ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT made this day of 1986 by and
between The Rightime Fund, Inc., a Maryland corporation (the
"Corporation") for the Rightime Government Securities Series (the
"Fund"), and Rightime Administrators, Inc., a Pennsylvania corporation
(the "Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to Administer the Fund's affairs, subject to the overall
supervision of the Board of 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.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange Commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of shareholders
and broker/dealers, if any, which are directed to the Administrator, or,
if any such inquiry or communication is more properly to be responded to
by the Fund's transfer agent, custodian, distributor, or accounting
services agents, overseeing their response thereto; (vi) overseeing all
relationships between the Fund and its custodian, transfer agent,
distributor, and accounting services agents, including the negotiation
of agreements in relation thereto and the supervision of the performance
of such agreements; and (vii) authorizing and directing any of the
Administrator's directors, officers and employees who may be elected as
directors or officers of the Corporation to serve in the capacities in
which they are elected. All services to be furnished by the
Administrator under this Agreement may be furnished through the medium
of any such directors, officers or employees of the Administrator. The
Corporation authorizes the Administrator to appoint and contract with
other parties to perform certain of the services to be furnished by the
Administrator under this Agreement, subject to ratification by the
officers of the Corporation and any such contract shall be countersigned
by the Fund to confirm such ratification. The Corporation, on behalf of
the Fund, represents that it will cooperate with the Administrator and
any other parties retained by the Administrator under this Agreement in
the performance of services to be rendered by the Administrator or any
other parties retained by the Administrator. On behalf of the Fund, the
Corporation further represents that it will indemnify and hold the
Administrator harmless from and against any loss, liability and expense,
including any legal expenses arising from failure of the Fund to so
cooperate with the Administrator and other parties retained by the
Administrator to perform services under this Agreement, or arising from
any error, omission, inaccuracy or other deficiency in information
provided by the Fund, or the failure of the Fund to provide any portion
of such or any information needed by the Administrator or any parties
retained by the Administrator to perform the services to be rendered
under this Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of the Fund
and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by the
Fund in connection with administering the ordinary course of the Fund's
business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator may
contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment advisor
or expenses otherwise incurred by the Fund in connection with the
management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are not
affiliated persons of the Administrator, the investment advisor or the
distributor;
(d) 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 records of
the Fund not being maintained by the Administrator, (iii) the pricing of
the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) the fees and expenses of the Fund's transfer and
dividend disbursing agent, which may be the custodian, which relate to
the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the Fund
to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing and
non-negotiable share deposit receipts evidencing shares of the Fund, if
any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission,, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of .50 of one percent (.50%)
of the average daily net assets of the Fund (specifically .041% per
month of the average daily net assets). This fee will be computed daily
and paid monthly within ten (10) business days after the last day of
each month. This fee shall be prorated for any fraction of a month at
the commencement or termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation.of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. 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 Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. On behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance
is specifically approved at least annually by the Board of Directors of
the Corporation provided, however, that this Agreement may be terminated
by the Fund at any time, without the payment of any penalty, by the
Board of Directors of the Corporation or by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the Fund,
or by the Administrator at any time, without the payment of any penalty,
on not more than sixty (60) days' nor less than thirty (30) days'
written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, 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.
9. During the term of this Agreement, the Fund agrees to furnish
the Administrator at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
provided for distribution to stockholders of the Fund 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 (5) business days (or such other time as may be
mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
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President
[Corporate Seal] Attest:
---------------------------
Secretary
RIGHTIME ADMINISTRATORS, INC.
By:
--------------------------------
President
[Corporate Seal] Attest:
---------------------------
Secretary
199420.1
