Exhibit 99.B(9)(a)
ADMINISTRATION AGREEMENT
This Agreement, dated as of the 25th day of July, 1996, made by and between
Trainer, Xxxxxxx First Mutual Funds, a business trust (the "Trust") operating as
an open-end, management investment company registered under the Investment
Company Act of 1940, as amended (the "Act"), duly organized and existing under
the laws of the State of Delaware and Fund/Plan Services, Inc. ("Fund/Plan"), a
corporation duly organized and existing under the laws of the State of Delaware
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue separate
series of shares representing interests in separate investment portfolios (the
"Series"), which Series are identified on Schedule "C" attached hereto, and
which Schedule "C" may be amended from time to time by mutual agreement of the
Trust and Fund/Plan; and
WHEREAS, the Parties desire to enter into an agreement whereby Fund/Plan
will provide certain administration services to the Trust on the terms and
conditions set forth in this Agreement; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such
administrative services under the terms and conditions set forth below; and
WHEREAS, the Trust will provide all necessary information to Fund/Plan
concerning the Series so that Fund/Plan may appropriately execute its
responsibilities hereunder;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
Section 1. Appointment The Trust hereby appoints Fund/Plan as
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administrator and Fund/Plan hereby accepts such appointment. The Trust further
agrees to appoint Fund/Plan as administrator to any additional Series which,
from time to time, may be added to the Trust.
Section 2. Duties and Obligations of Fund/Plan
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(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of the Trust,
Fund/Plan shall provide to each of the Series all administrative services set
forth in Schedule "A" attached hereto, which Schedule is incorporated by
reference in its entirety into this Agreement. In addition to the obligations
set forth in Schedule "A", Fund/Plan shall (i) provide its own office space,
facilities,
equipment and personnel for the performance of its duties under this Agreement;
and (ii) take all actions it deems necessary to properly execute the
administrative responsibilities of the Trust.
(b) So that Fund/Plan may perform its duties under the terms of
this Agreement, the Board of Trustees of the Trust shall direct the officers,
investment advisor, distributor, legal counsel, independent accountants and
custodian of the Trust to cooperate fully with Fund/Plan and to provide such
information, documents and advice relating to the Trust as is within the
possession or knowledge of such persons provided that no such person need
provide any information to Fund/Plan if to do so would, in the reasoned opinion
of counsel to the Trust, result in the loss of any privilege or confidential
treatment with respect to such information. In connection with its duties,
Fund/Plan shall be entitled to rely, and shall be held harmless by the Trust
when acting in reasonable reliance upon the instruction, advice or any documents
provided by the Trust to Fund/Plan by any of the aforementioned persons. All
fees charged by any such persons shall be deemed an expense of the Trust.
(c) Any activities performed by Fund/Plan under this Agreement
shall conform to the requirements of:
(1) the provisions of the Act and the Securities Act of 1933,
as amended, and of any rules or regulations in force thereunder;
(2) any other applicable provision of state and federal law;
(3) the provisions of the Trust Instrument of the Trust, as
amended from time to time;
(4) any policies and determinations of the Board of Trustees
of the Trust; and
(5) the fundamental policies of the Trust as reflected in its
registration statement filed pursuant to the Act.
Fund/Plan acknowledges that all records that it maintains for the
Trust are the property of the Trust and will be surrendered promptly to the
Trust upon written request. Fund/Plan will preserve, for the periods prescribed
under Rule 31a-2 under the Act, all such records required to be maintained under
Rule 31a-1 of the Act.
(d) Nothing in this Agreement shall prevent Fund/Plan or any
officer thereof from acting as administrator for any other person, firm or
corporation. While the administrative services supplied to the Trust may be
different than those supplied to other persons, firms or corporations, Fund/Plan
shall provide the Trust equitable treatment in supplying services. The
Trust recognizes that it will not receive preferential treatment from Fund/Plan
as compared with the treatment provided to other Fund/Plan clients. Fund/Plan
agrees to maintain the records and all other information of the Trust in a
confidential manner and shall not use such information for any purpose other
than the performance of Fund/Plan's duties under this Agreement.
Section 3. Allocation of Expenses All costs and expenses of the Trust
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shall be paid by the Trust including, but not limited to:
(a) fees paid to an investment adviser (the "Adviser");
(b) interest and taxes;
(c) brokerage fees and commissions;
(d) insurance premiums;
(e) compensation and expenses of its Trustees who are not
affiliated persons of the Adviser;
(f) legal, accounting and audit expenses;
(g) custodian and transfer agent, or shareholder servicing agent,
fees and expenses;
(h) fees and expenses incident to the registration of the shares
of the Trust under Federal or state securities laws;
(i) expenses related to preparing, setting in type, printing and
mailing prospectuses, statements of additional information,
reports and notices and proxy material to shareholders of the
Trust;
(j) all expenses incidental to holding meetings of shareholders
and Trustees of the Trust;
(k) such extraordinary expenses as may arise, including
litigation, affecting the Trust and the legal obligations
which the Trust may have regarding indemnification of its
officers and directors; and
(l) fees and out-of-pocket expenses paid on behalf of the Trust by
Fund/Plan.
Section 4. Compensation of Fund/Plan The Trust agrees to pay Fund/Plan
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compensation for its services and to reimburse it for expenses, at the rates and
amounts as set forth in Schedule "B" attached hereto, and as shall be set forth
in any amendments to such Schedule "B" approved by the Trust and Fund/Plan. The
Trust agrees and understands that Fund/Plan's compensation be comprised of two
components and payable on a monthly basis as follows:
(i) an asset based fee calculated on the Trust's total assets subject
to a minimum fee calculated on the number of series and classes within each
series, which the Trust hereby authorizes Fund/Plan to collect by debiting the
Trust's custody account for invoices which are rendered for the services
performed for the applicable function. The invoices for the services performed
will be sent to the Trust after such debiting with the indication that payment
has been made; and
(ii) reimbursement of any out-of-pocket expenses paid by Fund/Plan on
behalf of the Trust, which out-of-pocket expenses will be billed to the Trust
within the first ten calendar days of the month following the month in which
such out-of-pocket expenses were incurred. The Trust agrees to reimburse
Fund/Plan for such expenses within ten calendar days of receipt of such xxxx.
For the purpose of determining fees payable to Fund/Plan, the value of the
Trust's net assets shall be computed at the times and in the manner specified in
the Trust's Prospectus and Statement of Additional Information then in effect.
During the term of this Agreement, should the Trust seek services or
functions in addition to those outlined above or in Schedule "A" attached, a
written amendment to this Agreement specifying the additional services and
corresponding compensation shall be executed by both Fund/Plan and the Trust.
Section 5. Duration
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(a) The term of this Agreement shall be for a period of two (2) years,
commencing on the date which the Trust's registration statement is declared
effective by the U.S. Securities and Exchange Commission ("Effective Date") and
shall continue thereafter on a year to year term subject to termination by
either Party set forth in (c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed
for two (2) years commencing on the Effective Date of this Agreement and shall
continue thereafter subject to review and adjustment as determined by the
Parties.
(c) After the initial term of this Agreement, the Trust or Fund/Plan may
give written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice, which date shall
not be less than one hundred twenty (120) days after the date of receipt of such
notice. Upon the effective termination date, the Trust shall pay to Fund/Plan
such compensation as may be due as of the date of termination and shall likewise
reimburse Fund/Plan for any out-of-pocket expenses and disbursements reasonably
incurred by Fund/Plan to such date.
(d) If a successor to any of Fund/Plan's duties or responsibilities
under this Agreement is designated by the Trust by written notice to Fund/Plan
in connection with the termination of this Agreement, Fund/Plan shall promptly,
upon such termination and at the expense of the Trust, transfer all records
which are the property of the Trust and shall cooperate in the transfer of such
records and its duties and responsibilities under the Agreement.
Section 6. Amendment No provision of this Agreement may be amended or
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modified, in any manner except by a written agreement properly authorized and
executed by Fund/Plan and the Trust.
Section 7. Applicable Law This Agreement shall be governed by the laws
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of the State of California and the exclusive venue of any action arising under
this Agreement shall be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
Section 8. Authority of Signatories The Parties represent and warrant
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to each other that the execution and delivery of this Agreement by the
undersigned officer of each Party has been duly and validly authorized; and,
when duly executed, this Agreement will constitute a valid and legally binding
enforceable obligation of each Party. The obligations under this Agreement
shall be binding upon the assets and property of the Trust and shall not be
binding upon any officer or shareholder of the Series individually.
Section 9. Limitation of Liability
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(a) Fund/Plan, its directors, officers, employees, shareholders and
agents shall only be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust in connection with the performance of this
Agreement that result from willful misfeasance, bad faith, gross negligence or
reckless disregard on the part of Fund/Plan in the performance of its
obligations and duties under this Agreement.
(b) Any person, even though a director, officer, employee, shareholder
or agent of Fund/Plan, who may be or become an officer, director, employee or
agent of the Trust, shall be deemed when rendering services to such entity or
acting on any business of such entity (other than services or business in
connection with Fund/Plan's duties under the Agreement), to be rendering such
services to or acting solely for the Trust and not as a director, officer,
employee, shareholder or agent of, or under the control or direction of
Fund/Plan even though such person may receive compensation from Fund/Plan.
(c) Notwithstanding any other provision of this Agreement, the Trust
shall indemnify and hold harmless Fund/Plan, its directors, officers, employees,
shareholders and agents from and against any and all claims, demands, expenses
and liabilities (whether with or without basis in fact or law) of any and every
nature which Fund/Plan may sustain or incur or which may be asserted against
Fund/Plan by any person by reason of, or as a result of (i) any action taken or
omitted to be taken by Fund/Plan in good faith, (ii) any action taken or omitted
to be taken by Fund/Plan in good faith in reliance upon any certificate,
instrument, order or stock certificate or other document reasonably believed by
Fund/Plan to be genuine and
signed, countersigned or executed by any duly authorized person, upon the oral
or written instruction of an authorized person of the Trust or upon the opinion
of legal counsel to the Trust; or (iii) any action taken in good faith or
omitted to be taken by Fund/Plan in connection with its appointment 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. Indemnification
under this subparagraph shall not apply, however, to actions or omissions of
Fund/Plan or its directors, officers, employees, shareholders or agents in cases
of its or their willful misfeasance, bad faith, gross negligence or reckless
disregard of its or their duties hereunder.
If a claim is made against Fund/Plan as to which Fund/Plan may seek
indemnity under this Section, Fund/Plan shall notify the Trust promptly after
any written assertion of such claim threatening to institute an action or
proceeding with respect thereto and shall notify the Trust promptly of any
action commenced against Fund/Plan within ten (10) days after Fund/Plan shall
have been served with a summons or other legal process, giving information as to
the nature and basis of the claim. Failure so to notify the Trust shall not,
however, relieve the Trust from any liability which it may have on account of
the indemnity under this Section 9(c) if the Trust has not been prejudiced in
any material respect by such failure.
The Trust and Fund/Plan shall cooperate in the control of the defense of
any action, suit or proceeding in which Fund/Plan is involved and for which
indemnity is being provided by the Trust to Fund/Plan. The Trust may negotiate
the settlement of any action, suit or proceeding subject to Fund/Plan's
approval, which shall not be unreasonably withheld. Fund/Plan shall have the
right, but not the obligation, to participate in the defense or settlement of a
claim or action, with its own counsel, but any costs or expenses incurred by
Fund/Plan in connection with, or as a result of, such participation will be
borne solely by Fund/Plan.
Fund/Plan shall have the right to participate in the defense of an action
or proceeding and to retain its own counsel, and the reasonable fees and
expenses of such counsel shall be borne by the Trust (which shall pay such fees,
costs and expenses at least quarterly) if:
(i) Fund/Plan has received an opinion of counsel stating that
the use of counsel chosen by the Trust to represent Fund/Plan would present such
counsel with a conflict of interest;
(ii) the defendants in, or targets of, any such action or
proceeding include both Fund/Plan and the Trust, and legal counsel to Fund/Plan
shall have reasonably
concluded that there are legal defenses available to it which are different from
or additional to those available to the Trust or which may be adverse to or
inconsistent with defenses available to the Trust (in which case the Trust shall
not have the right to direct the defense of such action on behalf of Fund/Plan);
or
(iii) the Trust shall authorize Fund/Plan to employ separate
counsel at the expense of the Trust. Notwithstanding anything to the contrary
herein, it is understood that the Trust shall not, in connection with any
action, suit or proceeding or related action, suit or proceeding, be liable
under this Agreement for the fees and expenses of more than one firm.
(d) The terms of this Section 9 shall survive the termination of this
Agreement.
Section 10. Notices Except as otherwise provided in this Agreement, any
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notice or other communication required by or permitted to be given in connection
with this Agreement shall be in writing, and shall be delivered in person or
sent by first class mail or by overnight delivery, postage prepaid to the
respective parties as follows:
If to Trainer, Xxxxxxx First Mutual Funds: If to Fund/Plan:
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Trainer, Xxxxxxx First Mutual Funds Fund/Plan Services, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx 0 Xxxx Xxx Xxxxxx
Xxx Xxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, President Attention: Xxxxxxx X. Xxxxx, President
Section 11. If any part, term or provision of this Agreement is held by
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any court to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid, provided that the basic agreement is not thereby
substantially impaired.
Section 12. This Agreement shall extend to and shall be binding upon the
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Parties and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Trust without the written consent
of Fund/Plan or by Fund/Plan without the written consent of the Trust,
authorized or approved by a resolution of their respective Boards of Directors
or Trustees.
Section 13. This Agreement may be executed in two or more counterparts,
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each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 14. This Agreement shall be governed by the laws of the State of
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California and the exclusive venue of any action arising under this Agreement
shall be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
Section 15. Section Headings Section and paragraph headings are for
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convenience only and shall not be construed as part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of eight typewritten pages, together with Schedules "A", "B" and "C,"
to be signed by their duly authorized officers as of the day and year first
above written.
Trainer, Xxxxxxx First Mutual Funds Fund/Plan Services, Inc.
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By: Xxxxx X. Xxxx, President By: Xxxxxxx X. Xxxxx, President
SCHEDULE "A"
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FUND ADMINISTRATION SeRVICES
for
TRAINER, XXXXXXX FIRST MUTUAL FUNDS
I. Regulatory Compliance
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A. Compliance - Investment Company Act of 1940, as amended
1. Review, report and renew
a. investment advisory contracts
b. fidelity bond
c. underwriting contracts
d. distribution (12b-1) plans
e administration contracts
f. accounting contracts
g. custody administration contracts
h. custody contract
i. transfer agent and shareholder services contracts
2. Filings
a. N-SAR (semi-annual report)
b. N-1A (Registration Statement, post-effective
amendments and supplements thereto ("stickers")
c. Notice pursuant to Rule 24f-2: indefinite
registration of shares
d. fidelity bond under 17g-1
e. shareholder reports under 30(b)2-1
3. Annual up-dates of biographical and financial information
through questionnaires for Directors/Trustees and Officers
B. Compliance - Other
1. applicable stock exchange rules
2. applicable state tax laws
II. Corporate Business and Shareholder/Public Information
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A. Trustees/Management
1. Preparation of quarterly Trustees' meetings
a. draft agendas - all necessary items of compliance
b. arrange and conduct meetings
c. prepare minutes of meetings
d. keep attendance records
e. maintain corporate records/minute book
B. Coordinate Proposals
1. Printers
2. Auditors
3. Literature fulfillment
4. Insurance
C. Maintain Corporate Calendars and Files
D. Release Corporate Information (as directed by management)
1. To shareholders
2. To financial and general press
3. To industry publications
a. distributions (dividends and capital gains)
b. tax information
c. changes to prospectus
d. letters from management
e. funds' performance
4. Respond to:
a. financial press
b. miscellaneous shareholders inquiries
c. industry questionnaires
E. Communications to Shareholders
1. Coordinate printing and distribution of annual, semi-annual
reports, and prospectus
III. Financial and Management Reporting
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A. Income and Expenses
1. Expense figures calculated and accrual levels set
2. Monitoring of expenses and expense caps (monthly)
3. Approve and coordinate payment of expenses
4. Checking Account Reconciliation (monthly) and establish
Trust operating expense checking account
5. Calculation of advisory fee, 12b-1 fee and reimbursements
to Trust (if applicable)
6. Approve the recording and amortization of organizational
costs and pre-paid expenses (supplied by Adviser) for
start-up funds and reorganizations
7. Calculation of average net assets
B. Distributions to Shareholders
1. Projections of distribution amounts
2. Calculations of dividends and capital gain distributions (in
conjunction with the Trust and its auditors)
a. compliance with income tax provisions
b. compliance with excise tax provisions
c. compliance with Investment Company Act of 1940, as
amended
C. Financial Reporting
1. Liaison between fund management, independent auditors and
printers for shareholder reports
2. Prepare and review semi-annual and annual reports to
shareholders
3. 60 day delivery to SEC and shareholders
4. Prepare and review semi-annual and annual N-SAR's
(financial data)
5. Preparation of Financial Statements for required SEC
Post-Effective Amendments (if applicable)
D. Subchapter M Compliance (monthly)
1. Asset diversification test
2. Short/short test
3. Income qualification test
E. Other Financial Analysis
1. Upon request from Trust management, other budgeting and
analyses can be constructed to meet specific needs (fee
revisions may be necessary)
2. Sales information, portfolio turnover (monthly)
3. Support independent accountants to the Trust regarding the
calculation of any return of capital or excise tax
4. Total return calculation (monthly)
5. 1099 Miscellaneous - prepared for Directors/Trustees
(annual)
6. Analysis of interest derived from various Government
obligations (annual) (if interest income was distributed
in a calendar year)
F. Review and Monitoring Functions (monthly)
1. Review expense and reclassification entries to ensure proper
update
2. Perform various reviews to ensure accuracy of
subscription/liquidation schedules, monthly expense
analyses and daily custodian bank statements to verify
accurate money movement
3. Review expense accruals and expenditures for accuracy
G. Preparation and distribution of operational reports to
management by 10th business day of each month
1. Management Statistics (Recap)
a. portfolio
b. book gains/losses/per share
c. net income, book income/per share
d. capital stock activity
e. distributions
2. Performance Analysis
a. total return
b. monthly, quarterly, year to date, average annual
returns
3. Expense Analysis
a. summary of due to/from adviser
b. expenses paid
c. expense cap
d. accrual monitoring
e. advisory fee
4. Analysis
a. short-short income test (i.e. 30% test)
x. xxxxx income (components)
5. Portfolio Turnover
a. market value
b. cost of purchases
c. net proceeds of sales
d. average market value
6. Asset Diversification Test
x. xxxxx assets
b. non-qualifying assets
7. Shareholder Activity Summary
a. shares sold, redeemed and reinvested
b. change in investment
H. Provide rating agencies statistical data as requested
(monthly/quarterly)
I. For Money-Market Funds - Rule 2a-7 weekly compliance monitoring
J. Standard schedules for Board Package (Quarterly)
1. Shareholder Activity Summary (III-G-7 from above)
2. Expense analysis
3. Other schedules can be provided (additional fees may apply)
SCHEDULE "B"
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ADMINISTRATION SERVICES FEE SCHEDULE
for
TRAINER, XXXXXXX FIRST MUTUAL FUNDS
This Fee Schedule is fixed for a period of two (2) years from the Effective Date
as that term is defined in the Agreement.
I. Subject to a minimum annual fee of $48,000 for the initial Series' first
class of shares and $12,000 for each additional separate series or class
thereof, the Trust agrees to pay Fund/Plan each month an asset based fee
calculated at the annual rate of:
.0015 On the First $ 50 Million of the Average Net Assets of the Trust;
.0010 On the Next $ 50 Million of the Average Net Assets of the Trust; and
.0005 Over $100 Million of the Average Net Assets of the Trust
II. Out-of-Pocket Expenses:
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The Trust will reimburse Fund/Plan Services monthly for all out-of-pocket
expenses, including postage, telecommunications (telephone and fax),
special reports, cost of XXXXX filings, Board Meeting materials, approved
record retention, transportation costs as incurred and copying and sending
materials to independent accountants for off-site audits.
III. Additional Services
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Activities of a non-recurring nature including but not limited to fund
consolidations, mergers, acquisitions, reorganizations, the addition or
deletion of a series, and shareholder meetings/proxies, are not included
herein, and may be quoted separately upon request. To the extent the Trust
should decide to issue additional multiple/separate classes of shares,
additional fees will apply. Any additional/enhanced services or reports
will be quoted upon request.
IV. Blue Sky Administration
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These services are included under Fund Administration
SCHEDULE "C"
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Identification of Series
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Below are listed the Series of Shares to which services under this Agreement are
to be performed as of the Effective Date of this Agreement:
Trainer, Xxxxxxx First Mutual Funds
First Mutual Fund
Trainer, Xxxxxxx Emerging Growth Fund
Trainer, Xxxxxxx Total Return Bond Fund
This Schedule "C" may be amended from time to time by agreement of the Parties.
