FUND ADMINISTRATION SERVICING AGREEMENT
This Agreement is made and entered into on this
27th day of September, 1996, by and between the AMquest
Matrix Funds, Inc., a Maryland corporation (hereinafter
referred to as the "Company") and Firstar Trust
Company, a corporation organized under the laws of the
State of Wisconsin (hereinafter referred to as "FTC").
WHEREAS, the Company is an open-ended management
investment company which is registered under the
Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create
separate series, each with its own separate investment
portfolio;
WHEREAS, FTC is a trust company and, among other
things, is in the business of providing fund
administration services for the benefit of its
customers; and
WHEREAS, the Company desires to retain FTC to act
as Administrator for each series of the Company listed
on Schedule A attached hereto (hereinafter collectively
referred to as the "Funds"), as may be amended from
time to time.
NOW, THEREFORE, the Company and FTC do mutually
promise and agree as follows:
I. Appointment of the Administrator
The Company hereby appoints FTC as
Administrator of the Funds on the terms and
conditions set forth in this Agreement, and FTC
hereby accepts such appointment and agrees to
perform the services and duties set forth in this
Agreement in consideration of the compensation
provided for herein.
II. Duties and Responsibilities of FTC
A. General Fund Management
1. Act as liaison among all
Company service providers
2. Coordinate Board communication
by:
a. Assisting Company
counsel in establishing meeting
agendas
b. Preparing Board
reports based on financial and
administrative data
c. Evaluating
independent auditor
d. Securing and
monitoring fidelity bond and
director and officer liability
coverage, and making the necessary
SEC filings relating thereto
e. Preparing minutes of
meetings of the Board and
shareholders
3. Audits
a. Prepare appropriate
schedules and assist independent
auditors
b. Provide information
to SEC and facilitate audit process
c. Provide office
facilities
4. Assist in overall operations
of the Company
5. Maintain the Company's
governing documents, including the
Articles of Incorporation, the By-laws
and the minute book
B. Compliance
1. Regulatory Compliance
a. Monitor compliance
with 1940 Act requirements,
including:
1) Asset
diversification tests
2) Total
return and SEC yield
calculations
3)
Maintenance of books and
records under Rule 31a-3
4) Code of
Ethics
b. Monitor compliance
with the policies and investment
limitations of each Fund as set
forth in the Funds' Prospectus and
Statement of Additional Information
2. Blue Sky Compliance
a. Prepare and file
with the appropriate state
securities authorities any and all
required compliance filings
relating to the registration of the
securities of the Company so as to
enable the Company to make a
continuous offering of its shares
b. Monitor status and
maintain registrations in each
state
3. SEC Registration and Reporting
a. Assist Company
counsel in updating Prospectus and
Statement of Additional Information
and in preparing proxy statements
and Rule 24f-2 notices
b. Prepare annual and
semiannual reports
c. Coordinate the
printing of publicly disseminated
Prospectuses and reports
4. IRS Compliance
a. Monitor Company's
status as a regulated investment
company under Subchapter M through
review of the following:
1) Asset
diversification requirements
2) Qualifying
income requirements
3)
Distribution requirements
b. Monitor short-short
testing
c. Calculate required
distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data
required by Funds' Prospectus and
Statement of Additional Information
2. Prepare financial reports for
shareholders, the Board, the SEC, and
independent auditors
3. Supervise the Company's
Custodian and Fund Accountants in the
maintenance of the Company's general
ledger and in the preparation of the
Company's financial statements,
including oversight of expense accruals
and payments, of the determination of
net asset value of each Fund's net
assets and of each Fund's shares, and of
the declaration and payment of dividends
and other distributions to shareholders
D. Tax Reporting
1. Prepare and file on a timely
basis appropriate federal and state tax
returns including Forms 1120/8610 with
any necessary schedules
2. Prepare state income
breakdowns where relevant
3. File Form 1099 Miscellaneous
for payments to directors and other
service providers
4. Monitor wash losses
5. Calculate eligible dividend
income for corporate shareholders
III. Compensation
The Company, on behalf of the Funds, agrees
to pay FTC for the performance of the duties
listed in this Agreement and the fees and out-of-
pocket expenses as set forth in the attached
Schedule B.
The Company agrees to pay all fees and
reimbursable expenses within ten (10) business
days following the mailing of the billing notice.
IV. Performance of Service; Limitation of Liability
A. FTC shall exercise reasonable care in
the performance of its duties under this
Agreement. FTC shall not be liable for any
error of judgment or mistake of law or for
any loss suffered by the Company in
connection with matters to which this
Agreement relates, including losses resulting
from mechanical breakdowns or the failure of
communication or power supplies beyond FTC's
control, except a loss resulting from FTC's
refusal or failure to comply with the terms
of this Agreement or from bad faith,
negligence, or willful misconduct on its part
in the performance of its duties under this
Agreement. Notwithstanding any other
provision of this Agreement, the Company
shall indemnify and hold harmless FTC from
and against any and all claims, demands,
losses, expenses, and liabilities (whether
with or without basis in fact or law) of any
and every nature (including reasonable
attorneys' fees) which FTC may sustain or
incur or which may be asserted against FTC by
any person arising out of any action taken or
omitted to be taken by it in performing the
services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon
any written or oral instruction provided to
FTC by any duly authorized officer of the
Company, such duly authorized officer to be
included in a list of authorized officers
furnished to FTC and as amended from time to
time in writing by resolution of the Board of
Directors of the Company.
In the event of a mechanical breakdown
or failure of communication or power supplies
beyond its control, FTC shall take all
reasonable steps to minimize service
interruptions for any period that such
interruption continues beyond FTC's control.
FTC will make every reasonable effort to
restore any lost or damaged data and correct
any errors resulting from such a breakdown at
the expense of FTC. FTC agrees that it
shall, at all times, have reasonable
contingency plans with appropriate parties,
making reasonable provision for emergency use
of electrical data processing equipment to
the extent appropriate equipment is
available. Representatives of the Company
shall be entitled to inspect FTC's premises
and operating capabilities at any time during
regular business hours of FTC, upon
reasonable notice to FTC.
Regardless of the above, FTC reserves
the right to reprocess and correct
administrative errors at its own expense.
B. In order that the indemnification
provisions contained in this section shall
apply, it is understood that if in any case
the Company may be asked to indemnify or hold
FTC harmless, the Company shall be fully and
promptly advised of all pertinent facts
concerning the situation in question, and it
is further understood that FTC will use all
reasonable care to notify the Company
promptly concerning any situation which
presents or appears likely to present the
probability of such a claim for
indemnification against the Company. The
Company shall have the option to defend FTC
against any claim which may be the subject of
this indemnification. In the event that the
Company so elects, it will so notify FTC and
thereupon the Company shall take over
complete defense of the claim, and FTC shall
in such situation initiate no further legal
or other expenses for which it shall seek
indemnification under this section. FTC
shall in no case confess any claim or make
any compromise in any case in which the
Company will be asked to indemnify FTC except
with the Company's prior written consent.
C. FTC shall indemnify and hold the Company
harmless from and against any and all claims,
demands, losses, expenses, and liabilities
(whether with or without basis in fact or
law) of any and every nature (including
reasonable attorneys' fees) which may be
asserted against the Company by any person
arising out of any action taken or omitted to
be taken by FTC as a result of FTC's refusal
or failure to comply with the terms of this
Agreement, its bad faith, negligence, or
willful misconduct.
V. Proprietary and Confidential information
FTC agrees on behalf of itself and its
directors, officers, and employees to treat
confidentiality and as proprietary information of
the Company all records and other information
relative to the Company and prior, present, or
potential shareholders of the Company (and clients
of said shareholders), and not to use such records
and information for any purpose other than the
performance of its responsibilities and duties
hereunder, except after prior notification to and
approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be
withheld where FTC may be exposed to civil or
criminal contempt proceedings for failure to
comply, when requested to divulge such information
by duly constituted authorities, or when so
requested by the Company.
VI. Data Necessary to Perform Services
The Company or its agent, which may be FTC,
shall furnish to FTC the data necessary to perform
the services described herein at times and in such
form as mutually agreed upon.
VII. Terms of the Agreement
This Agreement shall become effective as of
the date hereof and, unless sooner terminated as
provided herein, shall continue automatically in
effect for successive annual periods. The
Agreement may be terminated by either party upon
giving ninety (90) days prior written notice to
the other party or such shorter period as is
mutually agreed upon by the parties.
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 FTC and the Company.
VIII. Duties in the Event of Termination
In the event that, in connection with
termination, a successor to any of FTC's duties or
responsibilities hereunder is designated by the
Company by written notice to FTC, FTC will
promptly, upon such termination and at the expense
of the Company, transfer to such successor all
relevant books, records, correspondence, and other
data established or maintained by FTC under this
Agreement in a form reasonably acceptable to the
Company (if such form differs from the form in
which FTC has maintained, the Company shall pay
any expenses associated with transferring the data
to such form), and will cooperate in the transfer
of such duties and responsibilities, including
provision for assistance from FTC's personnel in
the establishment of books, records, and other
data by such successor.
IX. Choice of Law
This Agreement shall be construed in
accordance with the laws of the State of
Wisconsin.
X. Notices
Notices of any kind to be given by either
party to the other party shall be in writing and
shall be duly given if mailed or delivered as
follows: Notice to FTC shall be sent to X.X. Xxx
0000, Xxxxxxxxx, Xxxxxxxxx 00000, and notice to
the Company shall be sent to Xxxxxxx X. Xxxxx,
AMquest Matrix Funds, Inc., 0000 XX 00xx Xxx,
Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000.
XI. Records
FTC shall keep records relating to the
services to be performed hereunder in the form and
manner and for such period as it may deem
advisable and is agreeable to the Company but not
inconsistent with the rules and regulations of
appropriate government authorities, in particular,
Section 31 of the 1940 Act and the rules
thereunder. FTC agrees that all such records
prepared or maintained by FTC relating to the
services to be performed by FTC hereunder are the
property of the Company and will be preserved,
maintained, and made available in accordance with
such section and rules of the 1940 Act and will be
promptly surrendered to the Company on and in
accordance with its request.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by a duly authorized
officer on one or more counterparts as of the day and
year first written above.
AMquest Matrix Funds, Inc. Firstar Trust Company:
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. XxXxx
--------------------------- ----------------------------
Xxxxxxx X. Xxxxx, President Xxxxxxx X. XxXxx
Attest: /s/ Xxxxxx X. Xxxxxx, Xx. Attest: /s/ Xxxx X. Xxxx
------------------------------- -----------------------
Xxxxxx X. Xxxxxx, Xx., Secretary Xxxx X. Xxxx
Schedule A
SEPARATE SERIES OF AMQUEST MATRIX FUNDS, INC.
Name of Series Date Added
AMquest Matrix Income Fund September 27, 1996
AMquest Matrix Total Return Fund September 27, 1996
AMquest Matrix Growth Fund September 27, 1996
Schedule B
Fund Administration and Compliance
Annual Fee Schedule
Minimum annual fee per fund: $30,000
6 basis points (.0006) on the first $200,000,000
5 basis points (.0005) on the next $300,000,000
3 basis points (.0003) on the balance
Out-of-Pocket expenses, including, but not limited to:
Postage
Stationery
Programming
Proxies
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
All other out-of-pocket expenses
Expenses from Board of Directors meetings
Auditing and legal expenses
Fees are billed monthly.
