Exhibit (5)(B)
AMERICA'S UTILITY FUND, INC.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
August 21, 1995
Mentor Investment Group, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Administrative Services Agreement
Dear Gentlemen:
America's Utility Fund, Inc., a Maryland corporation (the "Fund"), is
engaged in the business of a registered investment company. The Fund desires
that you act as administrator of the Fund, and you are willing to act as such
administrator and to perform such services under the terms and conditions
hereinafter set forth. Accordingly, the Fund agrees with you as follows:
1. Delivery of Fund Documents. The Fund has furnished you with copies
properly certified or authenticated of each of the following:
(a) Articles of Incorporation of the Fund.
(b) By-Laws of the Fund as in effect on the date hereof.
(c) Resolutions of the Board of Directors of the Fund selecting
you as administrator and approving the form of this Agreement.
The Fund will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
2. Administrative Services. You will continuously provide business
management services to the Fund and will generally, subject to the general
oversight of the Board of Directors of the Fund and, except as provided in the
next following paragraph, manage all of the business and affairs of the Fund,
subject always to the provisions of the Fund's Articles of Incorporation and
By-Laws and of the Investment Company Act of 1940, as amended (the "1940 Act"),
and subject, further, to such policies and instructions as the Board of
Directors of the Fund may from time to time establish. You shall, except as
provided in the next
following paragraph, advise and assist the officers of the Fund in taking such
steps as are necessary or appropriate to carry out the decisions of the Board of
Directors of the Fund and the appropriate committees of such Board of Directors
regarding the conduct of the business of the Fund. Without limiting the
generality of the foregoing, and subject in each case to the provisions of the
following paragraph, you will take all reasonable steps to coordinate and
oversee the preparation and filing of all amendments to the registration
statement of the Fund on Form N-1A as are required by the Securities Act of 1933
or the 1940 Act, and the preparation and mailing of all financial reports to
shareholders required by the 1940 Act; to coordinate and oversee the Fund's
compliance with the registration requirements of applicable state securities or
"Blue Sky" laws; to prepare and furnish all reports to the Board of Directors of
the Fund in respect of the Fund, including materials relating to any meeting of
the Board of Directors of the Fund, as may reasonably be requested by the Board
of Directors or the officers of the Fund; to oversee and perform certain agreed
tax-related functions for the Fund (including, without limitation, performance
of excise tax and income tax calculations for year-end dividend distributions to
shareholders, preparation of the income tax information footnote in year-end
financial statements, and preparation and filing of federal tax returns for the
Fund and Virginia and Maryland tax return forms); and otherwise to assist the
officers of the Fund in the performance of their duties. You will be fully
protected in complying with or relying on the instructions of the President or
any other officer of the Fund, or the advice of counsel for the Fund, in the
performance of your duties hereunder,.
Notwithstanding any provision of this Agreement, you will not at any
time provide, or be required to provide, to the Fund or to any person with
respect to the Fund, investment research, advice, or supervision, or in any way
advise the Fund or any person acting on behalf of the Fund as to the value of
securities or other investments or as to the advisability of investing in,
purchasing, or selling securities or other investments, nor shall you be
responsible for monitoring, determining, or advising as to the compliance of any
investment in or purchase or sale of securities or other investments with any
applicable law.
3. Allocation of Charges and Expenses. You will make available, without
expense to the Fund, the services of such of your directors, officers, and
employees as may duly be elected Directors or officers of the Fund, subject to
their individual consent to serve and to any limitations imposed by law. You
will provide, at your expense, all clerical services relating to the business of
the Fund. You will pay the compensation of such of your directors, officers, and
employees as may duly be elected Directors or officers of the Fund. You will not
be required to pay any expenses of the Fund other than those specifically
allocated to you in this paragraph 3. In particular, but without limiting the
generality of the foregoing, you will not be required to pay: clerical salaries
not relating to the services described in paragraph 2 above; fees and expenses
incurred by the Fund in connection with membership in investment company
organizations; brokers' commissions; payment for portfolio pricing services to a
pricing agent, if any; legal, auditing, or accounting expenses; taxes or
governmental fees; the fees and expenses of the transfer agent of the Fund; the
cost of preparing share certificates or any other expenses, including clerical
expenses, incurred in
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connection with the issue, sale, underwriting, redemption, or repurchase of
shares of the Fund; the expenses of and fees for registering or qualifying
securities for sale; the fees and expenses of Directors of the Fund who are not
affiliated with you; the cost of preparing and distributing reports and notices
to shareholders; public and investor relations expenses; or the fees or
disbursements of custodians of the Fund's assets, including expenses incurred in
the performance of any obligations enumerated by the Articles of Incorporation
or By-Laws of the Fund insofar as they govern agreements with any such
custodian.
4. Compensation. As compensation for the services performed and the
facilities furnished and expenses assumed by you, including the services of any
consultants retained by you, the Fund shall pay you, promptly (but in any event
within three business days) after the last day of each calendar month, a fee,
calculated daily, of 0.65 of 1% annually of the Fund's average daily net assets,
less the amount of any fees paid to Commonwealth Investment Counsel, Inc. for
such month under its Management Contract with the Fund dated as of August 21,
1995.
If this Agreement is terminated as of any date not the last day of a
calendar month, the fee payable to you shall be paid promptly (but in any event
within three business days) after such date of termination.
The average daily net assets of the Fund shall in all cases be based
only on business days and be computed as of the time of the regular close of
business of the New York Stock Exchange, or such other time as may be determined
by the Board of Directors. Each such payment shall be accompanied by a report of
the Fund prepared either by the Fund or by a reputable firm of independent
accountants which shall show the amount properly payable to you under this
Agreement and the detailed computation thereof.
5. Limitation of Liability. You shall not be liable for any error of
judgement 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 your part in the
performance of your duties, or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though also
employed by you, who may be or become an employee of and paid by the Fund shall
be deemed, when acting within the scope of his or her employment by the Fund, to
be acting in such employment solely for the Fund and not as your employee or
agent.
6. Duration and Termination of this Agreement. This Agreement shall
remain in force until August 21, 1997 and continue 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 you
or of the Fund, cast in person at a meeting called for the purpose of voting on
such approval and by a vote of the Board of Directors. This Agreement may, on 30
days notice, be terminated at any time without the payment of any penalty by
you, and, immediately upon notice, by the Board of Directors or by vote of a
majority of the outstanding voting securities of the Fund. In interpreting the
provisions of
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this Agreement, the definitions contained in Section 2(a) of the 1940 Act, as
modified by rule 18f-2 under the Act (particularly the definitions of
"interested person" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission by any
rule, regulation, or order.
7. Amendment of this Agreement. No provisions of this Agreement may be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge, or termination is sought, and no amendment of this Agreement shall be
effective as to the Fund until approved by the Board of Directors, including a
majority of the Directors who are not interested persons of you or of the Fund,
cast in person at a meeting called for the purpose of voting on such approval.
8. 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. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Fund, whereupon this letter shall become a binding contract.
Yours very truly,
AMERICA'S UTILITY FUND, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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The foregoing Agreement is hereby accepted as of the date thereof.
MENTOR INVESTMENT GROUP, INC.
By: /s/ Xxxx X. Xxxxxxxx
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