ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT made , 2000, by and between The
----------
Rightime Fund, Inc., a Maryland corporation (the "Corporation") for The
Rightime OTC Fund 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 Corporation
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 Corporation's registration and/or the registration of the
Fund's shares under the securities or "blue-sky" laws of the various states
(the Corporation 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 Corporation to confirm
such ratification. The Corporation 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. 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 Corporation 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 Corporation, or the failure of the Corporation 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 Corporation, in
connection with their service to 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 Corporation, on behalf of 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 Corporation, on behalf of 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, who 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 Fund's proper proportionate share of the fees of any trade
association of which the Corporation 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 Fund's proper proportionate share of the fees and expenses involved
in registering and maintaining registrations of the Corporation and the
shares of the Fund 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 Corporation'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 Corporation, on behalf of the Fund, shall
pay the Administrator a fee based on the rates stated in Schedule A of this
Agreement. This fee will be computed daily and shall be payable twice monthly
according to such schedule as is set forth from time to time by the parties
to this Agreement and approved by the Board of Directors of the Corporation.
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. 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 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 Corporation
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 Corporation 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 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 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: --------------------------
Xxxxx X. Rights
President
[Corporate Seal] Attest: --------------------------
Xxxxxx X. Xxxxx, Xx.
Secretary
RIGHTIME ADMINISTRATORS, INC.
By: --------------------------
Xxxxx X. Rights
President
[Corporate Seal] Attest: --------------------------
Xxxxxx X. Xxxxx, Xx.
Secretary
SCHEDULE A
ADMINISTRATION AGREEMENT
Attached to and part of the Administration Agreement dated , 2000
----------
between The Rightime Fund, Inc. (the "Corporation") for The Rightime OTC Fund
(the "Fund") and Rightime Administrators, Inc. (the "Administrator").
CURRENT FEE SCHEDULE
I. Class A Shares
* The Corporation, on behalf of the Fund, shall pay the Administrator a fee
at the annualized rate of 0.85 of one percent (0.85%) of the first five-
hundred million dollars of the Fund's Class A Shares average daily net assets
and 0.80 of one percent (0.80%) of the Fund's Class A Shares average daily
net assets in excess of five-hundred million dollars.
II. Class C Shares
* The Corporation, on behalf of the Fund, shall pay the Administrator a fee
at the annualized rate of 0.70 of one percent (0.70%) of the first five-
hundred million dollars of the Fund's Class C Shares average daily net assets
and 0.65 of one percent (0.65%) of the Fund's Class C Shares average daily
net assets in excess of five-hundred million dollars.
