EXHIBIT 2(g)(2)
ADMINISTRATIVE SERVICES AGREEMENT
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AGREEMENT dated as of January 1, 1989, by and between BLUE CHIP VALUE
FUND, INC., a Maryland corporation (the "Fund"), and AMERICAN DATA SERVICES,
INC., a New York corporation (the "Administrator").
Background
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1. The Fund is a diversified closed-end management investment company
registered with the United States Securities and Exchange Commission.
2. The Administrator performs certain services appropriate to the
operation of the Fund pursuant to an Amended and Restated Administrative
Services Agreement dated as of September 1, 1988.
3. The Fund and the Administrator desire to enter into a new
Administrative Services Agreement in order to increase the fees payable by the
Fund to the Administrator.
Terms
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NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the Fund and the Administrator hereby agree as follows:
1. Duties of the Administrator. The Administrator will perform the
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following services for the Fund:
(a) journalize the Fund's investment, capital share and income and
expense activities;
(b) maintain individual ledgers for investment securities;
(c) maintain historical tax lots for each security;
(d) calculate the Fund's net asset value and communicate such
value to the Fund and to such publications as the Fund shall designate from time
to time;
(e) determine the Fund's net investment income and amount of
quarterly dividends, to be reviewed by the Fund's independent public
accountants;
(f) calculate capital gains and losses and the amount per share
available for distribution on an annualized
basis, to be reviewed by the Fund's independent public accountants;
(g) prepare quarterly broker security transaction summaries and
monthly security transaction listings with respect to the Fund;
(h) supply various Fund statistical data as reasonably requested;
(i) compute the Fund's yields, total return, expense ratios and
portfolio turnover rate;
(j) maintain such books and records of the Fund as may be required
under the Investment Company Act of 1940 to fulfill its duties hereunder;
(k) prepare the Fund's federal, state and local income tax
returns;
(l) prepare the financial information for the Fund's proxy
statements and semi-annual and annual reports to shareholders;
(m) prepare the Fund's Form N-SAR reports in conjunction with the
Fund's appointed legal counsel;
(n) refer to the Fund's officers or transfer agent shareholder
inquiries relating to the Fund (with the exception of requests for literature
and price quotations which shall be responded to by the Administrator);
(o) calculate various contractual expenses (e.g. advisory and
custody fees);
(p) monitor expense accruals and notify Fund management of any
proposed adjustments;
(q) review and approve all invoices for the Fund's account and
submit to a Fund officer for authorization of payment;
(r) provide office space to the Fund, including facilities for an
independent or Securities and Exchange Commission audit as may be required;
(s) monitor the Fund's status as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended; and
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(t) monitor compliance with the Fund's policies and limitations as
set forth in the Prospectus, Articles of Incorporation and Bylaws of the Fund.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor 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 an agent of the Fund.
2. Compensation of the Administrator.
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(a) Administrative Fee. For the services rendered and expenses
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assumed by the-Administrator, the Fund shall pay to the Administrator, within
ten days after receipt of an invoice from the Administrator at the beginning of
each month, a monthly fee that is the greater of: (i) 1/12 of 0.10% of the
first $75 million of the Fund's average weekly net assets; 1/12 of 0.05% of the
excess over $75 million, but less than $125 million; and 1/12 of 0.03% of the
excess over $125 million; or (ii) $6,900.
(b) Expenses. The Fund shall reimburse the Administrator for any
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out-of-pocket expenses advanced by the Administrator in connection with, but not
limited to, the printing or filing of documents for the Fund, travel at the
request of the Fund, telephone, facsimile, stationery, postage, telex and
courier charges, incurred in connection with the performance of its duties
hereunder. The Administrator shall provide the Fund with reports of and receipts
for such expenses and the Fund shall reimburse the Administrator therefor within
ten days after receipt thereof.
3. Responsibility and Indemnification.
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(a) The Administrator shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement, but shall be without
liability to the Fund for any action taken or omitted by it in good faith
without negli gence, bad faith, willful misconduct or reckless disregard of its
duties hereunder. It shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Fund) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice
provided that such action is not in violation of applicable federal or state
laws or regulations, and provided further that such action is taken without
negligence, bad faith, willful misconduct or reckless disregard of its duties.
(b) The Fund shall indemnify and hold harmless the Administrator
from all loss, cost, damage and expense, including reasonable expenses for
counsel, incurred by the
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Administrator as a result of any claim, demand, action or suit arising out of
the inaccuracy of information furnished in writing to the Administrator by the
Fund, provided that this indemnification shall not apply to actions or omissions
of the Administrator in case of its own negligence, bad faith or willful
misconduct or that of its employees or agents. In order that indemnification
under this Section 3(b) shall be available in any case in which the Fund may be
asked to indemnify or hold harmless the Administrator, the Fund shall be fully
and promptly advised of all pertinent facts concerning the situation presenting
or appearing likely to present the probability of such a claim for
indemnification. The Fund shall have the option to defend the Administrator
against any claim that may be the subject of this indemnification, and if the
Fund so elects, it will so notify the Administrator, and thereupon the Fund
shall take over complete defense of the claim, and the Administrator shall incur
no further legal or other expenses for which it shall seek indemnification. The
Administrator shall in no case confess any claim or make any compromise in which
the Fund will be asked to indemnify the Administrator except with the Fund's
prior written consent.
(c) The Administrator shall indemnify and hold harmless the Fund
from all loss, cost, damage and expense, including reasonable expenses for
counsel, incurred by the Fund as a result of any claim, demand, action or suit
arising out of the Administrator's failure to comply with the terms of this
Agreement or applicable federal or state laws or regulations, or which arise out
of the Administrator's negligence, bad faith or willful misconduct, or reckless
disregard of its duties, provided that this indemnification shall not apply to
actions or omissions of the Fund in case of its own negligence, bad faith or
willful misconduct or that of its employees or agents. In order that
indemnification under this Section 3(c) shall be available in any case in which
the Administrator may be asked to indemnify or hold harmless the Fund, the Fund
shall fully and promptly advise the Administrator of all pertinent facts
concerning the situation presenting or appearing likely to present the
probability of such a claim for indemnification against the Administrator. The
Administrator shall have the option to defend the Fund against any claim that
may be the subject of this indemnification, and if the Administrator so elects
it will so notify the Fund, and thereupon the Administrator shall take over
complete defense of the claim, and the Fund shall incur no further legal or
other expenses for which it shall seek indemnification. The Fund shall, in no
case, confess any claim or make any compromise in any case in which the
Administrator will be asked to indemnify the Fund except with the
Administrator's prior written consent.
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4. Reports.
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(a) The Fund shall provide to the Administrator on a quarterly
basis a report of a duly authorized officer of the Fund representing that all
information furnished to the Administrator during the preceding quarter was
true, complete and correct. The Administrator shall not be responsible for the
accuracy of any information furnished to it by the Fund, and the Fund shall hold
the Administrator harmless in regard to any liability incurred by reason of the
inaccuracy of such information.
(b) The Administrator shall provide to the Board of Directors of
the Fund on a quarterly basis a report, in such form as the Administrator and
the Fund shall from time to time agree, representing that, to its knowledge, the
Fund was in compliance with all requirements of applicable federal and state
law, including without limitation, the rules and regulations of the Securities
and Exchange Commission and the Internal Revenue Service, or specifying any
instances in which the Fund was not so in compliance. Whenever, in the course of
performing its duties under this Agreement, the Administrator determines, on the
basis of information supplied to the Administrator by the Fund, that a violation
of applicable law has occurred or that, to its knowledge, a possible violation
of applicable law may have occurred or, with the passage of time, would occur,
the Administrator shall promptly notify the Fund and its counsel of such
violation.
5. Activities of the Administrator. The Administrator shall be free
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to render similar services to others so long as its services hereunder are not
impaired thereby.
6. Duration and Termination of this Agreement. This Agreement shall
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become effective as of the date hereof and shall remain in force until
terminated as provided herein. This Agreement may be terminated at any time,
without the payment of any penalty, by the Fund on not less than 90 days' prior
written notice to the Administrator, or by the Administrator on not less than 90
days' prior written notice to the Fund. This Agreement shall automatically
terminate in the event of its assignment.
7. Amendments of this Agreement. This Agreement may be amended by
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the parties hereto only if such amendment is in writing.
8. Governing Law. The provisions of this Agreement shall be construe
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and interpreted in accordance with the laws of the State of New York as at the
time in effect and the applicable provisions of the Investment Company Act of
1940. To the extent that the applicable law of the State of New York, or any of
the
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provisions herein, conflict with the applicable provisions of the Investment
Company Act of 1940, the latter shall control.
9. Notices. All notices and other communications hereunder shall be
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in writing, shall be deemed to have been given when received or when sent by
telex, and shall be given to the following addresses (or such other addresses as
to which notice is given):
To the Fund:
Xxxxxx X. Xxxxxxxx, Treasurer
Blue Chip Value Fund, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
To the Administrator:
Xxxxxxx Xxxxx, President
American Data Services, Inc.
000 Xxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
10. Miscellaneous. This Agreement embodies the entire agreement and
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understanding between the Fund and the Administrator, and supersedes all prior
agreements and understandings relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BLUE CHIP VALUE FUND, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, Chairman
AMERICAN DATA SERVICES, INC.
By: Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx, President
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