ADMINISTRATION AGREEMENT
(Xxxxxxx Opportunities Fund)
THIS AGREEMENT is made as of July 23, 1999, by and between XXXXXXX
INVESTMENTS, a Massachusetts business trust (the "Trust"), acting on behalf of
the Xxxxxxx Opportunities Fund (the "Fund"), and XXXXXXX ASSET MANAGEMENT, INC.
("Xxxxxxx Management"), a Michigan corporation.
WHEREAS, the Trust is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares of Common Stock; and
WHEREAS, the Trust desires Xxxxxxx Management to provide, and Xxxxxxx
Management is willing to provide, management and administrative services to the
Fund;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and Xxxxxxx Management hereby agree as
follows:
1. Retention of Xxxxxxx Management. Effective October 11, 1999,
the Trust hereby retains Xxxxxxx Management to act as the administrator of the
Fund and to furnish the Fund with the management and administrative services
described in Section 2 below. Xxxxxxx Management hereby accepts such employment
to perform the duties set forth below. Xxxxxxx Management shall, for all
purposes herein, be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to act for
or represent the Trust in any way and shall not be deemed an agent of the
Trust.
2. Administrative and Accounting Services. Xxxxxxx Management
shall perform or supervise the performance by others of other administrative
services in connection with the operations of the Fund, and, on behalf of the
Trust, will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Fund's operations.
Xxxxxxx Management shall provide the Trustees of the Trust with such reports
regarding investment performance and compliance with investment policies and
applicable laws, rules and regulations as they may reasonably request but shall
have no responsibility for supervising the performance by any investment
adviser or subadviser of its responsibilities.
Xxxxxxx Management shall provide the Trust with administrative
services, regulatory reporting, fund accounting and related portfolio
accounting services, all necessary office space, equipment, personnel,
compensation and facilities (including facilities for shareholders' meetings
but not Trustees' meetings that are not held at offices of Xxxxxxx Management)
for handling the affairs of the Fund and such other services as the Trustees
may, from time to time, reasonably request and Xxxxxxx Management shall, from
time to time, reasonably determine to be necessary to perform its obligations
under this Agreement. In addition, at the request of the Trust's Board of
Trustees (the "Trustees"), Xxxxxxx Management shall make reports to the
Trustees concerning the performance of its obligations hereunder.
Without limiting the generality of the foregoing, Xxxxxxx Management
shall:
(a) calculate contractual expenses and control all
disbursements for the Fund, and as appropriate compute the yields,
total return, expense ratios, portfolio turnover rate and, if required,
portfolio average dollar-weighed maturity for the Fund;
(b) assist counsel with the preparation of prospectuses,
statements of additional information, registration statements, and
proxy materials for the Fund;
(c) prepare such reports, applications and documents
(including reports regarding the sale and redemption of shares as may
be required in order to comply with Federal and state securities law)
as may be necessary or desirable to register the Fund's shares with
state securities authorities, monitor sale of the Fund's shares for
compliance with state securities laws, and file with the appropriate
state securities authorities the registration statements and reports
for the Fund and the Fund's shares and all amendments thereto, as may
be necessary or convenient to register and keep effective the Fund's
shares with state securities authorities to enable the Trust to make
a continuous offering of the Fund's shares;
(d) develop and prepare communications to shareholders,
including the annual report to shareholders, coordinate mailing
prospectuses, notices, proxy statements, proxies and other reports
to shareholders of the Fund, and supervise and facilitate the
solicitation of proxies for all shareholder meetings of the Fund,
including tabulation process for such shareholder meetings;
(e) coordinate with counsel the preparation and
negotiation of, and administer, contracts on behalf of the Fund with,
among others, the Fund's investment adviser, distributor, custodian,
and transfer agent;
(f) maintain the Fund's general ledger and prepare the
Fund's financial statements, including expense accruals and payments,
determine the net asset value of the Fund's assets and of the Fund's
shares, and supervise the Fund's transfer agent with respect to the
payment of dividends and other distributions to shareholders;
(g) calculate performance data of the Fund for
dissemination to information services covering the investment company
industry;
(h) coordinate and supervise the preparation and filing
of the Fund's tax returns;
(i) examine and review the operations and performance of
the various organizations providing services to the Fund, including,
without limitation, the Fund's investment adviser, distributor,
custodian, transfer agent, counsel and independent public accountants;
(j) assist with the layout and printing of publicly
disseminated prospectuses and assist with and coordinate layout and
printing of the Fund's semi-annual and annual reports to shareholders;
(k) assist with the design, development, and operation of
the Fund, including new portfolio and class investment objectives,
policies and structure;
(l) provide individuals acceptable to the Trustees for
nomination, appointment, or election as officers of the Trust, who will
be responsible for the management of certain of the Trust's affairs as
determined by the Trustees;
(m) obtain and keep in effect fidelity bonds and directors
and officers/errors and omissions insurance policies for the Fund in
accordance with the requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act as such bonds and policies are approved by the Trust's Board
of Trustees;
(n) monitor and advise the Trust and the Fund on their
registered investment company status under the Internal Revenue Code
of 1986, as amended;
(o) perform all administrative services and functions of
the Trust and the Fund to the extent administrative services and
functions are not provided to the Trust or the Fund pursuant to the
Fund's investment advisory agreement, distribution agreement, custodian
agreement and transfer agent agreement;
(p) furnish advice and recommendations with respect to
other aspects of the business and affairs of the Fund as the Trust and
Xxxxxxx Management shall determine desirable;
(q) prepare and file with the SEC the semi-annual report
for the Fund on Form N-SAR and all required notices pursuant to Rule
24f-2;
(r) review, and file with the National Association of
Securities Dealers where necessary, marketing materials relating to the
Fund; and
(s) assist in the training and oversight of third parties
used to perform any of the services described herein.
Xxxxxxx Management shall also be available, at its expense, to perform
internal audit examinations no more frequently that once annually at the
request of the Trust. In addition, Xxxxxxx Management will perform or oversee
other services for the Trust as agreed from time to time, including, but not
limited to mailing the annual and semi-annual reports to shareholders of the
Fund; preparing an annual list of shareholders; and mailing notices of
shareholders' meetings, proxies and proxy statements, for all of which the
Trust will pay Xxxxxxx Management's out-of-pocket expenses.
In the performance of its duties hereunder, Xxxxxxx Management will
comply with the provisions of the Declaration of Trust and the Bylaws of the
Trust, will safeguard and promote the welfare of the Trust, and will comply
with the policies that the Trustees may from time to time reasonably determine;
provided that such policies are not in conflict with this Agreement, the
Trust's governing documents, or any applicable statutes or regulations.
3. Allocation of Charges and Expenses.
(A) Xxxxxxx Management. Xxxxxxx Management shall furnish at its
own expense the executive, supervisory and clerical personnel necessary to
perform its obligations under this Agreement. Xxxxxxx Management 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 Trust as well as all
Trustees of the Trust who are affiliated persons of Xxxxxxx Management or any
affiliated corporation of Xxxxxxx Management; provided, however, that unless
otherwise specifically provided, Xxxxxxx Management shall not be obligated to
pay the compensation of any employee of the Trust retained by the Trustees of
the Trust to perform services on behalf of the Trust.
(B) The Trust. The Trust assumes and shall pay or cause to be
paid all other expenses of the Trust 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 of the Fund, all
expenses incurred in connection with issuing and redeeming shares of the Fund,
the costs of custodial services, the cost of initial and ongoing registration
of the shares of the Fund under federal and state securities laws, fees and
out-of-pocket expenses of Trustees who are not affiliated persons of Xxxxxxx
Management or the investment adviser to the Trust or any affiliated corporation
of Xxxxxxx Management or the Investment Adviser, the costs of Trustees'
meetings, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Trust.
4. Compensation of Xxxxxxx Management.
(a) Administration Fee. For the services to be rendered, the
facilities furnished and the expenses assumed by Xxxxxxx Management pursuant
to this Agreement, the Trust shall pay to Xxxxxxx Management compensation at
an annual rate calculated daily and paid monthly equal to 0.15% of the Fund's
average daily net assets. If this Agreement becomes effective subsequent to
the first day of a month or terminates before the last day of a month, Xxxxxxx
Management's compensation for that part of the month in which this Agreement
is in effect shall be prorated in a manner consistent with the calculation of
the fees as set forth above. Payment of Xxxxxxx Management's compensation for
the preceding month shall be made promptly.
(b) Compensation from Transactions. The Trust hereby authorizes
any entity or person associated with Xxxxxxx Management which is a member of
a national securities exchange to effect any transaction on the exchange for
the account of the Trust which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T) (a) (2) (iv).
(c) Survival of Compensation Rates. All rights of compensation
under this Agreement for services performed as of the termination date shall
survive the termination of this Agreement.
5. Activities of Xxxxxxx Management. The services of Xxxxxxx
Management rendered to the Trust are not to be deemed to be exclusive. Xxxxxxx
Management is free to render such services to others and to have other
businesses and interests. It is understood that Trustees, officers, employees
and Shareholders of the Trust are or may be or become interested in Xxxxxxx
Management, as directors, officers, employees and shareholders or otherwise and
that directors, officers, employees and shareholders of Xxxxxxx Management and
its counsel are or may be or become similarly interested in the Trust, and that
Xxxxxxx Management may be or become interested in the Trust as a Shareholder
or otherwise.
6. Confidentiality. Xxxxxxx Management agrees on behalf of
itself and its employees to treat confidentially all records and other
information relative to the Trust and its prior, present or potential
Shareholders and relative to Xxxxxxx Management and its prior, present or
potential customers, except, after prior notification to and approval in
writing by the Trust, which approval shall not be unreasonably withheld and may
not be withheld where Xxxxxxx Management 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 Trust.
7. Representations, Warranties and Covenants.
(a) In the event of equipment failures beyond Xxxxxxx Management's
control, Xxxxxxx Management shall, at no additional expense to the Trust, take
reasonable steps to minimize service interruptions but shall have no liability
with respect to such service interruptions if such reasonable steps are taken.
Xxxxxxx Management shall develop and maintain a plan for recovery from
equipment failures which may include contractual arrangements with appropriate
parties making reasonable provision for emergency use of electronic data
processing equipment to the extent appropriate equipment is available.
(b) Xxxxxxx Management undertakes to comply with all applicable
requirements of the 1933 Act, the 1934 Act, the 1940 Act and any laws, rules
and regulations of governmental authorities having jurisdiction with respect
to the duties to be performed by Xxxxxxx Management hereunder.
(c) Xxxxxxx Management warrants that all software code owned by or
under its control, used in the performance of its obligations under this
contract, will be Year 2000 compliant. For purposes of this paragraph, "Year
2000 Compliant" means that the software will continue to operate beyond
December 31, 1999, without creating any logical or mathematical inconsistencies
concerning any date after December 31, 1999, and without decreasing the
functionality of the system applicable to dates prior to January 1, 2000,
including, but not limited to, making changes to (a) date and data century
recognition; (b) calculations which accommodate same-century and multi-century
formulas and date values; and (c) input/output of date values which reflect
century dates. All changes described in this paragraph will be made at no
additional cost to the Fund.
8. Term; Termination. This Agreement shall become effective with
respect to the Fund on the date hereof and shall remain in full force until the
second anniversary of the effective date set forth in Section 1, unless sooner
terminated as hereinafter provided. This Agreement shall continue in force
from year to year thereafter with respect to the Fund, but only as long as such
continuance is specifically approved for the Fund at least annually in the
manner required by the 1940 Act and the rules and regulations thereunder;
provided, however, that if the continuation of this Agreement is not approved
for the Fund, Xxxxxxx Management may continue to serve in such capacity for the
Fund in the manner and to the extent permitted by the 1940 Act and the rules
and regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment by the Xxxxxxx Management, and may be terminated by the Board of
Trustees of the Trust, by vote of a majority of the outstanding voting
securities of the Trust, or by Xxxxxxx Management, at any time without cause
and without the payment of any penalty on sixty (60) days' written notice by
one party to the other party. This Agreement may also be terminated
immediately, upon delivery of notice of termination and without the payment of
any penalty, by the Trust in the event that the Board of Trustees determines
that Cause for termination exists. The term "Cause" shall include, without
limitation, (i) a material breach of this Agreement or other action or omission
by Xxxxxxx Management which has or is likely to have a material and imminent
adverse effect on the Fund or its shareholders, (ii) any other breach of this
Agreement by Xxxxxxx Management which is not cured within twenty (20) business
days after written notice of such breach from the Board, (iii) the insolvency
or the filing of bankruptcy or reorganization proceedings by or against Xxxxxxx
Management, or (iv) the conviction of Xxxxxxx Management or any director or
executive officer of Xxxxxxx Management of a felony. The terms "assignment"
and "majority of the outstanding voting securities" have the meanings set forth
in the 1940 Act and the rules and regulations thereunder. Termination of this
Agreement shall not affect the right of Xxxxxxx Management to receive payments
on any unpaid balance of the compensation described in Section 4 earned prior
to the effective date of such termination.
9. Amendments. This Agreement or any part hereof may be changed
or waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
10. Certain Records. Xxxxxxx Management shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by Xxxxxxx Management
on behalf of the Trust shall be prepared and maintained at the expense of
Xxxxxxx Management, but shall be the property of the Trust and will be made
available to or surrendered promptly to the Trust on request. In case of any
request or demand for the inspection of such records by another party, Xxxxxxx
Management shall notify the Trust and follow the Trust's instructions as to
permitting or refusing such inspection.
11. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
12. Notices. 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, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party
giving notice: if to the Trust, at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xx.
Xxxxx, Xxxxxxxx 00000; and if to Xxxxxxx Management at 000 Xxxx Xxxx Xxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000.
13. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the
applicable provisions of the 1940 Act. To the extent that the applicable laws
of the Commonwealth of Massachusetts, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same
instrument.
15. Limitation of Trust Liability. The Declaration of Trust
establishing Xxxxxxx Investments, dated July 19, 1993, a copy of which,
together with all amendments thereto (the "Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts, provides that the
name "Xxxxxxx Investments" refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of Xxxxxxx Investments, shall be held
to any personal liability, nor shall result be had to their private property
for the satisfaction of any obligation or claim or otherwise in connection with
the affairs of said Xxxxxxx Investments, but the Trust Estate only shall be
liable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
XXXXXXX INVESTMENTS XXXXXXX ASSET MANAGEMENT, INC.
By: /S/ XXXX X. XXXXXXXX By: /S/ XXXX X. XXXXXX
Xxxx X. Xxxxxxxx, Chairman Xxxx X. Xxxxxx, President
