OLD WESTBURY FUNDS, INC.
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is made as of this day
of , 1996, between Old Westbury Funds, Inc., a Maryland Corporation (herein
called the "Fund"), and Federated Administrative Services, a Delaware business
trust (herein called "FAS").
WHEREAS, the Fund is a Maryland Corporation consisting of one
or more portfolios, which operates as an open-end management investment company
and will so register under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund desires to retain FAS as its Administrator
to provide it with Administrative Services (as herein defined), and FAS is
willing to render such services;
NOW THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
1. Appointment of Administrator. The Fund hereby appoints FAS
as Administrator of the Fund on the terms and conditions set forth in this
Agreement; and FAS hereby accepts such appointment and agrees to perform the
services and duties set forth in Section 2 of this Agreement in consideration
of the compensation provided for in Section 5 hereof.
2. Services and Duties. As Administrator, and subject to the
supervision and control of the Fund's Board of Directors FAS, or its delegatee,
will provide facilities, equipment and personnel to carry out the following
administrative services for operation of the business and affairs of the Fund
and each of its portfolios:
(a) in conjunction with counsel for the Fund, prepare,
file and maintain the Fund's governing documents and
any amendments thereto, including the Articles of
Incorporation (which has already been prepared and
filed), the By-laws and minutes of meetings of
Directors and shareholders;
(b) in conjunction with counsel for the Fund, prepare
and file with the Securities and Exchange Commission
and the appropriate state securities authorities the
registration statements for the Fund and the Fund's
shares and all amendments thereto, reports to
regulatory authorities and shareholders,
prospectuses, proxy statements, and such other
documents all as may be necessary to enable the Fund
to make a continuous offering of its shares;
(c) in conjunction with counsel for the Fund, prepare,
negotiate, and administer contracts on behalf of the
Fund with, and coordinate the activities of, among
others, the Fund's investment adviser, distributor,
custodian, portfolio accountant, transfer agent and
independent accountants;
(d) supervise the Fund's portfolio accountant in the
maintenance of the Fund's general ledger and in the
preparation of the Fund's financial statements,
including periodic (i) review and evaluation of
expense accruals; (ii) review, evaluation and
authorization of expenses payments; (iii) projection
of future expenses; and (iv) periodic review of the
determination of the net asset value of the Fund and
of the declaration and payments of dividends and
other distributions to shareholders;
(e) calculate performance data of the Fund for
dissemination to information services covering the
investment company industry;
(f) prepare and file the Fund's tax returns;
(g) examine and review the operations of the Fund's
custodian and transfer agent;
(h) coordinate the layout and printing of publicly
disseminated prospectuses and reports;
(i) perform internal audit examinations in accordance
with a charter to be adopted by FAS and the Fund;
(j) assist with the design, development, and operation
of the Fund;
(k) provide individuals reasonably acceptable to the
Fund's Board of Directors for nomination,
appointment, or election as officers of the Fund,
who will be responsible for the management of
certain of the Fund's affairs as determined by the
Fund's Board of Directors;
(l) consult with the Fund and its Board of Directors on
matters concerning the Fund and its affairs; and
(m) make periodic reports to the Fund's Board of
Directors in the performance of its obligations
under this Agreement.
The foregoing, along with any additional services that FAS shall agree in
writing to perform for the Fund hereunder, shall hereafter be referred to as
"Administrative Services." Administrative Services shall not include any
duties, functions, or services to be performed for the Fund by the Fund's
investment adviser, distributor, custodian, portfolio accountant, transfer
agent or independent accountants pursuant to their respective agreements with
the Fund.
3. Records. FAS shall create and maintain all necessary books
and records in accordance with all applicable laws, rules and regulations,
including but not limited to records required by the 1940 Act and the rules
thereunder, as the same may be amended from time to time, pertaining to the
Administrative Services performed by it and not otherwise created and
maintained by another party pursuant to contract with the Fund. Where
applicable, such records shall be maintained by FAS for the periods and in the
places required by Rule 31a-2 under the 1940 Act. The books and records
pertaining to the Fund which are in the possession of FAS shall be the property
of the Fund. The Fund, or the Fund's authorized representatives, shall have
access to such books and records at all times during FAS's normal business
hours. Upon the reasonable request of the Fund, copies of any such books and
records shall be provided promptly by FAS to the Fund or the Fund's authorized
representatives.
4. Expenses. FAS shall be responsible for expenses incurred
in providing office space, equipment, and personnel as may be necessary or
convenient to provide the Administrative Services to the Fund, including the
compensation of FAS employees who serve as Directors or officers of the Fund.
The Fund shall be responsible for all other expenses incurred by FAS on behalf
of the Fund, including without limitation postage and courier expenses,
printing expenses, travel expenses, registration fees, filing fees, fees of
outside counsel and independent accountants, insurance premiums, fees payable
to Directors who are not FAS employees, and trade associate dues.
5. Compensation. For the Administrative Services provided,
the Fund hereby agrees to pay and FAS hereby agrees to accept as full
compensation for its services rendered hereunder an administrative fee at an
annual rate per portfolio of the Fund's shares, payable daily, as specified
below:
Max. Admin. Average Daily Net Assets
Fee of the Fund
.15% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
However, in no event shall the administrative fee received during any year of
this Agreement be less than, or be paid at a rate less than, would aggregate
$75,000, per portfolio.
6. Responsibility of Administrator
(a) FAS shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund
in connection with the matters to which this
Agreement relates, except a loss resulting from
willful 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. FAS shall be entitled
to rely on and may act upon advice of counsel (who
may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably
taken or omitted pursuant to such advice. Any
person, even though also an officer, trustee,
partner, employee or agent of FAS, who may be or
become an officer, Director, employee or agent of
the Fund, shall be deemed, when rendering services
to the Fund or acting on any business of the Fund
(other than services or business in connection with
the duties of FAS hereunder) to be rendering such
services to or acting solely for the Fund and not as
an officer, trustee, partner, employee or agent or
one under the control or direction of FAS even
though paid by FAS.
(b) FAS shall be kept indemnified by the Fund and be
without liability for any action taken or thing done
by it in performing the Administrative Services in
accordance with the above standards. In order that
the indemnification provisions contained in this
Section 6 shall apply, however, it is understood
that if in any case the Fund may be asked to
indemnify or save FAS harmless, the Fund shall be
fully and promptly advised of all pertinent facts
concerning the situation in question, and it is
further understood that FAS will use all reasonable
care to identify and notify the Fund promptly
concerning any situation which presents or appears
likely to present the probability of such a claim
for indemnification against the Fund. The fund shall
have the option to defend FAS against any claim
which may be the subject of this indemnification. In
the event that the Fund so elects, it will so notify
FAS and thereupon the Fund shall take over complete
defense of the claim, and FAS shall in such
situation initiate no further legal or other
expenses for which it shall seek indemnification
under this Section. FAS shall in no case confess any
claim or make
any compromise in any case in which the Fund will be
asked to indemnify FAS except with the Fund's
written consent.
7. Duration and Termination.
(a) The term of this Agreement shall commence on the
date hereof, and extend until August 31, 1998 and
thereafter for successive twelve-month periods,
provided that such continuation is specifically
approved at least annually by the Board of Directors
and by a majority of those Directors who are neither
parties to this Agreement nor, other than by their
service as directors of the Fund, interested
persons, as defined in the 1940 Act, if any such
person is party to this Agreement.
(b) During any term of this Agreement, each time the
Fund adds a New Portfolio, an additional term shall
commence on the first date upon which the New
Portfolio has sufficient average daily net assets
such that FAS will begin to earn a sum not less than
its minimum ("annualized") administrative fee in
connection with the New Portfolio pursuant to
Section 5 of this Agreement ("Additional Term").
Such Additional Term shall extend to the later to
occur of (i) the second anniversary of the
commencement of the Additional Term, or (ii) the
expiration of the Initial Term.
(c) During any term of this Agreement, each time the
Fund adds a class of shares to any portfolio, an
additional term shall commence on the later to occur
of (i) the first date upon which the relevant
portfolio has sufficient average daily net assets
such that FAS will begin to earn a sum not less than
its minimum ("annualized") administrative fee
pursuant to Section 5 of this Agreement or (ii) the
effective date of the registration statement or
post-effective amendment registering the new class
of shares ("Class Term"). Such Class Term shall
extend to the third anniversary of the commencement
of the Class Term.
(d) This Agreement may be terminated at any time after
August 31, 1998, without penalty, by a vote of a
majority of the outstanding voting securities as
defined in the 1940 Act, or by a vote of a majority
of the entire Board of Directors, on six months'
written notice to FAS, or by FAS upon six months'
written notice to the Fund.
8. Amendment. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which an enforcement of the change, waiver,
discharge or termination is sought.
9. Limitations of Liability of Directors and Shareholders of
FAS. The execution and delivery of this Agreement have been authorized by the
Directors of FAS and signed by an authorized officer of FAS, acting as such,
and neither such authorization by such Directors nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the Directors or
shareholders of FAS, but bind only the trust property of FAS as provided in the
Declaration of Trust of FAS.
10. Notices. Notices of any kind to be given hereunder shall
be in writing (including facsimile communication) and shall be duly given if
delivered to the Fund, to its investment adviser and to FAS at the following
addresses: Old Westbury Funds, Inc. (Fund), 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000, Attention: Xxxxxx Xxxxxx, Bessemer Trust Company, N.A. (Adviser), 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxxx; and if delivered to
FAS at Federated Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000-0000, Attention:
President.
11. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court or
regulatory agency decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. Subject to the provisions of Section 6
hereof, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by
Pennsylvania law; provided, however, that nothing herein shall be construed in
a manner inconsistent with the 1940 Act or any rule or regulation promulgated
by the Securities and Exchange Commission thereunder.
12. Counterparts. This Agreement may be executed by different
parties on separate counterparts, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall together
constitute one and the same instrument.
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.
Old Westbury Funds, Inc. Federated Administrative Services
By: By:
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[Title] [Title]
Attest: Attest:
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Secretary
