BBH COMMON SETTLEMENT II FUND, INC.
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, dated May 10, 2001 between BBH COMMON
SETTLEMENT II FUND, INC., a Maryland corporation (the "Corporation"), and XXXXX
BROTHERS XXXXXXXX TRUST COMPANY, LLC (the "Administrator").
W I T N E S S E T H:
WHEREAS, the Corporation is a diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Corporation has been organized for the purpose of
investing its funds in securities and has retained an investment adviser for
this purpose and desires to avail itself of the facilities available to the
Administrator with respect to the administration of the day to day affairs of
the Corporation, and the Administrator is willing to furnish such administrative
services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties agree as follows:
Section 1. The Corporation hereby appoints the Administrator to
administer all aspects of the operations of the Corporation (except those
subject to the supervision of the investment adviser), subject to the overall
supervision of the Directors of the Corporation for the period and on the terms
set forth in this Agreement. The Administrator hereby accepts such appointment
and agrees during such period to render the services herein described and to
assume the obligations set forth herein, for the compensation herein provided.
Section 2. Subject to the supervision of the Directors of the
Corporation, the Administrator shall administer all aspects of the operations of
the Corporation (except those subject to the supervision of the investment
adviser) and, in connection therewith, shall (i) furnish the Corporation with
adequate office facilities, utilities, office equipment and related services;
(ii) be responsible for the financial and accounting records required to be
maintained for the Corporation (including those being maintained by the
custodian) other than those being maintained by the investment adviser; (iii)
furnish the Corporation with ordinary clerical, bookkeeping and recordkeeping
services at such office facilities; (iv) arrange, but not pay for, the
preparation of all required tax returns and reports to its shareholders and the
Securities and Exchange Commission and the periodic updating of its prospectus;
and (v) oversee the performance of administrative and professional services to
the Corporation by others, including the custodian, transfer agent and
shareholder servicing agent.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator assumes and will pay all expenses incurred by
the Administrator or by the Corporation in connection with administering the
ordinary course of business of the Corporation, other than those assumed by the
Corporation herein.
The Corporation assumes and will pay the expenses described below:
(a) the fees and expenses of any investment adviser or expenses
otherwise incurred in connection with the management of the investment and
reinvestment of its assets,
(b) the fees and expenses of Directors of the Corporation who are not
affiliated persons of the Administrator, or of any entity with whom the
Administrator has subcontracted its performance under this Agreement (the
"Subadministrator") or any investment adviser of the Corporation or of an
investment company in which the Corporation invests its investable assets,
(c) the fees and expenses of the custodian which relate to (i) the
custodial function and the recordkeeping connected therewith, (ii) the
maintenance of the required accounting not being maintained by the Administrator
or the Subadministrator, (iii) the pricing of the shares, including the cost of
any pricing service or services which may be retained pursuant to the
authorization of the Directors of the Corporation, and (iv) the cashiering
function in connection with the issuance and redemption of the securities,
(d) the fees and expenses of the transfer agent and shareholder
servicing agent, which relate to the maintenance of each shareholder account and
the fees and expenses of any eligible institution,
(e) the charges and expenses of legal counsel and independent
accountants for the Corporation,
(f) brokers' commissions and any issue or transfer taxes chargeable in
connection with its securities transactions,
(g) all taxes and corporate fees payable by the Corporation to federal,
state or other governmental agencies,
(h) the fees of any trade association of which the Corporation may be a
member,
(i) the cost of share certificates, if any,
(j) the fees and expenses involved in registering and maintaining
registrations of the Corporation and of shares with the Securities and Exchange
Commission, registering the Corporation as a broker or dealer and qualifying
shares under state securities laws, including the preparation and printing of
the Corporation's registration statements and prospectuses for filing under
federal and state securities laws for such purposes,
(k) the cost of any liability insurance or fidelity bonds,
(l) allocable communications expenses with respect to investor services
and all expenses of shareholders' and Directors' meetings and of preparing,
printing and mailing reports and prospectuses to shareholders in the amount
necessary for distribution to shareholders, and
(m) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of business of the Corporation.
General expenses of the Corporation shall be charged directly to the
Corporation.
Section 3. As full compensation for the services performed and the
facilities furnished by the Administrator, the Administrator shall receive a fee
of 0.03% from the Corporation. Such fee is computed daily and paid monthly at an
annual rate of a percentage of the average daily net assets of the Corporation.
Section 4. 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 Corporation's assets.
Section 5. The Administrator shall not be liable for any error of
judgment or for any loss suffered by the Corporation 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.
Section 6. The Administrator may subcontract for the performance of its
obligations hereunder with any one or more persons; provided, however, that the
Administrator shall not enter into any such subcontract unless the Directors of
the Corporation shall have found the subcontracting party to be qualified to
perform the obligations sought to be subcontracted; and provided, further, that
unless the Corporation otherwise expressly agrees in writing, the Administrator
shall be as fully responsible to the Corporation for the acts and omissions of
any subcontractor as it would be for its own acts or omissions. If permitted by
the subadministration agreement between the Administrator and the
Subadministrator, the Subadministrator may authorize and permit any of its
directors, officers and employees who may be elected as officers of the
Corporation to serve in the capacities in which they are elected and the
Subadministrator will pay the salaries of all personnel of the Corporation who
are affiliated with the Subadministrator.
Section 7. This Agreement shall become effective on the date determined
by mutual agreement of the parties. This Agreement shall continue in effect for
two years from the date of its effectiveness and thereafter, but only so long as
its continuance is specifically approved at least annually in the same manner as
an investment advisory contract under the 1940 Act; provided, however, that this
Agreement may be terminated by the Corporation at any time, without the payment
of any penalty, by the Directors of the Corporation or by a vote of a majority
of the outstanding voting securities (as defined in the 0000 Xxx) of the
Corporation, upon not less than 60 days' written notice to the Administrator, or
by the Administrator at any time, without the payment of any penalty, upon not
less than 90 days' written notice to the Corporation. This Agreement shall
terminate automatically in the event of its assignment (as defined in the 1940
Act).
Section 8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also be an
officer or employee of the Corporation to engage in any other business or to
devote his time and attention in part to the management or other aspects of any
business, whether of a similar or a dissimilar nature, nor limit or restrict the
right of the Administrator to engage in any other business or to render services
of any kind to any other corporation, firm, individual or association.
Section 9. During the term of this Agreement, the Corporation agrees to
furnish the Administrator at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders or the public, which refer in any way
to the Administrator, prior to use thereof and not to use such material if the
Administrator reasonably objects in writing within five business days (or such
other time as may be mutually agreed) after receipt thereof. In the event of
termination of this Agreement, the Corporation will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer in any
way to the Administrator. The Corporation shall furnish or otherwise make
available to the Administrator such other information relating to the business
affairs of the Corporation as the Administrator at any time, or from time to
time, reasonably requests in order to discharge its obligations hereunder.
Section 10. This Agreement may be amended only by mutual written
consent.
Section 11. The Directors have authorized the execution of this
Agreement in their capacity as Directors and not individually and the
Administrator agrees that neither shareholders of the Corporation nor the
Directors nor any officer, employee, representative or agent of the Corporation
shall be personally liable upon, nor shall resort be had to their private
property for the satisfaction of, obligations given, executed or delivered on
behalf of or by the Corporation, that neither shareholders of the Corporation
nor the Directors, officers, employees, representatives or agents of the
Corporation shall be personally liable hereunder, and that the Administrator
shall look solely to the property of the Corporation for the satisfaction of any
claim hereunder.
Section 12. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Administrator at 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000, Attention: Senior Vice President; or (2) to the
Corporation at BBH Common Settlement II Fund, Inc., 00 Xxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Secretary.
Section 13. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
BBH COMMON SETTLEMENT II FUND, INC.
By:
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Xxxxxx X. Xxxxxxxx
President
XXXXX BROTHERS XXXXXXXX TRUST COMPANY, LLC
By:
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Name:
Title:
