ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this __ day of April, 1997, by and between The
Xxxxxxxxxx Funds, a Delaware business trust (the "Trust"), and Sunstone
Financial Group, Inc., a Wisconsin corporation (the "Administrator").
WHEREAS, the Trust 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 beneficial interests (the "Shares") in separate series with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Trust 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 Trust as are listed on
Schedule A hereto and any additional investment portfolios the Trust 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
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The Trust 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
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(a) Subject to the direction and control of the Trust's Board of Trustees
and utilizing information provided by the Trust and its agents, the
Administrator will: (1) provide office space, facilities, equipment and
personnel to carry out its services hereunder; (2) compile data for, prepare and
file with respect to the Funds 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 the Trust 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 Trust's custodian or transfer agent, subject to
review and approval of the Trust and the Trust'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) prepare, with the assistance of the
Trust's legal counsel, the Registration Statement for the Trust (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 Trust assets on proper authorization from
the Trust; (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 Trust'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
Trust's investment adviser and sub-advisers 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 documents to be filed with states to register and
maintain the Fund's securities registration, including, without limitation,
sales reports, updated prospectuses, Form U-1s; (14) develop with legal counsel
and the secretary of the Trust an agenda for each board meeting and, if
requested by the Trustees, attend board meetings and prepare minutes; (15)
coordinate the preparation of other matters required to be reported to the
board, including, without limitation, details of Rule 12b-1 payments, code 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 Trust and its independent accountants; and
(18) generally assist in the Trust'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 Trustees of the Trust 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 Trust 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 Trust when acting in reliance, upon the instruction, advice,
information or any documents relating to the Funds provided to the Administrator
by an "Authorized Person" of the Trust (as defined herein) or by any of the
aforementioned persons. Fees charged by such persons shall be an expense of the
Trust. 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. "Authorized Persons" of the Trust shall mean those individuals
identified as such in writing to the Administrator. The Administrator shall not
be held to have notice of any change of authority of any officer, agent,
representative or employee of the Trust until receipt of written notice thereof
from the Trust.
(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 Trust
are the property of the Trust and further agrees to surrender promptly to the
Trust any of such records upon the Trust'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 Trust.
(d) It is understood that in determining security valuations, the
Administrator may employ one or more pricing services approved by the Trust to
determine valuations of portfolio securities for purposes of calculating net
asset values of the Funds. 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 Trust 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
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(a) In consideration of the services rendered pursuant to this Agreement,
the Trust will pay the Administrator a fee, computed daily and payable monthly,
as provided in Schedule B hereto, plus out-of-pocket expenses. The Trust 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 Trust, 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, fees and expenses of pricing
services, 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 Trust's Prospectuses and
resolutions of the Trust's Board of Trustees. 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 Trust 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 Trustees; Commission fees
and state Blue Sky fees; advisory fees; charges of custodians, transfer agents,
dividend disbursing and accounting services 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 Trustees; 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 Trust, will be borne by
the Trust, its distributor or its investment adviser, except for such expenses
permitted to be paid by the Trust under a distribution plan adopted in
accordance with applicable laws.
4. PROPRIETARY AND CONFIDENTIAL INFORMATION
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The Administrator agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records relative
to the Funds and prior, present or potential shareholders of the Trust (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 Trust, which
approval 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 Trust. Records
and information which has become known to the public through no wrongful act of
the Administrator or any of its employees, agents or representatives shall not
be subject to this paragraph.
5. LIMITATION OF LIABILITY
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(a) 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 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. 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 Authorized Person.
(b) The Administrator 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. The Administrator
will, however, take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond the Administrator's control.
6. TERM
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(a) This Agreement shall become effective as 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 terminated as provided
herein, this Agreement shall continue in effect with respect to each Fund until
April __, 1998. 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 (i) upon mutual consent of the parties, or (ii)
by either party upon not less than sixty (60) 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 Trust.
(c) Notwithstanding anything herein to the contrary, upon the termination
of this Agreement or the liquidation of a Fund or the Trust, the Administrator
shall deliver the records of the Fund(s) and/or Trust as the case may be to the
Trust or person(s) designated by the Trust and thereafter the Trust 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 Trust or a Fund(s), and the Trust 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
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The services of the Administrator rendered to the Trust are not deemed to be
exclusive. The Administrator may render such services and any other services to
others, including other investment companies. The Trust 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 (except as to Section 9
hereof which shall be construed in accordance with Delaware 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. MISCELLANEOUS
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This Agreement is executed by or on behalf of the Trust and the obligations
hereunder are not binding upon any of the Trustees, officers or shareholders of
the Trust individually but are binding only upon the Funds to which such
obligations pertain and the assets and property of such Funds.
10. NOTICES
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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 Trust shall be sent to The Xxxxxxxxxx Funds, 000
Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxxx
X. Xxxxxxx III.
11. COUNTERPARTS
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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 XXXXXXXXXX FUNDS
(the "Trust")
By:
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President
SUNSTONE FINANCIAL GROUP, INC.
("Administrator")
By:
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President
SCHEDULE A
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
THE XXXXXXXXXX FUNDS
AND
SUNSTONE FINANCIAL GROUP, INC.
NAME OF FUND
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XXXXXXXXXX BALANCED FUND
SCHEDULE B
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
THE XXXXXXXXXX FUNDS
AND
SUNSTONE FINANCIAL GROUP, INC.
MINIMUM
NAME OF FUND AVERAGE NET ASSETS ANNUAL FEES ANNUAL
------------ ------------------ ----------- -------
Balanced Fund Up to $50 Million 20.0 basis points $65,000
$50 Million to $100 Million 13.0 basis points
Over $100 Million 5.0 basis points
The minimum annual fee is subject to an automatic annual escalation of 5%.
Sunstone will notify the Trust of each such escalation but no amendment of this
Schedule B shall be required. The Trust shall pay the Administrator $35,000 for
its initial start-up services for the Fund. The Trust shall also pay/reimburse
the Administrator's out-of-pocket expenses as described in the Agreement. The
foregoing fee schedule assumes a single class of shares for each Fund.
