XXXXX' FUNDS
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT (the "Agreement") is made as of the 13th day
of February, 1996, by and between XXXXX' FUNDS (the "Fund"), a Massachusetts
Business Trust (the "Trust"), and DECLARATION SERVICE COMPANY (the
"Administrator"), a Pennsylvania corporation.
WITNESSETH THAT:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and is registering its shares of common stock under the Securities Act of 1933,
as amended (the "1933 Act") in one or more distinct series of shares (the
"Portfolio" or "Portfolios");
WHEREAS, the Fund and the Administrator desire to enter into this Agreement
pursuant to which the Administrator will provide administrative services to the
Portfolios of the Fund identified on Schedule A hereto, as may be amended from
time to time, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Fund and the Administrator, intending to be
legally bound hereby, agree as follows:
1. APPOINTMENT OF ADMINISTRATOR. The Fund hereby appoints the Administrator
to perform the services described in this Agreement for the Portfolios of the
Fund identified on Schedule A, and the Administrator hereby accepts such
appointment. The Administrator shall act under such appointment pursuant to the
terms and conditions hereinafter set forth.
2. FUND DOCUMENTS. The Fund has provided to the Administrator properly
certified or authenticated copies of the following Fund related documents in
effect on the date hereof: the Fund's organizational documents, including
Indenture of Trust and By-Laws; the Fund's Registration Statement on Form N-1A,
including all exhibits thereto; the Fund's Prospectus and Statement of
Additional Information; all contracts with the Fund's investment adviser,
custodian, transfer agent/shareholder servicing agent, distributor, accounting
services agent and custodian; if applicable, notice filed with or granted by the
Commodity Futures Trading Commission relating to the Fund's status as a
commodity pool operator; and resolutions of the Fund's Board of Trustees
authorizing the appointment of the Administrator and approving this Agreement
(members of the Board of Trustees being referred to herein as "Trustees"). The
Fund shall promptly provide to the Administrator copies, properly certified or
authenticated, of all additions, amendments or supplements to the foregoing, if
any.
3. ADMINISTRATIVE SERVICES. Subject to the direction and control of the
Board of Trustees of the Fund and to the extent not otherwise the responsibility
of, or provided by, the Fund or other agents of the Fund, the Administrator
shall provide the administrative services set forth on Schedule B hereto. The
Fund shall provide, and shall cause its investment adviser, custodian, transfer
agent/shareholder servicing agent, distributor, accounting services agent, legal
counsel and independent public accountants to cooperate with the Administrator
and to provide it with, such information, documents and advice as the
Administrator may reasonably request in order to enable the Administrator to
perform its duties hereunder. The Administrator shall provide office space,
facilities, equipment and personnel necessary to perform its obligations under
this Agreement.
4. ALLOCATION OF EXPENSES. The Administrator shall bear all costs and
expenses associated with its obligation to provide the office space, facilities,
equipment and personnel necessary to perform its duties under this Agreement,
including compensation of officers of the Fund who are affiliated persons of the
Administrator (if applicable). The Fund shall pay all its expenses other than
those expressly stated to be payable by the Administrator hereunder, which
expenses payable by the Fund shall include, without limitation: organizational
expenses; fees and expenses payable to the Fund's investment adviser, custodian,
transfer agent/shareholder servicing agent, distributor, accounting services
agent, legal counsel and independent public accountants; all documented
out-of-pocket expenses incurred by the Administrator in connection with the
provision of administrative services hereunder; the cost of obtaining quotations
for calculating the value of the assets of each Portfolio; taxes levied against
the Fund or any Portfolio; brokerage fees, xxxx-ups and commissions in
connection with the purchase and sale of Portfolio securities; costs, including
the interest expense, of borrowing money; costs and/or fees incident to holding
meetings of the Board of Trustees and shareholders; costs and/or fees related to
preparation (including typesetting and printing charges) and mailing of copies
of the Fund's Prospectus, Statement of Additional Information, reports and proxy
materials to the existing shareholders of the Fund and filing of reports with
regulatory bodies; costs and/or fees related to maintenance of the Fund's
corporate existence; costs and/or fees of initial and on-going registration of
shares with Federal and state securities authorities; costs of printing share
certificates representing shares of the Fund; fees payable to, and expenses of,
Trustees who are not "interested persons" of the Fund; premiums payable on the
fidelity bond required by Section 17(g) of the 1940 Act, and any other premiums
payable on insurance policies related to the Fund's business and the investment
activities of its Portfolios; fees, voluntary assessments and other expenses
incurred in connection with the Fund's membership in investment company
organizations; and such non-recurring expenses as may arise, including actions,
suits or proceedings to which the Fund is a party and the legal obligation which
the Fund may have to indemnify its Trustees and officers with respect thereto.
5. RECORDKEEPING 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 1940 Act and the rules thereunder, as the same may be amended from time to
time, relating to the various services performed by it and not otherwise created
and maintained by another party pursuant to a contract with the Fund. All
records shall be the property of the Fund at all times and shall be available
for inspection and use by the Fund. Where applicable, such records shall be
maintained by the Administrator for the periods and in the places required by
Rule 31a-2 under the 1940 Act.
6. AUDIT, INSPECTION AND VISITATION. The Administrator shall make available
during regular business hours all records and other data created and maintained
pursuant to this Agreement for reasonable audit and inspection by the Fund or
any person retained by the Fund. Upon reasonable notice by the Fund, the
Administrator shall make available during regular business hours its facilities
and premises employed in connection with its performance of this Agreement for
reasonable visitation by the Fund, or any person retained by the Fund.
7. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as otherwise
provided herein, the Fund assumes full responsibility for ensuring that the Fund
complies with all applicable requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended, the 1940 Act, and the rules thereunder, and
any other applicable laws, rules and regulations.
8. COMPENSATION. The Fund shall pay to the Administrator as compensation
for its services rendered hereunder the annual fee set forth in Schedule A. The
fee shall be calculated and accrued daily, and paid monthly. The Fund shall also
reimburse the Administrator for its out-of-pocket expenses related to the
performance of its duties hereunder, including, without limitation,
telecommunications charges, postage and delivery services, record retention
costs, reproduction charges and traveling and lodging expenses incurred by
officers and employees of the Administrator. The Fund shall pay the
Administrator's monthly invoices for administration fees and out-of-pocket
expenses within five days of the respective month-end. If this Agreement becomes
effective subsequent to the first day of a month or terminates before the last
day of a month, the Fund shall pay to the Administrator an administration fee
that is prorated for that part of the month in which this Agreement is in
effect. All rights of compensation and reimbursement under this Agreement for
services performed by the Administrator as of the termination date shall survive
the termination of this Agreement.
9. APPOINTMENT OF AGENTS. The Administrator may at any time or times in its
discretion appoint (and may at any time remove) other parties as its agent to
carry out such provisions of this Agreement as the Administrator may from time
to time direct; provided, however, that the appointment of any such agent shall
not relieve the Administrator of any of its responsibilities or liabilities
hereunder.
10. USE OF ADMINISTRATOR'S NAME. The Fund shall not use the name of the
Administrator or any of its affiliates in the Prospectus, Statement of
Additional Information, sales literature or other material relating to the Fund
in a manner not approved prior thereto in writing by the Administrator;
provided, however, that the Administrator shall approve all uses of its and its
affiliates' names that merely refer in accurate terms to their appointments
hereunder or that are required by the Securities and Exchange Commission (the
"SEC") or any state securities commission; and further provided, that in no
event shall such approval be unreasonably withheld.
11. USE OF FUND'S NAME. Neither the Administrator nor any of its affiliates
shall use the name of the Fund or material relating to the Fund on any forms
(including any checks, bank drafts or bank statements) for other than internal
use in a manner not approved prior thereto in writing by the Fund; provided,
however, that the Fund shall approve all uses of its name that merely refer in
accurate terms to the appointment of the Administrator hereunder or that are
required by the SEC or any state securities commission; and further provided,
that in no event shall such approval be unreasonably withheld.
12. LIABILITY OF ADMINISTRATOR. The duties of the Administrator shall be
limited to those expressly set forth herein, and no implied duties are assumed
by or may be asserted against the Administrator hereunder. The Administrator
may, in connection with this Agreement, employ agents or attorneys in fact, and
shall not be liable for any loss arising out of or in connection with its
actions under this Agreement so long as it acts in good faith and with due
diligence, and is not negligent or guilty of any willful misconduct. The
Administrator may consult counsel to the Fund or the Fund's independent public
accountants or other experts with respect to any matter arising in connection
with the Administrator's duties, and the Administrator shall not be liable for
any action taken or omitted by the Administrator in good faith in reliance on
the oral or written advice of such counsel, independent public accountants or
other experts. The Administrator shall not be liable for any action taken or
omitted by the Administrator in reliance on the oral or written instruction,
authorization, approval or information provided to the Administrator by any
person reasonably believed by the Administrator to be authorized by the Fund to
give such instruction, authorization, approval or information. The Administrator
shall not be liable or responsible for any acts or omissions of any predecessor
administrator or any other persons having responsibility for matters to which
this Agreement relates prior to the effective date of this Agreement nor shall
the Administrator be responsible for reviewing any such acts or omissions. Any
person, even though also an officer, trustee, employee or agent of the
Administrator or any of its affiliates, who may be or become an officer or
Trustee of the Fund, shall be deemed, when rendering services to the Fund as
such officer or Trustee, to be rendering such services to or acting solely for
the Fund and not as an officer, trustee, employee or agent or one under the
control or direction of the Administrator or any of its affiliates, even though
paid by one of those entities. As used above in this Section 12 (except the
previous sentence) and in Section 13, the term "Administrator" shall include
trustees, officers, employees and other agents of the Administrator.
13. INDEMNIFICATION. The Trust hereby agrees to indemnify and hold harmless
the Administrator from and against any and all claims, demands, expenses
(including attorney's fees) and liabilities whether with or without basis in
fact or law, of any and every nature which the Administrator may sustain or
incur or which may be asserted against the Administrator by any person by reason
of, or as a result of: (i) any action taken or omitted to be taken by the
Administrator in good faith reliance upon any instrument, order or communication
believed by it to be genuine and to be signed, countersigned or executed by any
duly authorized person, upon the oral instruction or written instruction of an
authorized person of the Trust or upon the opinion of legal counsel for the
Trust or its own counsel; or (ii) any action taken or permitted to be taken by
the Administrator in connection with its appointment in good faith in reliance
upon any law, act, regulation or interpretation of the same even though the same
may thereafter have been altered, changed, amended or repealed. However,
indemnification hereunder shall not apply to actions or omissions of the
Administrator or its directors, officers, employees, or agents in cases of its
own negligence, willful misconduct, bad faith, or reckless disregard of its or
their own duties hereunder. The right to indemnity hereunder shall include the
right to advancement of defense expenses in the event of any pending or
threatened litigation; provided, however, that the Administrator shall agree
that any advancement of expenses shall be returned to the Fund if it is
ultimately determined by an administrative or judicial tribunal that the
expenses (and related liability, if any) resulted from the Administrator's own
wilful misfeasance, bad faith, gross negligence or reckless disregard of its
duties and obligations under this Agreement.
The Administrator shall give prompt written notice to the Fund of a written
assertion or claim of any threatened or pending legal proceeding which may be
subject to indemnity under this Section; provided, however, that the
Administrator's failure to notify the Fund of such threatened or pending legal
proceeding shall not operate to relieve the Fund of any liability arising
hereunder. The Fund shall be entitled, if it so elects, to assume the defense of
any claim subject to this Indemnity and such defense shall be conducted by
counsel chosen by the Fund and satisfactory to the Administrator; provided,
however, that if the defendants include both the Administrator and the Fund, and
the Administrator shall have reasonably concluded that there may be one or more
legal defenses available to it which are different from or additional to those
available to the Fund ("conflict of interest"), the Fund shall not have the
right to elect to defend the claim on behalf of the Administrator, and the
Administrator shall have the right to select separate counsel to defend such
claim on behalf of the Administrator. In the event that the Fund elects to
assume the defense of any claim pursuant to the preceding sentence and retains
counsel satisfactory to the Administrator, the Administrator shall bear the fees
and expenses of additional counsel retained by it, except for reasonable
investigation costs which shall be borne by the Fund. If the Fund (i) does not
elect to assume the defense of a claim, (ii) elects to assume the defense of a
claim but chooses counsel that is not satisfactory to the Administrator, or
(iii) has no right to assume the defense of a claim because of a conflict of
interest, the Fund shall advance or reimburse the Administrator, at the election
of the Administrator, reasonable fees and expenses of any counsel retained by
the Administrator, including reasonable investigation costs.
14. SCOPE OF DUTIES. The Administrator and the Fund shall regularly consult
with each other regarding the Administrator's performance of its obligations and
its compensation under the foregoing provisions. In connection therewith, the
Fund shall submit to the Administrator at a reasonable time in advance of filing
with the SEC copies of any amended or supplemented Registration Statement of the
Fund (including exhibits) under the 1940 Act and the 1933 Act, and, at a
reasonable time in advance of their proposed use, copies of any amended or
supplemented forms relating to any plan, program or service offered by the Fund.
Any change in such materials that would require a change in the Administrator's
obligations under this Agreement shall be subject to the Administrator's
approval. In the event that a change in such documents or in the procedures
contained therein increases the cost or burden to the Administrator of
performing its obligations hereunder, the Administrator shall be entitled to
receive reasonable compensation therefor.
15. DURATION. This Agreement shall become effective on the date first
written above and shall continue in force for two years from that date (the
"Initial Term"). Thereafter, this Agreement shall continue in force from year to
year (each a "Successive Term"), provided continuance after the Initial Term is
approved at least annually by (i) the vote of a majority of the Trustees of the
Fund and (ii) the vote of a majority of those Trustees of the Fund who are not
"interested persons" of the Fund, and who are not parties to this Agreement or
"interested persons" of any such party, cast at a meeting called for the purpose
of voting on the approval.
16. TERMINATION. This Agreement shall terminate as follows:
a. This Agreement shall terminate automatically in the event of its
assignment.
b. Either the Fund or the Administrator may terminate this Agreement
without penalty prior to the commencement of any Successive Term by
providing to the other party 90 days prior written notice of such
termination.
c. Either party (the "terminating party") may immediately terminate
this Agreement during the Initial Term or any Successive Term in the event
of a material breach of this Agreement by the other party (the "breaching
party"), provided that the terminating party has given to the breaching
party notice of such breach, and the breaching party has not remedied such
breach within 45 days after receipt of such notice.
Upon the termination of this Agreement, the Fund shall pay to the
Administrator such compensation and out-of-pocket expenses as may be payable for
the period prior to the effective date of such termination. In the event that
the Fund designates a successor to any of the Administrator's obligations
hereunder, the Administrator shall, at the expense and direction of the Fund,
transfer to such successor all relevant books, records and other data
established or maintained by the Administrator under the foregoing provisions.
Sections 4, 8, 10, 11, 12, 13, 16, 17, 21, 22, 23, 24 and 25 shall survive
any termination of this Agreement.
17. FORCE MAJEURE. The Administrator shall not be liable for any delays or
errors in the performance of its obligations hereunder occurring by reason of
circumstances not reasonably foreseeable and beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot or
failure of communications or power supply. In the event of equipment breakdowns
which are beyond the reasonable control of the Administrator and not primarily
attributable to the failure of the Administrator to reasonably maintain or
provide for the maintenance of such equipment, the Administrator shall, at no
additional expense to the Fund, take reasonable steps in good faith to minimize
service interruptions, but shall have no liability with respect thereto.
18. AMENDMENT. The terms of this Agreement shall not be waived, altered,
modified, amended or supplemented in any manner whatsoever except by a written
instrument signed by the Administrator and the Fund.
19. NON-EXCLUSIVE SERVICES. The types of administrative services rendered
by the Administrator hereunder are not exclusive. The Administrator may render
such services to any other investment company and have other businesses and
interests.
20. DEFINITIONS. As used in this Agreement, the terms "assignment" and
"interested person" shall have the respective meanings set forth in the 1940 Act
and the rules enacted thereunder as now in effect or hereafter amended.
21. CONFIDENTIALITY. The Administrator shall treat confidentially and as
proprietary information of the Fund all records and other information related to
the Fund and prior, present or potential shareholders and shall not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except as may be required by
administrative or judicial tribunals or as requested by the Fund.
22. NOTICE. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand or
upon receipt if sent by certified or registered mail (postage prepaid and return
receipt requested) or by a nationally recognized overnight courier service
(appropriately marked for overnight delivery) or upon transmission if sent by
telex or facsimile (with request for immediate confirmation of receipt in a
manner customary for communications of such respective type and with physical
delivery of the communication being made by one or the other means specified in
this Section 22 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) if to the Fund:
Xxxxx' Funds
C/X Xxxxx' Capital Management Co.
00000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000-0000
ATTN: Xx. Xxxxxx X. Xxxxx'
President and Trustee
(b) if to the Administrator:
Declaration Service Company
Xxxxx 0000
000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attn: Mr. Xxxxxxx Xxxxx, President
or to such other respective addresses as the parties shall designate by like
notice, provided that notice of a change of address shall be effective only upon
receipt thereof.
23. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
24. GOVERNING LAW. This Agreement shall be administered, construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania to the
extent that such laws are not preempted by the provisions of any law of the
United States heretofore or hereafter enacted, as the same may be amended from
time to time.
25. ENTIRE AGREEMENT. This Agreement (including the Exhibits attached
hereto) contains the entire agreement and understanding of the parties with
respect to the subject matter hereof and supersedes all prior written or oral
agreements and understandings with respect thereto.
26. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. The captions 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. This Agreement may be executed in two counterparts,
each of which taken together shall constitute one and the same instrument.
27. LIMITATION OF LIABILITY. The term "Xxxxx' Funds" means and refers to
the Trustees from time to time serving under the Master Trust Agreement of the
Trust dated October 15, 1993, as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that obligations of the
Trust hereunder shall not be binding upon any Trustee, Shareholder, nominees,
officers, agents or employees of the Trust, personally, but bind only the assets
and property of the Trust, as provided in the Master Trust Agreement. The
execution and delivery of this Agreement have been authorized by the Trustees
and signed by an authorized officer of the Trust, acting as such, and neither
such authorization nor such execution and delivery 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 assets and property of the Trust as provided
in the Master Trust Agreement. The Master Trust Agreement is on file with the
Secretary of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
XXXXX' FUNDS
By: /S/
---------------------------------------
Xxxxxx X. Xxxxx', President and Trustee
DECLARATION SERVICE COMPANY
By: /S/
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Xxxxxxx X. Xxxxx, President
SCHEDULE A
XXXXX' FUNDS
Portfolio and Fee Schedule
Portfolios covered by Administration Agreement:
XXXXX' U. S. GOVERNMENT TOTAL RETURN BOND FUND
Fees for administrative services on
behalf of the Portfolios:
System set-up, conversion of records Time & Materials
transfer of historical records, permits, etc.
to Declaration Group systems.
Annual Fee, Administrative Services:
First Class of Shares, per portfolio ....................... $24,000
Second Class of Shares, per portfolio ...................... 16,000
Each additional Class, per portfolio ....................... 12,000
Plus standard out-of-pocket expenses including (but not limited to): postage,
courier, telephone, travel, Fund specific costs related to Fund/SERV and
Networking, printing, copying, and other standard miscellaneous items.
SCHEDULE B
Administrative Services Provided by Declaration Services Company
1. Provide overall day-to-day Fund administrative management, including
coordination of investment adviser, custodian, transfer agency, distribution,
and pricing and accounting activities.
2. Assist the Fund and Fund counsel with the design and development of the
Fund, including investment objectives, policies and structure of new Portfolios.
3. Assist Fund counsel with the preparation of Registration Statements,
Prospectuses, Statements of Additional Information, and proxy materials.
4. Prepare and file such reports, applications and documents as may be
necessary or desirable to register the Fund's shares with the Federal and state
securities authorities, and monitor the sale of Fund shares for compliance with
Federal and state securities laws;
5. Prepare and file Semi-Annual Report on Form N-SAR.
6. Prepare and file reports to shareholders, including the annual report to
shareholders, and coordinate mailing Prospectuses, notices, proxy statements,
proxies and other reports to shareholders.
7. Assist with layout and printing of shareholder communications, including
Prospectuses and reports to shareholders.
8. Administer contracts on behalf of the Fund with, among others, the
Fund's investment adviser, custodian, transfer agent/shareholder servicing
agent, distributor, and accounting services agent.
9. Coordinate the representations of outside legal counsel and independent
public accountants to the Fund.
10. Assist Fund in obtaining fidelity bond and trustees and officers/errors
and omissions insurance policies for the Fund in accordance with the
requirements of Rules 17g-1 and 17d-1(7) under the 1940 Act, as such bonds and
policies are approved by the Fund's Board of Trustees.
11. Prepare and maintain materials for trustees/management meetings
including, agendas, minutes, attendance records and minute books.
12. Coordinate shareholder meetings, including assisting Fund counsel in
preparation of proxy materials, preparation of minutes and tabulation of
results.
13. Monitor and pay Fund bills, maintain Fund budget and report budget
expenses and variances to Fund management.
14. Monitor the Fund's compliance with the investment restrictions and
limitations imposed by the 1940 Act and state Blue Sky laws and applicable
regulations thereunder, the fundamental and non-fundamental investment policies
and limitations set forth in the Fund's Prospectuses and Statement of Additional
Information, and the investment restrictions and limitations necessary for each
Portfolio of the Fund to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended, or any successor
statute.
15. Prepare and distribute to appropriate parties notices announcing the
declaration of dividends and other distributions to shareholders.
16. Provide personnel to serve as officers of the Fund if so elected by the
Board of Trustees of the Fund, and the Fund provides coverage for said officers
under the Fund's Directors and Officers and Errors and Omissions insurance.
17. Provide other administrative services as may be agreed from time to
time in writing by the Fund and the Administrator.
18. Assist in the preparation and filing of the Fund's annual report
pursuant to Rule 24f-2 of the Investment Company Act of 1940, as amended.
