EXHIBIT 9.1
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 31st day of December, 1995, by and
between Xxx Xxxxxxx Funds, Inc., a Maryland Corporation (the
"Corporation"), and Sunstone Financial Group, Inc., a Wisconsin
Corporation (the "Administrator").
WHEREAS, the Corporation is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the "Act") and is
authorized to issue shares of common stock (the "Shares") in separate
series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Corporation and the Administrator desire to enter into
an agreement pursuant to which the Administrator shall provide
administration and fund accounting services to such investment portfolios
of the Corporation as are listed on Schedule A hereto and any additional
investment portfolios the Corporation and Administrator may agree upon and
include on Schedule A as such Schedule may be amended from time to time
(such investment portfolios and any additional investment portfolios are
individually referred to as a "Fund" and collectively the "Funds").
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. Appointment
The Corporation hereby appoints the Administrator as administrator
and fund accountant of the Funds for the period and on the terms set forth
in this Agreement. The Administrator accepts such appointment and agrees
to render the services herein set forth, for the compensation herein
provided.
2. Services as Administrator
(a) Subject to the direction and control of the Corporation's Board
of Directors and utilizing information provided by the Corporation and its
agents, the Administrator will: (1) provide office space, facilities,
equipment and personnel to carry out its services hereunder; (2) compile
data for and prepare with respect to the Funds timely Notices to the
Securities and Exchange Commission (the "Commission") required pursuant to
Rule 24f-2 under the Act and Semi-Annual Reports on Form N-SAR; (3) assist
in the preparation for execution by the Corporation and file all federal
income and excise tax returns and state income tax returns (and such other
required tax filings as may be agreed to by the parties) other than those
required to be made by the Corporation's custodian or transfer agent,
subject to review and approval of the Corporation and the Corporation's
independent accountants; (4) prepare the financial statements for the
Annual and Semi-Annual Reports required pursuant to Section 30(d) under
the Act; (5) assist the Corporation's legal counsel in the preparation of
the Registration Statement for the Corporation (on Form N-1A or any
replacement therefor) and any amendments thereto; (6) determine and
periodically monitor each Fund's income and expense accruals and cause all
appropriate expenses to be paid from Corporation assets on proper
authorization from the Corporation; (7) calculate daily net asset values
and income factors of each Fund; (8) maintain all general ledger accounts
and related subledgers; (9) perform security valuations; (10) assist in
the acquisition of the Corporation's fidelity bond required by the Act,
monitor the amount of the bond and make the necessary Commission filings
related thereto; (11) from time to time as the Administrator deems
appropriate, check each Fund's compliance with the policies and
limitations of each Fund relating to the portfolio investments as set
forth in the Prospectus and Statement of Additional Information and
monitor each Fund's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (but these
functions shall not relieve the Corporation's investment adviser and sub-
advisers, if any, of their primary day-to-day responsibility for assuring
such compliance); (12) maintain, and/or coordinate with the other service
providers the maintenance of, the accounts, books and other documents
required pursuant to Rule 31a-1(a) and (b) under the Act; (13) prepare
and/or file all subsequent documents to be filed with states to maintain
the Fund's securities registration, including, without limitation, sales
reports, updated prospectuses, Form U-1s; (14) develop with legal counsel
and secretary of the Corporation an agenda for each board meeting and, if
requested by the Directors, attend board meetings and prepare minutes;
(15) coordinate preparation of other matters required to be reported to
the board, including, without limitation, details of Rule 12b-1 payments,
codes of ethics compliance and broker commissions; (16) prepare Form 1099s
for directors and other fund vendors; (17) calculate dividend and capital
gains distributions subject to review and approval by the Corporation and
its independent accountants; and (18) generally assist in the
Corporation's administrative operations as mutually agreed to by the
parties. The duties of the Administrator shall be confined to those
expressly set forth herein, and no implied duties are assumed by or may be
asserted against the Administrator hereunder.
(b) The Directors of the Corporation shall cause the officers,
adviser, legal counsel, independent accountants and custodian for the
Funds to cooperate with the Administrator and to provide the
Administrator, upon request, with such information, documents and advice
relating to the Funds and the Corporation as is within the possession or
knowledge of such persons, in order to enable the Administrator to perform
its duties hereunder. In connection with its duties hereunder, the
Administrator shall be entitled to rely, and shall be held harmless by the
Corporation when acting in reliance, upon the instruction, advice,
information or any documents relating to the Funds provided to the
Administrator by an officer or representative of the Funds or by any of
the aforementioned persons. Fees charged by such persons shall be an
expense of the respective Fund. The Administrator shall be entitled to
rely on any document which it reasonably believes to be genuine and to
have been signed or presented by the proper party. The Administrator
shall not be held to have notice of any change of authority of any
officer, agent, representative or employee of the Corporation until
receipt of written notice thereof from the Corporation.
(c) In compliance with the requirements of Rule 31a-3 under the Act,
the Administrator hereby agrees that all records which it maintains for
the Corporation are the property of the Corporation and further agrees to
surrender promptly to the Corporation any of such records upon the
Corporation's request. Subject to the terms of Section 6, the
Administrator further agrees to preserve for the periods prescribed by
Rule 31a-2 under the Act the records described in (a) above which are
maintained by the Administrator for the Corporation.
(d) It is understood that in determining security valuations, the
Administrator employs one or more pricing services to determine valuations
of portfolio securities for purposes of calculating net asset values of
the Funds. The Administrator shall identify to the Corporation and the
Board of Directors any such pricing service utilized on behalf of the
Corporation. The Administrator is authorized to rely on the prices
provided by such service(s) or by the Funds' investment adviser or other
authorized representative of the Funds, and shall not be liable for losses
to the Corporation or its securityholders as a result of its' reliance on
the valuations provided by the approved pricing service(s) or the
representative.
3. Fees; Delegation; Expenses
(a) In consideration of the services rendered pursuant to this
Agreement, the Corporation will pay the Administrator a fee, computed
daily and payable monthly, as provided in Schedule B hereto, plus out-of-
pocket expenses. The Corporation shall also pay the Administrator for
organizational start-up services provided on behalf of the Funds as
specified in Schedule B. Out-of-pocket expenses include, but are not
limited to, travel, lodging and meals in connection with travel on behalf
of the Corporation, programming and related expenses (previously incurred
or to be incurred by Administrator) in connection with providing
electronic transmission of data between the Administrator and the Funds'
other service providers, brokers, dealers and depositories, and
photocopying, postage and overnight delivery expenses. Fees shall be paid
by each Fund at a rate that would aggregate at least the applicable
minimum fee for each Fund.
(b) For the purpose of determining fees payable to the
Administrator, net asset value shall be computed in accordance with the
Corporation's Prospectuses and resolutions of the Corporation's Board of
Directors. The fee for the period from the day of the month this
Agreement is entered into until the end of that month shall be pro-rated
according to the proportion which such period bears to the full monthly
period. Upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be pro-rated according to
the proportion which such period bears to the full monthly period and
shall be payable upon the date of termination of this Agreement. Should
the Corporation be liquidated, merged with or acquired by another fund or
investment company, any accrued fees shall be immediately payable. Such
fee as is attributable to each Fund shall be a separate charge to each
Fund and shall be the several (and not joint or joint and several)
obligation of each such Fund.
(c) The Administrator will bear all expenses in connection with the
performance of its services under this Agreement except as otherwise
provided herein. Other costs and expenses to be incurred in the operation
of the Funds, including, but not limited to: taxes; interest; brokerage
fees and commissions, if any; salaries, fees and expenses of officers and
Directors; Commission fees and state Blue Sky fees; advisory fees; charges
of custodians, transfer agents, dividend disbursing agents; security
pricing services; insurance premiums; outside auditing and legal expenses;
costs of organization and maintenance of corporate existence; typesetting,
printing, proofing and mailing of prospectuses, statements of additional
information, supplements, notices and proxy materials for regulatory
purposes and for distribution to current shareholders; typesetting,
printing, proofing and mailing and other costs of shareholder reports;
expenses incidental to holding meetings of the Fund's shareholders and
Directors; and any extraordinary expenses; will be borne by the Funds or
their investment adviser. Expenses incurred for distribution of fund
shares, including the typesetting, printing, proofing and mailing of
prospectuses for persons who are not shareholders of the Corporation, will
be borne by the Corporation or its investment adviser, except for such
expenses permitted to be paid by the Corporation under a distribution plan
adopted in accordance with applicable laws.
4. Proprietary and Confidential Information
The Administrator agrees on behalf of itself and its employees to
treat confidentially and as proprietary information of the Corporation all
records and other information relative to the Funds and prior, present or
potential shareholders of the Corporation (and clients of said
shareholders), and not to use such records and information for any purpose
other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the
Corporation, which approval shall not be unreasonably withheld and may not
be withheld where the Administrator may be exposed to civil or criminal
proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, when subject to governmental
or regulatory audit or investigation, or when so requested by the
Corporation.
5. Limitation of Liability
The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Funds in connection with
the matters to which this Agreement relates, except for a loss resulting
from willful misfeasance, bad faith or negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Furthermore, the
Administrator shall not be liable for any action taken or omitted to be
taken in accordance with instructions received by the Administrator from
an officer or representative of the Corporation.
6. Term
(a) This Agreement shall become effective with respect to each Fund
listed on Schedule A hereof as of the effective date of the Corporation's
Registration Statement as declared by the Securities and Exchange
Commission and, with respect to each Fund not in existence on that date,
on the date an amendment to Schedule A to this Agreement relating to that
Fund is executed. This Agreement shall continue in effect with respect to
each Fund until December 31, 1996 (the "Initial Term"). Thereafter, if
not terminated as provided herein, this Agreement shall continue
automatically in effect as to each Fund for successive annual periods.
(b) This Agreement may be terminated with respect to any one or more
particular Funds without penalty after the Initial Term (i) upon mutual
consent of the parties, or (ii) by either party upon not less than ninety
(90) days' written notice to the other party (which notice may be waived
by the party entitled to the notice). The terms of this Agreement shall
not be waived, altered, modified, amended or supplemented in any manner
whatsoever except by a written instrument signed by the Administrator and
the Corporation.
(c) Notwithstanding anything herein to the contrary, upon the
termination of this Agreement or the liquidation of a Fund or the
Corporation, the Administrator shall deliver the records of the Fund(s)
and/or Corporation as the case may be to the Corporation or person(s)
designated by the Corporation and thereafter the Corporation or its
designee shall be solely responsible for preserving the records for the
periods required by all applicable laws, rules and regulations. In
addition, in the event of termination of this Agreement, or the proposed
liquidation or merger of the Corporation or a Fund(s), and the Corporation
requests the Administrator to provide services in connection therewith,
the Administrator shall provide such services and be entitled to such
compensation as the parties may mutually agree.
7. Non-Exclusivity
The services of the Administrator rendered to the Corporation are not
deemed to be exclusive. The Administrator may render such services and
any other services to others, including other investment companies. The
Corporation recognizes that from time to time directors, officers and
employees of the Administrator may serve as trustees, directors, officers
and employees of other entities (including other investment companies),
that such other entities may include the name of the Administrator as part
of their name and that the Administrator or its affiliates may enter into
investment advisory or other agreements with such other entities.
8. Governing Law; Invalidity
This Agreement shall be governed by Wisconsin law. To the extent
that the applicable laws of the State of Wisconsin, or any of the
provisions herein, conflict with the applicable provisions of the Act, the
latter shall control, and nothing herein shall be construed in a manner
inconsistent with the Act or any rule or order of the Commission
thereunder. Any provision of this Agreement which may be determined by
competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
9. Notices
Any notice required or to be permitted to be given by either party to
the other shall be in writing and shall be deemed to have been given when
sent by registered or certified mail, postage prepaid, return receipt
requested, as follows: Notice to the Administrator shall be sent to
Sunstone Financial Group, Inc., 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, XX, 00000, Attention Xxxxxx X. Xxxxxxx, and notice to the
Corporation shall be sent to Xxx Xxxxxxx Funds, Inc., Attention: Xxxxxxx
Xxx Xxxxxxx, ___________________________________.
10. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original agreement but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by a duly authorized officer as of the day and year first
above written.
XXX XXXXXXX FUNDS, INC.
(the "Corporation")
By:_____________________________
Xxxxxxx Xxx Xxxxxxx
President
SUNSTONE FINANCIAL GROUP, INC.
("Administrator")
By:_____________________________
President
Schedule A
to the
Administration and Fund Accounting Agreement
by and between
XXX XXXXXXX FUNDS, INC.
and
Sunstone Financial Group, Inc.
Xxx Xxxxxxx Micro-Cap Fund
Xxx Xxxxxxx Emerging Growth Fund
Xxx Xxxxxxx Mid-Cap Fund
Schedule B
to the
Administration and Fund Accounting Agreement
by and between
Xxx Xxxxxxx Funds, Inc.
and
Sunstone Financial Group, Inc.
Minimum
Name of Fund Annual Fees Annual Fee
Micro-Cap Up to $50 Million 22.5 basis points $61,500
$50 Million to $100 Million 15.0 basis points
$100 Million to $250 Million 10.0 basis points
Over $250 Million 7.5 basis points
Emerging Up to $50 Million 22.5 basis points $61,500
Growth $50 Million to $100 Million 15.0 basis points
$100 Million to $250 Million 10.0 basis points
Over $250 Million 7.5 basis points
Mid-Cap Up to $50 Million 22.5 basis points $61,500
$50 Million to $100 Million 15.0 basis points
$100 Million to $250 Million 10.0 basis points
Over $250 Million 7.5 basis points
In addition to the foregoing, the Corporation shall pay to the
Administrator $_______ for organizational start-up services provided by
the Administrator on behalf of the Funds. The Corporation shall also
pay/reimburse the Administrator's out-of-pocket expenses as described in
the Agreement.
Dated: December 31, 1995.
XXX XXXXXXX FUNDS, INC. SUNSTONE FINANCIAL GROUP, INC.
By: /s/ Xxxxxxx Xxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxxx Xxx Xxxxxxx Xxxxxx X. Xxxxxxx
President President
