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EXHIBIT (h)(1)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of August 1, 2001, by and between XXXXXXX
INVESTMENTS, a Massachusetts business trust (the "Trust"), and XXXXXXX ASSET
MANAGEMENT, INC., a Michigan corporation ("Xxxxxxx Management").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and is authorized to issue shares of beneficial interests ("Shares") in separate
series with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust desires Xxxxxxx Management to provide, and Xxxxxxx
Management is willing to provide, management and administrative services to each
series listed on Schedule A (as amended from time to time) (the "Funds") to this
Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and Xxxxxxx Management hereby agree as follows:
1. Retention of Xxxxxxx Management. Effective August 1, 2001, the Trust
hereby retains Xxxxxxx Management to furnish the management and administrative
services described in Section 2 below. Xxxxxxx Management hereby accepts such
employment to perform the duties set forth below. Xxxxxxx Management shall, for
all purposes herein, be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to act for
or represent the Trust in any way and shall not be deemed an agent of the Trust.
2. Administrative and Accounting Services. Xxxxxxx Management shall
perform, or supervise the performance by others of, administrative services in
connection with the operations of the Fund, and, on behalf of the Trust, will
investigate, assist in the selection of and conduct relations with custodians,
depositories, accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Fund's operations. Xxxxxxx Management shall
provide the Trustees of the Trust with such reports regarding investment
performance and compliance with investment policies and applicable laws, rules
and regulations as they may reasonably request but shall have no responsibility
for supervising the performance by any investment adviser or subadviser of its
responsibilities.
Xxxxxxx Management shall provide the Trust with administrative
services, regulatory reporting, all necessary office space, equipment,
personnel, compensation and facilities (including facilities for meetings of
shareholders and Trustees') for handling the affairs of the Fund and such other
services as the Trustees may, from time to time, reasonably request and Xxxxxxx
Management shall, from time to time, reasonably determine to be necessary to
perform its obligations under this Agreement.
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Without limiting the generality of the foregoing, Xxxxxxx Management
shall:
(a) calculate contractual expenses and control all disbursements
for the Funds, and as appropriate compute the yields, total return,
expense ratios, portfolio turnover rate and, if required, portfolio
average dollar-weighed maturity for the Funds;
(b) assist counsel with the preparation of prospectuses,
statements of additional information, registration statements, and
proxy materials for the Funds;
(c) prepare such reports, applications and documents (including
reports regarding the sale and redemption of shares as may be required
in order to comply with Federal and state securities law) as may be
necessary or desirable to register the Trust's shares with state
securities authorities, monitor sale of the Trust's Shares for
compliance with state securities laws, and file with the appropriate
state securities authorities the registration statements and reports
for the Trust and the Trust's Shares and all amendments thereto, as may
be necessary or convenient to register and keep effective the Trust's
Shares with state securities authorities to enable the Trust to make a
continuous offering of the Trust's Shares;
(d) develop and prepare communications to shareholders, including
the annual report to shareholders, coordinate mailing prospectuses,
notices, proxy statements, proxies and other reports to shareholders of
the Funds, and supervise and facilitate the solicitation of proxies for
all shareholder meetings of the Funds, including tabulation process for
such shareholder meetings;
(e) coordinate with counsel the preparation and negotiation of,
and administer, contracts on behalf of the Funds with, among others,
each Fund's investment adviser, subadviser, distributor, custodian, and
transfer agent;
(f) maintain each Fund's general ledger and prepare each Fund's
financial statements, including expense accruals and payments,
determine the net asset value of each Fund's assets and of each Fund's
shares, and supervise the Trust's transfer agent with respect to the
payment of dividends and other distributions to shareholders;
(g) monitor trading compliance by the Trust and each Fund's
employees and subadvisers;
(h) coordinate and supervise the preparation and filing of each
Fund's tax returns;
(i) examine and review the operations and performance of the
various organizations providing services to the Funds, including,
without limitation, each Fund's investment adviser, investment
sub-advisor, distributor, custodian, transfer agent, counsel and
independent public accountants;
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(j) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and printing of each
Fund's semi-annual and annual reports to shareholders;
(k) assist with the design, development, and operation of each
Fund, including new portfolio and class investment objectives, policies
and structure;
(l) provide individuals acceptable to the Trustees for nomination,
appointment, or election as officers of the Trust, who will be
responsible for the management of certain of the Trust's affairs as
determined by the Trustees;
(m) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Trust in
accordance with the requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act as such bonds and policies are approved by the Trust's Board
of Trustees;
(n) monitor and advise the Trust on its registered investment
company status under the Internal Revenue Code of 1986, as amended;
(o) perform all administrative services and functions of the Trust
to the extent administrative services and functions are not provided to
the Trust pursuant to each Fund's investment advisory agreement,
distribution agreement, custodian agreement and transfer agent
agreement;
(p) furnish advice and recommendations with respect to other
aspects of the business and affairs of each Fund as the Trust and
Xxxxxxx Management shall determine desirable;
(q) prepare and file with the SEC the semi-annual report for each
Fund on Form N-SAR and all required notices pursuant to Rule 24f-2;
(r) assist the Trust's independent public accountants with the
annual audit of the Trust's operations; and
(s) assist in the training and oversight of third parties used to
perform any of the services described herein.
Xxxxxxx Management shall also be available, at its expense, to perform
internal audit examinations no more frequently than once annually at the request
of the Trust. In addition, Xxxxxxx Management will perform or oversee other
services for the Trust as agreed from time to time, including, but not limited
to mailing the annual and semi-annual reports to shareholders of the Funds;
preparing an annual list of shareholders; and mailing notices of shareholders'
meetings, proxies and proxy statements, for all of which the Trust will pay
Xxxxxxx Management's out-of-pocket expenses.
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In the performance of its duties hereunder, Xxxxxxx Management will
comply with the provisions of the Declaration of Trust and the Bylaws of the
Trust, will safeguard and promote the welfare of the Trust, and will comply with
the policies that the Trustees may from time to time reasonably determine;
provided that such policies are not in conflict with this Agreement, the Trust's
governing documents, or any applicable statutes or regulations.
3. Allocation of Charges and Expenses.
(a) Xxxxxxx Management. Xxxxxxx Management shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. Xxxxxxx Management shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of Xxxxxxx Management or any affiliated
corporation of Xxxxxxx Management; provided, however, that unless otherwise
specifically provided, Xxxxxxx Management shall not be obligated to pay the
compensation of any employee of the Trust retained by the Trustees of the Trust
to perform services on behalf of the Trust.
(b) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust not otherwise allocated herein, including, without
limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing shareholders of the Fund, all
expenses incurred in connection with issuing and redeeming shares of the Funds,
the costs of custodial services, the cost of initial and ongoing registration of
the shares of the Funds under federal and state securities laws, fees and
out-of-pocket expenses of Trustees who are not affiliated persons of Xxxxxxx
Management or the investment adviser to the Trust or any affiliated corporation
of Xxxxxxx Management or the Investment Adviser, the costs of Trustees'
meetings, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Trust.
4. Compensation of Xxxxxxx Management.
(a) Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by Xxxxxxx Management pursuant to this
Agreement, the Trust shall pay to Xxxxxxx Management compensation at an annual
rate calculated daily and paid monthly equal to 0.10% of the total average daily
net assets of all Funds. If this Agreement becomes effective subsequent to the
first day of a month or terminates before the last day of a month, Xxxxxxx
Management's compensation for that part of the month in which this Agreement is
in effect shall be prorated in a manner consistent with the calculation of the
fees as set forth above. Payment of Xxxxxxx Management's compensation for the
preceding month shall be made promptly.
(b) Compensation from Transactions. The Trust hereby authorizes any
entity or person
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associated with Xxxxxxx Management which is a member of a national securities
exchange to effect any transaction on the exchange for the account of the Trust
which is permitted by Section 11(a) of the Securities Exchange Act of 1934 (the
"1934 Act") and Rule 11a2-2(T) thereunder, and the Trust hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T)(a)(2)(iv).
(c) Survival of Compensation Rates. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
5. Activities of Xxxxxxx Management. The services of Xxxxxxx
Management rendered to the Trust are not to be deemed to be exclusive. Xxxxxxx
Management is free to render such services to others and to have other
businesses and interests. It is understood that Trustees, officers, employees
and Shareholders of the Trust are or may be or become interested in Xxxxxxx
Management, as directors, officers, employees and shareholders or otherwise and
that directors, officers, employees and shareholders of Xxxxxxx Management and
its counsel are or may be or become similarly interested in the Trust, and that
Xxxxxxx Management may be or become interested in the Trust as a Shareholder or
otherwise.
6. Confidentiality. Xxxxxxx Management agrees on behalf of itself and
its employees to treat confidentially all records and other information relative
to the Trust and its prior, present or potential Shareholders and relative to
Xxxxxxx Management and its prior, present or potential customers, except, after
prior notification to and approval in writing by the Trust, which approval shall
not be unreasonably withheld and may not be withheld where Xxxxxxx Management
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Trust.
7. Representations, Warranties and Covenants.
(a) In the event of equipment failures beyond Xxxxxxx Management's
control, Xxxxxxx Management shall, at no additional expense to the Trust, take
reasonable steps to minimize service interruptions but shall have no liability
with respect to such service interruptions if such reasonable steps are taken.
Xxxxxxx Management shall develop and maintain a plan for recovery from equipment
failures which may include contractual arrangements with appropriate parties
making reasonable provision for emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
(b) Xxxxxxx Management undertakes to comply with all applicable
requirements of the Securities Act of 1933, the 1934 Act, the 1940 Act and any
laws, rules and regulations of governmental authorities having jurisdiction with
respect to the duties to be performed by Xxxxxxx Management hereunder.
8. Effective Date; Term; Termination. This Agreement shall become
effective with respect to the Funds on the date hereof and shall remain in full
force until the second anniversary of
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the effective date set forth in Section 1, unless sooner terminated as
hereinafter provided. This Agreement shall continue in force from year to year
thereafter with respect to the Funds, but only as long as such continuance is
specifically approved for the Funds at least annually in the manner required by
the 1940 Act and the rules and regulations thereunder; provided, however, that
if the continuation of this Agreement is not approved for the Funds, Xxxxxxx
Management may continue to serve in such capacity for the Funds in the manner
and to the extent permitted by the 1940 Act and the rules and regulations
thereunder.
This Agreement shall automatically terminate in the event of its
assignment by Xxxxxxx Management, and may be terminated by the Board of Trustees
of the Trust, by vote of a majority of the outstanding voting securities of the
Trust, or by Xxxxxxx Management, at any time without cause and without the
payment of any penalty on sixty (60) days' written notice by one party to the
other party. This Agreement may also be terminated immediately, upon delivery of
notice of termination and without the payment of any penalty, by the Trust in
the event that the Board of Trustees determines that Cause for termination
exists. The term "Cause" shall include, without limitation, (i) a material
breach of this Agreement or other action or omission by Xxxxxxx Management which
has or is likely to have a material and imminent adverse effect on each Fund or
its shareholders, (ii) any other breach of this Agreement by Xxxxxxx Management
which is not cured within twenty (20) business days after written notice of such
breach from the Board of Trustees of the Trust, (iii) the insolvency or the
filing of bankruptcy or reorganization proceedings by or against Xxxxxxx
Management, or (iv) the conviction of Xxxxxxx Management or any director or
executive officer of Xxxxxxx Management of a felony. The terms "assignment" and
"majority of the outstanding voting securities" have the meanings set forth in
the 1940 Act and the rules and regulations thereunder. Termination of this
Agreement shall not affect the right of Xxxxxxx Management to receive payments
on any unpaid balance of the compensation described in Section 4 earned prior to
the effective date of such termination.
9. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
10. Certain Records. Xxxxxxx Management shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by Xxxxxxx Management
on behalf of the Trust shall be prepared and maintained at the expense of
Xxxxxxx Management, but shall be the property of the Trust and will be made
available to or surrendered promptly to the Trust on request. In case of any
request or demand for the inspection of such records by another party, Xxxxxxx
Management shall notify the Trust and follow the Trust's instructions as to
permitting or refusing such inspection.
11. Definitions of Certain Terms. The terms "interested person" and
"affiliated person", when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
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12. Notices. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other party
at the last address furnished by the other party to the party giving notice: if
to the Trust, c/o Firstar Mutual Fund Services, LLC, 000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000; and if to Xxxxxxx Management at 000 Xxxx Xxxx Xxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000.
13. Governing Law. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the Commonwealth of
Massachusetts, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
15. Limitation of Trust Liability. The Declaration of Trust
establishing Xxxxxxx Investments, dated July 19, 1993, a copy of which, together
with all amendments thereto (the "Declaration"), is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name "Xxxxxxx
Investments" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of Xxxxxxx Investments, shall be held to any personal
liability, nor shall result be had to their private property for the
satisfaction of any obligation or claim or otherwise in connection with the
affairs of said Xxxxxxx Investments, but the Trust Estate only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
XXXXXXX INVESTMENTS XXXXXXX ASSET MANAGEMENT, INC.
By: /S/ XXXX X. XXXXXXXX By: /S/ XXXXXX X. XXXXXX
Xxxx X. Xxxxxxxx, Chairman Xxxxxx X. Xxxxxx, Vice President
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EXHIBIT A
TO
ADMINISTRATION AGREEMENT
This Agreement shall apply to the Funds identified below:
Xxxxxxx Growth and Income Fund
Xxxxxxx Large-Cap Growth Fund
Xxxxxxx Small-Cap Growth Fund
Xxxxxxx Communications Fund
Xxxxxxx Market Neutral Fund
Xxxxxxx Government Money Market Fund
XXXXXXX INVESTMENTS
By: __________________________
Its: _________________________
XXXXXXX ASSET MANAGEMENT, INC.
By: __________________________
Its: _________________________
Dated: ______________________
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