AMENDED AND RESTATED
OPERATING SERVICES AGREEMENT
XXXXXX MUTUAL FUNDS, INC.
This Agreement, made and entered into as of the first day of November 2007,
amends and restates the Agreement entered into as of the 30th day of November,
1999, by and between Xxxxxx Mutual Funds, Inc., a Maryland corporation (the
"Fund"), and Edgemoor Capital Management Inc., (now known as Edgemoor Investment
Advisors, Inc.), a Maryland corporation (hereinafter referred to as "Advisor").
WHEREAS, the Fund is an open-end management investment company, registered
under the Investment Company Act of 1940, as amended (the "Act"), and authorized
to issue shares representing interests in the Xxxxxx Focus Fund (the
"Portfolio"); and
WHEREAS, Advisor is registered as an investment advisor under the Investment
Advisers Act of 1940, and engages in the business of asset management and the
provision of certain other administrative and recordkeeping services in
connection therewith; and
WHEREAS, the Fund wishes to engage Advisor, to provide, or arrange for the
provision of, certain operational services which are necessary for the
day-to-day operations of the Portfolio in the manner and on the terms and
conditions hereinafter set forth, and Advisor wishes to accept such engagement;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
hereinafter contained, the Fund and Advisor agree as follows:
1. Obligations of Advisor
(a) Services. The Fund hereby retains Advisor to provide, or, upon
receipt of approval of the Fund, arrange for other companies to provide, the
following services to the Portfolio in the manner and to the extent that such
services are reasonably necessary for the operation of the Portfolio
(collectively, the "Services"):
(1) accounting services and functions, including costs and expenses of
any independent public accountants;
(2) non-litigation related legal and compliance services, including the
expenses of maintaining registration and qualification of the Fund and the
Portfolio under federal, state and any other applicable laws and regulations;
(3) dividend disbursing agent, dividend reinvestment agent, transfer
agent, and registrar services and functions (including answering inquiries
related to shareholder Portfolio accounts);
(4) custodian and depository services and functions;
(5) distribution, marketing, and/or underwriting services;
(6) independent pricing services;
(7) preparation of reports describing the operations of the Portfolio,
including the costs of providing such reports to broker-dealers, financial
institutions and other organizations which render services and assistance in
connection with the distribution of shares of the Portfolio;
(8) sub-accounting and recordkeeping services and functions (other than
those books and records required to be maintained by Advisor under the
Investment Advisory Agreement between the Fund and Advisor), including
maintenance of shareholder records and shareholder information concerning the
status of their Portfolio accounts by investment Advisors, broker-dealers,
financial institutions, and other organizations on behalf of Advisor;
(9) shareholder and board of directors communication services,
including the costs of preparing, printing and distributing notices of
shareholders' meetings, proxy statements, prospectuses, statements of additional
information, Portfolio reports, and other communications to the Fund's Portfolio
shareholders, as well as all expenses of shareholders' and board of directors'
meetings, including the compensation and reimbursable expenses of the directors
of the Fund;
(10) other day-to-day administrative services, including the costs of
designing, printing, and issuing certificates representing shares of the
Portfolio, and premiums for the fidelity bond maintained by the Fund pursuant to
Section 17(g) of the Act and rules promulgated thereunder (except for such
premiums as may be allocated to third parties, as insureds thereunder).
(b) Exclusions from Service. Notwithstanding the provisions of
Paragraph 1(a) above, the Services shall not include and Advisor will not be
responsible for any of the following:
(1) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Fund or the Portfolio in connection with securities
transactions to which the Fund or the Portfolio is a party or in connection with
securities owned by the Fund or the Portfolio;
(2) the interest on indebtedness, if any, incurred by the Fund or the
Portfolio;
(3) the taxes, including franchise, income, issue, transfer, business
license, and other corporate fees payable by the Fund or the Portfolio to
federal, state, county, city, or other governmental agents;
(4) the expenses, including fees and disbursements of counsel, in
connection with litigation by or against the Fund or the Portfolio;
(5) acquired fund fees and expenses; and
(6) any other extraordinary expense of the Fund or Portfolio.
(c) Books and Records. All books and records prepared and maintained by
Advisor for the Fund under this Agreement shall be the property of the Fund and,
upon request therefor, Advisor shall surrender to the Fund such of the books and
records so requested.
(d) Staff and Facilities. Advisor assumes and shall pay for maintaining the
staff, personnel, space, equipment and facilities necessary to perform its
obligations under this Agreement.
2. Obligations of the Fund
(a) Fee. The Fund will pay to the Advisor on the last day of each month an
annual fee equal to 0.25% of the average net assets of the Portfolio, such fee
to be computed daily based upon the net asset value of the Portfolio as
determined by a valuation made in accordance with the Fund's procedure for
calculating Portfolio net asset value as described in the Fund's Prospectus
and/or Statement of Additional Information.
(b) Information. The Fund will, from time to time, furnish or otherwise
make available to Advisor such information relating to the business and affairs
of the Portfolio as Advisor may reasonably require in order to discharge its
duties and obligations hereunder.
3. Term. This Agreement shall remain in effect initially for two years
after its execution, and from year to year thereafter provided such continuance
is approved at least annually by the vote of a majority of the directors of the
Fund who are not parties to this Agreement or "interested persons" (as defined
in the Act) of any such party, which vote must be cast in person at a meeting
called for the purpose of voting on such approval; provided, however, that:
(a) the Fund, at any time and without the payment of any penalty terminate
this Agreement upon 60 days written notice to Advisor;
(b) the Agreement shall immediately terminate in the event of its assignment
(within the meaning of the Act and the Rules thereunder); and
(c) Advisor may terminate this Agreement without payment of penalty on 60
days written notice to the Fund.
4. Miscellaneous
(a) Performance Review. Advisor will permit representatives of the Fund,
including the Fund's independent auditors, to have reasonable access to the
personnel and records of Advisor in order to enable such representatives to
monitor the quality of services being provided and the level of fees due Advisor
pursuant to this Agreement. In addition, Advisor shall promptly deliver to the
board of directors of the Fund such information as may reasonably be requested
from time to time to permit the board of directors to make an informed
determination regarding continuation of this Agreement and the payments
contemplated to be made hereunder.
(b) Notices. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at the principal
office of such party.
(c) Choice of Law. This Agreement shall be construed in accordance with the
laws of the State of placeStateMaryland and the applicable provisions of the
Act. To the extent the applicable law of the State of StateplaceMaryland or any
of the provisions herein conflict with the applicable provisions of the Act, the
latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
Xxxxxx Mutual Funds, Inc.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President
Edgemoor Investment Advisors, Inc.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President
