ADMINISTRATIVE AGREEMENT
BETWEEN
XXXXX XXX FLOATING RATE INCOME FUND
AND
XXXXX XXX & FARNHAM INCORPORATED
XXXXX XXX FLOATING RATE INCOME FUND, a Massachusetts business
trust registered under the Securities Act of 1933 ("1933 Act") and
the Investment Company Act of 1940 ("1940 Act") (the "Fund"),
hereby appoints XXXXX XXX & FARNHAM INCORPORATED, a Delaware
corporation, of Chicago, Illinois ("Administrator"), to furnish
certain administrative services with respect to the Fund.
The Fund and Administrator hereby agree that:
1. Administrative Services. Subject to the terms of this
Agreement and the supervision and control of the Fund's Board of
Trustees ("Trustees"), Administrator shall provide the following
services with respect to the Fund:
(a) Preparation and maintenance of the Fund's registration
statement with the Securities and Exchange Commission ("SEC");
(b) Preparation and periodic updating of the prospectus and
statement of additional information for the Fund
("Prospectus");
(c) Preparation, filing with appropriate regulatory authorities,
and dissemination of various reports for the Fund, including
but not limited to semiannual reports to shareholders under
Section 30(d) of the 1940 Act, annual and semiannual reports
on Form N-SAR, and notices pursuant to Rule 24f-2;
(d) Arrangement for all meetings of shareholders, including the
collection of all information required for preparation of
proxy statements, the preparation and filing with appropriate
regulatory agencies of such proxy statements, the supervision
of solicitation of shareholders and shareholder nominees in
connection therewith, tabulation (or supervision of the
tabulation) of votes, response to all inquiries regarding such
meetings from shareholders, the public and the media, and
preparation and retention of all minutes and all other records
required to be kept in connection with such meetings;
(e) Maintenance and retention of all Fund charter documents and
the filing of all documents required to maintain the Fund's
status as a Massachusetts business trust and as a registered
open-end investment company;
(f) Arrangement and preparation and dissemination of all materials
for meetings of the Board of Trustees and committees thereof
and preparation and retention of all minutes and other records
thereof;
(g) Preparation and filing of the Fund's federal, state, and local
income tax returns and calculation of any tax required to be
paid in connection therewith;
(h) Calculation of all Fund expenses and arrangement for the
payment thereof;
(i) Calculation of and arrangement for payment of all income,
capital gain, and other distributions to shareholders of the
Fund;
(j) Determination, after consultation with the officers of the
Fund, of the jurisdictions in which shares of beneficial
interest of the Fund ("Shares") shall be registered or
qualified for sale, or may be sold pursuant to an exemption
from such registration or qualification, and preparation and
maintenance of the registration or qualification of the Shares
for sale under the securities laws of each such jurisdiction;
(k) Provision of the services of persons who may be appointed as
officers of the Fund by the Board of Trustees (it is agreed
that some person or persons may be officers of both the Fund
and the Administrator, and that the existence of any such dual
interest shall not affect the validity of this Agreement
except as otherwise provided by specific provision of
applicable law);
(l) Preparation and, subject to approval of the Fund's Chief
Financial Officer, dissemination of the Fund's quarterly
financial information to the Board of Trustees and preparation
of such other reports relating to the business and affairs of
the Fund as the officers and Board of Trustees may from time
to time reasonably request;
(m) Administration of the Fund's Code of Ethics and periodic
reporting to the Board of Trustees of Trustee and officer
compliance therewith;
(n) Provision of internal legal, accounting, compliance, audit,
and risk management services and periodic reporting to the
Board of Trustees with respect to such services;
(o) Negotiation, administration, and oversight of third party
services to the Fund including, but not limited to, custody,
tax, transfer agency, disaster recovery, audit, and legal
services;
(p) Negotiation and arrangement for insurance desired or required
of the Fund and administering all claims thereunder;
(q) Response to all inquiries by regulatory agencies, the press,
and the general public concerning the business and affairs of
the Fund, including the oversight of all periodic inspections
of the operations of the Fund and its agents by regulatory
authorities and responses to subpoenas and tax levies;
(r) Handling and resolution of any complaints registered with the
Fund by shareholders, regulatory authorities, and the general
public;
(s) Monitoring legal, tax, regulatory, and industry developments
related to the business affairs of the Fund and communicating
such developments to the officers and Board of Trustees as
they may reasonably request or as the Administrator believes
appropriate;
(t) Administration of operating policies of the Fund and
recommendation to the officers and the Board of Trustees of
the Fund of modifications to such policies to facilitate the
protection of shareholders or market competitiveness of the
Fund and to the extent necessary to comply with new legal or
regulatory requirements;
(u) Responding to surveys conducted by third parties and reporting
of Fund performance and other portfolio information; and
(v) Filing of claims, class actions involving portfolio
securities, and handling administrative matters in connection
with the litigation or settlement of such claims.
2. Use of Affiliated Companies and Subcontractors. In
connection with the services to be provided by Administrator under
this Agreement, Administrator may, to the extent it deems
appropriate, and subject to compliance with the requirements of
applicable laws and regulations and upon receipt of approval of
the Trustees, make use of (i) its affiliated companies and their
directors, trustees, officers, and employees and (ii)
subcontractors selected by Administrator, provided that
Administrator shall supervise and remain fully responsible for the
services of all such third parties in accordance with and to the
extent provided by this Agreement. All costs and expenses
associated with services provided by any such third parties shall
be borne by Administrator or such parties.
3. Instructions, Opinions of Counsel, and Signatures. At
any time Administrator may apply to a duly authorized agent of the
Fund for instructions regarding the Fund, and may consult counsel
for the Fund or its own counsel, in respect of any matter arising
in connection with this Agreement, and it shall not be liable for
any action taken or omitted by it in good faith in accordance with
such instructions or with the advice or opinion of such counsel.
Administrator shall be protected in acting upon any such
instruction, advice, or opinion and upon any other paper or
document delivered by the Fund or such counsel believed by
Administrator to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any
change of authority of any officer or agent of the Fund, until
receipt of written notice thereof from the Fund.
4. Expenses Borne by Fund. Except to the extent expressly
assumed by Administrator herein or under a separate agreement
between the Fund and Administrator and except to the extent
required by law to be paid by Administrator, the Fund shall pay
all costs and expenses incidental to its organization, operations
and business. Without limitation, such costs and expenses shall
include but not be limited to:
(a) All charges of depositories, custodians and other agencies for
the safekeeping and servicing of its cash, securities, and
other property;
(b) All charges for equipment or services used for obtaining price
quotations or for communication between Administrator or the
Fund and the custodian, transfer agent or any other agent
selected by the Fund;
(c) All charges for investment advisory, portfolio management, and
accounting services provided to the Fund by the Administrator,
or any other provider of such services;
(d) All charges for services of the Fund's independent auditors
and for services to the Fund by legal counsel;
(e) All compensation of Trustees, other than those affiliated with
Administrator, all expenses incurred in connection with their
services to the Fund, and all expenses of meetings of the
Trustees or committees thereof;
(f) All expenses incidental to holding meetings of shareholders,
including printing and of supplying each record-date
shareholder with notice and proxy solicitation material, and
all other proxy solicitation expenses;
(g) All expenses of printing of annual or more frequent revisions
of the Fund's prospectus(es) and of supplying each then-
existing shareholder with a copy of a revised prospectus;
(h) All expenses related to preparing and transmitting
certificates representing the Fund's shares;
(i) All expenses of bond and insurance coverage required by law or
deemed advisable by the Board of Trustees;
(j) All brokers' commissions and other normal charges incident to
the purchase, sale, or lending of Fund securities;
(k) All taxes and governmental fees payable to federal, state or
other governmental agencies, domestic or foreign, including
all stamp or other transfer taxes;
(l) All expenses of registering and maintaining the registration
of the Fund under the 1940 Act and, to the extent no exemption
is available, expenses of registering the Fund's shares under
the 1933 Act, of qualifying and maintaining qualification of
the Fund's shares for sale under securities laws of various
states or other jurisdictions and of registration and
qualification of the Fund under all other laws applicable to
the Fund or its business activities;
(m) All interest on indebtedness, if any, incurred by the Fund;
and
(n) All fees, dues and other expenses incurred by the Fund in
connection with membership of the Fund in any trade
association or other investment company organization.
5. Allocation of Expenses Borne by the Fund. Any expenses
borne by the Fund that are attributable solely to the
organization, operation or business of the Fund shall be paid
solely out of Fund assets.
6. Expenses Borne by Administrator. Administrator at its
own expense shall furnish all executive and other personnel,
office space, and office facilities required to render the
services set forth in this Agreement. However, Administrator
shall not be required to pay or provide any credit for services
provided by the Fund's custodian or other agents without
additional cost to the Fund.
In the event that Administrator pays or assumes any expenses
of the Fund not required to be paid or assumed by Administrator
under this Agreement, Administrator shall not be obligated hereby
to pay or assume the same or similar expense in the future;
provided that nothing contained herein shall be deemed to relieve
Administrator of any obligation to the Fund under any separate
agreement or arrangement between the parties.
7. Administration Fee. For the services rendered,
facilities provided, and charges assumed and paid by Administrator
hereunder, the Fund shall pay to Administrator out of the assets
of the Fund fees at the annual rate of 0.25%. The administrative
fee shall accrue on each calendar day, and shall be payable
monthly on the first business day of the next succeeding calendar
month. The daily fee accrual shall be computed by multiplying the
fraction of one divided by the number of days in the calendar year
by the applicable annual rate of fee, and multiplying this product
by the net assets of the Fund, determined in the manner
established by the Board of Trustees, as of the close of business
on the last preceding business day on which the Fund's net asset
value was determined.
8. State Expense Limitation. If for any fiscal year, the
Fund's aggregate operating expenses ("Aggregate Operating
Expenses") exceed the applicable percentage expense limit imposed
under the securities law and regulations of any state in which
Shares of the Fund are qualified for sale (the "State Expense
Limit"), the Administrator shall pay the Fund the amount of such
excess. For purposes of this State Expense Limit, Aggregate
Operating Expenses shall (a) include (i) any fees or expense
reimbursements payable to Administrator pursuant to this
Agreement, and (ii) to the extent the Fund invests all or a
portion of its assets in another investment company registered
under the 1940 Act, the pro rata portion of that company's
operating expenses allocated to the Fund, and (iii) any
compensation payable to Administrator pursuant to any separate
agreement relating to the Fund's investment operations and
portfolio management and (iv) other expenses incurred in the
ordinary course of business, but (b) exclude any interest, taxes,
brokerage commissions, and other normal charges incident to the
purchase, sale or loan of securities, commodity interests or other
investments held by the Fund, litigation and indemnification
expense, and other extraordinary expenses not incurred in the
ordinary course of business. Except as otherwise agreed to by the
parties or unless otherwise required by the law or regulation of
any state, any reimbursement by Administrator to the Fund under
this section shall not exceed the administrative fee payable to
Administrator by the Fund under this Agreement.
Any payment to the Fund by Administrator hereunder shall be
made monthly, by annualizing the Aggregate Operating Expenses for
each month as of the last day of the month. An adjustment for
payments made during any fiscal year of the Fund shall be made on
or before the last day of the first month following such fiscal
year of the Fund if the Annual Operating Expenses for such fiscal
year (i) do not exceed the State Expense Limitation or (ii) for
such fiscal year there is no applicable State Expense Limit.
9. Non-Exclusivity. The services of Administrator to the
Fund hereunder are not to be deemed exclusive and Administrator
shall be free to render similar services to others.
10. Standard of Care. Neither Administrator, nor any of its
directors, officers or stockholders, agents or employees shall be
liable to the Fund or its shareholders for any action taken or
thing done by it or its subcontractors or agents on behalf of the
Fund in carrying out the terms and provisions of this Agreement if
done in good faith and without negligence or misconduct on the
part of Administrator, its subcontractors, or agents.
11. Indemnification. The Fund shall indemnify and hold
Administrator and its controlling persons, if any, harmless from
any and all claims, actions, suits, losses, costs, damages, and
expenses, including reasonable expenses for counsel, incurred by
it in connection with its acceptance of this Agreement, in
connection with any action or omission by it or its agents or
subcontractors in the performance of its duties hereunder to the
Fund, or as a result of acting upon any instruction believed by it
to have been executed by a duly authorized agent of the Fund or as
a result of acting upon information provided by the Fund in form
and under policies agreed to by Administrator and the Fund,
provided that: (i) this indemnification shall not apply to actions
or omissions constituting negligence or misconduct of
Administrator or its agents or subcontractors, including but not
limited to willful misfeasance, bad faith, or gross negligence in
the performance of their duties, or reckless disregard of their
obligations and duties under this Agreement; and (ii)
Administrator shall give the Fund prompt notice and reasonable
opportunity to defend against any such claim or action in its own
name or in the name of Administrator.
Administrator shall indemnify and hold harmless the Fund from
and against any and all claims, demands, expenses and liabilities
which the Fund may sustain or incur arising out of, or incurred
because of, the negligence or misconduct of Administrator or its
agents or subcontractors, provided that the Fund shall give
Administrator prompt notice and reasonable opportunity to defend
against any such claim or action in its own name or in the name of
the Fund.
12. Effective Date, Amendment, and Termination. This
Agreement shall become effective as of the date hereof and, unless
terminated as hereinafter provided, shall remain in effect
thereafter from year to year so long as such continuance is
specifically approved with respect to the Fund at least annually
by a majority of the Trustees who are not interested persons of
the Fund or Administrator.
This Agreement may be modified or amended from time to time
by mutual agreement between the Administrator and the Fund and may
be terminated by Administrator or the Fund by at least sixty (60)
days' written notice given by the terminating party to the other
party. Upon termination, the Fund shall pay to Administrator such
compensation as may be due under this Agreement as of the date of
such termination and shall reimburse Administrator for its costs,
expenses, and disbursements payable under this Agreement to such
date. In the event that, in connection with a termination, a
successor to any of the duties or responsibilities of
Administrator hereunder is designated by the Fund by written
notice to Administrator, upon such termination Administrator shall
promptly, and at the expense of the Fund with respect to which
this Agreement is terminated, transfer to such successor all
relevant books, records, and data established or maintained by
Administrator under this Agreement and shall cooperate in the
transfer of such duties and responsibilities, including provision,
at the expense of the Fund, for assistance from Administrator
personnel in the establishment of books, records, and other data
by such successor.
13. Assignment. Any interest of Administrator under this
Agreement shall not be assigned either voluntarily or
involuntarily, by operation of law or otherwise, without the prior
written consent of the Fund.
14. Books and Records. Administrator shall maintain, or
oversee the maintenance by such other persons as may from time to
time be approved by the Board of Trustees to maintain, the books,
documents, records, and data required to be kept by the Fund under
the 1940 Act, the laws of the Commonwealth of Massachusetts or
such other authorities having jurisdiction over the Fund or as may
otherwise be required for the proper operation of the business and
affairs of the Fund (other than those required to be maintained by
any investment adviser retained by the Fund in accordance with
Section 15 of the 1940 Act).
Administrator will periodically send to the Fund all books,
documents, records, and data of the Fund that are no longer needed
for current purposes or required to be retained as set forth
herein. Administrator shall have no liability for loss or
destruction of said books, documents, records, or data after they
are returned to the Fund.
Administrator agrees that all such books, documents, records,
and data which it maintains shall be maintained in accordance with
Rule 31a-3 of the 1940 Act and that any such items maintained by
it shall be the property of the Fund. Administrator further
agrees to surrender promptly to the Fund any such items it
maintains upon request, provided that the Administrator shall be
permitted to retain a copy of all such items. Administrator
agrees to preserve all such items maintained under Rule 31a-1 for
the period prescribed under Rule 31a-2 of the 1940 Act.
The Fund shall furnish or otherwise make available to
Administrator such copies of the financial statements, proxy
statements, reports, and other information relating to the
business and affairs of the Fund as Administrator may, at any time
or from time to time, reasonably require in order to discharge its
obligations under this Agreement.
15. Non-Liability of Trustees and Shareholders. Any
obligation of the Fund hereunder shall be binding only upon the
assets of the Fund and shall not be binding upon any Trustee,
officer, employee, agent or shareholder of the Fund. Neither the
authorization of any action by the Trustees or shareholders of the
Fund nor the execution of this Agreement on behalf of the Fund
shall impose any liability upon any Trustee or any shareholder.
16. Use of Administrator's Name. The Fund may use its name
or any other name derived from the name "Xxxxx Xxx & Xxxxxxx" only
for so long as this Agreement or any extension, renewal, or
amendment hereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the
business of Administrator as it relates to the services it has
agreed to furnish under this Agreement. At such time as this
Agreement or any extension, renewal or amendment hereof, or such
other similar agreement shall no longer be in effect, the Fund
will cease to use any name derived from the name "Xxxxx Xxx &
Farnham" or otherwise connected with Administrator, or with any
organization which shall have succeeded to Administrator's
business herein described.
17. References and Headings. In this Agreement and in any
such amendment, references to this Agreement and all expressions
such as "herein," "hereof," and "hereunder" shall be deemed to
refer to this Agreement as amended or affected by any such
amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this Agreement.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
Dated: November _, 1998
XXXXX XXX FLOATING RATE INCOME FUND
Attest: By:_____________________________
Xxxxxx X. Xxxxx
___________________ President
Xxxxxxxxx X. Xxxxxxx
Assistant Secretary
XXXXX XXX & FARNHAM INCORPORATED
Attest: By:____________________________
Xxxxxx X. Xxxxx
President, Mutual Funds
________________________ division
Xxxxxxxxx X. Xxxxxxx
Assistant Secretary
