returns including forms 1120/8610
with any necessary schedules.
2. Prepare state income breakdowns where relevant.
3. File 1099 Miscellaneous for payments to directors and
other service providers.
4. Calculate eligible dividend income.
III. COMPENSATION
The Fund agrees to pay the Administrator for performance of the duties
listed in this Agreement the fees and out-of-pocket expenses set forth in the
attached Schedule A.
These fees may be changed from time to time, subject to mutual written
agreement between the Fund and the Administrator.
The Fund agrees to pay all fees and reimbursable expenses within ten
(10) business days following the mailing of the billing notice.
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IV. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. The Administrator shall exercise reasonable care in the
performance of its duties under this Agreement. The
Administrator shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
connection with matters to which this Agreement relates,
including losses resulting from failure of computing or
communication equipment or power supplies beyond the
Administrator's control, except a loss resulting from the
Administrator's refusal or failure to comply with the terms of
this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its dudes under
this Agreement.
The Administrator shall take all reasonable steps to minimize
service interruptions and will make every reasonable effort to
restore any lost or damaged data and correct any errors
resulting from such interruptions at the expense of the
Administrator. The Administrator agrees that it shall, at all
times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of data
processing equipment to the extent appropriate equipment is
available. Representatives of the Fund shall be entitled to
inspect the Administrator's premises and operating capabilities
at any time during regular business hours of the Administrator,
upon reasonable notice to the Administrator.
The Fund shall indemnify and hold the Administrator harmless
from and against any and all claims, demands, losses, expenses,
and liabilities (whether with or without basis in fact or law)
of any and every nature (including reasonable attorneys' fees)
which the Administrator may sustain or incur or which may be
asserted against the Administrator by any person arising out of
any action taken or omitted to be taken by it in performing the
services hereunder (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral
instruction provided to the Administrator by any duly authorized
officer of the Fund.
B. The Administrator shall indemnify and hold the Fund harmless
from and against any and all claims, demands, losses, expenses,
and liabilities (whether with or without basis in fact or law)
of any and every nature (including reasonable attorneys' fees)
which may be asserted against the Fund by any person arising out
of any action taken or omitted to be taken by the Administrator
as a result of the Administrator's refusal or failure to comply
with the terms of this Agreement, its bad faith, negligence, or
willful misconduct.
C. If a party hereto (the "Indemnifying Party") is asked to
indemnify or hold the other party hereto harmless (the
"Indemnified Party"), the Indemnifying Party shall be fully and
promptly advised of all pertinent facts concerning the situation
in question, and the Indemnified Party will use all reasonable
care to notify the Indemnifying Party promptly concerning any
situation which presents or appears likely to present the
likelihood of a claim for indemnification against the
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Indemnifying Party. The Indemnifying Party shall have the option
to defend the Indemnified Party against any claim which may be
the subject of this indemnification. In the event that the
Indemnifying Party so elects, it will so notify the Indemnified
Party and thereupon the Indemnifying Party shall take over
complete defense of the claim, and the Indemnified Party shall
in such situation initiate no further legal or other expenses
for which it shall seek indemnification under this section. The
Indemnified Party shall in no case confess any claim or make any
compromise in any case in which the Indemnifying Party will be
asked to indemnify the Indemnified Party except with the
Indemnifying Party's prior written consent.
V. CONFIDENTIALITY
The Administrator shall maintain in strict confidence all information
relating to the Fund's business which is received by the Administrator during
the course of rendering any service hereunder.
VI. DATA NECESSARY TO PERFORM SERVICE
The Fund and its agents shall furnish to the Administrator the data
necessary to perform the services described herein at times and in such form as
mutually agreed upon.
VII. RECORDS
The Administrator shall keep records relating to the services to be
performed hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Fund but not inconsistent with the rules and
regulations of appropriate government authorities, including Section 31 of the
Investment Company Act and the rules thereunder. The Administrator agrees that
all such records prepared or maintained by the Administrator relating to the
services to be performed by the Administrator hereunder are the property of the
Fund and will be preserved, maintained, and made available in accordance with
the Investment Company Act and the rules thereunder, and will be promptly
surrendered to the Fund on and in accordance with its request.
VIII. TERMS OF AGREEMENT
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue automatically in effect for
successive annual periods. The Agreement may be terminated by either party upon
giving sixty (60) days prior written notice to the other party or such shorter
period as is mutually agreed upon by the parties.
IX. DUTIES IN THE EVENT OF TERMINATION
If a successor to any of the Administrator's duties or responsibilities
hereunder is designated by the Fund by written notice to the Administrator, the
Administrator will promptly transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by the
Administrator under this Agreement in a form reasonably acceptable to the Fund
and will cooperate in the transfer of such duties and responsibilities,
including provision
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for assistance from the Administrator's personnel in the establishment of books,
records, and other data by such successor.
X. CHOICE OF LAW
This Agreement shall be construed in accordance with the laws of the
State of Minnesota.
XI. NOTICES
Notices of any kind to be given by either party to the other party shall
be in writing and shall be duly given if mailed or delivered to the attention
of an officer of the relevant party at such party's principal business address
or at such other location as such party may designate.
In witness whereof, the parties have duly executed this Agreement as of
the day and year first above written.
XXXXX AND POWER BALANCED FUND, INC. XXXXX AND POWER, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
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Its: President Its: Chairman
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SCHEDULE A
FEES AND EXPENSES PAYABLE UNDER
FUND ADMINISTRATION SERVICING AGREEMENT
PAYMENT PERIOD AMOUNT OF FEES
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Payable in arrears within 10 days after Computed at an annual rate of 0.01%
the end of each month. based upon the Fund's average daily
net assets.
In addition to the fees set forth above, the Administrator shall be entitled to
reimbursement of out-of-pocket expenses incurred directly in providing the
services under the Agreement. Examples of such direct expenses include filing,
mailing and printing costs for prospectuses, shareholder reports and SEC
filings.
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