ADMINISTRATION AGREEMENT
This Agreement is made as of November 1, 1994, between
Xxxxxxxxx & Xxxxxx Equity Assets, a Delaware business trust ("Trust"), and
Xxxxxxxxx & Xxxxxx Management Incorporated, a New York corporation
("Administrator").
WHEREAS, the Trust is registered under the Investment Company Act
of 1940, as amended ("1940 Act"), as an open-end, diversified management
investment company and has the power to establish several separate series
of shares ("Series"), with each Series having its own assets and
investment policies; and
WHEREAS, the Trust desires to retain the Administrator to furnish
administrative services to each Series listed in Schedule A attached
hereto, and to such other Series of the Trust hereinafter established as
agreed to from time to time by the parties, evidenced by an addendum to
Schedule A (hereinafter "Series" shall refer to each Series which is
subject to this Agreement and all agreements and actions described herein
to be made or taken by a Series shall be made or taken by the Trust on
behalf of the Series), and the Administrator is willing to furnish such
services,
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties agree as follows:
1. Services of the Administrator.
1.1 Administrative Services. The Administrator shall
supervise each Series's business and affairs and shall provide such
services required for effective administration of such Series as are not
provided by employees or other agents engaged by such Series; provided,
that the Administrator shall not have any obligation to provide under this
Agreement any direct or indirect services to a Series's shareholders, any
services related to the distribution of a Series's shares, or any other
services that are the subject of a separate agreement or arrangement
between a Series and the Administrator. Subject to the foregoing, in
providing administrative services hereunder, the Administrator shall:
1.1.1 Office Space, Equipment and Facilities.
Furnish without cost to each Series, or pay the cost of, such office
space, office equipment and office facilities as are adequate for the
Series's needs.
1.1.2 Personnel. Provide, without remuneration
from or other cost to each Series, the services of individuals competent
to perform all of the Series's executive, administrative and clerical
functions that are not performed by employees or other agents engaged by
the Series or by the Administrator acting in some other capacity pursuant
to a separate agreement or arrangement with the Series.
1.1.3 Agents. Assist each Series in selecting
and coordinating the activities of the other agents engaged by the Series,
including the Series's shareholder servicing agent, custodian, independent
auditors and legal counsel.
1.1.4 Trustees and Officers. Authorize and
permit the Administrator's directors, officers or employees who may be
elected or appointed as trustees or officers of the Trust to serve in such
capacities, without remuneration from or other cost to the Trust or any
Series.
1.1.5 Books and Records. Assure that all
financial, accounting and other records required to be maintained and
preserved by each Series are maintained and preserved by it or on its
behalf in accordance with applicable laws and regulations.
1.1.6 Reports and Filings. Assist in (but not
pay for) the preparation and filing of all periodic reports by each Series
to shareholders of such Series and all reports and filings required to
maintain the registration and qualification of the Series and the Series's
shares, or to meet other regulatory or tax requirements applicable to the
Series, under federal and state securities and tax laws.
2. Expenses of each Series.
2.1 Expenses to be Paid by the Administrator. The
Administrator shall pay all salaries, expenses and fees of the officers,
trustees, or employees of the Trust who are officers, directors or
employees of the Administrator.
In the event that the Administrator pays or assumes any
expenses of the Trust or a Series not required to be paid or assumed by
the Administrator under this Agreement, the Administrator shall not be
obligated hereby to pay or assume the same or any similar expense in the
future; provided, that nothing herein contained shall be deemed to relieve
the Administrator of any obligation to the Trust or to a Series under any
separate agreement or arrangement between the parties.
2.2 Expenses to be Paid by the Series. Each Series
shall bear all expenses of its operation, except those specifically
allocated to the Administrator under this Agreement or under any separate
agreement between such Series and the Administrator. Expenses to be borne
by such Series shall include both expenses directly attributable to the
operation of that Series and the offering of its shares, as well as the
portion of any expenses of the Trust that is properly allocable to such
Series in a manner approved by the trustees of the Trust ("Trustees").
Subject to any separate agreement or arrangement between the Trust or a
Series and the Administrator, the expenses hereby allocated to each
Series, and not to the Administrator, include, but are not limited to:
2.2.1 Custody. All charges of depositories,
custodians, and other agents for the transfer, receipt, safekeeping, and
servicing of its cash, securities, and other property.
2.2.2 Shareholder Servicing. All expenses of
maintaining and servicing shareholder accounts, including but not limited
to the charges of any shareholder servicing agent, dividend disbursing
agent or other agent engaged by a Series to service shareholder accounts.
2.2.3 Shareholder Reports. All expenses of
preparing, setting in type, printing and distributing reports and other
communications to shareholders of a Series.
2.2.4 Prospectuses. All expenses of preparing,
setting in type, printing and mailing annual or more frequent revisions of
a Series's Prospectus and Statement of Additional Information ("SAI") and
any supplements thereto and of supplying them to shareholders of the
Series.
2.2.5 Pricing and Portfolio Valuation. All
expenses of computing a Series's net asset value ("NAV") per share,
including any equipment or services obtained for the purpose of pricing
shares or valuing the Series's investment portfolio.
2.2.6 Communications. All charges for equipment
or services used for communications between the Administrator or the
Series and any custodian, shareholder servicing agent, portfolio
accounting services agent, or other agent engaged by a Series.
2.2.7 Legal and Accounting Fees. All charges
for services and expenses of a Series's legal counsel and independent
auditors.
2.2.8 Trustees' Fees and Expenses. All
compensation of Trustees other than those affiliated with the
Administrator, all expenses incurred in connection with such unaffiliated
Trustees' services as Trustees, and all other expenses of meetings of the
Trustees or committees thereof.
2.2.9 Shareholder Meetings. All expenses
incidental to holding meetings of shareholders, including the printing of
notices and proxy materials, and proxy solicitation therefor.
2.2.10 Federal Registration Fees. All fees and
expenses of registering and maintaining the registration of the Trust and
each Series under the 1940 Act and the registration of each Series's
shares under the Securities Act of 1933 (the "1933 Act"), including all
fees and expenses incurred in connection with the preparation, setting in
type, printing, and filing of any Registration Statement, Prospectus and
SAI under the 1933 Act or the 1940 Act, and any amendments or supplements
that may be made from time to time.
2.2.11 State Registration Fees. All fees and
expenses of qualifying and maintaining the qualification of the Trust and
each Series and of each Series's shares for sale under securities laws of
various states or jurisdictions, and of registration and qualification of
each Series under all other laws applicable to a Series or its business
activities (including registering the Series as a broker-dealer, or any
officer of the Series or any person as agent or salesman of the Series in
any state).
2.2.12 Share Certificates. All expenses of
preparing and transmitting a Series's share certificates, if any.
2.2.13 Confirmations. All expenses incurred in
connection with the issue and transfer of a Series's shares, including the
expenses of confirming all share transactions.
2.2.14 Bonding and Insurance. All expenses of
bond, liability, and other insurance coverage required by law or
regulation or deemed advisable by the Trustees, including, without
limitation, such bond, liability and other insurance expense that may from
time to time be allocated to the Series in a manner approved by the
Trustees.
2.2.15 Brokerage Commissions. All brokers'
commissions and other charges incident to the purchase, sale or lending of
a Series's portfolio securities.
2.2.16 Taxes. All taxes or governmental fees
payable by or with respect to a Series to federal, state or other
governmental agencies, domestic or foreign, including stamp or other
transfer taxes.
2.2.17 Trade Association Fees. All fees, dues
and other expenses incurred in connection with a Series's membership in
any trade association or other investment organization.
2.2.18 Nonrecurring and Extraordinary Expenses.
Such nonrecurring and extraordinary expenses as may arise, including the
costs of actions, suits, or proceedings to which the Series is a party and
the expenses a Series may incur as a result of its legal obligation to
provide indemnification to the Trust's officers, Trustees and agents.
2.2.19 Organizational Expenses. All
organizational expenses of each Series paid or assessed by the
Administrator, which such Series shall reimburse to the Administrator at
such time or times and subject to such condition or conditions as shall be
specified in the Prospectus and SAI pursuant to which such Series makes
the initial public offering of its shares.
2.2.20 Investment Advisory Services. Any fees
and expenses for investment advisory services that may be incurred or
contracted for by a Series.
3. Administration Fee.
3.1 Fee. As compensation for all services rendered,
facilities provided and expenses paid or assumed by the Administrator to
or for each Series under this Agreement, such Series shall pay the
Administrator an annual fee as set out in Schedule B to this Agreement.
3.2 Computation and Payment of Fee. The administration
fee shall accrue on each calendar day, and shall be payable monthly on the
first business day of the next succeeding calendar month. The daily fee
accruals for each Series shall be computed by multiplying the fraction of
one divided by the number of days in the calendar year by the applicable
annual administration fee rate (as set forth in Schedule B hereto), and
multiplying this product by the NAV of such Series, determined in the
manner set forth in such Series's then-current Prospectus, as of the close
of business on the last preceding business day on which such Series's NAV
was determined.
3.3 State Expense Limitation. If in any fiscal year a
Series's operating expenses plus such Series's pro rata portion of the
operating expenses of any portfolio of Equity Managers Trust in which such
Series invests all or substantially all of its assets ("Aggregate
Operating Expenses"), which includes any fees or expense reimbursements
payable to the Administrator pursuant to this Agreement and any
compensation payable to the Administrator pursuant to (i) the Management
Agreement between such portfolio and the Administrator, or (ii) any other
agreement or arrangement with respect to such Series, but excluding
interest, taxes, brokerage commissions, litigation and indemnification
expenses, and other extraordinary expenses not incurred in the ordinary
course of such Series's business) exceed the lowest applicable percentage
expense limitation imposed under the securities law and regulations of any
state in which such Series's shares are qualified for sale (the "State
Expense Limitation"), then the administration fee payable to the
Administrator under this Agreement by such Series shall be reduced by the
amount of such excess; provided, that the Administrator shall have no
obligation hereunder to reimburse the Series for any such expenses which
exceed such administration fee.
Any reduction in the administration fee shall be made
monthly, by annualizing the Aggregate Operating Expenses of such Series
for each month as of the last day of such month. An adjustment shall be
made on or before the last day of the first month of the next succeeding
fiscal year if Aggregate Operating Expenses for such Series's fiscal year
do not exceed the State Expense Limitation or if for such fiscal year
there is no applicable State Expense Limitation.
4. Ownership of Records. All records required to be maintained
and preserved by each Series pursuant to the provisions or rules or
regulations of the Securities and Exchange Commission ("SEC") under
Section 31(a) of the 1940 Act and maintained and preserved by the
Administrator on behalf of such Series are the property of such Series and
shall be surrendered by the Administrator promptly on request by the
Series; provided, that the Administrator may at its own expense make and
retain copies of any such records.
5. Reports to Administrator. Each Series shall furnish or
otherwise make available to the Administrator such copies of that Series's
Prospectus, SAI, financial statements, proxy statements, reports, and
other information relating to its business and affairs as the
Administrator may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
6. Reports to each Series. The Administrator shall prepare and
furnish to each Series such reports, statistical data and other
information in such form and at such intervals as such Series may
reasonably request.
7. Services to Other Clients. Nothing herein contained shall
limit the freedom of the Administrator or any affiliated person of the
Administrator to render administrative services to other investment
companies, to act as administrator to other persons, firms, or
corporations, or to engage in other business activities.
8. Limitation of Liability. The Administrator shall look only
to the assets of each Series for performance of this Agreement by the
Trust on behalf of such Series, and neither the Shareholders of the Trust,
its Trustees ("Trustees") nor any of the Trust's officers, employees or
agents, whether past, present or future shall be personally liable
therefor.
9. Indemnification by Series. Each Series shall indemnify the
Administrator and hold it harmless from and against any and all losses,
damages and expenses, including reasonable attorneys' fees and expenses,
incurred by the Administrator that result from: (i) any claim, action,
suit or proceeding in connection with the Administrator's entry into or
performance of this Agreement with respect to such Series; or (ii) any
action taken or omission to act committed by the Administrator in the
performance of its obligations hereunder with respect to such Series; or
(iii) any action of the Administrator upon instructions believed in good
faith by it to have been executed by a duly authorized officer or
representative of the Trust with respect to such Series; provided, that
the Administrator shall not be entitled to such indemnification in respect
of actions or omissions constituting negligence or misconduct on the part
of the Administrator or its employees, agents or contractors. Before
confessing any claim against it which may be subject to indemnification by
a Series hereunder, the Administrator shall give such Series reasonable
opportunity to defend against such claim in its own name or in the name of
the Administrator.
10. Indemnification by the Administrator. The Administrator
shall indemnify each Series and hold it harmless from and against any and
all losses, damages and expenses, including reasonable attorneys' fees and
expenses, incurred by such Series which result from: (i) the
Administrator's failure to comply with the terms of this Agreement with
respect to such Series; or (ii) the Administrator's lack of good faith in
performing its obligations hereunder with respect to such Series; or (iii)
the negligence or misconduct of the Administrator or its employees, agents
or contractors in connection herewith with respect to such Series. A
Series shall not be entitled to such indemnification in respect of actions
or omissions constituting negligence or misconduct on the part of that
Series or its employees, agents or contractors other than the
Administrator unless such negligence or misconduct results from or is
accompanied by negligence or misconduct on the part of the Administrator,
any affiliated person of the Administrator, or any affiliated person of an
affiliated person of the Administrator. Before confessing any claim
against it which may be subject to indemnification hereunder, a Series
shall give the Administrator reasonable opportunity to defend against such
claim in its own name or in the name of the Trust on behalf of such
Series.
11. Effect of Agreement. Nothing herein contained shall be
deemed to require the Trust or any Series to take any action contrary to
the Trust Instrument or Bylaws of the Trust or any applicable law,
regulation or order to which it is subject or by which it is bound, or to
relieve or deprive the Trustees of their responsibility for and control of
the conduct of the business and affairs of the Series or Trust.
12. Term of Agreement. The term of this Agreement shall begin
on the date first above written with respect to each Series listed in
Schedule A on the date hereof and, unless sooner terminated as hereinafter
provided, this Agreement shall remain in effect through November 1, 1996.
With respect to each Series added by execution of an Addendum to Schedule
A, the term of this Agreement shall begin on the date of such execution
and, unless sooner terminated as hereinafter provided, this Agreement
shall remain in effect to the date two years after such execution.
Thereafter, in each case this Agreement shall continue in effect with
respect to each Series from year to year, subject to the termination
provisions and all other terms and conditions hereof; provided, such
continuance with respect to a Series is approved at least annually by vote
or written consent of the Trustees, including a majority of the Trustees
who are not interested persons of either party hereto ("Disinterested
Trustees"); and provided further, that the Administrator shall not have
notified a Series in writing at least sixty days prior to the first
expiration date hereof or at least sixty days prior to any expiration date
in any year thereafter that it does not desire such continuation. The
Administrator shall furnish any Series, promptly upon its request, such
information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal or amendment thereof.
13. Amendment or Assignment of Agreement. Any amendment to this
Agreement shall be in writing signed by the parties hereto; provided, that
no such amendment shall be effective unless authorized on behalf of any
Series (i) by resolution of the Trustees, including the vote or written
consent of a majority of the Disinterested Trustees, or (ii) by vote of a
majority of the outstanding voting securities of such Series. This
Agreement shall terminate automatically and immediately in the event of
its assignment; provided, that with the consent of a Series, the
Administrator may subcontract to another person any of its
responsibilities with respect to such Series.
14. Termination of Agreement. This Agreement may be terminated
at any time by either party hereto, without the payment of any penalty,
upon sixty days' prior written notice to the other party; provided, that
in the case of termination by any Series, such action shall have been
authorized (i) by resolution of the Trustees, including the vote or
written consent of the Disinterested Trustees, or (ii) by vote of a
majority of the outstanding voting securities of such Series.
15. Name of a Series. Each Series hereby agrees that if the
Administrator shall at any time for any reason cease to serve as
administrator to a Series, such Series shall, if and when requested by the
Administrator, eliminate from such Series's name the name "Xxxxxxxxx &
Xxxxxx" and thereafter refrain from using the name "Xxxxxxxxx & Xxxxxx" or
the initials "N&B" in connection with its business or activities, and the
foregoing agreement of each Series shall survive any termination of this
Agreement and any extension or renewal thereof.
16. Interpretation and Definition of Terms. Any question of
interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940
Act shall be resolved by reference to such term or provision of the 1940
Act and to interpretation thereof, if any, by the United States courts or,
in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC validly issued pursuant to the 1940 Act.
Specifically, the terms "vote of a majority of the outstanding voting
securities," "interested persons," "assignment" and "affiliated person,"
as used in this Agreement shall have the meanings assigned to them by
Section 2(a) of the 1940 Act. In addition, when the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement
is modified, interpreted or relaxed by a rule, regulation or order of the
SEC, whether of special or of general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
17. Choice of Law. This Agreement is made and to be principally
performed in the State of New York, and except insofar as the 1940 Act or
other federal laws and regulations may be controlling, this Agreement
shall be governed by, and construed and enforced in accordance with, the
internal laws of the State of New York.
18. Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
19. Execution in Counterparts. This Agreement may be executed
simultaneously in 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 signed by their respective officers thereunto duly
authorized and their respective seals to be hereunto affixed, as of the
day and year first above written.
XXXXXXXXX & XXXXXX EQUITY ASSETS
By /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Vice President
Attest:
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXXXXX & XXXXXX MANAGEMENT
INCORPORATED
By /s/ Xxxxxxx Xxxxxx
-------------------------
Xxxxxxx Xxxxxx
President
Attest:
/s/ Xxxxx Xxxxxxx
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