Exhibit g(b)
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT dated as of ____, 1995 between Southwest Small Cap Equity
Fund, Inc. (the "Fund"), a Delaware corporation, and XxXxxxx & Company I, L.P.
("XxXxxxx"), a limited partnership.
WHEREAS, the Fund has been organized to operate as a diversified,
closed-end management investment company registered under the Investment Company
Act of 1940; and
WHEREAS, the Fund wishes to avail itself of the information, advice,
assistance and facilities of XxXxxxx to perform on behalf of the Fund the
services as hereinafter described; and
WHEREAS, XxXxxxx wishes to provide such services to the Fund under the
conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Fund and XxXxxxx agree as follows:
1. EMPLOYMENT. The Fund, being duly authorized, hereby employs XxXxxxx
to perform those services described in this Agreement. XxXxxxx shall perform the
obligations thereof upon the terms and conditions hereinafter set forth.
2. FUND ADMINISTRATION. Subject to the direction and control of the
Fund, XxXxxxx shall supervise the Fund's business affairs not otherwise
supervised by other agents of the Fund. To the extent not otherwise the primary
responsibility of, or provided by, other agents of the Fund, XxXxxxx shall (1)
prepare all reports required to be filed by the Fund with the Securities and
Exchange Commission ("SEC") on Form N-SAR, or such other form as the SEC may
substitute for Form N-SAR; (2) provide to the Fund's independent accountants
such information as is necessary for such accountants to prepare and file the
Fund's federal, state and local tax returns, and review such returns after they
are prepared; (3) respond to certain inquiries from the Fund's stockholders in
connection with proxies, rights offerings and other such events; (4) assist in
the preparation and dissemination to stockholders of the Fund proxy and rights
offering materials and oversee the tabulation of proxies by the Fund's transfer
agent, (5) negotiate contractual arrangements with the Fund's agents, including
custodians, transfer agents, dividend paying agents, independent accountants and
printing companies, monitor the performance of such agents pursuant to such
arrangements, and make such reports and recommendations to the Board of
Directors concerning the provision of such services as the Fund reasonably
requests or XxXxxxx deems appropriate; (6)
assist in preparing financial information relating to the Fund for the Fund's
periodic reports to stockholders, prospectuses, proxy materials and earnings
releases; (7) assist in monitoring compliance of the Fund's operations with the
Investment Company Act of 1940 and with its investment policies and limitations;
(8) assist in the calculation of the Fund's net asset value in accordance with
the Fund's registration statement under the Investment Company Act of 1940 and
the Securities Act of 1933 and make the Fund's net asset value available for
public dissemination; (9) assist in establishing the accounting policies of the
Fund; (10) assist the Fund in determining the amount of dividends or other
distributions available to be paid by the Fund to its stockholders; (11) arrange
for the printing (at the Fund's expense) of financial reports, prospectuses,
proxy materials and dividend notices to stockholders; (12) provide the Fund's
transfer agent, dividend paying agent and custodian with such information as is
required for such parties to effect the payment of dividends and other
distributions and implementing the Fund's Dividend Reinvestment Plan; and (13)
assist in the preparation and dissemination of press releases regarding such
dividends and other distributions. Although this Agreement does not specify the
level of assistance to be provided by XxXxxxx, it does obligate XxXxxxx to
render such services when, as and to the extent that the Fund deems appropriate
in order for the Fund to obtain the benefits of the Agreement. XxXxxxx shall
provide personnel to serve as officers of the Fund if so elected by the Board of
Directors; provided, however, that the Fund shall reimburse XxXxxxx for the
expenses incurred by such personnel in attending Board of Directors' meetings
and shareholders' meetings of the Fund.
Notwithstanding the foregoing, XxXxxxx may utilize the services of one
or more sub-administrators of its choice subject to the approval of the Board of
Directors of the Fund. The cost of employing each such sub-administrator will be
paid by XxXxxxx and not by the Fund.
3. RECORD KEEPING AND OTHER INFORMATION. XxXxxxx or its agent shall
create and maintain all necessary records in accordance with all applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder, as
the same may be amended from time to time, pertaining to the various functions
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 XxXxxxx or its agent for the periods and in the places required by
Rule 31a-2 under the Investment Company Act of 1940.
4. AUDIT, INSPECTION AND VISITATION. XxXxxxx shall make available to
the Fund during regular business hours all records and other data created and
maintained pursuant to the foregoing provisions of this Agreement for reasonable
audit and inspection
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by the Fund or any regulatory agency having authority over the Fund.
5. COMPENSATION. For the performance of XxXxxxx'x obligations under
this Agreement, the Fund shall pay XxXxxxx, on the first business day following
the end of each month, a fee equal to one twelfth (1/12) of the annual rate of
.50% of the Fund's average weekly net assets during such month. XxXxxxx shall
not be required to reimburse the Fund or the Fund's investment adviser for (or
have deducted from its fees) any expenses in excess of expense limitations
imposed by certain state securities commissions having jurisdiction over the
Fund.
6. INDEMNIFICATION OF XXXXXXX. XxXxxxx may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the Investment Company Act of 1940 and the rules thereunder,
neither XxXxxxx nor its shareholders, officers, directors, employees, agents,
control persons or affiliates of any thereof shall be subject to any liability
for, or any damages, expenses or losses incurred by the Fund in connection with,
any error of judgment, mistake of law, any act or omission connected with or
arising out of any services rendered under or payments made pursuant to this
Agreement or any other matter to which this Agreement relates, except by reason
of willful misfeasance, bad faith or gross negligence on the part of any such
persons in the performance of the duties of XxXxxxx under this Agreement or by
reason of reckless disregard by any of such persons of the obligations and
duties of XxXxxxx under this Agreement.
Any person, even though also a director, officer, employee, shareholder
or agent of XxXxxxx, or any of its affiliates, 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, to be rendering such
services to or acting solely as an officer, director, employee or agent of the
Fund and not as a director, officer, employee, shareholder or agent of or one
under the control or direction of XxXxxxx or any of its affiliates, even though
paid by one of those entities.
Notwithstanding any other provision of this Agreement, the Fund shall
indemnify and hold harmless XxXxxxx, its directors, officers, employees,
shareholders, agents, control persons and affiliates, from and against any and
all claims, demands, expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which XxXxxxx may sustain or incur or which
may be asserted against XxXxxxx by any person, by reason of, or as a result of:
(i) any action taken or omitted to be taken by XxXxxxx in good faith in reliance
upon any certificate, instrument, order or stock certificate believed by it to
be genuine and to be signed, countersigned or executed by any duly authorized
person, upon the oral instructions or written
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instructions of an authorized person of the Fund or upon the opinion of legal
counsel for the Fund or its own counsel; or (ii) any action taken or omitted to
be taken by XxXxxxx in connection with its appointment in good faith in reliance
upon any law, act, regulation or interpretation of the same even though the same
may thereafter have been altered, changed, amended or repealed. However,
indemnification under this subparagraph shall not apply to actions or omissions
of XxXxxxx or its directors, officers, employees, shareholders or agents in
cases of its or their own gross negligence, willful misconduct, bad faith, or
reckless disregard of its or their own duties hereunder. WITHOUT LIMITING OR
ENLARGING THE SCOPE OF THE INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS
AGREEMENT, THE PARTIES HERETO SHALL BE ENTITLED TO INDEMNIFICATION IN ACCORDANCE
WITH THE TERMS HEREOF, REGARDLESS OF WHETHER THE LOSS OR CLAIM GIVING RISE TO
SUCH INDEMNIFICATION OBLIGATION IS THE RESULT OF THE STRICT LIABILITY OR
NEGLIGENCE OF THE PARTY INDEMNIFIED. THE PARTIES AGREE THAT THIS PARAGRAPH
CONSTITUTES A CONSPICUOUS LEGEND.
7. SERVICES FOR OTHERS. Nothing in this Agreement shall prevent XxXxxxx
or any affiliated person of XxXxxxx from providing services for any other
person, firm or corporation, including other investment companies; provided,
however, that XxXxxxx expressly represents that it will undertake no activities
which, in its judgment, will adversely affect the performance of its obligations
to the Fund under this Agreement.
8. COMPLIANCE WITH THE INVESTMENT COMPANY ACT OF 1940. The parties
hereto acknowledge and agree that nothing contained herein shall be construed to
require XxXxxxx to perform any services for the Fund which services could cause
XxXxxxx to be deemed an "investment adviser" of the Fund within the meaning of
Section 2(a)(20) of the Investment Company Act of 1940 or to supersede or
contravene the Prospectus or Statement of Additional Information of the Fund or
any provisions of the Investment Company Act of 1940 and the rules thereunder.
9. RENEWAL AND TERMINATION. This Agreement shall become effective on
the date first above written and shall remain in force for a period of two (2)
years from such date, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Directors who are not interested persons of the Fund or XxXxxxx, cast in
person at a meeting called for the purpose of voting on such approval and by a
vote of the Board of Directors or of a majority of the Fund's outstanding voting
securities. This Agreement may be terminated without the payment of any penalty
by either party upon sixty (60) days' written notice to the other party. This
Agreement shall terminate automatically in the event of its assignment. Upon the
termination of this Agreement, the Fund shall pay XxXxxxx such compensation as
may be payable for the period prior to the effective date of such
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termination.
10. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
SOUTHWEST SMALL CAP EQUITY FUND, INC.
By: ________________________________
Its: President
XxXXXXX & COMPANY I, L.P.
By: ________________________________
Its: General Partner
0264914.01
119520/2129
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