EXHIBIT B-6
OPERATING SERVICES AGREEMENT
OPERATING SERVICES AGREEMENT
AAPEX FUNDS, INC.
THIS AGREEMENT is made and entered into as of the 29th of January, 1999, by
and between Aapex Funds, Inc., a Maryland corporation (the "Fund"), and Aapex
Equity Advisers, Inc., an Illinois corporation (hereinafter referred to as
"Manager").
WHEREAS, the Fund is a diversified, open-end management investment company,
registered under the Investment Company Act of 1940, as amended (the "Act"), and
authorized to issue shares representing interests in The Aapex Equity Fund (the
"Portfolio"); and
WHEREAS, Manager is registered as an investment advisor under the
Investment Advisors Act of 1940, and engages in the business of asset management
and the provision of certain other administrative and record keeping services in
connection therewith; and
WHEREAS, the Fund wishes to engage Manager, to provide, or arrange for the
provision of, certain operational services which are necessary for the
day-to-day operations of the Portfolio in the manner and on the terms and
conditions hereinafter set forth, and Manager wishes to accept such engagement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and Manager agree as follows:
1. OBLIGATIONS OF MANAGER
(a) Services. The Fund hereby retains Manager to provide, or, upon receipt of
written approval of the Fund arrange for other companies to provide, the
following services to the Portfolio in the manner and to the extent that such
services are reasonably necessary for the operation of the Portfolio
(collectively, the "Services"):
(1) accounting services and functions, including costs and expenses of any
independent public accountants;
(2) non-litigation related legal and compliance services, including the
expenses of maintaining registration and qualification of the Fund and
the Portfolio under federal, state and any other applicable laws and
regulations;
(3) dividend disbursing agent, dividend reinvestment agent, transfer
agent, and registrar services and functions (including answering
inquiries related to shareholder Portfolio accounts);
(4) custodian and depository services and functions;
(5) distribution, marketing, and/or underwriting services;
(6) independent pricing services;
(7) preparation of reports describing the operations of the Portfolio,
including the costs of providing such reports to broker-dealers,
financial institutions and other organizations which render services
and assistance in connection with the distribution of shares of the
Portfolio;
(8) sub-accounting and recordkeeping services and functions (other than
those books and records required to be maintained by Manager under the
Investment Advisory Agreement between the Fund and Manager dated
August 15, 1998), including maintenance of shareholder records and
shareholder information concerning the status of their Portfolio
accounts by investment advisors, broker-dealers, financial
institutions, and other organizations on behalf of Manager;
(9) shareholder and board of directors communication services, including
the costs of preparing, printing and distributing notices of
shareholders' meetings, proxy statements, prospectuses, statements of
additional information, Portfolio reports, and other communications to
the Fund's Portfolio shareholders, as well as all expenses of
shareholders' and board of directors' meetings, including the
compensation and reimbursable expenses of the directors of the Fund;
(10) other day-to-day administrative services, including the costs of
designing, printing, and issuing certificates representing shares of
the Portfolio, and premiums for the fidelity bond maintained by the
Fund pursuant to Section 17(g) of the Act and rules promulgated
thereunder (except for such premiums as may be allocated to third
parties, as insureds thereunder).
(b) Exclusions from Service. Notwithstanding the provisions of Paragraph 1(a)
above, the Services shall not include and Manager will not be responsible for
any of the following:
(1) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Fund or the Portfolio in connection with securities
transactions to which the Fund or the Portfolio is a party or in
connection with securities owned by the Fund or the Portfolio;
(2) the interest on indebtedness, if any, incurred by the Fund or the
Portfolio;
(3) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Fund or the Portfolio
to federal, state, county, city, or other governmental agents;
(4) the expenses, including fees and disbursements of counsel, in
connection with litigation by or against the Fund or the Portfolio;
and
(5) any other extraordinary expense of the Fund or Portfolio.
(c) Books and Records. All books and records prepared and maintained by Manager
for the Fund under this Agreement shall be the property of the Fund and, upon
request therefor, Manager shall surrender to the Fund such of the books and
records so requested.
(d) Staff and Facilities. Manager assumes and shall pay for maintaining the
staff, personnel, space, equipment and facilities necessary to perform its
obligations under this Agreement.
2. OBLIGATIONS OF THE FUND
(a) Fee. The Fund will pay to Manager on the last day of each month a fee at an
annual rate equal to 1.25% of average net asset of the Portfolio, such fee to be
computed daily based upon the net asset value of the Portfolio as determined by
a valuation made in accordance with the Fund's procedure for calculating
Portfolio net asset value as described in the Fund's Prospectus and/or Statement
of Additional Information. During any period when the determination of a
Portfolio's net asset value is suspended by the directors of the Fund, the net
asset value of a share of that Portfolio as of the last business day prior to
such suspension shall, for the purpose of this Paragraph 2(a), be deemed to be
the net asset value at the close of each succeeding business day until it is
again determined.
(b) Information. The Fund will, from time to time, furnish or otherwise make
available to Manager such information relating to the business and affairs of
the Portfolio as Manager may reasonably require in order to discharge its duties
and obligations hereunder.
3. TERM. This Agreement shall remain in effect until no later than January 29,
2001, and from year to year thereafter provided such continuance is approved at
least annually by (1) the vote of a majority of the Board of Directors of the
Fund or (2) a vote of a "majority" (as that term is defined in the Investment
Company Act of 1940) of the Fund's outstanding securities, provided that in
either event the continuance is also approved 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 any such party, which vote must be cast in
person at a meeting called for the purpose of voting on such approval; provided,
however, that;
(a) the Fund, at any time and without the payment of any penalty may
terminate this Agreement upon 60 days written notice to Manager;
(b) the Agreement shall immediately terminate in the event of its
assignment (within the meaning of the Act and the Rules thereunder); and
(c) Manager may terminate this Agreement without payment of penalty on 60
days written notice to the Fund.
4. NOTICES. Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Fund: If to the Manager:
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Aapex Funds, Inc. Aapex Equity Advisers, Inc.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
ATTENTION: Xxxxx X. Xxxxxxxxxxx ATTENTION: Xxxxx X. Xxxxxxxxxxx
President President
5. MISCELLANEOUS
(a) Performance Review. Manager will permit representatives of the Fund,
including the Fund's independent auditors, to have reasonable access to the
personnel and records of Manager in order to enable such representatives to
monitor the quality of services being provided and the level of fees due
Manager pursuant to this Agreement. In addition, Manager 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
and the payments contemplated to be made hereunder.
(b) Choice of Law. This Agreement shall be construed in accordance with the
laws of the State of Maryland and the applicable provisions of the Act. To
the extent the applicable law of the State of Maryland or any of the
provisions herein conflict with the applicable provisions of the Act, the
latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
Aapex Funds, Inc. Aapex Equity Advisers, Inc.
______________________________ ______________________________
By: Xxxxx X. Xxxxxxxxxxx By: Xxxxx X. Xxxxxxxxxxx
President Vice President
ATTEST: ATTEST:
By: __________________________ By: __________________________
Secretary Secretary
