EX-99.H.3.A
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 1st day of April, 2005, by and between
UMB Scout Funds, a Delaware business trust (the "Trust") and UMB Fund Services,
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 "1940 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
as 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 current and prior agents
and service providers, the Administrator will provide the services listed on
Schedule B hereto. The duties of the Administrator shall be confined to those
expressly set forth therein, and no implied duties are assumed by or may be
asserted against the Administrator hereunder. In the event the Administrator is
asked to correct any action taken or inaction by any prior service provider,
then the Administrator shall provide such services and shall be entitled to such
compensation as the parties may mutually agree.
(b) The Trustees of the Trust shall cause the officers, investment
adviser(s) and sub-advisers, legal counsel, independent accountants, transfer
agent, custodian and other service providers and agents, past and present, for
the Funds to cooperate with the Administrator and to provide the Administrator
with such information, documents and advice relating to the Funds and the Trust
as necessary and/or appropriate or as requested by the Administrator, in order
to enable the Administrator to perform its duties hereunder. In connection with
its duties hereunder, the Administrator shall (without investigation or
verification) be entitled and is hereby instructed to, rely upon any and all
instructions, advice,
information or documents provided to the Administrator by an officer or
representative of the Funds or by any of the aforementioned persons. The
Administrator shall be entitled to rely on any document that it reasonably
believes to be genuine and to have been signed or presented by the proper party.
Fees charged by such persons shall be an expense of the Trust. The Administrator
shall not be held to have notice of any change of authority of any officer,
agent, representative or employee of the Trust, investment adviser or service
provider until receipt of written notice thereof from the Trust. As used in this
Agreement, the term "investment adviser" includes all sub-advisers or persons
performing similar services.
(c) To the extent required by Rule 31a-3 under the 1940 Act, the
Administrator hereby agrees that all records which it maintains for the Trust
pursuant to its duties hereunder 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, and where applicable, the
Administrator further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records described in Schedule B which are
maintained by the Administrator for the Trust.
(d) It is understood that in determining security valuations, the
Administrator employs one or more pricing services, as directed by the Trust, to
determine valuations of portfolio securities for purposes of calculating net
asset values of the Funds. The Trust shall identify to the Administrator the
pricing service(s) to be utilized on behalf of the Trust. The Administrator
shall price the securities and other holdings of the Trust for which market
quotations or prices are available by the use of such services unless otherwise
directed by the Trust's investment adviser. For those securities where prices
are not provided by the pricing service(s) utilized by the Administrator, the
Trust shall approve, in good faith, the procedures for determining the fair
value of the securities. The Trust's investment adviser shall determine or
obtain the valuation of the securities in accordance with those procedures and
shall deliver to the Administrator the resulting prices for use in its
calculation of net asset values. The Administrator is authorized to rely on the
prices provided by such service(s) or by the Trust's investment adviser(s) or
other authorized representatives of the Funds without investigation or
verification.
(e) The Trust's Board of Trustees and the Funds' investment adviser(s)
have and retain primary responsibility for all compliance matters relating to
the Funds including but not limited to compliance with the 1940 Act, the
Internal Revenue Code of 1986, as amended, the USA PATRIOT Act of 2002, the
Xxxxxxxx-Xxxxx Act of 2002 and the policies and limitations of each Fund
relating to the portfolio investments as set forth in the Prospectus and
Statement of Additional Information. The Administrator's monitoring and other
functions hereunder shall not relieve the Board of Trustees and the investment
adviser(s) of their primary day-to-day responsibility for assuring such
compliance.
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
based on monthly net assets, plus out-of-pocket expenses, each as provided in
Schedule C hereto. Fees shall be earned and paid monthly in an amount equal to
at least 1/12th of the applicable annual fee. Basis point fees and minimum
annual fees apply separately to each Fund, and average net assets are not
aggregated in calculating the applicable basis point fee per Fund or the
applicable minimum. Fees shall be adjusted in accordance with Schedule C or as
otherwise agreed to by the parties from time to time. The parties may amend this
Agreement to
include fees for any additional services requested by the Trust, enhancements to
current services, or to add Funds for which the Administrator has been retained.
The Trust agrees to pay the Administrator's then current rate for additional
services provided, or for enhancements to existing services currently provided,
after the execution of this Agreement.
(b) For the purpose of determining fees payable to the Administrator, net
asset value shall be computed in accordance with the Trust's Prospectus 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 that 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.
(c) The Administrator will bear all expenses incurred by it in connection
with the performance of its services under Section 2, except as otherwise
provided herein. The Administrator shall not be required to pay or finance any
costs and expenses incurred in the operation of the Funds, including, but not
limited to: taxes; interest; brokerage fees and commissions; salaries, fees and
expenses of officers and Trustees; Securities and Exchange Commission (the
"Commission") fees and state Blue Sky fees; advisory fees; charges of
custodians, transfer agents, dividend disbursing and accounting services agents
and other service providers; security pricing services; insurance premiums;
outside auditing and legal expenses; costs of organization and maintenance of
corporate existence; taxes and fees payable to federal, state and other
governmental agencies; preparation, typesetting, printing, proofing and mailing
of prospectuses, statements of additional information, supplements, notices,
forms and applications and proxy materials for regulatory purposes and for
distribution to current shareholders; preparation, typesetting, printing,
proofing and mailing and other costs of shareholder reports; expenses in
connection with the electronic transmission of documents and information
including electronic filings with the Commission and the states; research and
statistical data services; expenses incidental to holding meetings of the Funds'
shareholders and Trustees; fees and expenses associated with internet, e-mail
and other related activities; and extraordinary expenses. Expenses incurred for
distribution of shares, including the typesetting, printing, proofing and
mailing of prospectuses for persons who are not shareholders of the Funds, will
be borne by the Trust's investment adviser, except for such expenses permitted
to be paid by the Trust under a distribution plan adopted in accordance with
applicable laws. Administrator shall not be required to pay any Blue Sky fees
unless and until it has received the amount of such fees from the Trust.
4. PROPRIETARY AND CONFIDENTIAL INFORMATION
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The Administrator agrees on behalf of itself and its employees to treat
all records relative to the Funds' shareholders confidentially and as
proprietary information of the Trust, not to use such information other than for
purposes of fulfilling its duties under the Agreement, and not to disclose such
information except: (i) when requested to divulge such information by
duly-constituted authorities or court process, or (ii) when requested by the
Trust, or (iii) to an affiliate, as defined by Section 248.3 of Regulation S-P
(17 CFR 248.1-248.30), or (iv) pursuant to any other exception permitted by
Sections 248.14 and 248.15 of Regulation S-P in the ordinary course of business
to carry out the activities
covered by the exception under which the Administrator received the information.
Records and information which have become known to the public through no
wrongful act of the Administrator or any of its employees, agents or
representatives, and information which was already in the possession of the
Administrator, on a non-confidential basis, prior to receipt thereof, 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 Trust in connection with the
matters to which this Agreement relates, except for a loss resulting from the
Administrator's willful misfeasance, bad faith or negligence in the performance
of its duties or from reckless disregard by it of its obligations and duties
under this Agreement. The Administrator agrees to indemnify and hold harmless
the Trust, its employees, agents, officers, directors, and nominees from and
against any and all claims, demands, actions and suits, and from and against any
and all judgments, liabilities, losses, damages, costs, charges, reasonable
counsel fees, and other expenses of every nature and character (a "Claim") which
may be asserted against the Trust or for which the Trust may be held liable
arising out of or resulting from the Administrator's willful misfeasance, bad
faith or negligence in the performance of its duties, or from reckless disregard
by it of its obligations and duties under this Agreement. Notwithstanding the
foregoing, the Administrator shall not be liable for (i) any action taken or
omitted to be taken in accordance with written or oral instructions received by
the Administrator from an officer or representative of the Trust or its
investment adviser, or (ii) any action taken or omission by any other prior
service provider.
(b) The Administrator assumes no responsibility hereunder, and shall not
be liable, for any default, 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 its
control.
(c) The Trust agrees to indemnify and hold harmless the Administrator,
its employees, agents, officers, directors and nominees from and against any and
all Claims which may be asserted against the Administrator or for which the
Administrator may be held liable arising out of or in any way relating to (i)
the Administrator's actions or omissions, except to the extent a Claim resulted
from the Administrator's willful misfeasance, bad faith, or negligence in the
performance of its duties or from reckless disregard by it of its obligations
and duties hereunder; (ii) the Administrator's reliance on, or use of
information, data, records and documents received by the Administrator from any
other party referenced in Section 2 hereof or other representative of the Trust,
or (iii) the reliance on, or the implementation of, any instructions, directions
or any other requests of the Trust; or (iv) any action taken by or omitted by
any other prior service provider.
(d) In no event and under no circumstances shall the Administrator, its
affiliates or any of its or their officers, directors, members, agents or
employees be liable to anyone, including, without limitation, the other party,
under any theory of tort, contract, strict liability or other legal or equitable
theory for lost profits, exemplary, punitive, special, indirect or consequential
damages for any act or failure to act under any provision of this Agreement
regardless of whether such damages were foreseeable and even if advised of the
possibility thereof.
6. TERM
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(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. This Agreement shall continue in
effect as to each Fund until terminated as provided herein.
(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 Funds, the Administrator
shall deliver the records of the Fund(s) in the form maintained by the
Administrator (to the extent permitted by applicable license agreements) to the
Trust or person(s) designated by the Trust at the Trust's cost and expense, 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 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.
(d) Notwithstanding anything herein to the contrary, upon the termination
of this Agreement, the indemnities provided by this Agreement shall survive the
termination of the Agreement and shall continue in effect with respect to any
and all matters arising (or alleged by any third party to have occurred, whether
by way of act or default) during the existence of this Agreement.
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), and that the Administrator or its affiliates may enter
into other agreements with such other entities.
8. GOVERNING LAW; INVALIDITY
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This Agreement shall be governed by Wisconsin law, excluding the laws on
conflicts of laws. 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 1940 Act, the latter shall control, and nothing herein shall
be construed in a manner inconsistent with the 1940 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
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. In such case, the
parties shall in good faith modify or substitute such provision consistent with
the original intent of the parties.
9. NOTICES
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Any notice required or 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 UMB Fund Services, Inc.,
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, XX, 00000, Attention: Xxxxx X.
Xxxxxxx, with a copy to General Counsel, and notice to the Trust shall be sent
to Scout Investment Advisors, Inc., 000 Xxxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000, Attention: Xxxx Xxxxx, Secretary.
10. ENTIRE AGREEMENT
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This Agreement constitutes the entire Agreement of the parties hereto.
11. LIMITATIONS
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This Agreement is executed by the Trust with respect to each of the Funds
and the obligations hereunder are not binding upon any of the Trustees, officers
or shareholders of the Funds individually but are binding only upon the Fund to
which such obligations pertain and the assets and property of such Fund. All
obligations of the Trust under this Agreement shall apply only on a Fund-by-Fund
basis, and the assets of one Fund shall not be liable for the obligations of
another Fund.
12. 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.
UMB SCOUT FUNDS
("Trust")
By: /S/ Xxxx XxXxxxx
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Title: Vice President
--------------------------------
UMB FUND SERVICES, INC.
("Administrator")
By: /S/ Xxxxxxxxx Xxx Xxxxxxx
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Title: Senior VP & General Counsel
---------------------------------
SCHEDULE A
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
UMB SCOUT FUNDS
AND
UMB FUND SERVICES, INC.
NAME OF FUNDS
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UMB Scout Stock Fund
UMB Scout Growth Fund
UMB Scout Small Cap Fund
UMB Scout Bond Fund
UMB Scout Kansas Tax-Exempt Bond Fund
UMB Scout Money Market Fund - Federal Portfolio
UMB Scout Money Market Fund - Prime Portfolio
UMB Scout Tax-Free Money Market Fund
SCHEDULE B
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
UMB SCOUT FUNDS
AND
UMB FUND SERVICES, INC.
SERVICES
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:
o provide office space, facilities, equipment and personnel to carry out
its services hereunder;
o compile data for and prepare with respect to the Funds timely Notices to
the Commission required pursuant to Rule 24f-2 under the 1940 Act and
Semi-Annual Reports on Form N-SAR;
o prepare and review the financial statements for the Funds' Annual and
Semi-Annual Reports included in Form N-CSR as required under the
Xxxxxxxx-Xxxxx Act; assist in compiling exhibits and disclosures for Form
N-CSR as requested by the Trust;
o compile data for and prepare with respect to the Funds the information
required to be included on Form N-Q;
o assist in the preparation 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;
o prepare the financial statements for the Annual and Semi-Annual Reports
required pursuant to Section 30(d) under the 1940 Act, subject to the
review and approval of the Trust and the Trust's independent accountants;
o provide financial and Fund performance information for inclusion in the
Registration Statement for the Trust (on Form N-1A or any replacement
therefor) and any amendments thereto, subject to the review of Trust
counsel;
o determine and periodically monitor each Fund's income and expense accruals
and cause all appropriate expenses to be paid from Fund assets on proper
authorization from the Trust;
o calculate income factors and daily net asset values of each Fund (i) in
accordance with the Trust's operating documents as provided to the
Administrator, and (ii) based on security valuations provided by the Trust,
the Trust's investment adviser, and pricing services, as provided herein;
o maintain all general ledger accounts and related subledgers;
o assist in the acquisition of the Trust's fidelity bond required by the 1940
Act, monitor the amount of the bond and make the necessary Commission
filings related thereto;
o 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, if any, of their primary day-to-day
responsibility for assuring such compliance);
o 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 1940 Act;
o prepare and/or file state securities qualification/notice compliance
filings, with the advice of the Trust's legal counsel, in accordance with
instructions from the Trust, which instructions will include the states to
qualify in, the amounts of Shares to initially and subsequently qualify and
the warning threshold to be maintained;
o 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;
o prepare Form 1099s for Trustees and other Trust vendors;
o calculate dividend and capital gains distributions subject to review and
approval by the Trust and its independent accountants; and
o 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.
SCHEDULE C
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
UMB SCOUT FUNDS
AND
UMB FUND SERVICES, INC.
FEES
ANNUAL ASSET BASED FEES
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AVERAGE NET ASSETS BASIS POINTS
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Up to $250 million 10.0* basis points
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Next $250 million 7.5* basis points
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Next $250 million 5.0* basis points
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Over $750 million 3.0* basis points
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*For more complex funds (e.g., international, mortgage-backed, etc.), add 2
basis points. Master-feeder funds and funds that are hedged (i.e., more than
10%) require customized pricing.
Minimum Monthly Fee: The asset based fees are subject to be a minimum monthly
fee in the amount of $6,250 for each fund. The minimum annual fee is subject to
an annual escalation equal to the increase in the Consumer Price Index - Urban
Wage Earners (CPI), which escalation shall be effective commencing one year from
the date of this Agreement (the "Anniversary Date") and on the corresponding
Anniversary Date each year thereafter. No amendment of this Schedule C shall be
required with each escalation. CPI shall be determined by reference to the
Consumer Price Index News Release issued by the Bureau of Labor Statistics, U.S.
Department of Labor. Additional fees shall apply when adding any additional
Funds and/or classes, including compensation for the Administrator's services in
connection with the organization of the new Fund(s) or classes. The
Administrator shall provide such services and be entitled to such compensation
as the parties may mutually agree in writing.
Multi-Class Fee: In addition to the asset based fee, there shall be a monthly
multi-class fee in the amount of $1,500 per class.
OUT-OF-POCKET AND OTHER RELATED EXPENSES
The Trust shall also pay/reimburse the Administrator's out-of-pocket and other
related expenses. Out-of-pocket expenses include, but are not limited to,
travel, lodging and meals in connection with travel in connection with Board
meetings and otherwise on behalf of the Funds, 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, XXXXX related fees, long distance telephone
charges, and photocopying, faxes, postage and overnight delivery expenses.
PRICING OF SECURITIES, RESEARCH AND INTERFACE FEES
The Trust shall pay the Administrator for pricing of securities, research
services, and other service interface fees such as Bloomberg, CCH, Nasdaq, etc.
in accordance with the attached pricing schedule. The pricing schedule shall be
amended as new asset classes or services are added. The Administrator reserves
the right to adjust the pricing schedule from time to time to reflect changes in
the underlying costs of providing the pricing or services upon thirty (30) days'
notice. The cost of fair value pricing services is not included.
TAX RETURN PREPARATION, ETC.
Prepare Federal income and excise tax returns for each Fund; $4,000/year
prepare annual and semi-annual tax provisions with financial per Fund
statement tax disclosure; calculate year end distribution
requirements.
REGULATORY REPORT PRODUCTION (PROJECT MANAGEMENT FOR ANNUAL REPORT, SEMI-ANNUAL
REPORT AND ANNUAL PROSPECTUS UPDATE)
Provide art direction; secure and analyze print $45,000/year
bids, as requested; proofread financial reports and
prospectus(es); oversee production and printing,
assuming one annual and semi-annual report and
one prospectus update per year.
STAND ALONE SCOUT MONEY MARKET FUND(S) REGULATORY REPORT PRODUCTION (PROJECT
MANAGEMENT FOR ANNUAL REPORT, SEMI-ANNUAL REPORT AND ANNUAL PROSPECTUS UPDATE)
Provide art direction; secure and analyze print bids, $6,000/year
as requested; proofread financial reports and prospectus(es);
oversee production and printing, assuming one annual and
semi-annual report and one prospectus update per year.
SPECIAL PROJECTS AND SERVICES $150/hour
