AMENDED AND RESTATED
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of May 14, 1997, by and between The Xxxxxxxx
Funds, Inc., a Maryland corporation ("Xxxxxxxx Funds"), and Sunstone Financial
Group, Inc., a Wisconsin Corporation (the "Administrator").
WHEREAS, Xxxxxxxx Funds is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end management investment company and is
authorized to issue shares of common stock (the "Shares") in separate classes
with each such class representing the interests in a separate portfolio of
securities and other assets; and
WHEREAS, Xxxxxxxx Funds 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 Xxxxxxxx Funds as are
listed on Schedule A hereto commencing with The Xxxxxxxx Growth Fund and any
additional investment portfolios Xxxxxxxx Funds 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
Xxxxxxxx Funds 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 Xxxxxxxx Fund's Board of
Directors and utilizing information provided by Xxxxxxxx Funds 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) prepare for execution by Xxxxxxxx Funds
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 Xxxxxxxx
Fund's custodian or transfer agent; (4) prepare compliance filings relating to
the registration of the securities of the Funds pursuant to state securities
laws with the advice of Xxxxxxxx Funds' counsel; (5) perform securities
valuations; (6) determine the income and expense accruals of the Funds; (7)
calculate daily net asset values and income factors of the Funds; (8) maintain
all general ledger accounts and related subledgers; (9) prepare financial
statements for the Annual and Semi-Annual Reports required pursuant to Section
30(d) under the Act; (10) review to the extent requested by Xxxxxxxx Funds
drafts of the Registration Statement for the Funds (on Form N-1A or any
replacement therefor) and any amendments thereto, and proxy materials; (11)
prepare and monitor each Fund's expense accruals and cause all appropriate
expenses to be paid from Fund assets on proper authorization from Xxxxxxxx
Funds; (12) assist in the acquisition of Xxxxxxxx Fund's fidelity bond required
by the Act, monitor the amount of the bond and make the necessary Commission
filings related thereto; (13) from time to time as the Administrator deems
appropriate, check each Fund's compliance with the policies and limitations
relating to portfolio investments as set forth in the Prospectus, Statement of
Additional Information, and Articles of Incorporation and monitor each Fund's
status as a regulated investment company under Subchapter M of the Internal
Revenue Code, as amended (but this function shall not relieve each Fund's
investment adviser of its primary day-to-day responsibility for assuring such
compliance); (14) 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; and (15) generally assist in each Fund's
administrative operations. In addition, the Administrator will monitor Xxxxxxxx
Funds' arrangements with respect to services provided pursuant to any plan of
distribution including reporting to the Board of Directors with respect to the
amounts paid or payable by the Funds from time to time under the plan and the
nature of the services provided, and maintaining appropriate records in
connection with its monitoring duties. 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 Xxxxxxxx Funds shall cause the officers and employees
of Xxxxxxxx Funds, the adviser, legal counsel, independent accountants,
custodian and transfer agent and other agents and representatives of the Funds
to cooperate with the Administrator and to provide the Administrator, upon
request, with such information, documents and advice relating to the Funds 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, shall not be liable or
responsible for any losses from its reliance, and shall be held harmless by the
Funds when acting in reliance, upon the instruction, advice, information or any
documents relating to the Funds provided to the Administrator by any of the
aforementioned persons or their representatives. Fees charged by such persons
shall be an expense of the Funds. 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 or employee of Xxxxxxxx
Funds until receipt of written notice thereof from Xxxxxxxx Funds.
2
(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 Funds
are the property of the Funds and further agrees to surrender promptly to each
Fund any of such records upon the Fund's request. 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
Fund.
(d) The Fund's Board of Directors and the Fund's investment adviser have
and retain responsibility for all compliance matters relating to the Fund
including but not limited to compliance with the Investment Company Act of 1940,
as amended, the Internal Revenue Code of 1986, as amended, and the policies and
limitations of each Fund relating to the portfolio investments as set forth in
the Prospectus and Statement of Additional Information. Sunstone's monitoring
and other functions hereunder shall not relieve the Board and the investment
adviser of their duty to act in good faith, in a manner reasonably believed to
be in the best interests of the Fund and with the care that an ordinary prudent
person in a like position would use under similar circumstances.
3. Fees; Delegation; Expenses
(a) In consideration of the services rendered pursuant to this Agreement,
Xxxxxxxx Funds will pay the Administrator a fee, computed daily and payable
monthly, at the annual rate specified in Schedule B plus reasonable
out-of-pocket expenses. Fees shall be paid at a rate that would aggregate at
least the applicable minimum fee. Out-of-pocket expenses include, but are not
limited to, travel, lodging and meals in connection with travel on behalf of
Xxxxxxxx Funds, security pricing and corporate action services utilized by the
Administrator, 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 and overnight delivery
expenses.
(b) For the purpose of determining fees payable to the Administrator, net
asset value shall be computed in accordance with the Fund's Prospectuses and
resolutions of Xxxxxxxx Funds' 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. Such fee as is
attributable to each Fund shall be a separate charge to such 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. Costs and expenses to be
3
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 and
administration fees; charges of custodians, transfer agents and dividend
disbursing agents; insurance premiums; outside auditing and legal expenses;
costs of organization and maintenance of corporate existence; typesetting,
proofing, printing and mailing of prospectuses, statements of additional
information, supplements, notices and proxy materials for regulatory purposes
and for distribution to current shareholders; typesetting, proofing, printing,
mailing and other costs of shareholder reports; expenses incidental to holding
meetings of shareholders and Directors; and any extraordinary expenses; will be
borne by the Funds. Expenses incurred for distribution of securities of the
Funds, including the typesetting, proofing, printing and mailing of prospectuses
for persons who are not shareholders of the Funds, will be borne by the Fund's
investment adviser.
4. Proprietary and Confidential Information
The Administrator agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of Xxxxxxxx Funds all records and
other information relative to the Funds and prior, present or potential
shareholders of the Funds (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by Xxxxxxxx Funds, 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, or when so requested by Xxxxxxxx
Funds.
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 Xxxxxxxx Funds in connection with the matters
to which this Agreement relates, except for a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Notwithstanding any other provision of this Agreement, and so long as
the Administrator acts in good faith and without gross negligence, Xxxxxxxx
Funds assumes full responsibility and shall indemnify and hold harmless the
Administrator from and against any and all actions, suits, claims, demands,
losses, expenses and liabilities whether with or without basis in fact or law
(including the costs of investigating or defending any alleged actions, suits,
claims, demands, losses, expenses and liabilities) of any and every nature which
the Administrator may sustain or incur or which may be asserted against the
Administrator by any person arising directly or indirectly out of any action
taken or omitted to be taken by it in performing the services hereunder, or in
reliance upon the instruction, advice, information or documents provided to the
Administrator by any party described in Section 2(b). (As used in this Section
5(a), the term
4
"Administrator" shall include past and present directors, officers, employees
and other corporate agents of the Administrator as well as the corporation
itself.) The indemnity and defense provisions set forth herein indefinitely
survive the termination of this Agreement.
6. Term
(a) This Agreement shall become effective with respect to each Fund listed
on Schedule A hereof as of the date hereof 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. Unless sooner terminated as provided herein,
this Agreement shall continue in effect with respect to each Fund until August
1, 1998. Thereafter, if not terminated, this Agreement shall continue
automatically in effect as to each Fund for successive annual periods unless
terminated as provided herein.
(b) This Agreement may be terminated with respect to any one or more
particular Funds without penalty by either party upon not less than ninety (90)
days written notice to the other party. 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 Xxxxxxxx Funds.
7. Non-Exclusivity
The services of the Administrator rendered hereunder are not deemed to be
exclusive. The Administrator may render such services and any other services to
others, including other investment companies. Xxxxxxxx Funds recognizes that
from time to time directors, officers and employees of the Administrator may
serve as directors, trustees, officers and employees of other corporations or
trusts (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 administration, distribution,
fund accounting or other agreements with such other corporations or trusts.
8. Governing Law; Invalidity
This Agreement shall be governed by New York law. To the extent that the
applicable laws of the State of New York, 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 without invalidating the remaining
provisions hereof, and any such
5
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 Xxxxxxxx Funds shall be sent to Xxxxxxxx Funds,
Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxxxxxx X.
Xxxxxxxx.
6
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.
THE XXXXXXXX FUNDS, INC.
("Xxxxxxxx Funds")
By:
--------------------------------------------
Xxxxxxxxx X. Xxxxxxxx
President
SUNSTONE FINANCIAL GROUP, INC.
("Administrator")
By:
--------------------------------------------
Xxxxxx X. Xxxxxxx
President
7
1
Schedule A
to the
Administration and Fund Accounting Agreement
by and between
The Xxxxxxxx Funds, Inc.
and
Sunstone Financial Group, Inc.
Name of Fund Effective Date
The Xxxxxxxx Growth Fund August 1, 1994
Schedule B
to the
Administration and Fund Accounting Agreement
by and between
the Xxxxxxxx Funds, Inc.
and
Sunstone Financial Group, Inc.
The Xxxxxxxx Growth Fund
Fee Schedule
Pursuant to Section 3, Xxxxxxxx Funds shall pay Administrator a fee, computed
daily and payable monthly, based on the aggregate average net assets of Xxxxxxxx
Growth Fund at the annual rate of 0.150 of 1% on the first $50 million of
average net assets, 0.125 of 1% on the next $50 million of average net assets,
0.075 of 1% on the next $100 million of average net assets, and 0.050 of 1% on
average net assets in excess of $200 million, subject to an annual minimum fee
of $60,000, plus out of pocket expenses. The parties understand that this fee
schedule assumes only one investment portfolio of the Xxxxxxxx Funds. The fee
schedule for multiple investment portfolios will be such schedule as the parties
may agree, as reflected in an amended Schedule B.
