EXHIBIT NO. EX-99.H.3.A
FORM OF ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this ____ day of ______, 2001, by and between
Scout Investment Advisers, Inc., a Maryland Corporation ("Scout") and Sunstone
Financial Group, Inc., a Wisconsin corporation (the "Administrator").
WHEREAS, Scout serves as Investment Adviser and Administrator to the Scout
Funds (such investment portfolios and any additional investment portfolios are
individually referred to as a "Fund" and collectively the "Funds");
WHEREAS, the Funds are open-end investment companies registered under the
Investment Company Act of 1940, as amended (the "1940 Act") and are 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, Scout and the Administrator desire to enter into an agreement
pursuant to which the Administrator shall provide administration and fund
accounting services to such Funds listed on Schedule A hereto and any additional
Funds Scout and Administrator may agree upon and include on Schedule A as such
Schedule may be amended from time to time;
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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Scout 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 Funds' Board of Directors
and utilizing information provided by Scout and its agents, 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 Board of Directors of the Funds shall cause the officers,
investment adviser, legal counsel, independent accountants, transfer agent,
custodian and other service providers for the Funds to cooperate with the
Administrator and to provide the Administrator with such information, documents
and advice relating to the Funds 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 be entitled to rely, and shall be held
harmless by Scout when acting in reliance (without investigation or
verification), upon the instruction, advice, information or any documents
relating to the Funds 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 Funds. The Administrator
shall not be held to have notice of any change of authority of any officer,
agent, representative or employee of the Funds or Scout until receipt of written
notice thereof from the Funds or Scout, as the case may be.
(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 Funds
pursuant to its duties hereunder are the property of the Funds and further
agrees to surrender promptly to the Funds any of such records upon the Fund'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 Funds.
(d) It is understood that in determining security valuations, the
Administrator employs one or more pricing services to determine valuations of
portfolio securities for purposes of calculating net asset values of the Funds.
The Administrator shall identify to the Funds and the Board of Directors any
such pricing service(s) utilized on behalf of the Funds. The Administrator is
authorized to rely on the prices provided by such service(s) or by the Funds'
investment adviser(s) or other authorized representatives of the Funds, and
shall not be liable for losses to the Funds, its securityholders or otherwise as
a result of its reliance on the valuations provided by the approved pricing
service(s) or representatives or its reliance on security valuation procedures
established by the Funds.
(e) The Funds' Board of Directors and the Funds' investment adviser 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, and the policies and limitations of each Fund
relating to the portfolio investments as set forth in the Prospectus and
Statement of Additional Information. Administrator's monitoring and other
functions hereunder shall not relieve the Board of Directors and the investment
adviser of their primary day-to-day responsibility for assuring such compliance.
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3. FEES; DELEGATION; EXPENSES
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(a) In consideration of the services rendered pursuant to this Agreement,
Scout will pay the Administrator a fee, computed daily and payable monthly,
equal to 5 basis points plus out-of-pocket expenses, The prices for the services
to be provided hereunder shall be fixed until May 1, 2001 (It is contemplated
that the Scout acquisition will be completed prior to that time). The parties
may amend this Agreement to include fees for any additional services requested
by the Funds, enhancements to current services, or to add Funds for which the
Administrator has been retained. Scout 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 Funds' Prospectus(es) and
resolutions of the Funds' Board of Directors. The fee for the period from the
day of the month this Agreement is entered into until the end of that month
shall be pro-rated according to the proportion 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 Funds 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 Directors; 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 Directors; 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 Funds' investment adviser, except for such expenses permitted to
be paid by the Funds 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 Funds.
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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 Funds all records relative
to the Funds' 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 by the Funds, which approval
shall not be unreasonably withheld and may not be withheld where the
Administrator may be exposed to civil or criminal proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, when subject to governmental or regulatory audit or investigation,
or when so requested by the Funds. 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 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 Scout or the Funds in connection with
the matters to which this Agreement relates, except for a loss resulting from
the Administrator's willful misfeasance, bad faith or gross negligence 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 (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 Scout or the Funds, or (ii) any action taken or omission by
any 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) Scout agrees to indemnify and hold harmless the Administrator, 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 which may be asserted against the
Administrator or for which the Administrator may be held liable (a "Claim")
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 gross 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 party referenced in Section 2 hereof or
other representative of Scout or the Funds, (iii) the reliance on, or the
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implementation of, any instructions, directions or any other requests of the
Funds; or (iv) any action taken by or omission of any 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
----
(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 with
respect to each Fund until _________, 2001 (the "Initial Term"). 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 after the Initial Term (i) upon mutual consent
of the parties, or (ii) by either party upon not less than one hundred and
twenty (120) 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 Scout.
(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
Scout or the Funds, as the case may be or person(s) designated by the Funds at
the Funds' cost and expense, and thereafter the Funds or their 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
Funds request 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) If Scout replaces the Administrator as the service provider for the
Funds for any reason other than upon the expiration of the Initial Term or any
successive twelve-month term, or if a third party is added to perform all or
part of the services provided by the
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Administrator under this Agreement, then Scout shall make a one-time cash
payment to the Administrator as liquidated damages in an amount equal to the
balance of the fees that would otherwise have been due the Administrator for the
remainder of the term of this Agreement, had it not been terminated. For
purposes of calculating the payment of such fees, the parties shall assume that
the Funds' assets will remain constant for the balance of the contract term.
This liquidated damages provision shall also apply in the event the Funds are
merged into another legal entity in part or in whole pursuant to any form of
business reorganization or are liquidated in part or in whole prior to the
expiration of the Initial Term or any subsequent term of this Agreement, and the
Administrator is not retained to provide administration and fund accounting
services. The parties acknowledge and agree that, in the event the Administrator
ceases to be retained as set forth above, (i) determination of actual damages
incurred by the Administrator would be extremely difficult, and (ii) the
liquidated damages provision contained herein is intended to adequately
compensate the Administrator for damages incurred and is not intended to
constitute any form of penalty. Any such payment shall be due and payable on or
before the day the Agreement terminates, a third party is added, or the Funds is
merged or liquidated, as applicable.
7. NON-EXCLUSIVITY
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The services of the Administrator rendered to the Scout are not deemed to
be exclusive. The Administrator may render such services and any other services
to others, including other investment companies. Scout 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
-------------------------
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.
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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 Sunstone Financial Group,
Inc., 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxx, XX, 00000, Attention: Xxxxxx
X. Xxxxxxx, with a copy to General Counsel, and notice to the Funds shall be
sent to Scout Bank, n.a., 000 Xxxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000,
Attention: Xxxxxx Xxxxxxxx, General Counsel.
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 Scout with respect to each of the Funds and
the obligations hereunder are not binding upon any of the Directors, officers or
shareholders of the Funds individually but are binding only upon the Funds to
which such obligations pertain and the assets and property of such Funds. All
obligations of the Funds 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.
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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.
SCOUT INVESTMENT ADVISERS, INC.
("Scout")
By:______________________________________
Executive Vice President
SUNSTONE FINANCIAL GROUP, INC.
("Administrator")
By:______________________________________
President
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SCHEDULE A
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
SCOUT INVESTMENT ADVISERS, INC.
AND
SUNSTONE FINANCIAL GROUP, INC.
NAME OF FUNDS
-------------
Date Converted For Date Converted
Fund Accounting Services Administration Services
UMB Scout Stock Fund ____________ ____________
UMB Scout Stock Select Fund ____________ ____________
UMB Scout Equity Index Fund ____________ ____________
UMB Scout WorldWide Fund ____________ ____________
UMB Scout WorldWide Select Fund ____________ ____________
UMB Scout Technology Fund ____________ ____________
UMB Scout Balanced Fund ____________ ____________
UMB Scout Bond Fund ____________ ____________
UMB Scout Kansas Tax-Exempt Bond Fund ____________ ____________
UMB Scout Money Market Fund ____________ ____________
Federal Portfolio ____________ ____________
Prime Portfolio ____________ ____________
UMB Scout Tax-Free Money Market Fund ____________ ____________
UMB Scout Energy Fund ____________ ____________
UMB Scout Small Cap Fund ____________ ____________
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SCHEDULE B
TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
SCOUT INVESTMENT ADVISERS, INC.
AND
SUNSTONE FINANCIAL GROUP, INC.
SERVICES
Subject to the direction and control of the Funds' Board of Directors and
utilizing information provided by the Funds and their 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 assist in the preparation for execution by the Funds and file all federal
income and excise tax returns and state income tax returns (and such other
required tax filings as may be agreed to by the parties) other than those
required to be made by the Funds' custodian or transfer agent, subject to
review and approval of the Funds and the Funds' independent accountants;
o prepare the financial statements for the Annual and Semi-Annual Reports
required pursuant to Section 30(d) under the 1940 Act;
o provide financial and Fund performance information for inclusion in the
Registration Statement for the Funds (on Form N-1A or any replacement
therefor) and any amendments thereto;
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 Funds;
o calculate daily net asset values and income factors of each Fund;
o maintain all general ledger accounts and related subledgers;
o perform security valuations using pricing services;
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o assist in the acquisition of the Funds' 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 Funds' 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 registration compliance filings, with
the advice of the Funds' legal counsel, in accordance with instructions
from the Funds, 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 Funds an agenda for
each board meeting and, if requested by the Directors, attend board
meetings and prepare minutes;
o prepare Form 1099s for Director and other Fund vendors;
o calculate dividend and capital gains distributions subject to review and
approval by the Funds and their independent accountants; and
o generally assist in the Funds' 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.
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