Exhibit 8(a)
ADMINISTRATION AGREEMENT
AGREEMENT made as of ____________, 2000, by and between XXXXXXX XXXXX
BASIC VALUE FUND, INC., a Maryland corporation (the "Fund") and FUND ASSET
MANAGEMENT, L.P., a Delaware limited partnership (the "Administrator").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end diversified
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Fund desires to retain the Administrator to provide
management and administrative services to the Fund in the manner and on the
terms hereinafter set forth; and
WHEREAS, the Administrator is willing to provide management and
administrative services to the Fund on the terms and conditions hereafter set
forth; and
WHEREAS, the Fund is one of the "feeder" funds for and invests all of
its assets in Master Basic Value Trust, which serves as the "master" portfolio
and has the same investment objective and policies as the Fund;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Administrator hereby agree as follows:
ARTICLE I
DUTIES OF THE ADMINISTRATOR
The Fund hereby employs the Administrator to act as a manager and
administrator and to furnish, or arrange for affiliates to furnish, the
management and administrative services described below, subject to review by and
the overall control of the Board of Directors of the Fund (the "Directors"), for
the period and on the terms and conditions set forth in this Agreement. The
Administrator hereby accepts such employment and agrees during such period, at
its own expense, to render, or arrange for the rendering of, such services and
to assume the obligations herein set forth for the compensation provided for
herein. The Administrator and its affiliates shall for all purposes herein be
deemed to be independent contractors and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Fund in
any way or otherwise be deemed agents of the Fund.
Management Services. The Administrator shall perform (or arrange for
the performance by affiliates of) the management and administrative services
necessary for the operation of the Fund including administering shareholder
accounts and handling shareholder relations. The Administrator shall provide the
Fund with office space, facilities, equipment and necessary personnel and such
other services as the Administrator, subject to review by the Directors, shall
from time to time determine to be necessary or useful to perform its obligations
under this Agreement. The Administrator shall also, on behalf of the Fund,
conduct relations with
custodians, depositories, transfer agents, dividend disbursing agents, other
shareholder servicing agents, accountants, attorneys, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and such other persons in any
such other capacity deemed to be necessary or desirable. The Administrator shall
make reports to the Directors of its performance of obligations hereunder and
furnish advice and recommendations with respect to such other aspects of the
business and affairs of the Fund as it shall determine to be desirable.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
(a) The Administrator. The Administrator assumes and shall pay, or
cause its affiliate to pay, for maintaining the staff and personnel necessary to
perform its obligations under this Agreement, and shall, at its own expense,
provide the office space, facilities and necessary personnel which it is
obligated to provided under Article I hereof. The Administrator shall pay, or
cause its affiliate to pay, compensation of all officers of the Fund and all
Directors of the Fund who are affiliated persons of the Administrator or of an
affiliate of the Administrator.
(b) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund (except for the expenses paid by the distributor of
the Fund's shares (the "Distributor")), including, without limitation: taxes,
expenses for legal and auditing services, costs of printing proxies, shareholder
reports, prospectuses and statements of additional information, charges of the
custodian, any sub-custodian and transfer agent, expenses of portfolio
transactions, expenses of redemption of shares, Securities and Exchange
Commission fees, expenses of registering the shares under Federal, state and
foreign laws, fees and actual out-of-pocket expenses of Directors who are not
affiliated persons of the Administrator, or of an affiliate of the
Administrator, accounting and pricing costs (including the daily calculation of
the net asset value), insurance, interest, and brokerage costs, litigation and
other extraordinary or non-recurring expenses, and other expenses properly
payable by the Fund. The Distributor will pay certain of the expenses of the
Fund incurred in connection with the continuous offering of shares of common
stock in the Fund.
ARTICLE III
COMPENSATION OF THE ADMINISTRATOR
Administrative Fees. For the services rendered, the facilities
furnished and expenses assumed by the Administrator, the Fund shall pay to the
Administrator at the end of each calendar month a fee based upon the average
daily value of the net assets of the Fund, as determined and computed in
accordance with the description of the determination of net asset value
contained in the prospectus and statement of additional information of the Fund,
at the annual rate of 0.25% of the average daily net assets of the Fund,
commencing on the day following effectiveness hereof. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of the
fee as set forth above. Payment of the Administrator's compensation for the
preceding month shall be made as promptly as possible after completion of the
computations contemplated above. During any period when the determination of net
asset value is suspended by the Directors, the
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net asset value of a share as of the last business day prior to such suspension
shall for this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
Notwithstanding the foregoing, the Administrator hereby agrees to waive
the above administrative fees until otherwise determined by the Directors in
accordance with Article VII.
ARTICLE IV
LIMITATION OF LIABILITY OF THE ADMINISTRATOR
The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in the
management and administration of the Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Administrator" shall include any affiliates of the
Administrator performing services for the Fund contemplated hereby and partners,
shareholders, directors, officers and employees of the Administrator and such
affiliates.
ARTICLE V
ACTIVITIES OF THE ADMINISTRATOR
The services of the Administrator to the Fund are not to be deemed to
be exclusive, and the Administrator and each affiliate is free to render
services to others. It is understood that Directors, officers, employees and
shareholders of the Fund are or may become interested in the Administrator and
its affiliates, as directors, officers, employees, partners and shareholders or
otherwise, and that the Administrator and directors, officers, employees,
partners and shareholders of the Administrator and its affiliates are or may
become similarly interested in the Fund as shareholders or otherwise.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above
written and shall remain in force for two years thereafter and thereafter
continue from year to year, but only so long as such continuance is specifically
approved at least annually by (i) the Directors of the Fund, or by the vote of a
majority of the outstanding voting securities of the Fund, and (ii) a majority
of those Directors who are not parties to this Agreement or interested persons
of any such party cast in person at a meeting called for the purpose of voting
on such approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Directors or by the vote of a majority of the outstanding
voting securities of the Fund, or by the Administrator, on sixty days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its assignment.
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ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by a majority of those Directors who are not parties to
this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
The terms "vote of majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with laws of the State
of New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
XXXXXXX XXXXX BASIC VALUE FUND, INC.
By:
---------------------------------
Name:
Title:
FUND ASSET MANAGEMENT, L.P.
By:
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Name:
Title:
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