ADMINISTRATIVE SERVICES AGREEMENT
BACK BAY FUNDS, INC.
(the "Fund")
TOTAL RETURN BOND FUND
(the "Portfolio")
Xxx Xxxx, Xxx Xxxx
Xxxxxxx 00, 0000
Xxxxx & Xxxx Asset Management L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting our assets in securities of the type, and in accordance with the
limitations, specified in our Articles of Incorporation, By-Laws and
Registration Statement filed with the Securities and Exchange Commission under
the Investment Company Act of 1940 (the "1940 Act") and the Securities Act of
1933, including the Prospectus forming a part thereof (the "Registration
Statement"), all as from time to time in effect, and in such manner and to such
extent as may from time to time be authorized by our Board of Directors. We
enclose copies of the documents listed above and will furnish you such
amendments thereto as may be made from time to time.
2. (a) We hereby employ you as our administrator (the
"Administrator") to provide all management and administrative services
reasonably necessary for our operation. The services to be provided by you shall
include but not be limited to those enumerated on Exhibit A hereto. The
personnel providing these services may be your employees or employees of your
affiliates or of other organizations. You shall make periodic reports to the
Fund's Board of Directors in the performance of your obligations under this
Agreement and the execution of your duties hereunder is subject to the general
control of the Board of Directors.
(b) It is understood that you will from time to time employ,
subcontract with or otherwise associate with yourself, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder. While this agreement is in effect, you or
persons affiliated with you, other than us ("your affiliates"), will provide
persons satisfactory to our Board of Directors to be elected or appointed
officers or employees of our corporation. These shall be a
president, a secretary, a treasurer, and such additional officers and employees
as may reasonably be necessary for the conduct of our business.
(c) You or your affiliates will also provide persons, who
may be our officers, to (i) supervise the performance of bookkeeping and related
services and calculation of net asset value and yield by our bookkeeping agent,
(ii) prepare reports to and the filings with regulatory authorities, and (iii)
perform such clerical, other office and shareholder services for us as we may
from time to time request of you. Such personnel may be your employees or
employees of your affiliates or of other organizations. Notwithstanding the
preceding, you shall not be required to perform any accounting services not
expressly provided for herein.
(d) You or your affiliates will also furnish us such
administrative and management supervision and assistance and such office
facilities as you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to which you may be
subject. You or your affiliates will also pay the expenses of promoting the sale
of our shares (other than the costs of preparing, printing and filing our
Registration Statement, printing copies of the prospectus contained therein and
complying with other applicable regulatory requirements), except to the extent
that we are permitted to bear such expenses under a plan adopted pursuant to
Rule 12b-1 under the 1940 Act or a similar rule.
3. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any liability to us or to our security
holders by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
4. In consideration of the foregoing, the Fund will pay you an
annual fee equal to .15% of the Portfolio's average daily net assets up to $100
million, .125% of the next $150 million of such assets, .100% of the next $250
million of such assets and .075% of such assets over $500 million, with a
minimum monthly fee of $8,000. Your fee will be accrued by us daily, and will be
payable on the last day of each calendar month for services performed hereunder
during that month or on such other schedule as we may agree in writing. You may
use any portion of this fee for distribution of our shares, or for making
payments to organizations whose customers or clients are our shareholders. You
may waive your right to any fee to which you are entitled hereunder, provided
such waiver is delivered to us in writing.
5. This Agreement will become effective on the date hereof
and shall continue in effect until September 30, 2001 and thereafter for
successive twelve-month periods (computed from each October 1st ), provided that
such continuation is specifically approved at least annually by our Board of
Directors and by a majority of those of our directors who are neither party to
this Agreement nor, other than by their service as directors of the Fund,
interested persons, as defined in the 1940 Act,
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of any such person who is party to this Agreement. This Agreement may be
terminated at any time, without the payment of any penalty, (a) on sixty days'
written notice to you (i) by vote of a majority of the outstanding voting
securities of each respective Portfolio voting separately, as defined in the
1940 Act, or (ii) by vote of a majority of our entire Board of Directors, or (b)
by you on sixty days' written notice to us.
6. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the Securities and Exchange Commission.
7. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your employees, or the right of any officers or directors of
Xxxxx & Xxxx Asset Management, Inc., your general partner, who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
8. This Agreement shall be construed in accordance with the
laws of the State of New York and the applicable provisions of the 1940 Act.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
BACK BAY FUNDS, INC.
By: /s/ Xxxxxxxxxx X. Xxxx
------------------------------
Name: Xxxxxxxxxx X. Xxxx
Title: Secretary
ACCEPTED: October 30, 2000
XXXXX & TANG ASSET MANAGEMENT L.P.
By: XXXXX & XXXX ASSET MANAGEMENT, INC.,
as General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxxx X. Xxxxxx
Title:Executive Vice President
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Exhibit A
Administration Services To Be Performed
By Xxxxx & Tang Asset Management L.P.
Administration Services
1. In conjunction with Fund counsel, prepare and file all Post-Effective
Amendments to the Registration Statement, all state and federal tax
returns and all other required regulatory filings.
2. In conjunction with Fund counsel, prepare and file all Blue Sky
filings, reports and renewals.
3. Coordinate, but not pay for, required Fidelity Bond and Directors and
Officers Insurance (if any) and monitor their compliance with
Investment Company Act.
4. Coordinate the preparation and distribution of all materials for
Directors, including the agenda for meetings and all exhibits thereto,
and actual and projected quarterly summaries.
5. Coordinate the activities of the Fund's Manager, Custodian, Legal
Counsel and Independent Accountants.
6. Prepare and file all periodic reports to shareholders and proxies and
provide support for shareholder meetings.
7. Monitor daily and periodic compliance with respect to all requirements
and restrictions of the Investment Company Act, the Internal Revenue
Code and the Prospectus.
8. Monitor daily the Fund's bookkeeping services agent's calculation of
all income and expense accruals, sales and redemptions of capital
shares outstanding.
9. Evaluate expenses, project future expenses, and process payments of
expenses.
10. Monitor and evaluate performance of accounting and accounting related
services by Fund's bookkeeping services agent. Nothing herein shall be
construed to require you to perform any accounting services not
expressly provided for in this Agreement.
