FORM OF
TANAKA FUNDS, INC.
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT (the "Agreement") dated as of December ____ 1998, between TANAKA
Funds, Inc. (the "Corporation"), a Maryland corporation, and AmeriPrime
Financial Services, Inc. (the "Administrator"), a Texas corporation.
WHEREAS, the Corporation has been organized to operate as an open-end
management investment company registered under the Investment Company Act of
1940 (the "Act"); and
WHEREAS, the Corporation wishes to avail itself of the information, advice,
assistance and facilities of the Administrator to perform on behalf of the
Corporation the services as hereinafter described; and
WHEREAS, the Administrator wishes to provide such services to the
Corporation under the conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Corporation and the Administrator agree as
follows:
1. Appointment. The Corporation, being duly authorized, hereby employs the
Administrator to perform those services described in this Agreement. The
Administrator shall perform the obligations thereof upon the terms and
conditions hereinafter set forth. Any administrative services undertaken by the
Administrator pursuant to this Agreement, as well as any other activities
undertaken by the Administrator on behalf of the Corporation pursuant hereto,
shall at all times be subject to any directives of the Board of Directors of the
Corporation.
2. Representations and Warranties of AmeriPrime.
(a) no legal or administrative proceedings have been instituted or
threatened against AmeriPrime that would impair its ability to perform its
duties and obligations under this Agreement; and
(b) AmeriPrime's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or obligation of
AmeriPrime or any law or regulation applicable to AmeriPrime.
3. Corporation Administration. The Administrator shall give the Corporation
the benefit of its best judgment, efforts and facilities in rendering its
services as administrator. The Administrator shall at all times conform to: (i)
all applicable provisions of the Act and any rules and regulations adopted
thereunder, (ii) the provisions of the Registration Statement of the Corporation
under the Securities Act of 1933 and the Act as amended from time to time, (iii)
the provisions of the Articles of Incorporation and the By-Laws of the
Corporation, and (iv) any other applicable provisions of state and federal law.
Subject to the direction and control of the Corporation, the Administrator
shall supervise the Corporation's business affairs not otherwise supervised by
other agents of the Corporation. To the extent not otherwise the primary
responsibility of, or provided by, other parties under agreement with the
Corporation, the Administrator shall supply (i) non-investment related
statistical and research data, (ii) internal regulatory compliance services, and
(iii) executive and administrative services. The Administrator shall supervise
the preparation of (i) tax returns, (ii) reports to shareholders of the
Corporation, (iii) reports to and filings with the Securities and Exchange
Commission, state securities commissions and Blue Sky authorities including
preliminary and definitive proxy materials and post-effective amendments to the
Corporation's registration statement, and (iv) necessary materials for meetings
of the Corporation's Board of Directors. The Administrator shall provide
personnel to serve as officers of the Corporation if so elected by the Board of
Directors; provided, however, that the Corporation shall reimburse the
Administrator for the expenses incurred by such personnel in attending Board of
Directors' meetings and shareholders' meetings of the Corporation. Executive and
administrative services include, but are not limited to, the coordination of all
third parties furnishing services to the Corporation, review of the books and
records of the Corporation maintained by such third parties, and the review and
submission to the officers of the Corporation for their approval, of invoices or
other requests for payment of Corporation expenses; and such other action with
respect to the Corporation as may be necessary in the opinion of the
Administrator to perform its duties hereunder.
4. Record Keeping and Other Information. The Administrator 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 Act 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 Corporation. Where
applicable, such records shall be maintained by the Administrator for the
periods and in the places required by Rule 31a-2 under the Act.
5. Audit, Inspection and Visitation. The Administrator shall make available
to the Corporation 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 by the Corporation or any regulatory agency
having authority over the Corporation.
6. Compensation. For the performance of the Administrator's obligations
under this Agreement, each series of the Corporation shall pay the
Administrator, on the first business day following the end of each month, a fee
as set out in the fee schedule attached hereto as Exhibit A. In addition, the
Corporation shall reimburse the Administrator for reasonable out-of-pocket
expenses incurred on behalf of the Corporation and for reasonable expenses
related to personnel of the Administrator attending Corporation meetings. The
Administrator shall not be required to reimburse the Corporation or the
Corporation'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 Corporation.
7. Limitation of Liability. Administrator may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the Act or the rules thereunder, neither Administrator nor its
shareholders, officers, directors, employees, agents, control persons or
affiliates of any thereof (collectively, the "Administrator's Employees") shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Corporation in connection with, any error of judgment, mistake of law, any
act or omission in connection 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
Administrator under this Agreement or by reason of reckless disregard by any of
such persons of the obligations and duties of Administrator under this
Agreement. Any person, even though also a director, officer, employee,
shareholder or agent of the Administrator, who may be or become an officer,
director, employee or agent of the Corporation, shall be deemed, when rendering
services to the Corporation or acting on any business of the Corporation (other
than services or business in connection with the Administrator's duties
hereunder), to be rendering such services to or acting solely for the
Corporation and not as a director, officer, employee, shareholder or agent, or
one under the control or direction of the Administrator, even though paid by it.
8. Indemnification. (a) Subject to and except as otherwise provided in the
Securities Act of 1933, as amended (the "1933 Act"), and the Act, the
Corporation shall indemnify Administrator and each of Administrator's Employees
(hereinafter collectively referred to as a "Covered Person") against all
liabilities, including, but not limited to, amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while serving as the administrator for the Corporation or as one of
Administrator's Employees, or, thereafter, by reason of being or having been the
administrator for the Corporation or one of Administrator's Employees,
including, but not limited to, liabilities arising due to any misrepresentation
or misstatement in any of the Corporation's prospectuses, other regulatory
filings, and amendments thereto, or in other documents originating from the
Corporation; provided, however, that this indemnity agreement shall not apply to
any liabilities arising due to any misrepresentation or misstatements in any of
the Corporation's prospectuses, other regulatory filings or amendments thereto
made in reliance upon information furnished to the Corporation by the
Administrator. In no case shall a Covered Person be indemnified against any
liability to which such Covered Person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties of such Covered Person.
(b) Subject to and except as otherwise provided in the Act and the 1933
Act, the Administrator shall indemnify the Corporation and its shareholders,
officers, directors, employees, agents, control persons or affiliates of any
thereof (hereafter collectively referred to as a "Covered Person of the
Corporation") against all liabilities, including, but not limited to, amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person of the Corporation in connection with the defense or disposition
of any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person of the
Corporation may be or may have been involved as a party or otherwise or with
which such person may be or may have been threatened, including, but not limited
to, liabilities arising due to any misrepresentation or misstatement in any of
the Corporation's prospectuses, other regulatory filings, and amendments
thereto, or in other documents originating from the Corporation made in reliance
upon information furnished
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by the Administrator to the Corporation. In no case shall a Covered Person of
the Corporation be indemnified against any liability to which such Covered
Person of the Corporation would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties of
such Covered Person of the Corporation.
9. Services for Others. Nothing in this Agreement shall prevent the
Administrator or any affiliated person of the Administrator from providing
services for any other person, firm or corporation, including other investment
companies; provided, however, that the Administrator expressly represents that
it will undertake no activities which, in its judgment, will adversely affect
the performance of its obligations to the Corporation under this Agreement.
10. Compliance with the Act. The parties hereto acknowledge and agree that
nothing contained herein shall be construed to require the Administrator to
perform any services for any series of the Corporation which services could
cause the Administrator to be deemed an "investment adviser" within the meaning
of Section 2(a)(20) of the Act or to supersede or contravene the Prospectus or
Statement of Additional Information of any series of the Corporation or any
provisions of the Act and the rules thereunder.
11. Effectiveness, Duration, Termination and Assignment. (a) This Agreement
shall be effective on the date first above written, shall continue in effect for
two years from that date and shall continue from year to year thereafter, but
only so long as such continuance is approved by a vote of a majority of the
directors of the Corporation who are not parties to this Agreement or interested
persons (as defined in the Act) of any such party, and by a vote of a majority
of the Corporation's Board of Directors or a majority of the Corporation's
outstanding voting securities.
(b) This Agreement may be terminated at any time, without the payment of
any penalty (i) by the Board on 60 days' written notice to the Administrator or
(ii) by the Administrator on 60 days' written notice to the Corporation.
(c) This Agreement and the rights and duties under this Agreement otherwise
shall not be assignable by either the Administrator or the Corporation except by
the specific written consent of the other party. All terms and provisions of
this Agreement shall be binding upon, inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto.
12. Limitation of Director and Shareholder Liability. It is expressly
agreed that the obligations of the Corporation hereunder shall not be binding
upon any of the directors, shareholders, nominees, officers, agent or employees
of the Corporation, personally, but bind only the property of the Corporation.
The execution and delivery of this Agreement have been authorized by the Board
of Directors of the Corporation and signed by an officer of the Corporation,
acting as such, and neither such authorization by the Board of 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,
but shall bind only the property of the Corporation.
13. Miscellaneous. (a) Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
(b) This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas.
(c) The captions and headings 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.
(d) Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
(e) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(f) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
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(g) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(h) Notices, requests, instructions and communications received by the
parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(i) Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each series of the Corporation are
separate and distinct from the assets and liabilities of each other series and
that no series shall be liable or shall be charged for any debt, obligation or
liability of any other series, whether arising under this Agreement or
otherwise.
(j) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof and each
party hereto warrants and represents that this Agreement, when executed and
delivered, will constitute a legal, valid and binding obligation of the party,
enforceable against the party in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
TANAKA Funds Inc.
By:
-------------------------------
Its: President
AmeriPrime Financial Services, Inc.
By:
-------------------------------
Its: President
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EXHIBIT A
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ADMINISTRATIVE SERVICES AGREEMENT
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Monthly Fee Schedule*
Average Value of Daily Net Assets Annual Rate
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Under Fifty Million Dollars 0.10%
Fifty to One Hundred Million Dollars 0.075%
Over One Hundred Million Dollars 0.050%
* Subject to a minimum fee of $2,500 per month for each series.
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