ADMINISTRATION AGREEMENT
AGREEMENT made this _________ day of ________, 1997 by and between
Xxxxxxx Capital Mutual Fund Group, Inc., a Maryland Corporation (the "Company"
or the "Fund"), and INVESTMENT COMPANY ADMINISTRATION CORPORATION, a Delaware
Corporation (the "Administrator").
W I T N E S S E T H
-------------------
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"), with shares
of beneficial interest organized into separate series; and
WHEREAS, the Fund wishes to retain the Administrator, and the
Administrator is willing, to provide management and administrative services to
such Portfolios of the Fund as the Fund and Administrator may agree upon
("Portfolios") and as listed on Schedule A attached hereto and made a part of
this agreement on the terms and conditions hereinafter set forth:
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby retains the Administrator to provide
certain management and administrative services, as set forth in Article 2 below.
The Administrator agrees to comply with all applicable requirements of the 1940
Act, the Securities Act of 1933, the Securities Exchange Act of 1934 and any
laws, rules and regulations of governmental or quasi-governmental authorities
having jurisdiction with respect to the duties to be performed by the
Administrator hereunder.
2. Services on a Continuing Basis. The Administrator shall perform the
following services on a regular basis which would be daily, weekly or as
otherwise appropriate or reasonably requested by the Fund:
(A) prepare and coordinate reports and other materials as the
Fund's Board of Directors may reasonably request of the Fund;
(B) prepare and/or supervise the preparation and filing of all
securities filings, periodic financial reports, prospectuses, statements of
additional information, marketing materials, tax returns, shareholder reports
and other regulatory reports or filings required of the Fund and the Portfolios;
(C) prepare all required filings necessary to qualify the Fund's
shares with state securities authorities to sell shares in all states where the
Fund currently does, or intends to do business;
(D) coordinate the preparation, printing and mailing of all
communications required to be sent to shareholders, including the annual and
semi-annual reports to shareholders, proxy statements, notices and other reports
to Fund shareholders;
(E) coordinate the preparation and payment of Fund and Portfolio
related expenses;
(F) assist in the selection of, investigate, conduct relations
with, and monitor and oversee the activities of the transfer agent, custodians,
accountants, depositories, attorneys, underwriters, insurers, and such other
persons in any other capacity deemed by the Company to be necessary or desirable
for the Portfolios' operations and as requested by the Company;
(G) review and adjust as necessary the Portfolios' daily expense
accruals;
(H) maintain and keep such books and records of the Fund as
required by law and for the proper operation of the Fund and its Portfolios
other than those maintained and kept by the Fund's investment adviser and
servicing agents;
(I) provide the Fund with (i) the services of persons competent
to perform the administrative and clerical functions described herein, and (ii)
individuals acceptable to the Directors for nomination, appointment or election
as officers of the Fund, who will be responsible for the management of certain
of the Fund's affairs as determined by the Directors;
(J) provide the Fund with office space as well as administrative
offices, equipment and facilities as are necessary for the performance of the
Administrator's duties under this Agreement;
(K) monitor each Portfolio's compliance with investment policies
and restrictions as set forth in the Portfolio's currently effective prospectus
and statement of additional information; and
(L) perform such additional services as may be agreed upon by the
Fund and the Administrator.
3. Responsibility of the Administrator. The Administrator shall be
under no duty to take any action on behalf of the Fund or the Portfolios except
as set forth herein or as may be agreed to by the Administrator in writing. In
the performance of its duties hereunder, the Administrator shall be obligated to
exercise reasonable care and diligence and to act in good faith and to use its
best efforts. The Administrator shall have no liability for any loss or damage
resulting from
2
the performance or non-performance of its duties hereunder unless solely caused
by or resulting from the gross negligence or willful misconduct of the
Administrator, its officers and employees.
4. Reliance Upon Instructions. The Fund agrees that the Administrator
shall be entitled to rely upon any instructions, oral or written, actually
received by the Administrator from the Fund and shall incur no liability to the
Fund in acting upon such oral or written instructions, provided such
instructions reasonably appear to have been received from a person duly
authorized by the Board of Directors of the Fund to give oral or written
instructions on behalf of the Fund or any Portfolio.
5. Confidentiality. The Administrator agrees on behalf of itself and
its employees to treat confidentiality all records and other information
relating to the Fund and Portfolios and all prior, present or potential
shareholders of any and all Portfolios, except after prior notification to, and
written approval of release of information by, the Fund, which approval shall
not be unreasonably withheld where the Administrator may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Fund.
6. Equipment Failures. In the event of equipment failures or the
occurrence of events beyond the Administrator's control which render the
performance of the Administrator's functions under this Agreement impossible,
the Administrator shall at no additional expense to the Fund, take reasonable
steps to minimize service interruptions. The Administrator shall develop and
maintain a plan for recovery from equipment failures which may include
contractual arrangements with appropriate third parties making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available.
7. Allocation of Charges and Expenses.
(A) The Administrator. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Fund as well as all Directors of the
Fund who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Fund retained by the Directors of the Fund
to perform services on behalf of the Fund.
(B) The Fund. The Fund assumes and shall pay or cause to be paid
all other expenses of the Fund not otherwise allocated herein, including,
without limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing shareholders, all expenses
incurred in connection with issuing and redeeming shares, the costs of pricing
services, the costs of custodial services, the cost of initial and ongoing
registration of the shares under federal and state securities
3
laws, fees and out-of-pocket expenses of Directors who are not affiliated
persons of the Administrator or the investment adviser to the Fund or any
affiliated corporation of the Administrator or the investment Adviser, the costs
of Directors' meetings, insurance, interest, brokerage costs, litigation and
other extraordinary or nonrecurring expenses, and all fees and charges of
investment advisers to the Fund.
8. Compensation. As compensation for services rendered by the
Administrator during the term of this Agreement, the Fund shall pay to the
Administrator compensation at an annual rate as set forth in Schedule A.
9. Indemnification.
(A) The Fund and Portfolios agree to indemnify and hold harmless
the Administrator from all taxes, filing fees, charges, assessments, claims and
liabilities (including without limitation, liabilities arising under the
Securities Act of 1933, the Securities Exchange Act of 1934, the 1940 Act, and
any state and foreign securities laws, all as amended from time to time) and
expenses, including (without limitation) reasonable attorneys fees and
disbursements, reasonably arising directly or indirectly from any action or
thing which the Administrator takes or does or omits to take or do at the
request of or in reliance upon the advice of the Board of Directors of the Fund,
provided that the Administrator will not be indemnified against any liability to
a Portfolio or to shareholders (or any expenses incident to such liability)
arising out of the Administrator's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations under this
Agreement. The Administrator agrees to indemnify and hold harmless the Fund and
each of its Directors from all taxes, filing fees, charges, assessments, claims
and liabilities (including without limitation, liabilities under the Securities
Act of 1933, the Securities Exchange Act of 1934, the 1940 Act, and any state
and foreign securities laws, all as amended from time to time) and expenses,
including (without limitation) reasonable attorneys fees and disbursements,
arising directly or indirectly from any action or thing which the Administrator
takes or does or omits to take or do which is in violation of this Agreement or
not in accordance with instructions properly given to the Administrator, or
arising out of the Administrator's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations under this
agreement.
(B) The rights of a party indemnified under this Section (an
"indemnified party") shall include the right to reasonable advances of defense
expenses in the event of any pending or threatened litigation with respect to
which indemnification hereunder may ultimately be merited. In order that the
indemnification provisions contained herein shall apply, however, it is
understood that if in any case one party (the "indemnifying party") may be asked
to indemnify or hold the indemnified party harmless, the indemnifying party
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the indemnified party
will use all reasonable care to identify and notify the indemnifying party
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the indemnifying
party, but failure to do so in good faith shall not affect the rights hereunder.
4
(C) The indemnifying party shall be entitled to participate at
its own expense or, if it so elects, to assume the defense of any suit brought
to enforce any claims subject to this indemnity provision. If the indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the indemnifying party and satisfactory to the
indemnified party, whose approval shall not be unreasonably withheld. In the
event that the indemnifying party elects to assume the defense of any suit and
retain counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by it. If the indemnifying party does not elect to
assume the defense of a suit, it will reimburse the indemnified party for the
reasonable fees and expenses of any counsel retained by the indemnified party.
10. Duration and Termination of this Agreement. This Agreement shall
continue until termination in accordance with the provisions of this Section.
This Agreement may be terminated only: (a) by the mutual written agreement of
the parties; (b) by either party on 60 days' written notice; or (c) by either
party in the event of a material breach of this Agreement by the other party,
provided the terminating party has notified the other party in writing of such
breach at least 45 days prior to the specified date of termination and the
breaching party has not remedied such breach by the specified date. This
Agreement shall not be assigned by either party without the prior written
consent of the other party.
11. Amendments and Assignment. This Agreement or any part hereof may
be changed or waived only by instrument in writing signed by both parties and
may not be assigned by either party without the written consent of the other.
12. Records. The Administrator shall, directly or through third
parties, maintain and preserve for the periods prescribed therein, records
relating to the services to be performed under this Agreement which are required
under the 1940 Act, and the rules and regulations thereunder. Any records
required to be maintained and preserved under the 1940 Act which are prepared or
maintained by the Administrator on behalf of the Fund shall be prepared and
maintained at the expense of the Administrator, but shall be the property of the
Fund, shall be readily accessible during normal business hours to the Fund and
its duly authorized agents, and shall be surrendered promptly to the Fund on
written request or upon termination of this Agreement. Records shall be
surrendered in usable machine readable form. In case of any request or demand
for the inspection of such records by another party, the Administrator shall
notify the Fund and follow the Fund's instructions as to permitting or refusing
such inspection; provided that the Administrator may exhibit such records to any
person in any case where it is advised by its counsel that it may be held liable
for failure to do so, unless (in cases involving potential exposure only to
civil liability) the Fund has agreed to indemnify the Administrator against such
liability.
13. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, to the following addresses or such other addresses
provided in writing: if to the Fund, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx; and
if to the Administrator at 0000 X. Xxxxxxxxx Xxx, Xxxxx 000, Xxxxxxxx, XX 00000.
5
14. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties thereto with respect to the services to be
performed hereunder, and supersedes all prior agreements and understandings,
relating to the subject matter hereof. The captions in this Agreement are
included for convenience of reference only and in no way define or limit any of
the provisions hereof or otherwise affect their construction or effect. This
Agreement shall be deemed to be a contract made in New York and governed by New
York law. 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 will
not be affected thereby. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below on the date first written above.
XXXXXXX CAPITAL MUTUAL FUND GROUP, INC.
By: _________________________________________
Name:
Title:
INVESTMENT COMPANY ADMINISTRATION CORPORATION
By: _________________________________________
Name:
Title:
6
Schedule to the Administration Agreement
Dated as of __________, 1997
between
Xxxxxxx Capital Mutual Fund Group, Inc.
and
Investment Company Administration Corporation
Portfolios: Xxxxxxx Fund
Xxxxxxx Fledgling Fund
Fees: Pursuant to Section 12 of the Agreement, the Fund shall pay the
Administrator compensation for services rendered to the
Portfolios at the following annual rates for each Portfolio
listed above, with a minimum fee of $40,000 annual per Portfolio:
Average Daily Net Assets Rate
------------------------ ----
$0 - $200 million 0.10%
200,000,001 - 500,000,000 0.05%
500,000,001 and greater 0.03%
Term: This Agreement shall become effective on _______, 1997 and shall
remain in effect for an Initial Term of _______ year(s) from such
date and, thereafter, for successive Renewal Terms of _______
year(s) each, unless and until this Agreement is terminated in
accordance with the provisions of Section ____ of the Agreement.
7
