ADMINISTRATIVE SERVICE AGREEMENT
BETWEEN
QUESTAR FUNDS, INC
IMPERIAL BANKFUND
AND
AMERICAN DATA SERVICES, INC.
[GRAPHIC OMITTED]
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INDEX
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1. DUTIES OF THE ADMINISTRATOR.............................................3
2. COMPENSATION OF THE ADMINISTRATOR.......................................5
3. RESPONSIBILITY AND INDEMNIFICATION......................................5
4. REPORTS.................................................................6
5. ACTIVITIES OF THE ADMINISTRATOR.........................................6
6. RECORDS.................................................................6
7. CONFIDENTIALITY.........................................................6
8. DURATION AND TERMINATION OF THE AGREEMENT...............................6
9. ASSIGNMENT..............................................................7
10. NEW YORK LAWS TO APPLY.................................................7
11. AMENDMENTS TO THIS AGREEMENT............................................7
12. MERGER OF AGREEMENT.....................................................7
13. NOTICES.................................................................7
SCHEDULE A..................................................................8
(A) ADMINISTRATIVE SERVICE FEE:.............................................8
FEE INCREASES............................................................8
(B) EXPENSES................................................................9
(C) STATE REGISTRATION (BLUE SKY) SURCHARGE:................................9
(D) SPECIAL REPORTS................................ERROR! BOOKMARK NOT DEFINED.
(E) SERVICE DEPOSIT................................ERROR! BOOKMARK NOT DEFINED.
SCHEDULE B.........................................ERROR! BOOKMARK NOT DEFINED.
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ADMINISTRATIVE SERVICES AGREEMENT
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AGREEMENT made the 16th day of December, 1998, by and between QueStar Funds,
Inc. Imperial BankFund., a Maryland Corporation, having its principal office and
place of business at the Hauppauge Corporate Center, 000 Xxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxx, Xxx Xxxx 00000 (the "Fund"), and American Data Services, Inc., a
New York corporation having its principal office and place of business at the
Hauppauge Corporate Center, 000 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx
00000 (the "Administrator").
BACKGROUND
WHEREAS, the Fund is a diversified open-end management investment
company registered with the United States Securities and Exchange Commission
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Administrator is a corporation experienced in
providing administrative services to mutual funds and possesses facilities
sufficient to provide such services; and
WHEREAS, the Fund desires to avail itself of the experience,
assistance and facilities of the Administrator and to have the Administrator
perform for the Fund certain services appropriate to the operations of the Fund
and the Administrator is willing to furnish such services in accordance with the
terms hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the Fund and the Administrator hereby agree to
the following:
1. DUTIES OF THE ADMINISTRATOR.
The Administrator agrees that it will provide all administrative
services necessary and customary to administer a mutual fund, as well as all
necessary and customary fund accounting services other than those provided by
the Fund's independent accountants, and will provide the Fund with the necessary
office space, communication and data processing facilities and personnel to
perform such services for the Fund, including:
ADMINISTRATION
(a) Monitor all regulatory (1940 Act and IRS) and prospectus
restrictions for compliance;
(b) Prepare and coordinate the printing of semi-annual and
annual financial statements;
(c) Prepare selected management reports for performance and
compliance analyses as agreed upon by the Fund Adviser and
Administrator from time to time;
(d) Prepare selected financial data required for directors'
meetings as agreed upon by the Fund's Board of Directors and
the Administrator from time to time and coordinate directors
meeting agendas with outside legal counsel to the Fund;
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(e) Determine income and capital gains available for
distribution and calculate distributions required to meet
regulatory, income, and excise tax requirements, to be
reviewed by the Fund's independent public accountants;
(f) Prepare the Fund's federal, state, and local tax returns
to be reviewed by the Fund's independent public accountants;
(g) Prepare and maintain the Fund's operating expense budget
to determine proper expense accruals to be charged to the Fund
in order to calculate it's daily net asset value;
(h) 1940 ACT filings -
In conjunction with the Fund's outside legal counsel the
Administrator will:
-- Prepare the Fund's Form N-SAR reports;
-- Update all financial sections of the Fund's Statement of
Additional Information and coordinate its completion;
-- Update all financial sections of the Fund's prospectus and
coordinate its completion;
-- Update all financial sections of the Fund's proxy
statement and coordinate its completion;
-- Prepare an annual update to Fund's 24f-2 filing
(if applicable);
(i) Monitor services provided by the Fund's custodian bank as
well as any other service providers to the Fund;
(j) Provide appropriate financial schedules (as requested by
the Fund's independent public accountants or SEC examiners),
coordinate the Fund's annual or SEC audit, and provide office
facilities as may be required;
(k) Attend all management and board of directors meetings;
(l) The preparation and filing (filing fee to be paid by the
Fund) of applications and reports as necessary to register or
maintain the Funds registration under the securities or "Blue
Sky" laws of the various states selected by the Fund's Adviser
or its Distributor.
FUND ACCOUNTING
(a) Timely calculate and transmit to NASDAQ the Fund's daily net asset value
and communicate such value to the Fund and its transfer agent. Net asset
value as determined by 1940 Act and prospectus;
(b) Maintain and keep current all books and records of the Fund as required by
Rule 31a-1 under the 1940 Act, as such rule or any successor rule may be
amended from time to time ("Rule 31a-1"), that are applicable to the
fulfillment of Administrator's duties hereunder, as well as any other
documents necessary or advisable for compliance with applicable regulations
as may be mutually agreed to between the Fund and the Administrator.
Without limiting the generality of the foregoing, the Administrator will
prepare and maintain the following records:
--Cash receipts journal
--Cash disbursements journal
--Dividend record
--Purchase and sales - portfolio securities
journals
--Subscription and redemption journals
--Security ledgers
--Broker ledger
--General ledger
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--Daily expense accruals
--Daily income accruals
--Securities and monies borrowed or loaned and
collateral therefore
--Foreign currency journals
--Trial balances
(c) Provide the Fund and its investment adviser with daily cash forecast
report, portfolio valuation, securities transaction report, net asset value
calculation, daily income and expense accrual report, and other standard
operational reports.
The Administrator shall, for all purposes herein, be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR.
In consideration of the services to be performed by the Administrator
as set forth herein, the Administrator shall be entitled to receive compensation
and reimbursement for all reasonable out-of-pocket expenses. The Fund agrees to
pay the Administrator the fees and reimbursement of out-of-pocket expenses as
set forth in the fee schedule attached hereto as Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
(a) The Administrator shall be held to the exercise of reasonable care
in carrying out the provisions of the Agreement, but shall be without liability
to the Fund for any action taken or omitted by it in good faith without
negligence, bad faith, willful misconduct or reckless disregard of its duties
hereunder. It shall be entitled to rely upon and may act upon the accounting
records and reports generated by the Fund, advice of the Fund, or of counsel for
the Fund and upon statements of the Fund's independent accountants, and shall be
without liability for any action reasonably taken or omitted pursuant to such
records and reports or advice, provided that such action is not, to the
knowledge of the Administrator, in violation of applicable federal or state laws
or regulations, and provided further that such action is taken without
negligence, bad faith, willful misconduct or reckless disregard of its duties.
(b) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder except as
hereinafter set forth. Nothing herein contained shall be construed to protect
the Administrator against any liability to the Fund or its security holders to
which the Administrator shall otherwise be subject by reason of willful
misfeasance, bad faith, negligence in the performance of its duties on behalf of
the Fund, reckless disregard of the Administrator's obligations and duties under
this Agreement or the willful violation of any applicable law.
(c) Except as may otherwise be provided by applicable law, neither the
Administrator nor its stockholders, officers, directors, employees or agents
shall be subject to, and the Fund shall indemnify and hold such persons harmless
from and against, any liability for and any damages, expenses or losses incurred
by reason of the inaccuracy of information furnished to the Administrator by the
Fund or its authorized agents or in connection with any error in judgment or
mistake of law or any act or omission in the course of, connected with or
arising out of any services to be rendered hereunder, except by reason of
willful misfeasance, bad faith or negligence in the performance of its duties,
by reason of reckless disregard of the Administrator's obligations and duties
under this Agreement or the willful violation of any applicable law.
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4. REPORTS.
(a) The Fund's Adviser shall provide to the Administrator on a
quarterly basis a report of a duly authorized officer of the Fund representing
that all information furnished to the Administrator during the preceding quarter
was true, complete and correct to the best of its knowledge. The Administrator
shall not be responsible for the accuracy of any information furnished to it by
the Fund's Adviser, and the Fund shall hold the Administrator harmless in regard
to any liability incurred by reason of the inaccuracy of such information.
(b) The Administrator shall provide to the Board of Directors of the
Fund, on a quarterly basis, a report, in such a form as the Administrator and
the Fund's Board of Directors shall from time to time agree, representing that,
to its knowledge, the Fund was in compliance with all requirements of applicable
federal and state law, including without limitation, the rules and regulations
of the Securities and Exchange Commission and the Internal Revenue Service, or
specifying any instances in which the Fund was not so in compliance. Whenever,
in the course of performing its duties under this Agreement, the Administrator
determines, that a violation of applicable law has occurred, or that, to its
knowledge, a possible violation of applicable law may have occurred or, with the
passage of time, could occur, the Administrator shall promptly notify the Fund
counsel of such violation.
5. ACTIVITIES OF THE ADMINISTRATOR.
The Administrator shall be free to render similar services to others so
long as its services hereinunder are not impaired thereby.
6. RECORDS.
The records maintained by the Administrator shall be the property of
the Fund, and shall be surrendered to the Fund, at the expense of the Fund,
promptly upon request by the Fund, provided that all service fees and expenses
charged by the Administrator in the performance of its duties hereunder have
been fully paid to the satisfaction of the Administrator, in the form in which
such accounts and records have been maintained or preserved. The Administrator
agrees to maintain a back-up set of accounts and records of the Fund (which
back-up set shall be updated on at least a weekly basis) at a location other
than that where the original accounts and records are stored. The Administrator
shall assist the Fund's independent auditors, or, upon approval of the Fund, any
regulatory body, in any requested review of the Fund's accounts and records. The
Administrator shall preserve the accounts and records as they are required to be
maintained and preserved by Rule 31a-1.
7. CONFIDENTIALITY.
The Administrator agrees that it will, on behalf of itself and its
officers and employees, treat all transactions contemplated by this Agreement,
and all other information germane thereto, as confidential and such information
shall not be disclosed to any person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THE AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, upon
ninety (90) days prior written notice.
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Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, the Administrator reserves the right to charge for any
other reasonable expenses associated with such termination.
9. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the prior written consent
of the Administrator, or by the Administrator without the prior written consent
of the Fund.
10. NEW YORK LAWS TO APPLY
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such
amendment is in writing and signed by both parties.
12. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing,
shall be deemed to have been given when delivered in person or by certified
mail, return receipt requested, and shall be given to the following addresses
(or such other addresses as to which notice is given):
To the Fund:...... To the Administrator:
Xxxxxxx Xxxxx..... Xxxxxxx Xxxxxx
President......... Vice President
QueStar Funds, Inc. Imperial BankFund American Data Services, Inc.
000 Xxxxx Xxxxxxx, Xxxxx 000 000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
QUESTAR FUNDS, INC. AMERICAN DATA SERVICES, INC.
IMPERIAL BANKFUND
By:____________________________ By:_________________________
Xxxxxxx Xxxxx, President Xxxxxxx Xxxxxx, Vice President
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SCHEDULE A
(A) ADMINISTRATIVE SERVICE FEE:
For the services rendered by the Administrator in its capacity as
administrator, as specified in Paragraph 1. DUTIES OF THE ADMINISTRATOR., the
Fund shall pay the Administrator within ten (10) days after receipt of an
invoice from the Administrator at the beginning of each month, a fee equal to
the greater of:
NOTE: The following fees are per portfolio serviced.
MINIMUM FEE:
CALCULATED FEE WILL BE BASED UPON PRIOR MONTH AVERAGE NET ASSETS:
(No prorating partial months)
EACH PORTFOLIO
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Under $5 million ............................. $1,950
From $5 million to $10 million................ 2,500
From $10 million to $20 million............... 3,000
From $20 million on........................... 3,700
OR,
NET ASSET CHARGE:
--First $75 million of average net assets of portfolio for month 1/12th of
0.175% (17.5 basis points), plus
--Next $75 million of average net assets of portfolio for month 1/12th of
0.125% (12.5 basis points), plus
--Over $150 million of average net assets of portfolio for month 1/12th of
0.075% (7.5 basis points).
MULTI-CLASS PROCESSING CHARGE
$300 per month will be charged for each additional class of stock per
portfolio.
FEE INCREASES
On each annual anniversary date of this Agreement, the fees enumerated above
will be increased by the change in the Consumer Price Index for the Northeast
region (CPI) for the twelve-month period ending with the month preceding such
annual anniversary date.
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(B) EXPENSES.
The Fund shall reimburse the Administrator for any out-of-pocket
expenses , exclusive of salaries, advanced by the Administrator in connection
with but not limited to the printing or filing of documents for the Fund,
travel, telephone, quotation services (currently (1) $0.12 per equity valuation,
$0.60 per bond valuation, and 1.50 for each foreign quotation or manual quote
insertion), facsimile transmissions, stationery and supplies, record storage,
NASDAQ insertion fee ($22 (1) per month), prorata portion of annual SAS 70
review, postage, telex, and courier charges, incurred in connection with the
performance of its duties hereunder. The Administrator shall provide the Fund
with a monthly invoice of such expenses and the Fund shall reimburse the
Administrator within fifteen (15) days after receipt thereof.
(1) Rate subject to change on 30 days notice.
(C) STATE REGISTRATION (BLUE SKY) SURCHARGE:
The fees enumerated in paragraph (a) above include the initial state
registration, renewal and maintenance of registrations (as detailed in Paragraph
1(l) DUTIES OF THE ADMINISTRATOR) for three (3) states. Each additional state
registration requested will be subject to the following fees:
Initial registration ............... $295.00
Registration renewal ............... $150.00
Sales reports (if required) ........ $ 25.00
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