XXXXXXXXX XXXXXX INCOME FUNDS
INVESTOR CLASS
ADMINISTRATION AGREEMENT
This Agreement is made as of February 9, 2001, between Xxxxxxxxx Xxxxxx
Income Funds, a Delaware business trust ("Trust"), and Xxxxxxxxx Xxxxxx
Management Inc., a New York corporation ("Administrator") with respect to the
Investor Class of shares.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end, diversified management investment
company and has established several separate series of shares ("Series"), with
each Series having its own assets and investment policies, and with each Series
having one or more classes of shares;
WHEREAS, the Trust desires to retain the Administrator to furnish
administrative services, including shareholder accounting, recordkeeping, and
other services to shareholders, to each Series listed in Schedule A attached
hereto (as it may be amended from time to time, a Series or, as appropriate, the
Investor Class of each such Series), and the Administrator is willing to furnish
such services,
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Services of the Administrator.
-----------------------------
1.1 ADMINISTRATIVE SERVICES. The Administrator shall supervise the
business and affairs of each Series and its Investor Class and shall provide
such services required for effective administration of such Series as are not
provided by employees or other agents engaged by such Series; provided, that the
Administrator shall not have any obligation to provide under this Agreement any
services related to the distribution of a Series's shares, or any other services
that are the subject of a separate agreement or arrangement between a Series and
the Administrator. The Administrator can use any of the officers and employees
of Xxxxxxxxx Xxxxxx, LLC to provide any of the services or reports required
under this agreement. Subject to the foregoing, in providing administrative
services hereunder, the Administrator shall:
1.1.1 OFFICE SPACE, EQUIPMENT AND FACILITIES. Furnish without
cost to each Series and its Investor Class, or pay the cost of, such office
space, office equipment and office facilities as are adequate for the needs
of its Series and their Investor Class;
1.1.2 PERSONNEL. Provide, without remuneration from or other cost
to each Series, the services of individuals competent to perform all of the
executive, administrative and clerical functions of each Series and its Investor
Class that are not performed by employees or other agents engaged by the Series
or by the Administrator acting in some other capacity pursuant to a separate
agreement or arrangement with the Series;
1.1.3 AGENTS. Assist each Series in selecting and coordinating
the activities of the other agents engaged by the Series, including the Series's
shareholder servicing agent, custodian, independent auditors and legal counsel;
- 2 -
1.1.4 Trustees and Officers. Authorize and permit the
Administrator's directors, officers or employees who may be elected or appointed
as trustees or officers of the Trust to serve in such capacities, without
remuneration from or other cost to the Trust or any Series;
1.1.5 BOOKS AND RECORDS. Assure that all financial, accounting
and other records required to be maintained and preserved by each Series are
maintained and preserved by it or on its behalf in accordance with applicable
laws and regulations; and
1.1.6 Reports and Filings. Assist in the preparation of (but not
pay for) all periodic reports by each Series or its Investor Class to
shareholders of such Series or Class and all reports and filings required to
maintain the registration and qualification of the Series and the Investor Class
shares, or to meet other regulatory or tax requirements applicable to the Series
or its Investor Class, under federal and state securities and tax laws.
1.2 SHAREHOLDER AND RELATED SERVICES (INVESTOR CLASS ONLY). The
Administrator shall provide such of the following services as are required by
any Series or its shareholders:
1.2.1 Direct shareholder services, consisting of:
(a) Processing Series share purchase and redemption
requests transmitted or delivered to the office of the Administrator;
- 3 -
(b) Coordinating and implementing bank-to-bank wire
transfers in connection with Series share purchases and redemptions;
(c) Executing exchange orders involving concurrent
purchases and redemption of shares of a Series and shares of other Series or of
other investment companies or series thereof;
(d) Responding to telephonic and in-person inquiries from
existing shareholders or their representatives requesting information regarding
matters such as shareholder account or transaction status, net asset value
("NAV") of Series shares, and Series performance, Series services, plans and
options, Series investment policies, Series portfolio holdings, and Series
distributions and classification thereof for tax purposes;
(e) Dealing with shareholder complaints and correspondence
directed to or brought to the attention of the Administrator; and
(f) Generating or developing and distributing special data,
notices, reports, programs and literature required by large shareholders, by
shareholders with specialized informational needs, or by shareholders generally
in light of developments, such as changes in tax laws.
- 4 -
1.2.2 Assisting any institutional servicing agent engaged by the
Series in the development, implementation and maintenance of the following
special programs and systems to enhance overall Series shareholder servicing
capability, consisting of:
(a) Training programs for personnel of such institutional
servicing agent;
(b) Joint programs with such institutional servicing agent
for the development of systems software, shareholder information reports, and
other special reports;
(c) Automatic data exchange facilities with shareholders
and such institutional servicing agent;
(d) Automated clearinghouse transfer procedures between
shareholders and such institutional servicing agent; and
(e) Touch-tone telephone information and transaction
systems for shareholders.
1.2.3 Soliciting and gathering shareholder proxies.
- 5 -
1.2.4 Such other shareholder and shareholder-related services,
whether similar to or different from those described in Subparagraphs 1.2.1,
1.2.2 and 1.2.3 of this Paragraph 1.2, as the parties may from time to time
agree in writing.
1.3 BLUE SKY SERVICES. The Administrator shall maintain under this
Agreement the registration or qualification of a Series and its shares under
state Blue Sky or securities laws and regulations, as necessary; PROVIDED that
such Series shall pay all related filing fees and registration or qualification
fees.
1.4 OTHER SERVICES. The Administrator shall provide such other
services required by a Series as the parties may from time to time agree in
writing are appropriate to be provided under this Agreement.
2. Expenses of each Series.
-----------------------
2.1 EXPENSES TO BE PAID BY THE ADMINISTRATOR. The Administrator shall
pay all salaries, expenses and fees of the officers, trustees, or employees of
the Trust who are officers, directors or employees of the Administrator. If the
Administrator pays or assumes any expenses of the Trust, Series or Class not
required to be paid or assumed by the Administrator under this Agreement, the
Administrator shall not be obligated hereby to pay or assume the same or any
similar expense in the future; PROVIDED, that nothing herein contained shall be
deemed to relieve the Administrator of any obligation to the Trust or to a
Series or Class under any separate agreement or arrangement between the parties.
- 6 -
2.2 EXPENSES TO BE PAID BY THE SERIES. Each Series shall bear all
expenses of its operation, except those specifically allocated to the
Administrator under this Agreement or under any separate agreement between such
Series and the Administrator. Expenses to be borne by such Series shall include
both expenses directly attributable to the operation of that Series and the
offering of its shares, as well as the portion of any expenses of the Trust that
is properly allocable to such Series in a manner approved by the trustees of the
Trust ("Trustees"). (The allocation of such expenses among the classes of a
Series, on either a class-specific or a pro rata basis, shall be made in
accordance with the Trust's Rule 18f-3 Plan.) Subject to any separate agreement
or arrangement between the Trust or a Series and the Administrator, the expenses
hereby allocated to each Series, and not to the Administrator, include, but are
not limited to:
2.2.1 CUSTODY. All charges of depositories, custodians, and
other agents for the transfer, receipt, safekeeping, and servicing of its
cash, securities, and other property;
2.2.2 SHAREHOLDER SERVICING. All expenses of maintaining and
servicing shareholder accounts, including but not limited to the charges of any
shareholder servicing agent, dividend disbursing agent or other agent (other
than the Administrator hereunder) engaged by a Series to service shareholder
accounts;
2.2.3 SHAREHOLDER REPORTS. All expenses of preparing, setting in
type, printing and distributing reports and other communications to shareholders
of a Series;
- 7 -
2.2.4 PROSPECTUSES. All expenses of preparing, setting in type,
printing and mailing annual or more frequent revisions of a Series's Prospectus
and SAI and any supplements thereto and of supplying them to shareholders of the
Series and Account holders;
2.2.5 PRICING AND PORTFOLIO VALUATION. All expenses of computing
a Series's net asset value ("NAV") per share, including any equipment or
services obtained for the purpose of pricing shares or valuing the Series's
investment portfolio;
2.2.6 COMMUNICATIONS. All charges for equipment or services used
for communications between the Administrator or the Series and any custodian,
shareholder servicing agent, portfolio accounting services agent, or other agent
engaged by a Series;
2.2.7 LEGAL AND ACCOUNTING FEES. All charges for services and
expenses of a Series's legal counsel and independent auditors;
2.2.8 TRUSTEES' FEES AND EXPENSES. All compensation of Trustees
other than those affiliated with the Administrator, all expenses incurred in
connection with such unaffiliated Trustees' services as Trustees, and all other
expenses of meetings of the Trustees or committees thereof;
2.2.9 SHAREHOLDER MEETINGS. All expenses incidental to holding
meetings of shareholders, including the printing of notices and proxy materials,
and proxy solicitation therefor;
- 8 -
2.2.10 FEDERAL REGISTRATION FEES. All fees and expenses of
registering and maintaining the registration of the Trust and each Series under
the 1940 Act and the registration of each Series's shares under the Securities
Act of 1933 (the "1933 Act"), including all fees and expenses incurred in
connection with the preparation, setting in type, printing, and filing of any
Registration Statement, Prospectus and SAI under the 1933 Act or the 1940 Act,
and any amendments or supplements that may be made from time to time;
2.2.11 STATE REGISTRATION FEES. All fees and expenses of
qualifying and maintaining the qualification of the Trust and each Series and of
each Series's shares for sale under securities laws of various states or
jurisdictions, and of registration and qualification of each Series under all
other laws applicable to a Series or its business activities (including
registering the Series as a broker-dealer, or any officer of the Series or any
person as agent or salesman of the Series in any state);
2.2.12 SHARE CERTIFICATES. All expenses of preparing and
transmitting a Series's share certificates, if any;
2.2.13 CONFIRMATIONS. All expenses incurred in connection with
the issue and transfer of a Series's shares, including the expenses of
confirming all share transactions;
2.2.14 BONDING AND INSURANCE. All expenses of bond, liability,
and other insurance coverage required by law or regulation or deemed advisable
by the Trustees, including, without limitation, such bond, liability and other
insurance expense that may from time to time be allocated to the Series in a
manner approved by the Trustees;
- 9 -
2.2.15 BROKERAGE COMMISSIONS. All brokers' commissions and other
charges incident to the purchase, sale or lending of a Series's portfolio
securities;
2.2.16 TAXES. All taxes or governmental fees payable by or with
respect to a Series to federal, state or other governmental agencies, domestic
or foreign, including stamp or other transfer taxes;
2.2.17 TRADE ASSOCIATION FEES. All fees, dues and other expenses
incurred in connection with a Series's membership in any trade association or
other investment organization;
2.2.18 NONRECURRING AND EXTRAORDINARY EXPENSES. Such nonrecurring
and extraordinary expenses as may arise, including the costs of actions, suits,
or proceedings to which the Series is a party and the expenses a Series may
incur as a result of its legal obligation to provide indemnification to the
Trust's officers, Trustees and agents;
2.2.19 ORGANIZATIONAL EXPENSES. All organizational expenses of
each Series paid or assessed by the Administrator, which such Series shall
reimburse to the Administrator at such time or times and subject to such
condition or conditions as shall be specified in the Prospectus and SAI pursuant
to which such Series makes the initial public offering of its shares; and
- 10 -
2.2.20 INVESTMENT ADVISORY SERVICES. Any fees and expenses for
investment advisory services that may be incurred or contracted for by a Series.
3. Administration Fee.
------------------
3.1 FEE. As compensation for all services rendered, facilities provided
and expenses paid or assumed by the Administrator to or for each Series or its
Investor Class under this Agreement, the Investor Class of such Series shall pay
the Administrator an annual fee as set out in Schedule B to this Agreement.
3.2 COMPUTATION AND PAYMENT OF FEE. The administration fee shall accrue
on each calendar day, and shall be payable monthly on the first business day of
the next succeeding calendar month. The daily fee accruals for each Series shall
be computed by multiplying the fraction of one divided by the number of days in
the calendar year by the applicable annual administration fee rate (as set forth
in Schedule B hereto), and multiplying this product by the NAV of the Investor
Class of such Series, determined in the manner set forth in such Series's
then-current Investor Class Prospectus, as of the close of business on the last
preceding business day on which such Series's Investor Class NAV was determined.
4. OWNERSHIP OF RECORDS. All records required to be maintained and
preserved by each Series pursuant to the provisions or rules or regulations of
the Securities and Exchange Commission ("SEC") under Section 31(a) of the 1940
Act and maintained and preserved by the Administrator on behalf of such Series
are the property of such Series and shall be surrendered by the Administrator
- 11 -
promptly on request by the Series; provided, that the Administrator may at its
own expense make and retain copies of any such records.
5. REPORTS TO ADMINISTRATOR. Each Series shall furnish or otherwise make
available to the Administrator such copies of that Series's Investor Class
Prospectus, SAI, financial statements, proxy statements, reports, and other
information relating to its business and affairs as the Administrator may, at
any time or from time to time, reasonably require in order to discharge its
obligations under this Agreement.
6. REPORTS TO EACH SERIES. The Administrator shall prepare and furnish to
each Series such reports, statistical data and other information in such form
and at such intervals as such Series may reasonably request.
7. OWNERSHIP OF SOFTWARE AND RELATED MATERIALS. All computer programs,
written procedures and similar items developed or acquired and used by the
Administrator in performing its obligations under this Agreement shall be the
property of the Administrator, and no Series will acquire any ownership interest
therein or property rights with respect thereto.
8. CONFIDENTIALITY. The Administrator agrees, on its own behalf and on
behalf of its employees, agents and contractors, to keep confidential any and
all records maintained and other information obtained hereunder which relates to
any Series or to any of a Series's former, current or prospective shareholders,
except that the Administrator may deliver records or divulge information (a)
when requested to do so by duly constituted authorities after prior notification
to and approval in writing by such Series (which approval will not be
- 12 -
unreasonably withheld and may not be withheld by such Series where the
Administrator advises such Series that it may be exposed to civil or criminal
contempt proceedings or other penalties for failure to comply with such request)
or (b) whenever requested in writing to do so by such Series.
9. THE ADMINISTRATOR'S ACTIONS IN RELIANCE ON SERIES' INSTRUCTIONS, LEGAL
OPINIONS, ETC.; SERIES' COMPLIANCE WITH LAWS.
9.1 The Administrator may at any time apply to an officer of the Trust
for instructions, and may consult with legal counsel for a Series or with the
Administrator's own legal counsel, in respect of any matter arising in
connection with this Agreement; and the Administrator shall not be liable for
any action taken or omitted to be taken in good faith and with due care in
accordance with such instructions or with the advice or opinion of such legal
counsel. The Administrator shall be protected in acting upon any such
instructions, advice or opinion and upon any other paper or document delivered
by a Series or such legal counsel which the Administrator believes to be genuine
and to have been signed by the proper person or persons, and the Administrator
shall not be held to have notice of any change of status or authority of any
officer or representative of the Trust, until receipt of written notice thereof
from the Series.
9.2 Except as otherwise provided in this Agreement or in any separate
agreement between the parties and except for the accuracy of information
furnished to each Series by the Administrator, each Series assumes full
responsibility for the preparation, contents, filing and distribution of its
Investor Class Prospectus and SAI, and full responsibility for other documents
or actions required for compliance with all applicable requirements of the 1940
- 13 -
Act, the Securities Exchange Act of 1934, the 1933 Act, and any other applicable
laws, rules and regulations of governmental authorities having jurisdiction over
such Series.
10. SERVICES TO OTHER CLIENTS. Nothing herein contained shall limit the
freedom of the Administrator or any affiliated person of the Administrator to
render administrative or shareholder services to other investment companies, to
act as administrator to other persons, firms, or corporations, or to engage in
other business activities.
11. LIMITATION OF LIABILITY REGARDING THE TRUST. The Administrator shall
look only to the assets of each Series for performance of this Agreement by the
Trust on behalf of such Series, and neither the Trustees of the Trust
("Trustees") nor any of the Trust's officers, employees or agents, whether past,
present or future shall be personally liable therefor.
12. INDEMNIFICATION BY SERIES. Each Series shall indemnify the
Administrator and hold it harmless from and against any and all losses, damages
and expenses, including reasonable attorneys' fees and expenses, incurred by the
Administrator that result from: (i) any claim, action, suit or proceeding in
connection with the Administrator's entry into or performance of this Agreement
with respect to such Series; or (ii) any action taken or omission to act
committed by the Administrator in the performance of its obligations hereunder
with respect to such Series; or (iii) any action of the Administrator upon
instructions believed in good faith by it to have been executed by a duly
authorized officer or representative of the Trust with respect to such Series;
PROVIDED, that the Administrator shall not be entitled to such indemnification
in respect of actions or omissions constituting negligence or misconduct on the
- 14 -
part of the Administrator or its employees, agents or contractors. Before
confessing any claim against it which may be subject to indemnification by a
Series hereunder, the Administrator shall give such Series reasonable
opportunity to defend against such claim in its own name or in the name of the
Administrator.
13. INDEMNIFICATION BY THE ADMINISTRATOR. The Administrator shall indemnify
each Series and hold it harmless from and against any and all losses, damages
and expenses, including reasonable attorneys' fees and expenses, incurred by
such Series which result from: (i) the Administrator's failure to comply with
the terms of this Agreement with respect to such Series; or (ii) the
Administrator's lack of good faith in performing its obligations hereunder with
respect to such Series; or (iii) the Administrator's negligence or misconduct or
that of its employees, agents or contractors in connection herewith with respect
to such Series. A Series shall not be entitled to such indemnification in
respect of actions or omissions constituting negligence or misconduct on the
part of that Series or its employees, agents or contractors other than the
Administrator unless such negligence or misconduct results from or is
accompanied by negligence or misconduct on the part of the Administrator, any
affiliated person of the Administrator, or any affiliated person of an
affiliated person of the Administrator. Before confessing any claim against it
which may be subject to indemnification hereunder, a Series shall give the
Administrator reasonable opportunity to defend against such claim in its own
name or in the name of the Trust on behalf of such Series.
14. EFFECT OF AGREEMENT. Nothing herein contained shall be deemed to
require the Trust or any Series to take any action contrary to the Trust
Instrument or By-laws of the Trust or any applicable law, regulation or order to
which it is subject or by which it is bound, or to relieve or deprive the
- 15 -
Trustees of their responsibility for and control of the conduct of the business
and affairs of the Series or Trust.
15. TERM OF AGREEMENT. The term of this Agreement shall begin on February
9, 2001 with respect to each Series and, unless sooner terminated as hereinafter
provided, this Agreement shall remain in effect through June 30, 2001.
Thereafter, this Agreement shall continue in effect with respect to each Series
from year to year, subject to the termination provisions and all other terms and
conditions hereof; provided, such continuance with respect to a Series is
approved at least annually by vote or written consent of the Trustees, including
a majority of the Trustees who are not interested persons of either party hereto
("Disinterested Trustees"); and provided further, that the Administrator shall
not have notified a Series in writing at least sixty days prior to the first
expiration date hereof or at least sixty days prior to any expiration date in
any year thereafter that it does not desire such continuation. The Administrator
shall furnish any Series, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment thereof.
16. AMENDMENT OR ASSIGNMENT OF AGREEMENT. Any amendment to this Agreement
shall be in writing signed by the parties hereto; provided, that no such
amendment shall be effective unless authorized on behalf of any Series (i) by
resolution of the Trustees, including the vote or written consent of a majority
of the Disinterested Trustees, or (ii) by vote of a majority of the outstanding
voting securities of the Investor Class of such Series. This Agreement shall
terminate automatically and immediately in the event of its assignment;
provided, that with the consent of a Series, the Administrator may subcontract
to another person any of its responsibilities with respect to such Series.
- 16 -
17. TERMINATION OF AGREEMENT. This Agreement may be terminated at any time
by either party hereto, without the payment of any penalty, upon at least sixty
days' prior written notice to the other party; provided, that in the case of
termination by any Series, such action shall have been authorized (i) by
resolution of the Trustees, including the vote or written consent of the
Disinterested Trustees, or (ii) by vote of a majority of the outstanding voting
securities of the Investor Class of such Series.
18. Name of a Series. Each Series hereby agrees that if the
Administrator shall at any time for any reason cease to serve as administrator
to a Series, such Series shall, if and when requested by the Administrator,
eliminate from such Series's name the name "Xxxxxxxxx Xxxxxx" and thereafter
refrain from using the name "Xxxxxxxxx Xxxxxx" or the initials "NB" in
connection with its business or activities, and the foregoing agreement of each
Series shall survive any termination of this Agreement and any extension or
renewal thereof.
19. Interpretation and Definition of Terms. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the Act shall be resolved by
reference to such term or provision of the 1940 Act and to interpretation
thereof, if any, by the United States courts or, in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
SEC validly issued pursuant to the 1940 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities," "interested persons,"
- 17 -
"assignment" and "affiliated person," as used in this Agreement shall have the
meanings assigned to them by Section 2(a) of the 1940 Act. In addition, when the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is modified, interpreted or relaxed by a rule, regulation or order of
the SEC, whether of special or of general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
20. CHOICE OF LAW. This Agreement is made and to be principally performed
in the State of New York, and except insofar as the Act or other federal laws
and regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of New
York.
21. CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
22. EXECUTION IN COUNTERPARTS. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
- 18 -
XXXXXXXXX XXXXXX INCOME FUNDS
By:
--------------------------------------------------
Title:
-----------------------------------------------
XXXXXXXXX XXXXXX MANAGEMENT INC.
By:
--------------------------------------------------
Title:
-----------------------------------------------
- 19 -
