ADMINISTRATION AGREEMENT
THIS AGREEMENT, made December 16, 1992, by and between PRIME
CASH FUND (the "Trust"), a Massachusetts business trust, 000
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, and Aquila
Management Corporation (the "Administrator"), a New York
corporation, 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000.
W I T N E S S E T H
In consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. In General.
The Administrator agrees to perform (at its own expense) the
functions set forth more fully herein for the Trust and for the
investment adviser for the Trust (the "Adviser").
2. Duties and Obligations of the Adviser and Administrator to
the Trust and to Each Other.
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of
the Trust, the Administrator shall provide all administrative
services to the Trust other than those services relating to the
investment portfolios of the Trust and the maintenance of its
accounting books and records; as part of such duties, the
Administrator shall:
(i) provide office space, personnel, facilities, and
equipment for the performance of the following functions and
for the maintenance of the headquarters of the Trust;
(ii) oversee all relationships between the Trust and its
transfer agent, custodian, legal counsel, auditors and
principal underwriter, including the negotiation, subject to
the approval of the Board of Trustees, of agreements in
relation thereto, the supervision and coordination of the
performance of such agreements, and the overseeing of all
administrative matters which are necessary or desirable to
the effective operation of the Trust and the sale,
servicing, or redemption of the Trust's shares;
(iii) provide to the Adviser and the Trust statistical and
other factual information and advice regarding economic
factors and trends, but shall not generally furnish advice
or make recommendations regarding the purchase or sale of
securities;
(iv) maintain the Trust's books and records (other than
accounting books and records), and prepare (or assist
counsel and auditors in the preparation of) all required
proxy statements, reports to the Trust's shareholders and
Trustees, reports to and other filings with the Securities
and Exchange Commission and any other governmental agencies,
and tax returns, and oversee the insurance relationships of
the Trust;
(v) prepare, on behalf of the Trust, such applications and
reports as may be necessary to register or maintain the
registration of the Trust and/or its shares under the
securities or "Blue-Sky" laws of all such jurisdictions as
may be required from time to time;
(vi) respond to any inquiries or other communications of
shareholders of the Trust and broker-dealers, or if any such
inquiry or communication is more properly to be responded to
by the Trust's shareholder servicing and transfer agent or
distributor, oversee such shareholder servicing and transfer
agent's or distributor's response thereto.
(b) Any activities performed by the Administrator under this
section shall at all times conform to, and be in accordance with,
any requirements imposed by: (1) the Investment Company Act of
1940 (the "1940 Act") and any rules or regulations in force
thereunder; (2) any other applicable laws, rules, and
regulations; (3) the Declaration of Trust and By-Laws of the
Trust as amended and restated from time to time; (4) any policies
and determinations of the Board of Trustees of the Trust; and (5)
the fundamental policies of the Trust, as reflected in its
registration statement under the 1940 Act, or as amended by the
shareholders of the Trust.
(c) The Administrator assumes no responsibility under this
agreement other than to render the services called for hereunder,
and specifically assumes no responsibilities for investment
advice or the investment or reinvestment of the Trust's assets.
(d) The Administrator shall not be liable for any error in
judgement or for any loss suffered by the Trust in connection
with the matters to which this Agreement relates, except a loss
resulting from wilful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this
Agreement.
(e) Nothing in this Agreement shall prevent the
Administrator or any officer thereof from acting as investment
adviser, sub-adviser, administrator or manager for any other
person, firm, or corporation, and shall not in any way limit or
restrict the Administrator or any of its officers, stockholders,
or employees from buying, selling, or trading any securities for
its own or their own accounts, or for the accounts of others from
whom it or they may be acting, provided, however, that the
Administrator expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the
performance of its obligations to the Adviser or the Trust under
this Agreement. The Trust agrees to indemnify the Administrator
to the full extent permitted by the Trust's Declaration of Trust
and the 1940 Act.
3. Allocation of Expenses.
The Administrator agrees that it will, at its own expense,
provide office space, facilities, equipment, and personnel for
the performance of its functions hereunder and will pay all
compensation of Trustees, officers, and employees of the Trust
who are affiliated persons of the Administrator.
4. Compensation of the Administrator.
(a) The Trust agrees to pay the Administrator and the
Administrator agrees to accept as full compensation for all
services rendered by the Administrator as such, a fee payable
monthly and computed on the net asset value of the Trust as of
the close of business each business day at the annual rate of .25
of 1% of such net asset value, for the first $300 million of such
net assets and .15 of 1% of such net asset value over $300
million.
(b) The Administrator agrees that the above fee shall be
reduced, but not below zero, by an amount equal to its pro-rata
portion (based upon the aggregate fees of the Adviser and the
Administrator) of the amount, if any, by which the total expenses
of the Trust in any fiscal year, exclusive of taxes, interest,
and brokerage fees, shall exceed the lesser of (i) 2.5% of the
first $30 million of average annual net assets of the Trust plus
2% of the next $70 million of such assets and 1.5% of its average
annual net assets in excess of $100 million, or (ii) 25% of the
Trust's total annual investment income. The payment of the above
fee at the end of every month will be reduced or postponed so
that at no time will there be any accrued but unpaid liability
under this expense limitation, subject to readjustment during the
year.
5. Duration and Termination.
(a) This Agreement shall become effective as of the date
first written above (which shall be the date of approval of
related agreements by the shareholders of the fund), after
approval by a vote of a majority of the Trustees who are not
parties to this Agreement or "interested persons" (as defined in
the 0000 Xxx) of any such party, with votes cast in person at a
meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated by the Administrator at
any time without penalty upon giving the Adviser and the Trust
sixty days' written notice (which notice may be waived by them)
and may be terminated by the Trust at any time without penalty
upon giving the Administrator sixty days' written notice (which
notice may be waived by the Administrator) provided that such
termination by the Trust shall be directed or approved by a vote
of a majority of its Trustees in office at the time, including a
majority of the Trustees who are not interested persons (as
defined in the 0000 Xxx) of the Trust. However, the
Administrator agrees that it will not exercise its termination
rights for at least two years from the effective date of this
Agreement except for regulatory reasons.
(c) The Administrator understands that the obligations of
this Agreement are not binding upon any shareholder of the Trust
personally, but bind only the Trust's property; the Administrator
represents that it has notice of the provisions of the Trust's
Declaration of Trust disclaiming shareholder liability for acts
or obligations of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized
officers and their seals to be hereunto affixed, all as of the
day and year first above written.
ATTEST: PRIME CASH FUND
________________________ By:___________________________________
Assistant Secretary Vice President
ATTEST: AQUILA MANAGEMENT CORPORATION
_______________________ By:___________________________________
Treasurer and Asst. Secy. President and Chairman
