ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN
▇▇▇▇▇▇▇▇▇ ASSOCIATES, INC.
AND
PORTFOLIOS, INC.
THIS ADMINISTRATIVE SERVICES AGREEMENT is made this 24th day of October,
1985 by and between ▇▇▇▇▇▇▇▇▇ Associates, Inc., a Texas corporation (the
"Fund"), and Portfolios, Inc., a Texas corporation ("Portfolios"):
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, Portfolios is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and engages in the business of
providing investment advisory services to the Fund and others; and
WHEREAS, the Fund desires to retain Portfolios to render certain additional
services in the manner and on the terms and conditions hereinafter set forth;
and
WHEREAS, Portfolios desires to be retained to perform such additional
services on said terms and conditions:
NOW, THEREFORE, for and in consideration of the mutual promises and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. SERVICES. The Fund hereby retains Portfolios to provide to the Fund such
accounting and bookkeeping services and functions (the "Services") as are
reasonably necessary for the operation of the Fund, including the preparation
and maintenance of the following books, records and other documents: (a)
journals containing itemized daily records in detail of all purchases and sales
of securities, receipts and deliveries of securities, all receipts and
disbursements of cash and all other debits and credits; (b) general and
auxiliary ledgers reflecting all asset, liability, reserve, capital, income and
expense accounts; and (c) a record of the proof of money balances in all ledger
accounts maintained pursuant to this Agreement. The foregoing books and records
shall be maintained by Portfolios in accordance with and for the time periods
specified by applicable rules and regulations, including Rules 3la-1 and 3la-2
under the Act. All such books and records shall be the property of the Fund and,
upon request therefor, Portfolios shall surrender to the Fund promptly such of
the books and records so requested.
2. INFORMATION FROM FUND. The Fund will, from time to time, furnish or
otherwise make available to Portfolios such information relating to the business
and affairs of the Fund as Portfolios may reasonably require in order to
discharge its duties and obligations hereunder.
3. COMPENSATION. For the Services to be rendered as provided above, the
Fund shall pay to Portfolios a cash fee at the annual rate of $16,000, payable
in equal monthly installments on the last day of each month. If Portfolios shall
serve for less than the whole of any month, the compensation to Portfolios shall
be prorated.
4. ALLOCATION OF CHARGES AND EXPENSES. Portfolios shall be responsible for
the compensation of its personnel, and for the costs of its office facilities
and equipment, employed in performing the Services. The Fund shall be
responsible for, and shall pay, all the other expenses associated with its
operations. Portfolios may arrange on behalf of the Fund to obtain data
processing, legal, auditing and consulting services reasonably necessary in
connection with the performance of the Services, and the Fund shall be
financially responsible for the cost of such services.
5. INSPECTION. Portfolios will permit representatives of the Fund,
including the Fund's independent auditors, to have reasonable assess to the
personnel and records of Portfolios in order to enable such representatives to
monitor the quality of services being provided pursuant to this Agreement. In
addition, Portfolios shall promptly deliver to the Board of Directors of the
Fund such information as may reasonably be requested from time to time to permit
the Board of Directors to make an informed determination regarding continuation
of this Agreement.
6. ACTIVITIES OF PORTFOLIOS. The services of Portfolios to the Fund are not
deemed to be exclusive. Portfolios shall be free to engage in any other
business, to render similar services to others and to provide other services to
the Fund for separate and additional consideration.
7. DURATION, TERMINATION AND AMENDMENT OF THIS AGREEMENT. This Agreement
shall become effective on November 1, 1985 and shall continue in effect for two
years from such date, and thereafter, but only so long as such continuance is
specifically approved at least annually (i) by the vote of a majority of the
directors of the Fund who are not parties to this Agreement or interested
persons (as defined in the Act) of the Fund or Portfolios, and (ii) by the Board
or by a vote of a majority of the outstanding voting securities of the Fund.
This Agreement may be terminated by Portfolios at any time without penalty on 60
days' written notice, and may be terminated at any time without penalty by the
Board or by the vote of a majority of the outstanding voting securities of the
Fund on 60 days' written notice. This Agreement may be amended by an instrument
in writing executed by the parties hereto and approved in the same manner as the
continuance hereof without the approval of the shareholders of the Fund, and it
shall automatically terminate in the event of its transfer or assignment.
8. INVESTMENT COMPANY ACT. This Agreement is made subject to the provisions
of the Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Administrative
Services Agreement to be executed as of the date first above written.
▇▇▇▇▇▇▇▇▇ ASSOCIATES, INC.
By /s/ ▇.▇. ▇▇▇▇▇▇
----------------------------
President
PORTFOLIOS, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Vice President
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