EXHIBIT 99.(k)(a)
XXXXX XXXXX PRIME RATE RESERVES
ADMINISTRATION AGREEMENT
AGREEMENT originally made on the 14th day of July, 1989, by and between
Xxxxx Xxxxx Prime Rate Reserves, a Massachusetts business trust (hereinafter
sometimes called the "Fund"), and Xxxxx Xxxxx Management, Inc., a Massachusetts
corporation, and re-executed this 1st day of November, 1990, by and between the
Fund and Xxxxx Xxxxx Management, a Massachusetts business trust (hereinafter
sometimes called the "Administrator") which is the successor to Xxxxx Xxxxx
Management, Inc. in a transaction qualifying under Rule 2a-6 under the
Investment Company of 1940.
1. Duties of the Administrator. The Fund hereby employs the
Administrator to administer the affairs of the Fund, subject to the supervision
of the Trustees of the Fund for the period and on the terms set forth in this
Agreement. The shares of beneficial interest of the Fund are of a single series
and class; however, shares may be issued in additional classes or divided into
additional series of the Fund that may be established from time to time by
action of the Trustees.
The Administrator hereby accepts such employment, and agrees to
administer the Fund's business affairs and, in connection therewith, to furnish
for the use of the Fund office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Fund. The
Administrator shall also pay the salaries and compensation of all officers and
Trustees of the Fund who are members of the Administrator's organization and who
render executive and administrative services to the Fund, and the salaries and
compensation of all other personnel of the Administrator performing management
and administrative services for the Fund. The Administrator shall for all
purposes herein be deemed to be an independent contractor and shall, except as
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.
In connection with its responsibilities as Administrator of the Fund,
the Administrator (i) will prepare all annual, semi-annual and other reports
required to be sent to Fund shareholders, and arrange for the printing and
dissemination of such reports to shareholders; (ii) will prepare and assemble
all reports required to be filed by the Fund with the Securities and Exchange
Commission ("SEC") on Form N-SAR, or on such other form as the SEC may
substitute for Form N-SAR, and file such reports with the SEC; (iii) will review
the provision of services by the Fund's independent accountants, including but
not limited to the preparation by such accountants of audited financial
statements of the Fund and the Fund's Federal, state and local tax returns; and
make such reports and recommendations to the Trustees of the Fund concerning the
performance of the independent accountants as the Trustees deem appropriate;
(iv) will arrange for the filing with the appropriate authorities all required
Federal, state and local tax returns; (v) will arrange for the dissemination to
shareholders of the Fund's proxy materials, and will oversee the tabulation of
proxies by the Fund's transfer agent; (vi) will review and supervise the
provision of custodian services to the Fund; and make such reports and
recommendations to the Trustees concerning the provision of such services as the
Trustees deem appropriate; (vii) will value all such portfolio investments and
other assets of the Fund as may be designated by the Trustees (subject to any
guidelines, directions and instructions of the Trustees), and review and
supervise the calculation of the net asset value of the Fund's shares by the
custodian; (viii) will negotiate the terms and conditions under which transfer
agency and dividend disbursing services will be provided to the Fund, and the
fees to be paid by the Fund in connection therewith; review and supervise the
provision of transfer agency and dividend disbursing services to the Fund; and
make such reports and recommendations to the Trustees concerning the performance
of the Fund's transfer and dividend disbursing agent as the Trustees deem
appropriate; (ix) will establish the accounting policies of the Fund; reconcile
accounting issues which may arise with respect to the Fund's operations; and
consult with the Fund's independent accountants, legal counsel, custodian,
accounting and bookkeeping agents and transfer and dividend disbursing agent as
necessary in connection therewith; (x) will determine the amount of all
distributions to be paid by the Fund to its shareholders; prepare and arrange
for the printing of notices to shareholders regarding such distributions and
provide the Fund's transfer and dividend disbursing agent and custodian with
such information as is required for such parties to effect the payment of
distributions and to implement the Fund's distribution reinvestment plan; (xi)
will review the Fund's bills and authorize payments of such bills by the Fund's
custodian; (xii) will make recommendations to the Trustees as to whether the
Fund should make tender offers for its own shares; arrange for the preparation
and filing of all issuer tender offer statements required to be filed by the
Fund with the SEC on Schedule 13E-4, or on such other form as the SEC may
substitute for Schedule 13E-4; arrange for the preparation and dissemination of
all appropriate tender offer documents and papers on behalf of the Fund; and
supervise and conduct the Fund's periodic tender offers for its own shares;
(xiii) will review and supervise the payment of early withdrawal charges (as
described in the Fund's current offering prospectus); (xiv) will review and
supervise the continuous offering of the Fund's shares through the principal
underwriter, and arrange for the payment by the principal underwriter of all
compensation to Authorized Dealers in accordance with the Fund's current
offering prospectus; (xv) will arrange for the preparation and filing of all
other reports, forms, registration statements and documents required to be filed
by the Fund with the SEC; (xvi) will arrange for the preparation and filing of
all reports, forms, registration statements and documents required to be filed
by the Fund with state securities administrators or blue sky authorities; (xvii)
will arrange for the preparation of all advertisements and promotional material
relating to the continuous offering of the Fund's shares, and all communications
by the Fund to its shareholders; and (xviii) will provide to the Fund such other
internal legal, auditing and accounting services and internal executive
management and administrative services as the Trustees deem appropriate to
conduct the Fund's business affairs.
The Administrator shall not be responsible for providing investment
advisory services to the Fund under this Agreement. Xxxxx Xxxxx Management in
its capacity of investment adviser to the Fund, shall be responsible for
managing the investment and reinvestment of the assets of the Fund under the
Fund's Investment Advisory Contract with the investment adviser.
2. Compensation of the Administrator. For the services, payments and
facilities to be furnished hereunder by the Administrator, the Fund shall pay to
the Administrator on the last day of each month a fee equal to 1/48 of 1% of the
average daily gross assets of the Fund throughout the month. In calculating the
gross assets of the Fund for this purpose, there shall be deducted therefrom all
liabilities of the Fund except the principal amount of any indebtedness for
money borrowed including debt securities issued by the Fund.
In case of initiation or termination of the Agreement during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of calendar days during which the Agreement is in effect and the fee
shall be computed upon the basis of the average gross assets for the business
days the Agreement is so in effect for that month.
The Administrator may, from time to time, waive all or a part of the
above compensation.
3. Allocation of Charges and Expenses. It is understood that the Fund
will pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder or by Xxxxx Xxxxx Management in its capacity as
investment adviser to the Fund under the Fund's Investment Advisory Contract
with the Adviser, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of maintaining the Fund and continuing its
existence, (ii) registration of the Fund under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase and
redemption (if any) of shares, including all expenses incurred in conducting
tender offers for the purpose of repurchasing Fund shares, (viii) expenses of
registering and qualifying the Fund and its shares under Federal and state
securities laws and of preparing and printing prospectuses for such purposes and
for distributing the same to shareholders and investors, and fees and expenses
of registering and maintaining registrations of the Fund and of the Fund's
principal underwriter, if any, as a broker-dealer or agent under state
securities laws, (ix) expenses of reports and notices to shareholders and of
meetings of shareholders and proxy solicitations therefor, (x) expenses of
reports to governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and disbursements of
custodians and subcustodians for all services to the Fund (including without
limitation safekeeping of funds and securities, keeping of books and accounts
and determination of net asset value), (xiv) fees, expenses and disbursements of
transfer agents, dividend disbursing agents, shareholder servicing agents and
registrars for all services to the Fund, (xv) expenses for servicing shareholder
accounts, (xvi) any direct charges to shareholders approved by the Trustees of
the Fund, (xvii) compensation of and any expenses of Trustees of the Fund,
(xviii) all payments to be made and expenses to be assumed by the Fund in
connection with the distribution of Fund shares, (xix) pricing and valuation
services employed by the Fund, (xx) the investment advisory fee payable to the
Fund's investment adviser under the Fund's Investment Advisory Contract with the
adviser, and (xxi) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims and obligation of
the Fund to indemnify its Trustees, officers and with respect thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Fund are or may be or become interested in the Administrator
as trustees, officers, employees, shareholders or otherwise and that trustees,
officers, employees and shareholders of the Administrator are or may be or
become similarly interested in the Fund, and that the Administrator may be or
become interested in the Fund as a shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Administrator or its subsidiaries or affiliates may enter into
advisory, management or administration agreements or other contracts or
relationship with such other companies or entities.
5. Limitation of Liability of the Administrator. The services of the
Administrator to the Fund are not to be deemed to be exclusive, the
Administrator being free to render services to others and engage in other
business activities. 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.
6. Duration and Termination of this Agreement. This Agreement shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect to and including February
28, 1991 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 1991 is specifically
approved at least annually (i) by the Boards of Trustees of the Fund, and (ii)
by the vote of a majority of those Trustees of the Fund who are not interested
persons of the Administrator or the Fund.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement by action of the Trustees of the
Fund or the trustees of the Administrator, and the Fund may, at any time upon
such written notice to the Administrator, terminate the Agreement by vote of a
majority of the outstanding voting securities of the Fund. This Agreement shall
terminate automatically in the event of its assignment.
7. Amendments of the Agreement. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Agreement shall be effective until approved by the vote of a majority of those
Trustees of the Fund who are not interested persons of the Administrator or the
Fund.
8. Limitation of Liability. The Administrator expressly acknowledges
the provision in the Declaration of Trust of the Fund (Article XIV, Section 2)
limiting the personal liability of the Trustees and shareholders of the Fund,
and the Administrator hereby agrees that it shall have recourse to the Fund for
payment of claims or obligations as between the Fund and the Administrator
arising out of this Agreement and shall not seek satisfaction from the Trustees
or shareholders of the Fund.
9. Certain Definitions. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order.
XXXXX XXXXX PRIME RATE RESERVES XXXXX XXXXX MANAGEMENT
By /s/ Xxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxx
President Vice President,
and not individually
