FUND ADMINISTRATION SERVICE AGREEMENT
Agreement made this 10th day of February, 1998, between Xxxxx
Funds, Inc., a Maryland corporation (the "Company"), and Xxxxx Investment
Advisors, Inc., a Florida corporation (the "Administrator").
W I T N E S S E T H:
WHEREAS, the Company is in the process of registering with the
Securities and Exchange Commission under the Investment Company Act of 1940
(the "Act") as an open-end management investment company consisting initially
of one series Xxxxx Twenty Fund (the "Fund"); and
WHEREAS, the Company desires to retain the Administrator to be
the Administrator for the Fund and as such to perform the services set forth in
this Agreement.
NOW, THEREFORE, the Company and the Administrator do mutually
promise and agree as follows:
1. Employment. The Company hereby employs the Administrator to
be the Administrator for the Fund for the period and on the terms set forth in
this Agreement. The Administrator hereby accepts such employment for the
compensation herein provided and agrees during such period to render the
services and to assume the obligations herein set forth.
2. Authority and Duties of the Administrator. The Administrator
shall supervise all aspects of the operations of the Fund except those
performed by the Fund's investment adviser under the Fund's investment advisory
agreement, subject to such policies as the board of directors of the Company
may determine. 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 Company or the Fund
in any way or otherwise be deemed to be an agent of the Company or the Fund.
However, one or more shareholders, officers, directors or employees of the
Administrator may serve as directors and/or officers of the Company, but
without compensation or reimbursement of expenses for such services from the
Company. Nothing herein contained shall be deemed to require the Company
to take any action contrary to its Articles of Incorporation or any applicable
statute or regulation, or to relieve or deprive the board of directors of the
Company of its responsibility for and control of the affairs of the Fund.
In connection with its supervision of the operations of the Fund,
the Administrator shall perform the following services for the Fund:
(a) Prepare and maintain the books, accounts and other documents
specified in Rule 31a-1, under the Act in accordance with the requirements of
Rule 31a-1 and Rule 31a-2 under the Act;
(b) Calculate the Fund's net asset value in accordance with the
provisions of the Company's Articles of Incorporation and By-Laws and its
Registration Statement;
(c) Respond to stockholder inquiries forwarded to it by the Fund:
(d) Prepare the financial statements contained in reports to
stockholders of the Fund:
(e) Prepare for execution by the Company and file all of the
Fund's federal and state tax returns;
(f) Prepare reports to and filings with the Securities and
Exchange Commission;
(g) Prepare reports to and filings with state Blue Sky
authorities;
(h) Furnish statistical and research data, clerical, accounting
and bookkeeping services and stationery and office supplies; and
(i) Keep and maintain the Fund's financial accounts and records,
and generally assist in all aspects of the Fund's operations to the extent
agreed to by the Administrator and the Company.
3. Expenses. The Administrator, at its own expense and without
reimbursement from the Company or the Fund, shall furnish office space, and
all necessary office facilities, equipment and executive personnel for
performing the services required to be performed by it under the Agreement.
The Administrator shall not be required to pay any expenses of the Fund. The
expenses of the Fund's operations borne by the Fund include by way of
illustration and not limitation, directors fees paid to those directors who are
not officers of the Company, the professional costs of preparing and the costs
of printing its registration statements required under the Securities Act of
1933 and the Act (and amendments thereto), the expense of registering its
shares with the Securities and Exchange Commission and in the various states,
the printing and distribution cost of prospectuses mailed to existing
shareholders, the cost of stock certificates (if any), director and officer
liability insurance, the printing and distribution and distribution costs of
reports to stockholders, reports to government authorities and proxy
statements, interest charges, taxes, legal expenses, association membership
dues, auditing services, insurance premiums, brokerage and other expenses
connected with the execution of portfolio securities transactions, fees and
expenses of the custodian of the Fund's assets, printing and mailing expenses
and charges and expenses of dividend disbursing agents, registrars and stock
transfer agents.
4. Compensation of the Administrator. For the services to be
rendered by the Administrator hereunder, the Company, through and on behalf of,
the Fund shall pay to the Administrator an administration fee, paid monthly,
based on the average net assets of the Fund, as determined by valuations made
as of the close of each business day of the month. The administration fee
shall be 1/12 of 0.1% of such average net assets up to and including
$30,000,000, and 1/12 of 0.05% of such average net assets of the Company in
excess of $30,000,000; provided, however, that for any month in which this
Agreement is not in effect for the entire month, such fee shall be reduced
proportionately on the basis of the number of calendar days during which it is
in effect and the fee computed upon the daily net assets of the business days
during which it is so in effect.
5. Ownership of Shares of the Company. Except in connection
with the initial capitalization of the Fund, the Administrator shall not take
an ownership position in the Fund, and shall not permit any of its
shareholders, officers, directors or employees to take a long or short position
in the shares of the Fund, except for the purchase of shares of the Fund for
investment purposes at the same price as that available to the public at the
time of purchase.
6. Exclusivity. The services of the Administrator to the Fund
hereunder are not to be deemed exclusive and the Administrator shall be free
to furnish similar services to others as long as the services hereunder are
not impaired thereby. During the period that this Agreement is in effect, the
Administrator shall be the Fund's sole administrator.
7. Liability. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on
the part of the Administrator, the Administrator shall not be subject to
liability to the Fund or to any shareholder of the Fund for any act or omission
in the course of, or connected with, rendering services hereunder, or for any
losses that may be sustained in the purchase, holding or sale of any security.
8. Amendments. This Agreement may be amended by the mutual
consent of the parties; provided, however, that in no event may it be amended
without the approval of the board of directors of the Company in the manner
required by the Act.
9. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by the board of directors of the Company or
by a vote of the majority of the outstanding voting securities of the Company
as defined in the Act, upon the giving of sixty (60) days' written notice to
the Administrator. This Agreement may be terminated by the Administrator at
any time upon the giving of sixty (60) days' written notice to the Company.
This Agreement shall terminate automatically in the event of its assignment (as
defined in Section 2(a)(4) of the Act). Subject to prior termination as herein
before provided, the Agreement shall continue in effect for two (2) years
from the date hereof and indefinitely thereafter, but only so long as the
continuance after such two (2) year period is specifically approved annually
by (i) the board of directors of the Company. Upon termination of the
Agreement the Administrator shall deliver to the Company all books, accounts
and other documents then maintained by it pursuant to Section 2 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on the day first above written.
XXXXX INVESTMENT ADVISORS, INC
(the "Administrator")
By: Xxxxxx X. Xxxxx
President
XXXXX FUNDS, INC.
(the "Fund")
By: Xxxxxx X. Xxxxx
President
