Exhibit 9.40
ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT made as of November 18, 1996, by and between the XXXXXXXX-
XXXXXXXXX MUTUAL FUNDS, a Delaware business trust (the "Trust"), and XXXXXXXX-
XXXXXXXXX CAPITAL MANAGEMENT, a California limited partnership (the "Company").
WHEREAS, the Trust is engaged in business as an open-end management
investment company of the series type and registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Company to provide certain
administrative services to the Trust and each of its several series, set forth
in Schedule A or hereafter organized (the "Portfolios"), in the manner and on
the terms and conditions hereafter set forth;
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter set forth, the parties intending to be legally bound, do
hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE COMPANY.
The Company shall oversee the administration of the Trust's and each
Portfolio's business and affairs as set forth herein and shall provide all
administrative services required for effective administration of the Trust and
the Portfolios which are not provided by the Trust's adviser, distributor,
administrator, custodian, transfer agents, accounting agents, independent
accountants and legal counsel. In connection therewith, the Company shall:
1.1 AGENTS. Assist the Trust in selecting, coordinating the
activities of, and negotiating with any person or agent engaged by the Trust,
including the Trust's consultants, transfer agent, sub-transfer agents,
intermediaries with respect to mutual fund alliance programs, dividend
disbursing agent, co-administrator, independent accountants, and independent
legal counsel;
1.2 TRUSTEES AND OFFICERS. Authorize and permit the Company's
officers and employees that may be elected or appointed as trustees or officers
of the Trust to serve in such capacities, without remuneration from or
additional cost to the Trust.
1.3 SHAREHOLDER INQUIRIES. Respond to all inquires from Trust
shareholders and/or their registered representative, or otherwise answer
communications from Trust shareholders and/or the registered representative if
such inquiries or communications are directed to the Company. If any such
inquiry or communication would be more properly answered by one of the agents
listed in Section 1.1 above, the Administrator will coordinate, as needed, the
provision of their response.
1.4 PERFORMANCE CALCULATION. Calculate performance data of
Trusts for dissemination to information services covering the investment company
industry, shareholders, and appropriate regulatory agencies.
1.5 REPORTS TO THE TRUST. Furnish to or place at the disposal
of the Trust such information, reports, evaluations, analyses, and opinions
relating to its administrative functions as may be requested by the Board of
Trustees of the Trust or as the Company deems desirable. The Company also will
assist in the preparation of agendas and other materials for meetings of the
Trust's Board of Trustees and will attend such meetings.
1.6 REPORTS AND FILINGS. Provide appropriate assistance in the
development and/or preparation of all reports, prospectuses, proxy statements,
and communications by the Trust to Trust shareholders, and coordinate the layout
and printing of publicly disseminated prospectuses and reports.
1.7 OFFICE AND OTHER FACILITIES. Furnish, without cost to the
Trust, or provide and pay the cost of, such office facilities, furnishings, and
office equipment as are necessary for the performance of the Company's duties to
the Trust under this Agreement.
2. OWNERSHIP AND CONFIDENTIALITY OF RECORDS.
All records required to be maintained and preserved by the Trust, pursuant
to rules or regulations of the Securities and Exchange Commission under Section
31(a) of the 1940 Act, that are maintained and preserved by the Company on
behalf of the Trust, are the property of the Trust and shall be surrendered by
the Company promptly on request by the Trust. The Company shall not disclose or
use any record or information obtained pursuant to this Agreement in any manner
whatsoever except as expressly authorized by this Agreement and applicable law.
The Company shall keep confidential any information obtained in connection with
its duties hereunder and shall disclose such information only if the Trust has
authorized such disclosure or if such disclosure is expressly required by
applicable law or federal or state regulatory authorities.
3. STANDARD OF CARE; INDEMNIFICATION.
3.1 The Company shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. The Company shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Trusts) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
Any person, even though also an officer, partner, employee or agent of the
Company, who may be or become an officer, trustee, employee or agent of the
Trust or who may act on any business of the Trust (other than services or
business in connection with the duties of the Company hereunder or the duties of
any affiliate of the Company pursuant to any other agreement with the Company)
shall be considered to be rendering such services to or acting solely for the
Trust and not as an officer, partner, employee or agent or one under the control
or direction of the Company even though paid by the Company.
3.2 The Trust shall indemnify the Company, its officers,
employees and partners, and hold them harmless from and against any and all
actions, suits and claims, and from and against all losses, damages (excluding
consequential, punitive or other indirect damages), costs, charges, reasonable
counsel fees and disbursements, payments, expenses, and liabilities (including
reasonable investigation expenses) arising out of any action taken or thing done
by them in performing the services in accordance with the above standards.
3.3 In order that the indemnification provisions contained in
this Article 3. shall apply, however, it is understood that if in any case the
Trust may be asked to indemnify or save the Company, its officers, employees and
partners, harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Company will use all reasonable care to identify and notify
the Trust promptly concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification against the Trust.
The Trust shall have the option to defend them against any claim which may be
subject to this indemnification. In the event that the Trust so elects, it will
so notify the parties and thereupon the Trust shall take over complete defense
of the claim with counsel reasonably acceptable to the parties, and the parties
shall in such situation initiate no further legal or other expenses for which
they shall seek indemnification under this Article. An indemnified party shall
in no case confess any claim or make any compromise in any case in which the
Trust will be asked to indemnify the party except with the Trust's prior written
consent.
4. INDEMNIFICATION BY THE COMPANY.
4.1 The Company shall indemnify the Trust and the Portfolios,
their officers and trustees and hold them harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages (excluding consequential, punitive or other
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indirect damages), costs, charges, reasonable counsel fees and disbursements,
payments, expenses, and liabilities (including reasonable investigation
expenses) arising directly or indirectly out of the services rendered hereunder
and arising or based upon the willful misfeasance, bad faith, or negligence of
the Company, its partners, officers, employees, and agents in the performance of
its or their duties on behalf of the Trust and the Portfolios.
4.2 In order that the indemnification provision contained herein
shall apply, however, it is understood that if in any case the Company may be
asked to indemnify or hold the Trust and the Portfolios, their officers, and
trustees harmless, the Company shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Trust and the Portfolios will use all reasonable care to
identify and notify the Company promptly concerning any situation which presents
or appears likely to present the probability of such a claim for indemnification
against the Company. The Company shall have the option to defend the Trust
against any claim which may be the subject to this indemnification. In the
event that the Company so elects, it will so notify the Trust and thereupon the
Company shall take over complete defense of the claim with counsel reasonably
acceptable to the parties, and the parties shall in such situation initiate no
further legal or other expenses for which they shall seek indemnification under
this Article. An indemnified party shall in no case confess any claim or make
any compromise in any case in which the Company will be asked to indemnify the
party except with the Company's prior written consent.
5. COMPENSATION AND EXPENSES.
5.1 The Trust will compensate the Company for the Administrative
Services in accordance with the fees agreed upon from time to time between the
parties hereto. Such fees do not include out-of-pocket and other third-party
disbursements of the Company for which the Trusts shall reimburse the Company
separately. The Company may at any time and from time to time waive any part or
all of any fee payable to it pursuant to this Agreement.
5.2 The fee shall accrue daily and the sum of the accruals shall
be paid monthly on or before the fifth (5th) business day of the month. The fee
for the period from the effective date of this Agreement with respect to a
Portfolio to the end of the initial month shall be prorated according to the
proportion that such period bears to the full month period. Upon any
termination of this Agreement before the end of any month, the fee for such
period shall be prorated according to the proportion which such period bears to
the full month period.
5.3 The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person or persons as the
Company may believe to be particularly suited to assist it in performing any of
the services under this Agreement. Such person or persons may be affiliates of
the Company, third-party service providers, or officers and employees who are
employed by both the Company and the Trust; provided, however, that the Company
shall be as fully responsible to each Trust for the acts and omissions of any
such subcontractor as it is for its own acts and omissions. Except as herein
provided, the compensation of such person or persons shall be paid by the
Company and no obligation shall be incurred on behalf of the Trust or the
Portfolios in such respect.
6. ASSIGNMENT.
Except as provided herein, neither this Agreement nor any of the rights or
obligations under this Agreement may be assigned by either party without the
written consent of the other party.
7. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall be effective from November 18, 1996, and shall
continue until June 1, 1997. Thereafter, the Agreement will continue annually,
provided such continuance is specifically approved by a vote of a majority of
those members of the Board who are not "interested persons" of any party to this
Agreement, as such term is defined in the 1940 Act. This Agreement may be
terminated by any of the parties, without the payment of any penalty, upon sixty
(60) days' notice. The termination date for all original or after-added
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Portfolios which are or become a party to this Agreement shall be coterminous,
except that Portfolios that merge or dissolve during the term shall cease to be
a party on the effective date of such merger or dissolution.
Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and materials will be borne by
the Trusts or the appropriate Trust.
8. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by a written agreement executed by both parties.
9. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of California.
10. NOTICES.
Except as otherwise specifically provided herein, notices and other
writings delivered or mailed postage prepaid to:
THE FUND: Xxxxxxxx-Xxxxxxxxx Mutual Trusts
000 Xxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, XX 00000
THE COMPANY: Xxxxxxxx-Xxxxxxxxx Services Company
000 Xxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, XX 00000
or to such other address as the Trust or the Company may hereafter specify,
shall be deemed to have been properly delivered or given hereunder.
11. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
12. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
13. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder or
any damages resulting therefrom to the Trust as a result of work stoppage, power
or other mechanical failure, natural disaster, governmental action,
communication disruption or other impossibility of performance.
14. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by either party without the prior
written consent of the other party. Nothing in this Article 14 shall prevent
the Company from delegating its responsibilities to another entity to the extent
provided herein.
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15. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
16. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE TRUST.
The execution and delivery of this Agreement have been authorized by the
trustees of the Trust and signed by an authorized officer of the Trust, acting
as such, and neither such authorization by such trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the trustees or
shareholders of the Trust, but bind only the appropriate property of the Trust,
or any Portfolio, as provided in the Declaration of Trust. The debts,
liabilities and obligations with respect to each Portfolio shall be enforceable
against the assets and property of such Portfolio only, and not against the
assets and property of any other Portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
THE TRUST THE COMPANY
XXXXXXXX-XXXXXXXXX XXXXXXXX-XXXXXXXXX
MUTUAL FUNDS CAPITAL MANAGEMENT
By:/s/E. Xxxxx Xxxxx, Jr. By:/s/E. Xxxxx Xxxxx, Jr.
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Its: Secretary Its: General Counsel
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