SENIOR FUNDS(TM)
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT (the "Agreement") is made as of the ________
day of ____________________, 2001, by and between SENIOR FUNDS(TM)(the "Trust"),
a Massachusetts Business Trust (the "Trust"), and FUND SERVICES, INC., d/b/a
Champion Fund Services (the "Administrator"), a Texas corporation.
WITNESSETH THAT:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and is registering its shares of common stock under the Securities Act of 1933,
as amended (the "1933 Act") in one or more distinct series of shares (the "Fund"
or "Funds");
WHEREAS, the Trust and the Administrator desire to enter into this
Agreement pursuant to which the Administrator will provide administrative
services to the Funds identified on Schedule A hereto, as may be amended from
time to time, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and the Administrator, intending to be
legally bound hereby, agree as follows:
1. APPOINTMENT OF ADMINISTRATOR. The Trust hereby appoints the Administrator
to perform the services described in this Agreement for the Funds
identified on Schedule A, and the Administrator hereby accepts such
appointment. The Administrator shall act under such appointment pursuant to
the terms and conditions hereinafter set forth.
2. FUND DOCUMENTS. The Trust has provided to the Administrator properly
certified or authenticated copies of the following Trust related documents
in effect on the date hereof: the Fund's organizational documents,
including Indenture of Trust and By-Laws; the Trust's Registration
Statement on Form N-1A, including all exhibits thereto; the Trust's
Prospectuses and Statement of Additional Information; all contracts with
the Trust's investment adviser,
custodian, transfer agent/shareholder servicing agent, distributor,
accounting services agent and custodian; if applicable, notice filed with
or granted by the Commodity Futures Trading Commission relating to the each
Fund's status as a commodity pool operator; and resolutions of the Trust's
Board of Trustees authorizing the appointment of the Administrator and
approving this Agreement (members of the Board of Trustees being referred
to herein as "Trustees"). The Trust shall promptly provide to the
Administrator copies, properly certified or authenticated, of all
additions, amendments or supplements to the foregoing, if any.
3. ADMINISTRATIVE SERVICES. Subject to the direction and control of the Board
of Trustees of the Trust and to the extent not otherwise the responsibility
of, or provided by, the Trust or other agents of the Trust, the
Administrator shall provide the administrative services set forth on
Schedule B hereto. The Trust shall provide, and shall cause its investment
adviser(s), custodian, transfer agent/shareholder servicing agent,
distributor, accounting services agent, legal counsel and independent
public accountants to cooperate with the Administrator and to provide it
with, such information, documents and advice as the Administrator may
reasonably request in order to enable the Administrator to perform its
duties hereunder. The Administrator shall provide office space, facilities,
equipment and personnel necessary to perform its obligations under this
Agreement.
4. ALLOCATION OF EXPENSES. The Administrator shall bear all costs and expenses
associated with its obligation to provide the office space, facilities,
equipment and personnel necessary to perform its duties under this
Agreement, including compensation of officers of the Trust who are
affiliated persons of the Administrator (if applicable). The Trust shall
pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder, which expenses payable by the Trust shall include,
without limitation: organizational expenses; fees and expenses payable to
the Trust's investment adviser(s), custodian, transfer agent/shareholder
servicing agent, distributor, accounting services agent, legal counsel and
independent public accountants; all documented
out-of-pocket expenses incurred by the Administrator in connection with the
provision of administrative services hereunder; the cost of obtaining
quotations for calculating the value of the assets of each Fund; taxes
levied against the Trust or any Fund; brokerage fees, xxxx-ups and
commissions in connection with the purchase and sale of Fund securities;
costs, including the interest expense, of borrowing money; costs and/or
fees incident to holding meetings of the Board of Trustees and
shareholders; costs and/or fees related to preparation (including
typesetting and printing charges) and mailing of copies of the Trust's
Prospectuses, Statements of Additional Information, reports and proxy
materials to the existing shareholders of the Funds and filing of reports
with regulatory bodies; costs and/or fees related to maintenance of the
Trust's existence; costs and/or fees of initial and on-going registration
of shares with Federal and state securities authorities; costs of printing
share certificates representing shares of the Funds; fees payable to, and
expenses of, Trustees who are not "interested persons" of the Trust;
premiums payable on the fidelity bond required by Section 17(g) of the 1940
Act, and any other premiums payable on insurance policies related to the
Trust's business and the investment activities of its Funds; fees,
voluntary assessments and other expenses incurred in connection with the
Trust's membership in investment company organizations; and such
non-recurring expenses as may arise, including actions, suits or
proceedings to which the Trust is a party and the legal obligation which
the Trust may have to indemnify its Trustees and officers with respect
thereto.
5. RECORDKEEPING AND OTHER INFORMATION. The Administrator shall create and
maintain all necessary records in accordance with all applicable laws,
rules and regulations, including, but not limited to, records required by
Section 31(a) of the 1940 Act and the rules thereunder, as the same may be
amended from time to time, relating to the various services performed by it
and not otherwise created and maintained by another party pursuant to a
contract with the Trust. All records shall be the property of the Trust at
all times and shall be available for inspection and
use by the Trust. Where applicable, such records shall be maintained by the
Administrator for the periods and in the places required by Rule 31a-2
under the 1940 Act.
6. AUDIT, INSPECTION AND VISITATION. The Administrator shall make available
during regular business hours all records and other data created and
maintained pursuant to this Agreement for reasonable audit and inspection
by the Trust or any person retained by the Trust. Upon reasonable notice by
the Trust, the Administrator shall make available during regular business
hours its facilities and premises employed in connection with its
performance of this Agreement for reasonable visitation by the Trust, or
any person retained by the Trust.
7. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as otherwise
provided herein, the Trust assumes full responsibility for ensuring that
the Trust complies with all applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended, the 1940 Act, and the rules
thereunder, and any other applicable laws, rules and regulations.
8. COMPENSATION. The Trust shall pay to the Administrator as compensation for
its services rendered hereunder the annual fee set forth in Schedule A. The
fee shall be calculated and accrued daily, and paid monthly. The Trust
shall also reimburse the Administrator for its out-of-pocket expenses
related to the performance of its duties hereunder, including, without
limitation, telecommunications charges, postage and delivery services,
record retention costs, reproduction charges and traveling and lodging
expenses incurred by officers and employees of the Administrator. The Trust
shall pay the Administrator's monthly invoices for administration fees and
out-of-pocket expenses on the first business day following the respective
month-end. If this Agreement becomes effective subsequent to the first day
of a month or terminates before the last day of a month, the Trust shall
pay to the Administrator an administration fee that is prorated for that
part of the month in which this Agreement is in effect. All rights of
compensation and reimbursement under this Agreement for services performed
by the Administrator as of the termination date shall survive the
termination of this Agreement.
9. APPOINTMENT OF AGENTS. The Administrator may at any time or times in its
discretion appoint (and may at any time remove) other parties as its agent
to carry out such provisions of this Agreement as the Administrator may
from time to time direct; provided, however, that the appointment of any
such agent shall not relieve the Administrator of any of its
responsibilities or liabilities hereunder.
10. USE OF ADMINISTRATOR'S NAME. The Funds shall not use the name of the
Administrator or any of its affiliates in the Prospectuses, Statements of
Additional Information, sales literature or other material relating to the
Trust in a manner not approved prior thereto in writing by the
Administrator; provided, however, that the Administrator shall approve all
uses of its and its affiliates' names that merely refer in accurate terms
to their appointments hereunder or that are required by the Securities and
Exchange Commission (the "SEC") or any state securities commission; and
further provided, that in no event shall such approval be unreasonably
withheld.
11. USE OF TRUST'S NAME. Neither the Administrator nor any of its affiliates
shall use the name of the Trust or any Fund or material relating to the
Trust or any Fund on any forms (including any checks, bank drafts or bank
statements) for other than internal use in a manner not approved prior
thereto in writing by the Trust; provided, however, that the Trust shall
approve all uses of its name or the name of any Fund that merely refer in
accurate terms to the appointment of the Administrator hereunder or that
are required by the SEC or any state securities commission; and further
provided, that in no event shall such approval be unreasonably withheld.
12. LIABILITY OF ADMINISTRATOR. The duties of the Administrator shall be
limited to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Administrator hereunder. The
Administrator may, in connection with this Agreement, employ
agents or attorneys in fact, and shall not be liable for any loss arising
out of or in connection with its actions under this Agreement so long as it
acts in good faith and with due diligence, and is not negligent or guilty
of any willful misconduct. The Administrator may consult counsel to the
Trust or the Trust's independent public accountants or other experts with
respect to any matter arising in connection with the Administrator's
duties, and the Administrator shall not be liable for any action taken or
omitted by the Administrator in good faith in reliance on the oral or
written advice of such counsel, independent public accountants or other
experts. The Administrator shall not be liable for any action taken or
omitted by the Administrator in reliance on the oral or written
instruction, authorization, approval or information provided to the
Administrator by any person reasonably believed by the Administrator to be
authorized by the Trust to give such instruction, authorization, approval
or information. The Administrator shall not be liable or responsible for
any acts or omissions of any predecessor administrator or any other persons
having responsibility for matters to which this Agreement relates prior to
the effective date of this Agreement nor shall the Administrator be
responsible for reviewing any such acts or omissions. Any person, even
though also an officer, trustee, employee or agent of the Administrator or
any of its affiliates, who may be or become an officer or Trustee of the
Trust, shall be deemed, when rendering services to the Trust as such
officer or Trustee, to be rendering such services to or acting solely for
the Trust and not as an officer, trustee, employee or agent or one under
the control or direction of the Administrator or any of its affiliates,
even though paid by one of those entities. As used above in this Section 12
(except the previous sentence) and in Section 13, the term "Administrator"
shall include directors, officers, employees and other agents of the
Administrator.
13. INDEMNIFICATION. The Trust hereby agrees to indemnify and hold harmless the
Administrator from and against any and all claims, demands, expenses
(including attorney's fees) and liabilities whether with or without basis
in fact or law, of any and every nature which the
Administrator may sustain or incur or which may be asserted against the
Administrator by any person by reason of, or as a result of: (i) any action
taken or omitted to be taken by the Administrator in good faith reliance
upon any instrument, order or communication believed by it to be genuine
and to be signed, countersigned or executed by any duly authorized person,
upon the oral instruction or written instruction of an authorized person of
the Trust or upon the opinion of legal counsel for the Trust or its own
counsel; or (ii) any action taken or permitted to be taken by the
Administrator in connection with its appointment in good faith in reliance
upon any law, act, regulation or interpretation of the same even though the
same may thereafter have been altered, changed, amended or repealed.
However, indemnification hereunder shall not apply to actions or omissions
of the Administrator or its directors, officers, employees, or agents in
cases of its own negligence, willful misconduct, bad faith, or reckless
disregard of its or their own duties hereunder. The right to indemnity
hereunder shall include the right to advancement of defense expenses in the
event of any pending or threatened litigation; provided, however, that the
Administrator shall agree that any advancement of expenses shall be
returned to the Trust if it is ultimately determined by an administrative
or judicial tribunal that the expenses (and related liability, if any)
resulted from the Administrator's own wilful misfeasance, bad faith,
negligence or reckless disregard of its duties and obligations under this
Agreement.
The Administrator shall give prompt written notice to the Trust of a
written assertion or claim of any threatened or pending legal proceeding
which may be subject to indemnity under this Section; provided, however,
that the Administrator's failure to notify the Trust of such threatened or
pending legal proceeding shall not operate to relieve the Trust of any
liability arising hereunder. The Trust shall be entitled, if it so elects,
to assume the defense of any claim subject to this Indemnity and such
defense shall be conducted by counsel chosen by the Trust and satisfactory
to the Administrator; provided, however, that if the defendants include
both the Administrator
and the Trust, and the Administrator shall have reasonably concluded that
there may be one or more legal defenses available to it which are different
from or additional to those available to the Trust ("conflict of
interest"), the Trust shall not have the right to elect to defend the claim
on behalf of the Administrator, and the Administrator shall have the right
to select separate counsel to defend such claim on behalf of the
Administrator. In the event that the Trust elects to assume the defense of
any claim pursuant to the preceding sentence and retains counsel
satisfactory to the Administrator, the Administrator shall bear the fees
and expenses of additional counsel retained by it, except for reasonable
investigation costs which shall be borne by the Trust. If the Trust (i)
does not elect to assume the defense of a claim, (ii) elects to assume the
defense of a claim but chooses counsel that is not satisfactory to the
Administrator, or (iii) has no right to assume the defense of a claim
because of a conflict of interest, the Trust shall advance or reimburse the
Administrator, at the election of the Administrator, reasonable fees and
expenses of any counsel retained by the Administrator, including reasonable
investigation costs.
14. SCOPE OF DUTIES. The Administrator and the Trust shall regularly consult
with each other regarding the Administrator's performance of its
obligations and its compensation under the foregoing provisions. In
connection therewith, the Trust shall submit to the Administrator at a
reasonable time in advance of filing with the SEC copies of any amended or
supplemented Registration Statement of the Trust (including exhibits) under
the 1940 Act and the 1933 Act, and, at a reasonable time in advance of
their proposed use, copies of any amended or supplemented forms relating to
any plan, program or service offered by the Trust. Any change in such
materials that would require a change in the Administrator's obligations
under this Agreement shall be subject to the Administrator's approval. In
the event that a change in such documents or in the procedures contained
therein increases the cost or burden to the Administrator of performing its
obligations hereunder, the Administrator shall be entitled to receive
reasonable compensation therefor.
15. DURATION. This Agreement shall become effective on the date first written
above and shall continue in force for two years from that date (the
"Initial Term"). Thereafter, this Agreement shall continue in force from
year to year (each a "Successive Term"), provided continuance after the
Initial Term is approved at least annually by (i) the vote of a majority of
the Trustees of the Trust and (ii) the vote of a majority of those Trustees
of the Trust who are not "interested persons" of the Trust, and who are not
parties to this Agreement or "interested persons" of any such party, cast
at a meeting called for the purpose of voting on the approval.
16. TERMINATION. This Agreement shall terminate as follows:
a. This Agreement shall terminate automatically in the event of its
assignment.
b. Either the Trust or the Administrator may terminate this Agreement
without penalty prior to the commencement of any Successive Term by
providing to the other party 90 days prior written notice of such
termination.
c. Either party (the "terminating party") may immediately terminate this
Agreement during the Initial Term or any Successive Term in the event
of a material breach of this Agreement by the other party (the
"breaching party"), provided that the terminating party has given to
the breaching party notice of such breach, and the breaching party has
not remedied such breach within 45 days after receipt of such notice.
Upon the termination of this Agreement, the Trust shall pay to the
Administrator such compensation and out-of-pocket expenses as may be
payable for the period prior to the effective date of such
termination. In the event that the Trust designates a successor to any
of the Administrator's obligations hereunder, the Administrator shall,
at the expense and direction of the Trust, transfer to such successor
all relevant books, records and other data established or maintained
by the Administrator under the foregoing provisions.
Sections 4, 8, 10, 11, 12, 13, 16, 17, 21, 22, 23, 24 and 25 shall
survive any termination of this Agreement.
17. FORCE MAJEURE. The Administrator shall not be liable for any delays or
errors in the performance of its obligations hereunder occurring by reason
of circumstances not reasonably foreseeable and beyond its control,
including but not limited to acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot or failure of communications or power supply. In
the event of equipment breakdowns which are beyond the reasonable control
of the Administrator, and not primarily attributable to the failure of the
Administrator to reasonably maintain or provide for the maintenance of such
equipment, the Administrator shall, at no additional expense to the Fund,
take reasonable steps in good faith to minimize service interruptions, but
shall have no liability with respect thereto.
18. AMENDMENT. 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.
19. NON-EXCLUSIVE SERVICES. The types of administrative services rendered by
the Administrator hereunder are not exclusive. The Administrator may render
such services to any other investment company and have other businesses and
interests.
20. DEFINITIONS. As used in this Agreement, the terms "assignment" and
"interested person" shall have the respective meanings set forth in the
1940 Act and the rules enacted thereunder as now in effect or hereafter
amended.
21. CONFIDENTIALITY. The Administrator shall treat confidentially and as
proprietary information of the Trust all records and other information
related to the Trust and prior, present or potential shareholders and shall
not use such records and information for any purpose other than performance
of its responsibilities and duties hereunder, except as may be required by
administrative or judicial tribunals or as requested by the Trust.
22. NOTICE. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand
or upon receipt if sent by certified or
registered mail (postage prepaid and return receipt requested) or by a
nationally recognized overnight courier service (appropriately marked for
overnight delivery) or upon transmission if sent by telex or facsimile
(with request for immediate confirmation of receipt in a manner customary
for communications of such respective type and with physical delivery of
the communication being made by one or the other means specified in this
Section 22 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) if to the Trust:
Senior Funds
00000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Xxxxx , President and Trustee
(b) if to the Administrator:
Fund Services, Inc., d/b/a Champion Fund Services
00000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxxx X. Xxxxxx, Vice President
or to such other respective addresses as the parties shall designate by
like notice, provided that notice of a change of address shall be effective
only upon receipt thereof.
23. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
24. GOVERNING LAW. This Agreement shall be administered, construed and enforced
in accordance with the laws of the State of Texas to the extent that such
laws are not preempted by the provisions of any law of the United States
heretofore or hereafter enacted, as the same may be amended from time to
time.
25. ENTIRE AGREEMENT. This Agreement (including the Exhibits attached hereto)
contains the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersedes all prior written or oral
agreements and understandings with respect thereto.
26. MISCELLANEOUS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
The captions in this 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. This Agreement may be executed in two counterparts, each of
which taken together shall constitute one and the same instrument.
27. LIMITATION OF LIABILITY. The term "Senior Funds (TM)" means and refers to
the Trustees from time to time serving under the Master Trust Agreement of
the Trust dated December 13, 2000, as the same may subsequently thereto
have been, or subsequently hereto be, amended. It is expressly agreed that
obligations of the Trust hereunder shall not be binding upon any Trustee,
Shareholder, nominee, officers, agents or employee of the Trust,
personally, but bind only the assets and property of the Trust, as provided
in the Master Trust Agreement. The execution and delivery of this Agreement
has been authorized by the Trustees and signed by an authorized officer of
the Trust, acting as such, and neither such authorization nor such
execution and delivery shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as provided in the
Master Trust Agreement. The Master Trust Agreement is on file with the
Secretary of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
SENIOR FUNDS(TM)
By:
----------------------------------------------
Xxxxxx X. Xxxxx, President and Trustee
FUND SERVICES, INC., D/B/A CHAMPION FUND SERVICES
By:
----------------------------------------------
Xxxxxxxx X. Xxxxxx, Vice President
SCHEDULE A
SENIOR FUNDS(TM)
ADMINISTRATION SERVICES FEES
Annual Base Fee: $280,000 for the Funds and Classes of Shares listed
---------------- below, plus $30,000 for each fund in addition to those
listed below
Annual Asset Based Fee: Based on total open shareholder accounts for Senior
----------------------- -------------------------------------------------------
Funds(TM)
---------
ASSETS BASIS POINT FEE
First $100 Million 0 basis points (.00%)
Next $100 Million 8 basis points (.08%)
Next $300 Million 6 basis points (.06%)
Next $500 Million 4 basis points (.04%)
Over $1 Billion 2 basis points (.02%)
Out-of-pocket costs: Standard out-of-pocket costs including, but not limited
postage, courier, telephone, travel, printing, copying,
filing fees, record retention and other miscellaneous
items.
Conversion cost: None
Existing Funds and Classes of Shares:
Senior U. S. Government Fund
Classes: No Load-Institutional
No Load-Retail
Senior Corporate Bond Fund
Classes: No Load-Institutional
No Load-Retail
Senior Large Cap Equity Fund
Classes: No Load-Institutional
No Load-Retail
Senior Balanced 50 Fund
Classes: No Load-Institutional
No Load-Retail
Senior Balanced 60 Fund
Classes: No Load-Institutional
No Load-Retail
Senior Balanced 70 Fund
Classes: No Load-Institutional
No Load-Retail
Senior Money Market Fund
SCHEDULE B
SENIOR FUNDS(TM)
ADMINISTRATIVE SERVICES PROVIDED BY FUND SERVICES, INC.
1. Provide overall day-to-day Trust administrative management, including
coordination of investment adviser, custodian, transfer agency,
distribution, and pricing and accounting activities.
2. Assist the Trust and Trust counsel with the design and development of
the Trust, including investment objectives, policies and structure of
new Funds.
3. Assist Trust counsel with the preparation of Registration Statements,
Prospectuses, Statements of Additional Information, and proxy
materials.
4. Prepare and file such reports, applications and documents as may be
necessary or desirable to register the Trust's shares with the Federal
and state securities authorities, and monitor the sale of Trust shares
for compliance with Federal and state securities laws;
5. Prepare and file Annual and Semi-Annual Report on Form N-SAR.
6. Prepare and file reports to shareholders, including the annual and
semi annual reports to shareholders, and coordinate mailing
Prospectuses, notices, proxy statements, proxies and other reports to
shareholders.
7. Assist with layout and printing of shareholder communications,
including Prospectuses and reports to shareholders.
8. Administer contracts on behalf of the Trust with, among others, the
Trust's investment adviser(s), custodian, transfer agent/shareholder
servicing agent, distributor, and accounting services agent.
9. Coordinate the representations of outside legal counsel and
independent public accountants to the Trust.
10. Assist Trust in obtaining fidelity bond and trustees and
officers/errors and omissions insurance policies for the Trust in
accordance with the requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act, as such bonds and policies are approved by the Trust's Board
of Trustees.
11. Prepare and maintain materials for trustees/management meetings
including, agendas, minutes, attendance records and minute books.
12. Coordinate shareholder meetings, including assisting Trust counsel in
preparation of proxy materials, preparation of minutes and tabulation
of results.
13. Monitor and pay Trust bills, maintain Trust budget and report budget
expenses and variances to Trust management.
14. Monitor the Trust's compliance with the investment restrictions and
limitations imposed by the 1940 Act and state Blue Sky laws and
applicable regulations thereunder, the fundamental and non-fundamental
investment policies and limitations set forth in the Trust's
Prospectuses and Statements of Additional Information, and the
investment restrictions and limitations necessary for each Fund of the
Trust to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended, or any successor
statute.
15. Prepare and distribute to appropriate parties notices announcing the
declaration of dividends and other distributions to shareholders.
16. Provide personnel to serve as officers of the Trust if so elected by
the Board of Trustees of the Trust, and the Trust provides coverage
for said officers under the Trust's Directors and Officers and Errors
and Omissions insurance.
17. Provide other administrative services as may be agreed from time to
time in writing by the Trust and the Administrator.
18. Assist in the preparation and filing of the Trust's annual report
pursuant to Rule 24f-2 of the Investment Company Act of 1940, as
amended.
