Exhibit (h-4)
THE SPECTRA FUND
ADMINISTRATION AGREEMENT
September 12, 2006
Xxxx Xxxxx Management, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Spectra Fund (the "Fund"), an unincorporated business Trust
organized under the laws of the Commonwealth of Massachusetts, herewith confirms
its agreement with you as follows:
The Fund desires to employ its capital by investing and reinvesting the
same in investments of the type and in accordance with the limitations specified
in its charter documents and in its Prospectus and Statement of Additional
Information as from time to time in effect, copies of which have been or will be
submitted to you, and in such manner and to such extent as from time to time may
be approved by the Fund's Board. The Fund desires to employ you to act as its
administrator pursuant to this Agreement.
In this connection it is understood that from time to time you will
employ or associate with yourself such person or persons as you may believe to
be particularly fitted to assist in the performance of this Agreement. Such
person or persons may be officers or employees who are employed by both you and
the Fund. Additionally, in rendering services hereunder, you may, subject to the
approval of the Fund's Board, cause such services or any portion thereof to be
provided by another person pursuant to a sub-administration agreement; PROVIDED
that in such event you shall remain responsible for monitoring and overseeing
the performance by such person of its obligation to the Fund under such
sub-administration agreement. The compensation of any such person or persons
shall be paid by you and no obligation may be incurred on the Fund's behalf in
any such respect.
Subject to the supervision and control of the Fund's Board, you will be
responsible for all aspects of the Fund's operations. You will supply accounting
and bookkeeping services, internal auditing and legal services, and internal
executive and administrative services; prepare reports to the Fund's
stockholders, tax returns, reports to and filings with the Securities and
Exchange Commission and state Blue Sky authorities; and calculate the net asset
value of the Fund's shares. Without limiting the foregoing, you agree, during
the term of this Agreement, to be responsible for:
(a) providing office space, telephone, office equipment and
supplies for the Fund;
(b) paying compensation of the Fund's officers for services
rendered as such;
(c) authorizing expenditures and approving bills for payment on
behalf of the Fund;
(d) preparation of the periodic updating of the Fund's
Registration Statement, including Prospectus and Statement of
Additional Information, for the purpose of filings with the
Securities and Exchange Commission and state securities
administrators and monitoring and maintaining the
effectiveness of such filings, as appropriate;
(e) supervising preparation of periodic reports to the Fund's
shareholders and filing of these reports with the Securities
and Exchange Commission, notices of dividends, capital gains
distributions and tax credits, and attending to routine
correspondence and other communications with individual
shareholders;
(f) the daily pricing of each Portfolio's investment portfolio and
the publication of the net asset value of each Portfolio's
shares, earnings reports and other financial data;
(g) monitoring relationships with organizations providing services
to the Fund, including the Fund's custodian, transfer agent
and printers;
(h) supervising compliance by the Fund with recordkeeping and
periodic reporting requirements under the Investment Company
Act of 1940, as amended (the "1940 Act") and regulations
thereunder, maintaining books and records for the Fund (other
than those maintained by the Fund's custodian and transfer
agent) and preparing and filing of tax reports other than the
Fund's income tax returns; and
(i) providing executive; clerical and secretarial help needed to
carry out these responsibilities.
You shall exercise your best judgment in rendering the services to be
provided hereunder and the Fund agrees as an inducement to your undertaking the
same that you shall not be liable hereunder for any error of judgment or mistake
of law or for any loss suffered by the Fund, provided that nothing herein shall
be deemed to protect or purport to protect you against any liability to the Fund
or to its security holders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of your
duties hereunder, or by reason of your reckless disregard of your obligations
and duties hereunder.
In consideration of the services rendered pursuant to this Agreement,
the Fund will pay you on the first business day of each calendar month a fee at
the annual rate of 0.04% of the Fund's average daily net assets. Net asset value
shall be computed on such days and at such time or times as described in the
Fund's then-current Prospectus and Statement of Additional Information. The fee
for the period from the effective date of this Agreement to the end of the month
in which such date occurs shall be pro-rated according to the proportion which
such period bears to the full monthly period, and upon any termination of this
Agreement before the end of any month, the fee for such part of a month shall be
pro-rated according to the proportion which such period bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement.
For the purpose of determining fees payable to you, the value of each
Portfolio's net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of each Portfolio's net
assets.
You will bear all expenses in connection with the performance of your
services under this Agreement. All other expenses to be incurred in the
operation of the Fund will be borne by the Fund, except to the extent
specifically assumed by you pursuant to your Investment Management Agreement
with the Fund.
The Fund understands that you now act and will continue to act as
administrator of various investment companies and fiduciary or other managed
accounts, and the Fund has no objection to your so acting. In addition, it is
understood that the persons employed by you to assist in the performance of
duties hereunder will not devote their full time to such service and nothing
contained herein shall be
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deemed to limit or restrict the right of you or the right of any of your
affiliates to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
Any person, even though also your officer, director, partner, employee
or agent, who may be or become an officer, Board member, employee or agent of
the Fund, shall be deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting solely for the
Fund and not as an officer, director, partner, employee, or agent or one under
your control or direction even though paid by you.
As to each Portfolio, this Agreement shall continue automatically for
successive annual periods ending on September 30th of each year, provided such
continuance is specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the 0000 Xxx) of such Portfolio's
outstanding voting securities, provided that in either event its continuance
also is approved by a majority of the Fund's Board members who are not
"interested persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. As to each Portfolio, this Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board or by vote of holders of a
majority of such Portfolio's shares or, upon not less than 60 days' notice, by
you. This Agreement also will terminate automatically in the event of its
assignment (as defined in the 1940 Act).
This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his or her capacity as an officer of the
Fund. The obligations of this Agreement shall only be binding upon the assets
and property of the Fund and shall not be binding upon any Board member, officer
or shareholder of the Fund individually.
If the foregoing is in accordance with your understanding, kindly so
indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THE SPECTRA FUND
By: /s/ Xxx Xxxxxx
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Accepted:
XXXX XXXXX MANAGEMENT INC.
By: /s/ Xxx Xxxxxx
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