TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made as of the ___ day of October,
1996 by and between Frontegra Funds, Inc., a Maryland
corporation (the "Corporation"), and Sunstone Investor
Services, LLC, a Wisconsin limited liability company
("Sunstone"):
WHEREAS, the Corporation is registered under the
Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company and
is authorized to issue shares of common stock
("Shares") in separate series with each such series
representing the interests in a separate portfolio of
securities and other assets;
WHEREAS, the Corporation desires to retain Sunstone
to render the transfer agency and other services
contemplated hereby with respect to each of the
investment portfolios of the Corporation as are listed
on Schedule A hereto and any additional investment
portfolios the Corporation and Sunstone 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"), and Sunstone is willing to render such
services.
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:
ARTICLE I
APPOINTMENT OF TRANSFER AGENT
A. Appointment.
1. The Corporation hereby constitutes and
appoints Sunstone as transfer agent and dividend
disbursing agent of all the Shares of the Funds during
the period of this Agreement, and Sunstone hereby
accepts such appointment as transfer agent and dividend
disbursing agent and agrees to perform the duties
thereof as hereinafter set forth.
2. Sunstone shall perform the transfer agent
and dividend disbursing agent services described on
Schedule B hereto. To the extent that the Corporation
requests Sunstone to perform any additional services in
a manner not consistent with Sunstone's usual
processing procedures, Sunstone and the Corporation
shall mutually agree as to the services to be
accomplished, the manner of accomplishment and the
compensation to which Sunstone shall be entitled with
respect thereto.
3. Sunstone may, in its discretion, appoint in
writing other parties qualified to perform transfer
agency and shareholder services reasonably acceptable
to the Corporation (individually, a "Sub-transfer
Agent") to carry out some or all of its
responsibilities under this Agreement with respect to a
Fund; provided, however, that unless the Corporation
shall enter into a written agreement with such Sub-
transfer Agent, the Sub-transfer Agent shall be the
agent of Sunstone and not the agent of the Corporation
or such Fund and, in such event Sunstone shall be fully
responsible for the acts or omissions of such Sub-
transfer Agent and shall not be relieved of any of its
responsibilities hereunder by the appointment of such
Sub-transfer Agent.
4. Subject to Sunstone's duty to act in good
faith with respect to the services described in this
Agreement, Sunstone shall have no duties or
responsibilities whatsoever hereunder except such
duties and responsibilities as are specifically set
forth in this Agreement, and no covenant or obligation
shall be implied in this Agreement against Sunstone.
B. Documents/Records.
1. In connection with such appointment, the
Corporation shall deliver or cause to be delivered the
following documents to Sunstone:
a) A copy of the Articles of Incorporation
and By-laws of the Corporation and all amendments
thereto, and a copy of the resolutions of the Board of
Directors of the Corporation appointing Sunstone and
authorizing the execution of this Transfer Agency
Agreement on behalf of the Funds, each certified by the
Secretary of the Corporation;
b) A certificate signed by a Co-President
and Secretary of the Corporation specifying: the
number of authorized Shares and the number of such
authorized Shares issued and currently outstanding, if
any; the names and specimen signatures of the officers
of the Corporation authorized to sign written stock
certificates, if any, and the individuals authorized to
provide oral instructions and to sign written
instructions and requests on behalf of the Corporation
(hereinafter referred to as "Authorized Persons").
c) In the event the Corporation issues
Share certificates, specimen Share certificates for
each Fund in the form approved by the Board of
Directors of the Corporation (and in a format
compatible with Sunstone's operating system), together
with a Certificate signed by the Secretary of the
Corporation as to such approval;
d) Copies of the Corporation's Registration
Statement, as amended to date, and the most recently
filed Post-Effective Amendment thereto, filed by the
Corporation with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "1933
Act"), and under the 1940 Act, as amended, together
with any applications filed in connection therewith;
and
e) Opinion of counsel for the Corporation
with respect to the Corporation's organization and
existence under the laws of its state of organization,
the validity of the authorized and outstanding Shares,
whether such Shares are fully paid and non-assessable
and the status of such Shares under the Securities Act
of 1933, as amended, and any other applicable federal
law or regulation (i.e., if subject to registration,
that they have been registered and that the
Registration Statement has become effective or, if
exempt, the specific grounds therefor.)
2. The Corporation agrees to deliver or to
cause to be delivered to Sunstone in Milwaukee,
Wisconsin, at the Corporation's expense, all of its
shareholder account records relating to the Funds in a
format acceptable to Sunstone and all such other
documents, records and information as Sunstone may
reasonably request in order for Sunstone to perform its
services hereunder.
ARTICLE II
COMPENSATION & EXPENSES
A. Compensation. In consideration for its services
hereunder as transfer agent and dividend disbursing
agent, each Fund will pay to Sunstone such compensation
as shall be set forth in a separate fee schedule to be
agreed to by each Fund and Sunstone from time to time.
A copy of the initial fee schedule is attached hereto
as Schedule C.
B. Expenses. The Corporation on behalf of each
Fund also agrees to promptly reimburse Sunstone for all
reasonable out-of-pocket expenses or disbursements
incurred by Sunstone in connection with the performance
of services under this Agreement including, but not
limited to, expenses for postage, express delivery
services, freight charges, envelopes, checks, drafts,
forms (continuous or otherwise), specially requested
reports and statements, bank account service fees and
charges, telephone calls, telegraphs, stationery
supplies, outside printing and mailing firms, magnetic
tapes, reels or cartridges (if sent to a Fund or to a
third party at a Fund's request) and magnetic tape
handling charges, off-site record storage, media for
storage of records (e.g., microfilm, microfiche,
optical platters, computer tapes and disks), computer
equipment installed at a Fund's request at a Fund's or
a third party's premises, telecommunications equipment,
telephone/telecommunication lines between the
Corporation and its agents, on one hand, and Sunstone
on the other, proxy soliciting, processing and/or
tabulating costs, second site back-up computer
facility, transmission of statement data for remote
printing or processing, and transaction fees to the
extent any of the foregoing are paid by Sunstone. Such
expenses shall not include personnel charges except
with the prior approval of an Authorized Person. If
requested by Sunstone, postage and other out-of-pocket
expenses are payable in advance, and in the event
requested, postage is due at least seven days prior to
the anticipated mail date. Other out-of pocket expenses
are payable in advance if so requested by Sunstone. In
the event Sunstone requests advance payment, Sunstone
shall not be obligated to incur such expenses or
perform the related service(s) until payment is
received. Sunstone may, at its option, arrange to have
various service providers submit invoices directly to
the Corporation for payment of out-of pocket expenses
reimbursable hereunder.
C. Payment Procedures.
1. Amounts due hereunder shall be due and paid
by the respective Fund on or before the thirtieth
(30th) day after the date of the statement therefor
(the "Due Date"). Service fees are billed monthly, and
out-of-pocket expenses are billed as incurred (unless
prepayment is requested by Sunstone). Sunstone may, at
its option, arrange to have various service providers
submit invoices directly to the Funds for payment of
out-of-pocket expenses reimbursable hereunder. The
Corporation is aware that its failure to pay all
amounts in a timely fashion so that they will be
received by Sunstone on or before the Due Date will
give rise to costs to Sunstone not contemplated by this
Agreement, including but not limited to carrying,
processing and accounting charges. Accordingly, in the
event that any amounts due hereunder are not received
by Sunstone by the Due Date, the Corporation shall pay
a late charge equal to one percent (1.0%) per month or
the maximum amount permitted by law, whichever is less,
until paid in full. In addition, the Corporation shall
pay reasonable attorney's fees and court costs of
Sunstone if any amounts due Sunstone are collected by
or through an attorney. The parties hereby agree that
such late charge represents a fair and reasonable
computation of the costs incurred by reason of late
payment or payment of amounts not properly due.
Acceptance of such late charge shall in no event
constitute a waiver of a Fund's default or prevent
Sunstone from exercising any other rights and remedies
available to it.
2. In the event that any charges are disputed,
the Fund shall, on or before the Due Date, pay all
undisputed amounts due hereunder and notify Sunstone in
writing of any disputed charges for out-of-pocket
expenses which it is disputing in good faith. Payment
for such disputed charges shall be due on or before the
close of the fifth (5th) business day after the day on
which Sunstone provides to the Corporation
documentation which an objective observer would agree
reasonably supports the disputed charges (the "Revised
Due Date"). Late charges shall not begin to accrue as
to charges disputed in good faith until the first day
after the Revised Due Date.
ARTICLE III
PROCESSING AND PROCEDURES
A. Issuance, Redemption and Transfer of Shares
1. Sunstone acknowledges that it has received a
copy of each Fund's Prospectus (as hereinafter
defined), which Prospectus describes how sales and
redemptions of shares of each Fund shall be made and
Sunstone agrees to accept purchase orders and
redemption requests with respect to Fund shares on each
Fund Business Day in accordance with such Prospectus.
"Fund Business Day" shall be deemed to be each day on
which the New York Stock Exchange is open for trading,
and "Prospectus" shall mean the last Fund prospectus
actually received by Sunstone from the Fund with
respect to which the Fund has indicated a registration
statement under the 1933 Act has become effective,
including the Statement of Additional Information,
incorporated by reference therein.
2. On each Fund Business Day Sunstone shall, as
of the time at which the net asset value of each Fund
is computed, issue to and redeem from the accounts
specified in a purchase order or redemption request in
proper form and accepted by the Corporation, which in
accordance with the Prospectus is effective on such
day, the appropriate number of full and fractional
Shares based on the net asset value per Share of the
respective Fund specified in an advice received on such
Fund Business Day from or on behalf of the Fund.
3. Upon the issuance of any Shares in
accordance with this Agreement, Sunstone shall not be
responsible for the payment of any original issue or
other taxes required to be paid by the Fund in
connection with such issuance of any Shares.
4. Sunstone shall not be required to issue any
Shares after it has received from an Authorized Person
or from an appropriate federal or state authority
written notification that the sale of Shares has been
suspended or discontinued, and Sunstone shall be
entitled to rely upon such written notification.
5. Upon receipt of a proper redemption request
and monies paid to it by the Custodian in connection
with a redemption of Shares, Sunstone shall cancel the
redeemed Shares and after making appropriate deduction
for any withholding of taxes required of it by
applicable law, make payment in accordance with the
Fund's redemption and payment procedures described in
the Prospectus.
6. (a) Except as otherwise provided in sub-
paragraph (b) of this paragraph, Shares will be
transferred or redeemed upon presentation to Sunstone
of Share certificates, if any, or instructions properly
endorsed for transfer or redemption, accompanied by
such documents as Sunstone deems necessary to evidence
the authority of the person making such transfer or
redemption, and bearing satisfactory evidence of the
payment of stock transfer taxes. Sunstone reserves the
right to refuse to transfer or redeem Shares until it
is satisfied that the endorsement on the stock
certificate, if any, or instructions is valid and
genuine, and for that purpose it will require, unless
otherwise instructed by an Authorized Person or except
as provided in sub-paragraph (b) of this paragraph, a
guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-
15. Sunstone also reserves the right to refuse to
transfer or redeem Shares until it is satisfied that
the requested transfer or redemption is legally
authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or
redemptions which Sunstone, in its judgment, deems
improper or unauthorized, or until it is satisfied that
there is no reasonable basis to any claims adverse to
such transfer or redemption. Sunstone may, in
effecting transfers and redemptions of Shares, rely
upon those provisions of the Uniform Act for the
Simplification of Fiduciary Security Transfers or the
Uniform Commercial Code, as the same may be amended
from time to time, applicable to the transfer of
securities, and the applicable Fund or Funds shall
indemnify Sunstone for any act done or omitted by it in
good faith in reliance upon such laws. In no event will
a Fund indemnify Sunstone for any act done by it as a
result of willful misfeasance, bad faith, negligence or
reckless disregard of its duties.
(b) Notwithstanding the foregoing or any
other provision contained in this Agreement to the
contrary, Sunstone shall be fully protected by each
Fund in not requiring any instruments, documents,
assurances, endorsements or guarantees, including,
without limitation, any signature guarantees, in
connection with a redemption, or transfer, of Shares
whenever Sunstone reasonably believes that requiring
the same would be inconsistent with the transfer and
redemption procedures as described in the Prospectus.
7. Notwithstanding any provision contained in
this Agreement to the contrary, Sunstone shall not be
required or expected to require, as a condition to any
transfer or redemption of any Shares pursuant to
paragraph 6 of this Article or any redemption of shares
pursuant to a computer tape or electronic data
transmission, any documents to evidence the authority
of the person requesting the transfer or redemption
and/or the payment of any stock transfer taxes, unless
Sunstone has some reasonable basis upon which to
question said authority, and shall be fully protected
in acting in accordance with the applicable provisions
of this Article.
8. In connection with each purchase and each
redemption of Shares, Sunstone shall send such
statements as are prescribed by the Federal securities
laws applicable to transfer agents or as described in
the Prospectus. If the Prospectus indicates that
certificates for Shares are available and if
specifically requested in writing by any shareholder,
or if otherwise required hereunder, Sunstone will
countersign, issue and mail to such shareholder at the
address set forth in the records of Sunstone a Share
certificate for any full Share requested.
9. On each Fund Business Day Sunstone shall
supply the Corporation with a statement specifying with
respect to the immediately preceding Fund Business Day:
the total number of Shares of the Funds (including
fractional Shares) issued and outstanding at the
opening of business on such day; the total number of
Shares of the Funds sold on such day; the total number
of Shares of the Funds and the dollar amount redeemed
from Shareholders by Sunstone on such day; and the
total number of Shares of the Funds issued and
outstanding.
10. Procedures for effecting purchase,
redemption or transfer transactions accepted from
investors by telephone or other methods shall be
established by mutual agreement between the Corporation
and Sunstone consistent with the terms of the
Prospectus. Sunstone upon written notice to the
Corporation may establish such additional procedures,
rules and regulations governing the transfer or
registration of Share certificates, if any, or the
purchase, redemption or transfer of Shares, as it may
deem advisable and consistent with such rules and
regulations generally adopted by mutual fund transfer
agents.
B. Dividends and Distributions.
1. The Corporation shall furnish to Sunstone a
copy of a resolution of its Board of Directors,
certified by the Secretary or any Assistant Secretary,
either (i) setting forth the date of the declaration of
a dividend or distribution, the date of accrual or
payment, as the case may be, thereof, the record date
as of which shareholders entitled to payment, or
accrual, as the case may be, shall be determined, the
amount per Share of such dividend or distribution, the
payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount, if any,
payable to Sunstone on such payment date, or (ii)
authorizing the declaration of dividends and
distributions on a daily or other periodic basis and
authorizing Sunstone to rely on a certificate of an
Authorized Person setting forth the information
described in subsection (i) of this paragraph.
2. In connection with a reinvestment of a
dividend or distribution of Shares of a Fund, Sunstone
shall as of each Fund Business Day, as specified in a
certificate or resolution described in paragraph 1,
issue Shares of the Fund based on the net asset value
per Share of such Fund specified in an advice received
from or on behalf of the Fund on such Fund Business
Day.
3. Upon the mail date specified in such
certificate or resolution, as the case may be, the
Corporation shall, in the case of a cash dividend or
distribution, cause the Custodian to deposit in an
account in the name of Sunstone on behalf of a Fund, an
amount of cash, if any, sufficient for Sunstone to make
the payment, as of the mail date, specified in such
Certificate or resolution, as the case may be, to the
Shareholders who were of record on the record date.
Sunstone will, upon receipt of any such cash, make
payment of such cash dividends or distributions to the
shareholders of record as of the record date. Sunstone
shall not be liable for any improper payments made in
good faith and without negligence, in accordance with a
certificate or resolution described in the preceding
paragraph. If Sunstone shall not receive from the
Custodian sufficient cash to make payments of any cash
dividend or distribution to all shareholders of a Fund
as of the record date, Sunstone shall, upon notifying
the Fund, withhold payment to all shareholders of
record as of the record date until sufficient cash is
provided to Sunstone.
4. It is understood that Sunstone in its
capacity as transfer agent and dividend disbursing
agent shall in no way be responsible for the
determination of the rate or form of dividends or
capital gain distributions due to the shareholders
pursuant to the terms of this Agreement. It is
expressly agreed and understood that Sunstone is not
liable for any loss as a result of processing a
distribution based on information provided in the
Certificate that is incorrect. The Funds agree to pay
Sunstone for any and all costs, both direct and out-of-
pocket expenses, incurred in such corrective work as
necessary to remedy such error, provided that Sunstone
has acted in good faith and without negligence.
5. It is understood that Sunstone shall file
with the Internal Revenue Service and deliver to
shareholders such appropriate federal tax forms
concerning the payment of dividend and capital gain
distributions but shall in no way be responsible for
the collection or withholding of taxes due on such
dividends or distributions due to shareholders, except
and only to the extent, required by applicable law.
C. Authorization and Issuance of Shares;
Recapitalization or Capital Adjustment.
1. Prior to the effective date of any increase
or decrease in the total number of Shares authorized to
be issued, or the issuance of any additional Shares of
a Fund pursuant to stock dividends, stock splits,
recapitalizations, capital adjustments or similar
transactions, the Corporation agrees to deliver to
Sunstone such documents, certificates, reports and
legal opinions as Sunstone may reasonably request.
2. In the event a Fund issues Share
certificates, the Corporation at its expense shall
furnish Sunstone with a sufficient supply of blank
Share certificates in the new form and from time to
time will replenish such supply upon the request of
Sunstone. Such blank Share certificates shall be
compatible with Sunstone's system and shall be properly
signed by facsimile or otherwise by officers of the
Corporation authorized by law or by the By-Laws to sign
Share certificates and, if required, shall bear the
corporate Seal or facsimile thereof. The Corporation
agrees to indemnify and exonerate, save and hold
Sunstone harmless, from and against any and all claims
or demands that may be asserted against Sunstone with
respect to the genuineness of any Share certificate
supplied to Sunstone pursuant to this section.
3. Sunstone may issue new Share certificates in
place of certificates represented to have been lost,
stolen, or destroyed upon receiving written
instructions from the shareholder accompanied by proof
of an indemnity or surety bond issued by a recognized
insurance institution specified by the Corporation or
Sunstone. If Sunstone receives written notification
from the shareholder or broker dealer that the
certificate issued was never received, and such
notification is made within 30 days of the date of
issuance, Sunstone may reissue the certificate without
requiring a surety bond. Sunstone may also reissue
certificates which are represented as lost, stolen, or
destroyed without requiring a surety bond provided that
the notification is in writing and accompanied by an
indemnification signed on behalf of a member firm of
the New York Stock Exchange and signed by an officer of
said firm with the signature guaranteed.
Notwithstanding the foregoing, Sunstone will reissue a
certificate upon written authorization from an
Authorized Person.
D. Records.
1. Sunstone shall keep such records as are
specified in Schedule D hereto in the form and manner,
and for such period, as it may deem advisable but not
inconsistent with the rules and regulations of
appropriate government authorities, in particular Rules
31a-2 and 31a-3 under the 1940 Act. Sunstone may
deliver to the Corporation from time to time at its
discretion, for safekeeping or disposition by the
Corporation in accordance with law, such records,
papers and documents accumulated in the execution of
its duties as such transfer agent, as Sunstone may deem
expedient, other than those which Sunstone is itself
required to maintain pursuant to applicable laws and
regulations. The Corporation shall assume all
responsibility for any failure thereafter to produce
any record, paper, canceled Share certificate, or other
document so returned, if and when required. To the
extent required by Section 31 of the 1940 Act and the
rules and regulations thereunder, the records specified
in Schedule D hereto maintained by Sunstone, which have
not been previously delivered to the Corporation
pursuant to the foregoing provisions of this paragraph,
shall be considered to be the property of the
Corporation, shall be made available upon request for
inspection by the officers, employees, and auditors of
the Corporation, and shall be delivered to the
Corporation promptly upon request and in any event upon
the date of termination of this Agreement, in the form
and manner kept by Sunstone on such date of termination
or such earlier date as may be requested by the
Corporation.
2. Sunstone agrees to keep all records and
other information relative to the Corporation, the
Funds and their shareholders confidential. In case of
any requests or demands for the inspection of the
shareholder records of a Fund, Sunstone will endeavor
to notify the Fund promptly and to secure instructions
from an Authorized Person as to such inspection.
Sunstone reserves the right, however, to exhibit the
shareholder records to any person whenever it receives
advice from its counsel that there is a reasonable
likelihood that Sunstone will be held liable for the
failure to exhibit the shareholder records to such
person; provided, however, that in connection with any
such disclosure Sunstone shall promptly notify the
Corporation that such disclosure has been made or is to
be made. Notwithstanding the foregoing, Sunstone may
disclose information when requested by a shareholder
concerning an account as to which such shareholder
claims a legal or beneficial interest or when requested
by the Corporation, the shareholder or the dealer of
record as to such account.
ARTICLE IV
CONCERNING THE CORPORATION
A. Representations. The Corporation represents and
warrants to Sunstone that:
(a) It is a corporation duly organized and
existing under the laws of the State of Maryland, it is
empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform
this Agreement, and all requisite corporate proceedings
have been taken to authorize it to enter into and
perform this Agreement.
(b) It is an investment company registered under
the 1940 Act.
(c) A registration statement under the 1933 Act
with respect to the Shares is effective.
B. Covenants.
1. The Corporation will provide to Sunstone
copies of all amendments to its Articles of
Incorporation and By-laws made after the date of this
Agreement. If requested by Sunstone, each copy of the
Articles of Incorporation of the Corporation and copies
of all amendments thereto shall be certified by the
Secretary of the Corporation. Each copy of the By-Laws
and copies of all amendments thereto, and copies of
resolutions of the Board of Directors, shall be
certified by the Secretary of the Corporation, if
requested by Sunstone.
2. The Corporation shall promptly deliver to
Sunstone written notice of any change in the Authorized
Persons, together with a specimen signature of each new
Authorized Person. In the event any Officer who shall
have signed manually or whose facsimile signature shall
have been affixed to blank Share certificates shall
die, resign or be removed prior to issuance of such
Share certificates, Sunstone may issue such Share
certificates of the Fund notwithstanding such death,
resignation or removal, and the Corporation shall
promptly deliver to Sunstone such approval, adoption or
ratification as may be required by law.
3. The Corporation shall deliver to Sunstone
the Fund's currently effective Prospectus and, for
purposes of this Agreement, Sunstone shall not be
deemed to have notice of any information contained in
such Prospectus until five (5) business days after it
is actually received by Sunstone.
4. All requisite steps will be taken by the
Corporation from time to time when and as necessary to
register the Corporation's shares for sale in all
states in which the Corporation's shares shall at the
time be offered for sale and require registration. If
at any time the Corporation receives notice of any stop
order or other proceeding in any such state affecting
such registration or the sale of the Corporation's
shares, or of any stop order or other proceeding under
the federal securities laws affecting the sale of the
Corporation's shares, the Corporation will give prompt
notice thereof to Sunstone.
5. The Corporation will comply with all
applicable requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended, the 1940 Act, blue
sky laws, and any other applicable laws, rules and
regulations.
6. The Corporation agrees that prior to
effecting any change in the Prospectus which would
increase or alter the duties and obligations of
Sunstone hereunder, it shall advise Sunstone of such
proposed change at least 30 days prior to the intended
date of the same, and shall proceed with such change
only if it shall have received the written consent of
Sunstone thereto, which shall not be unreasonably
withheld.
ARTICLE V
CONCERNING THE TRANSFER AGENT
A. Representations. Sunstone represents and
warrants to the Fund that:
(a) It is a corporation duly organized and
existing under the laws of the State of Wisconsin, is
empowered under applicable law and by its Articles of
Incorporation and By-Laws to enter into and perform
this Agreement, and all requisite corporate proceedings
have been taken to authorize it to enter into and
perform this Agreement.
(b) It is duly registered as a transfer agent
under Section 17A of the Securities Exchange Act of
1934, as amended, to the extent required.
B. Limitation of Liability.
1. Sunstone shall not be liable for any loss or
damage, including counsel fees, resulting from its
actions or omissions to act or otherwise, except for
any loss or damage arising out of its bad faith,
willful misfeasance, negligence or reckless disregard
of its duties under this Agreement. Sunstone shall not
be liable and shall be indemnified in acting upon any
writing or document reasonably believed by it to be
genuine and to have been signed or made by an
Authorized Person or verbal instructions which the
individual receiving the instructions on behalf of
Sunstone reasonably believes in good faith to have been
given by an Authorized Person, and Sunstone shall not
be held to have any notice of any change of authority
of any person until receipt of written notice thereof
from a Fund or such person. It shall also be protected
in processing Share certificates, if any, which bear
the proper countersignature of Sunstone and which it
reasonably believes to bear the proper manual or
facsimile signature of the officers.
2. Sunstone assumes no responsibility
hereunder, and shall not be liable, for any damage,
loss of data, errors, delay or any other loss
whatsoever caused by events beyond its reasonable
control. Sunstone will, however, take all reasonable
steps to minimize service interruptions for any period
that such interruption continues beyond Sunstone's
control.
3. In no event and under no circumstances shall
either party to this Agreement be liable to anyone,
including, without limitation to the other party, for
consequential or punitive damages for any act or
failure to act under any provision of this Agreement
even if advised of the possibility thereof.
C. Indemnification.
1. The Corporation shall indemnify and
exonerate, save and hold harmless Sunstone from and
against any and all claims (whether with or without
basis in fact or law), demands, expenses (including
reasonable attorney's fees) and liabilities of any and
every nature which the Indemnified Party (as defined
below) may sustain or incur or which may be asserted
against the Indemnified Party by any person by reason
of or as a result of any action taken or omitted to be
taken by any prior transfer agent of the Corporation or
as a result of any action taken or omitted to be taken
by the Indemnified Party in good faith and without
negligence or willful misconduct or in reliance upon
(i) any provision of this Agreement; (ii) the
Prospectus; (iii) any instrument, order or Share
certificate reasonably believed by it to be genuine and
to be signed, countersigned or executed by an
Authorized Person; (iv) any Certificate or other
instructions of an Authorized Person; or (v) any
opinion of legal counsel for the Corporation or, if
approved by the Corporation, for the Indemnified Party.
The Corporation shall indemnify and exonerate, save and
hold the Indemnified Party harmless from and against
any and all claims (whether with or without basis in
fact or law), demands, expenses (including reasonable
attorney's fees) and liabilities of any and every
nature which the Indemnified Party may sustain or incur
or which may be asserted against the Indemnified Party
by any person by reason of or as a result of any action
taken or omitted to be taken by the Indemnified Party
in good faith in connection with its appointment or in
reliance upon any law, act, regulation or any
interpretation of the same.
2. Sunstone shall indemnify and hold the
Corporation harmless from and against any and all
losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or
attributable to any action or failure or omission to
act by Sunstone as a result of Sunstone's lack of good
faith, negligence or willful misconduct.
3. The party seeking indemnification under this
Section (C) (the "Indemnified Party") shall not settle
any claim, demand, expense or liability to which it may
seek indemnity (each, an "Indemnifiable Claim") without
the express written consent of the party against which
indemnification is sought (the "Indemnifying Party").
The Indemnified Party shall notify the Indemnifying
Party promptly after receipt of notification of an
Indemnifiable Claim, provided that the failure to
furnish such notification shall not impair the
Indemnified Party's right to seek indemnification
unless the Indemnifying Party is unable to adequately
defend the Indemnifiable Claim as a result of such
failure, and further provided, that if as a result of
the failure to provide timely notice of the institution
of litigation a judgment by default is entered, prior
to seeking indemnification, the Indemnified Party, at
its own cost and expense, shall open such judgment.
The Indemnifying Party shall have the right to defend
any Indemnifiable Claim at its own expense, provided
that such defense shall be conducted by counsel
selected by the Indemnifying Party and reasonably
acceptable to the Indemnified Party. The Indemnified
Party may join in such defense at its own expense, but
to the extent that it shall so desire the Indemnifying
Party shall direct such defense. The Indemnifying
Party shall not settle any Indemnifiable Claim without
the express written consent of the Indemnified Party if
the Indemnified Party determines that such settlement
would have an adverse effect on the Indemnified Party
beyond the scope of this Agreement. In such event,
each of the Indemnifying Party and the Indemnified
Party shall be responsible for their own defense at
their own cost and expense, and such claim shall not be
deemed an Indemnifiable Claim hereunder. If the
Indemnifying Party shall fail or refuse to defend an
Indemnifiable Claim, the Indemnified Party may provide
its own defense at the cost and expense of the
Indemnifying Party. Anything in this Agreement to the
contrary notwithstanding, the Indemnifying Party shall
not indemnify the Indemnified Party against any
liability or expense arising out of the Indemnified
Party's willful misfeasance, bad faith, negligence or
reckless disregard of its duties and obligations under
this Agreement.
4. The indemnity and defense provisions
provided hereunder shall indefinitely survive the
termination of this Agreement.
D. Procedures.
1. At any time Sunstone may apply to an
Authorized Person of the Corporation for written
instructions with respect to any matter arising in
connection with Sunstone's duties and obligations under
this Agreement, and Sunstone shall not be liable for
any action taken or permitted by it in good faith in
accordance with such written instructions. Such
application by Sunstone for written instructions from
an Authorized Person of the Corporation may set forth
in writing any action proposed to be taken or omitted
by Sunstone with respect to its duties or obligations
under this Agreement and the date on and/or after which
such action shall be taken. Sunstone shall not be
liable for any action taken or omitted in accordance
with a proposal included in any such application on or
after the date specified therein unless, prior to
taking or omitting any such action, Sunstone has
received written instructions in response to such
application specifying the action to be taken or
omitted. Sunstone may consult counsel of the
Corporation, or upon notice and approval from the
Corporation, its own counsel, at the expense of the
Corporation and shall be fully protected with respect
to anything done or omitted by it in good faith in
accordance with the advice or opinion of counsel to the
Corporation or its own counsel.
2. Notwithstanding any of the foregoing
provisions of this Agreement, Sunstone shall be under
no duty or obligation under this Agreement to inquire
into, and shall not be liable for:
(a) The legality of the issue or sale of any
Shares, the sufficiency of the amount to be received
therefor, or the authority of the Corporation, as the
case may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or
of a redemption of any Shares, the propriety of the
amount to be paid therefor, or the authority of the
Corporation, as the case may be, to request such
transfer or redemption;
(c) The legality of the declaration of any
dividend by the Corporation, on behalf of a Fund or
Funds, or the legality of the issue of any Shares in
payment of any stock dividend; or
(d) The legality of any recapitalization or
readjustment of Shares.
ARTICLE V
TERM
1. This Agreement shall remain in full force
and effect for a one-year period from the date hereof
(the "Initial Term"), and thereafter shall
automatically extend for additional, successive twelve
(12) month terms unless earlier terminated as provided
below. Each party, in addition to any other rights and
remedies, shall have the right to terminate this
Agreement at any time upon the material breach of this
Agreement by the other party. In the event of a
material breach, the non-breaching party shall notify
the breaching party in writing of such breach and upon
receipt of such notice, the breaching party shall have
45 days to remedy the breach or the non-breaching party
may forthwith terminate this Agreement upon the
expiration of said period.
2. Either of the parties hereto may terminate
this Agreement only after the Initial Term, except as
noted in paragraph 1 above, by giving to the other
party a notice in writing specifying the date of such
termination, which shall be not less than sixty (60)
days after the date of receipt of such notice. In the
event such notice is given by the Corporation, it shall
be accompanied by a copy of a resolution of the Board
of Directors of the Corporation, certified by the
Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating the successor
transfer agent or transfer agents. In the event such
notice is given by Sunstone, the Corporation shall on
or before the termination date, deliver to Sunstone a
copy of a resolution of its Board of Directors
certified by the Secretary or any Assistant Secretary
designating a successor transfer agent or transfer
agents. In the absence of such designation by the
Corporation, the Corporation shall upon the date
specified in the notice of termination of this
Agreement and delivery of the records maintained
hereunder, be deemed to be its own transfer agent and
Sunstone shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement. Fees and
out-of-pocket expenses incurred by Sunstone, but unpaid
by the Corporation upon such termination, shall be
immediately due and payable upon and notwithstanding
such termination.
3. In the event this Agreement is terminated as
provided herein, Sunstone, upon the written request of
the Corporation, shall deliver the records of the
Corporation to the Corporation or its successor
transfer agent in the form maintained by Sunstone. The
Corporation shall be responsible to Sunstone for all
out-of-pocket expenses and for the reasonable costs and
expenses associated with the preparation and delivery
of such media, including: (a) any custom programming
requested by the Corporation in connection with the
preparation of such media; (b) transportation of forms
and other Corporation materials used in connection with
the processing of Fund transactions by Sunstone; and
(c) transportation of the Corporation's records and
files in the possession of Sunstone. Sunstone shall
not reduce the level of service provided to the
Corporation following notice of termination by the
Corporation.
ARTICLE VI
MISCELLANEOUS
A. Notices. Any notice or other instrument in
writing, authorized or required by this Agreement to be
given to the Corporation with respect to any Fund shall
be sufficiently given if addressed to the Corporation
and mailed and delivered to a Co-President at 000
Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or at such
other place as the Corporation may from time to time
designate in writing. Any notice or other instrument
in writing, authorized or required by this Agreement to
be given to Sunstone shall be sufficiently given if
addressed to Sunstone and mailed or delivered to the
President at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as
Sunstone may from time to time designate in writing.
B. Amendments/Assignments.
1. This Agreement may not be amended or
modified in any manner except by a written agreement
executed by both parties with the formality of this
Agreement.
2. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective
successors and assigns. This Agreement shall not be
assignable by either party without the written consent
of the other party except that Sunstone may assign this
Agreement to an affiliate with advance written notice
to the Corporation; provided, however, the personnel of
the affiliate have the same or better qualifications
and experience as Sunstone.
C. Wisconsin Law. This Agreement shall be governed
by and construed in accordance with the laws of the
State of Wisconsin. If any part, term or provision of
this Agreement is determined by the courts or any
regulatory authority having jurisdiction over the issue
to be illegal, in conflict with any law or otherwise
invalid, the remaining portion or portions shall be
considered severable and shall not be affected, and the
rights and obligations of the parties shall be
construed and enforced as if the Agreement did not
contain the particular part, term or provision held to
be illegal or invalid.
D. Counterparts. This Agreement may be executed in
any number of counterparts each of which shall be
deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
E. Back-up Facility. During the terms of this
Agreement, Sunstone shall provide a facility capable of
safeguarding the transfer agency and dividend
disbursing records of the Corporation in case of damage
to the primary facility providing those services (the
"Back-Up Facility"). Transfer of the transfer agency
and dividend records of the Fund to the Back-Up
Facility shall commence as soon as practicable after
damage to the primary facility results in an inability
to provide the transfer agency and dividend disbursing
services. After the primary facility has recovered,
Sunstone shall again utilize it to provide the transfer
agency and dividend disbursing services to the Fund.
Sunstone shall use reasonable efforts to provide the
services described in this Agreement from the Back-Up
Facility.
This space intentionally left blank.
F. Non-Exclusive; Other Agreements. The services
of Sunstone hereunder are not deemed exclusive and
Sunstone shall be free to render similar services to
others. Except as specifically provided herein, this
Agreement does not in any way affect any other
agreements entered into among the parties hereto and
any actions taken or omitted by any party hereunder
shall not affect any rights or obligations of any other
party hereunder.
G. Captions. The captions in the Agreement are
included for convenience of reference only, and in no
way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective
corporate officer, thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as
the day and year first above written.
SUNSTONE INVESTOR SERVICES, LLC FRONTEGRA FUNDS,
INC.
By:______________________________ By:________________________________
(Signature) (Signature)
______________________________ ________________________________
(Name) (Name)
______________________________ ________________________________
(Title) (Title)
______________________________ ________________________________
(Date Signed) (Date Signed)
SCHEDULE A
Frontegra Total Return Bond Fund
SCHEDULE B
SERVICES
Maintenance of shareholder accounts
Maintain records for each shareholder account;
Scan account documents for electronic storage;
Issue customer statements;
Record changes to shareholder account information;
Maintain account documentation files for each
shareholder; and
Establish and maintain XXX accounts.
Shareholder servicing and shareholder transactions
Respond to written and telephone (recorded
lines) inquiries from shareholders for
information about their accounts;
Process shareholder purchase and redemption
orders;
Set up account information, including address,
dividend options, taxpayer identification
numbers and wire instructions;
Issue transaction confirmations;
Process transfers and exchanges; and
Process dividend and capital gain payments by
check, wire or ACH or purchase new shares
through dividend reinvestment.
Compliance reporting
Provide required reports to the Securities and
Exchange Commission, the National Association of
Securities Dealers and the states in which each
fund is registered;
Prepare and distribute to the Internal Revenue
Service required Internal Revenue Service forms
1099, 1042, 5498 and 945 relating to earned
income and capital gains; and
Issue tax withholding reports to the Internal
Revenue Service.
Telephone service representatives on-line access
Respond to shareholder or dealer inquiries related to:
Account registration;
Share balances;
Account options;
Dividend and capital gain distribution status;
Withholding status;
Transaction dates and types;
Shares traded;
Social security number/tax ID number;
External account number;
Address;
Customer or account type;
Dollars available/not available in the account;
Shares purchased/redeemed today;
Dividend accrual, current dividend period; and
Market value of shares.
Standard reports
Shareholder base analysis (monthly)
New account listing (weekly)
Purchases, redemptions, exchanges (monthly)
Servicing summary (monthly)
Other Service Features
In addition to the standard features listed above,
Sunstone's system offers additional features to meet
specialized needs which are available at additional
cost.
SCHEDULE C
FEE SCHEDULE
Base fees
Annual Shareholder
Account Fee Minimum Annual Fee Per
(open/closed) Fund
Year 1 $ 14.00 $ 12,000
Year 2 + 14.00 14,000
The base fee assumes a single class of shares, no
load or 12b-1 plan; availability of automatic
investment plans and systematic withdrawal plans
(using Sunstone's regular processing date);
quarterly or less frequent dividend distributions
for equity, fixed income and balanced funds; monthly
dividend distributions for money market funds;
annual capital gains distributions; and all standard
reports. The minimum annual fees per fund are
subject to an annual escalation of 6% per year.
Additional fees to be added to base fee
Type of Service or Annual Shareholder Minimum Annual
Fund Function Account Fee Fee Per Fund
Front-end load $ 1.50 $ 2,000
CDSC or back-end load 2.00 3,000
12b-1 plan 1.00 1,000
Monthly dividends on
non-daily accrual funds 2.00 2,000
Check writing privilege 2.00 0,000
Xxx-time set-up fees
Per fund set-up (for future funds) $ 2,000
NSCC FundSERV set-up (per fund group) 2,500
NSCC networking (per fund group) 1,500
Remote access set-up (per location) 500
Voice Response Unit (VRU) 2,000
Account maintenance and processing fees
(per occurrence)
Shareholder account set-up 2.00
Check writing signature verification .50
Omnibus account transaction 2.50
Locating lost shareholders 8.00
Taxpayer ID number solicitation 1.50
Monthly remote access user charge
First user and password 250.00
Additional users and
passwords (each) 100.00
VRU transaction .25
Fund Serve/Networking transaction .20
Out-of-pocket expenses
Per check processing (dividend, capital gains,
redemption) .25
Per statement and confirm processing .25
Per tax form processing .15
Production of ad hoc reports starting at $ 100.00
Bulk mailings/insert handling charges
1 insert .25
2-3 inserts (per piece) .20
4 or more inserts (per piece) .15
Bank account service fees and any other
bank charges At cost
Check stock At cost
Statement paper At cost
Envelopes At cost
Tax forms At cost
Postage and express delivery charges At cost
Telephone and long distance charges At cost
Fax charges At cost
P.O. box rental At cost
800-phone number At cost
Inventory and records storage At cost
FundSERV charges At cost
Additional fees which may be passed on to
shareholders
Outgoing wire fee Varies by bank
Telephone exchange fee $ 5.00
Check writing transaction fees
Stop payments Varies by bank
Non-sufficient funds Varies by bank
Check copy 2.50
Account transcripts older than 2 years
(per year, per fund) 5.00
Non-sufficient funds Varies by bank
XXX/SEP processing
Annual maintenance or custodial fee
(per account) 15.00
Account termination (transfer or rollover) 15.00
Custom Programming
Additional fees may apply for special
programming to meet your servicing requirements
or to create custom reports.
SCHEDULE D
RECORDS MAINTAINED BY SUNSTONE
Account applications
Canceled certificates plus stock powers and
supporting documents
Checks including check registers, reconciliation
records, any adjustment records and tax
withholding documentation
Indemnity bonds for replacement of lost or missing
stock certificates and checks
Liquidation, redemption, withdrawal and transfer
requests including stock powers, signature
guarantees and any supporting documentation
Shareholder correspondence
Shareholder transaction records
Share transaction history of the Funds
