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EXHIBIT 8.(i)
ADMINISTRATIVE SERVICE AGREEMENT
THIS AGREEMENT is made as of this ____ day of ____________, 1999, by and
between Homestead Funds, Inc. ("Homestead Funds"), a Maryland corporation, on
behalf of the Stock Index Fund, and RE Advisers Corporation ("RE Advisers"), a
Virginia corporation.
WHEREAS, Homestead Funds engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, Homestead Funds is a series type investment company currently
consisting of six series, each with its own investment program, policies,
objectives, and restrictions; and
WHEREAS, Homestead Funds desires to retain RE Advisers to perform certain
administrative services on behalf of its Stock Index Fund pursuant to the terms
and conditions set forth herein and RE Advisers desires to perform such
services;
NOW, THEREFORE, the parties hereto agree as follows:
1. Administrative Services. RE Advisers shall provide certain
administrative services to the Stock Index Fund, including: (i)
maintenance of the Stock Index Fund's corporate existence and corporate
records; (ii) maintenance of the registration and qualification of the
Stock Index Fund's shares under federal and state law; (iii)
coordination and supervision of the financial, accounting, and
administrative functions for the Stock Index Fund; (iv) selection,
coordination of the activities of, supervision, and service as liaison
with various agents and other parties employed by the Stock Index Fund
(e.g., custodian, transfer agent, auditors, and attorneys); and (v)
assistance in the preparation and development of all shareholder
communications and reports. RE Advisers also will furnish to or place
at the disposal of the Stock Index Fund such information, reports,
evaluations, analyses, and opinions as the Stock Index Fund may, from
time to time, reasonably request or which RE Advisers believes would be
helpful to the Stock Index Fund.
2. Compensation. Homestead Funds, with respect to the Stock Index Fund,
shall pay RE Advisers as compensation for all services rendered and for
the expenses which it assumes, on a monthly basis, an administration
fee based on the Stock Index Fund's average daily net assets at an
annualized rate equal to .25% of average daily net assets. The fee
shall accrue each calendar day and the sum of the daily fee accruals
shall be paid monthly on the first business day of the next calendar
month. The daily fee accruals shall be computed by multiplying the
fraction of one over the number of calendar days in the year by the
annual rate described above and multiplying the product by the net
assets of the Stock Index Fund as determined in accordance with
Homestead Funds' prospectus as of the close of business on the previous
business day on which Homestead Funds was open for business.
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3. Services to Other Clients. Nothing herein contained shall limit the
freedom of RE Advisers to render administrative services to other
investment companies or engage in other business activities with other
persons, firms or corporations.
4. Limitation of Liability. Neither RE Advisers, any of its officers,
directors, or employees, nor any person performing, at the direction or
request of RE Advisers, administrative or other functions for Homestead
Funds with respect to the Stock Index Fund in connection with RE
Advisers' discharge of its obligations undertaken or reasonably assumed
with respect to this Agreement, shall be liable for any error of
judgement or mistake of law or for any loss suffered by Homestead
Funds, with respect to the Stock Index Fund, in connection with the
matters to which this Agreement relates, except for loss resulting from
willful misfeasance, bad faith, or gross negligence in the performance
of its duties on behalf of Homestead Funds or from reckless disregard
by RE Advisers or any such person of the duties of RE Advisers under
this Agreement.
5. Term. This Agreement shall remain in full force and effect for a period of
one year from the date hereof and shall be automatically renewed
thereafter for successive one-year periods, unless otherwise terminated in
accordance with the provisions of this Agreement.
6. Termination. This Agreement may be terminated upon mutual agreement of the
parties in writing or by either party hereto, without the payment of any
penalty, upon 60 days prior written notice to the other party.
7. Amendment. This Agreement may be amended only upon mutual agreement of the
parties in writing.
8. Assignment. Neither this Agreement nor any of the rights, obligations or
liabilities of either party may be assigned without the prior written
consent of the other party, except that RE Advisers is authorized to
delegate any of its obligations to Bankers Trust Company or any of its
affiliates so long as RE Advisers remains responsible for any compensation
due any delegate.
9. Captions. The captions in this Agreement are included for convenience of
reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
10. Interpretation. Nothing herein contained shall be deemed to require
Homestead Funds to take any action contrary to its Articles of
Incorporation or By-Laws, or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve
or deprive the Board of Directors of its responsibility for and control of
the conduct of the affairs of Homestead Funds.
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11. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together constitute one
and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed on its behalf by an duly authorized officer as of the date
specified above.
HOMESTEAD FUNDS, INC.
By:
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Name:
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Title:
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RE ADVISERS CORPORATION
By:
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Name:
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Title:
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